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Norms on oil, gas exploration licences may be eased soon
FM calls for ‘calibrated risks’ from RBI
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Stock exchanges see cash market turnover slide 25% last fiscal
Tax Advice
SEBI to sign bilateral MoUs to attract more foreign investors
personal finance
Financial planning for this momentous event should start right from the beginning - a few years after your child's birth. The first important step is to determine the amount of expenditure that would be incurred, counting the remaining years for the wedding and then adjust it with inflation
Avoid traditional insurance plans
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Norms on oil, gas exploration licences may be eased soon
New Delhi, October 14 "Before the next round (of exploration licensing) we would like to put in place a more investor friendly regime both for investment and from point of view of pricing," Oil Minister S. Jaipal Reddy said on Sunday. Companies have to get prior government approval for the formulae they use to work out selling prices for the oil and gas under the current rules. India, the world's fourth-biggest oil importer, wants to tap domestic supply to cut its ballooning import bill and widening budget deficit. So far local companies have dominated the auctions for Indian oil and gas exploration licences and the government wants to attract more overseas bidders. Speaking at the Petrotech energy conference, Reddy said a panel headed by C. Ranagarajan, chairman of the Prime Minister's economic advisory council, will submit a report in the next few weeks suggesting improvements to the current exploration policy. "It is our endeavour to initiate tenth round (of auction) in this calendar year," he said, adding the cabinet has to approve the recommendations of the panel. Oil secretary G.C. Chaturvedi said from the next exploration round, the oil ministry will obtain approvals from various ministries including environment and defence before the oil and gas blocks go under hammer. He said contractors on about a dozen blocks are awaiting defence approvals for carrying out exploration. Australian-based mining major BHP Billiton said in its annual report that offshore Indian exploration has been hit due to delays in getting permits from the defence ministry. BHP Billiton, which operates ten offshore blocks, and its local partner have claimed force majeure as a result of these delays. — Reuters Reliance cuts capex by over $3 bn in KG-D6
Reliance Industries has cut capital investment on the main oil and gas fields in the KG-D6 block by over US $3 billion on back of an unexpected drop in reserves in an area that was once India’s most prolific. The company has filed revised field development plans for the Dhirubhai-1 and 3 (D1 & D3) gas fields as well as D-26 MA oil and gas field — the only producing areas among a total of 19 oil and gas discoveries made in KG-DWN-98/3 or KG-D6 block. Sources said the company has scaled down capex in D1&D3 fields to $5.928 billion from $8.836 billion two-phase spending it had proposed in 2006. Reliance has already spent $5.693 billion on the D1 & D3 fields that began producing gas in April 2009, and plans to invest a further $235 million in raising gas compression capacity. — PTI |
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FM calls for ‘calibrated risks’ from RBI
In an interview with Reuters, Chidambaram said the government was committed to "fiscal correction", a nod to rating agencies that have threatened to make India the only BRIC nation with a junk credit status, even accounting for recent economic reforms. Chidambaram was appointed in August to revive Asia's third-biggest economy back to its former glory. After growing close to 10% before the global financial crisis, years of policy inertia has slowed the rate of expansion to close to 5% and a deep budget deficit has put the country's credit rating in peril. After loosening rules on foreign investment in retailing and airlines in a set of "big bang" reforms to kick start a revival in the economy, Chidambaram said it was now the RBI's turn to take action. "It's a call that the RBI has to take," Chidambaram told Reuters on the sidelines of an International Monetary Fund meeting in Tokyo, two weeks before the RBI is due to review policy. "But I hope the positives outweigh the negatives and that while the government has taken and will take a number of fiscal measures, that these measures will encourage the RBI also to take what I call some calibrated risks." The central bank has resisted pressure to cut interest rates since April, partly because of concern that inflation was too high and also because it wanted to see the government take action to lift growth, which was 5.5% in the April-June quarter, low by India's recent standards. "Decision making in life is about taking risks. That's my view," Chidambaram said. "But I'm not the governor." The minister might not get his way. Many economists expect the RBI to keep its main policy rate unchanged at 8% at an October 30 policy review. The finance minister argued that India's sovereign credit rating should not be downgraded by Standard & Poor's Ratings Services as the country's real and potential growth rates are higher than most countries. He defended the country's subsidies programmes, saying that the government was making changes to decrease wasteful spending for some schemes but that some subsidies should not be eliminated for the sake of the country's poor. Credit ratings agency S&P warned this week that, even with recent reforms, India faced a one-in-three chance of a downgrade within the next two years, which would put the country in "junk" status and make its debt less attractive to investors. "Our actual growth and potential growth is way above advanced countries and the rest of the world, so I don't think we deserve a downgrade," Chidambaram said. "We are a safe and attractive destination for investment." Standard & Poor's ranks India at the lowest investment grade, with a negative outlook. One challenge is curbing a budget deficit that a government panel warned last month had taken the country to a "fiscal precipice" and could hit 6.1% of GDP in the current fiscal. Another obstacle to fiscal consolidation is costly subsidies on food and fuel. The Indian government is committed to policies to promote a "fiscal correction" and that by changing the way some subsidies are distributed the government could cut costs by 20%, Chidambaram said. — Reuters
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Akai targets Rs 250 cr revenue with TV Smart Box launch
Q: How has the Akai brand been performing in the competitive Indian market? A: The Akai brand has a global lineage of over eight decades and has been present in India for over two decades. Our USP is our technologically advanced products coupled with great consumer offerings. Akai announced its revival in the Indian market with the launch of its new range of ultra-slim LED, LCD high-definition and CRT televisions over two years back. We’ve been performing fairly well over the last few years and are optimistic of achieving a turnover of Rs 250 crore in our consumer electronics and home appliances business by the end of this fiscal with our new technology launches. Our TVs have been our largest growth driver and contribute around 80% of our total turnover. Q: How have you developed your marketing and distribution strategy to aid your growth strategy? A: Akai has a strong distribution network across the country. Our products are available in more than 4000 multibrand retail outlets across India. For LCD and LED TVs, our focus is across all tier I and tier II cities as growth in this segment is primarily coming in from these markets. Q: Are there any launches planned in this festive season? A: We have launched two new LED TV models and one new LCD TV model in this festive season. We’ve also launched the Akai Smart Box, a revolutionary product which can convert any television into a smart TV and that too at a price of a normal smart phone. We are hopeful that Smart Box sales will contribute 25% to our revenues in this fiscal. Q: What are your business targets going forward? A: We expect to double our current turnover figures in the next three years by expanding our product portfolio and entering new verticals. We also hope to expand our reach to newer markets beyond tier 1 and tier 2 into tier 3 cities. Q: What is your outlook for the Indian consumer electronics industry? A: According to a recent Assocham report, the consumer durable and electronics industry buoyed by the fast growing middle class is valued at around Rs 34,000 crore and is growing at a CAGR of nearly 15%. Product life span in today’s digital age is short; buy anything and by the time you’ve stepped out of the store it’s already outdated. As such, we have to be on our toes to provide the latest technology upgrades and products to our customers. Demand for energy efficient products is also on the rise and manufacturers have to ramp up quickly to cater to this demand. Also, increasingly like in other verticals, social media marketing is becoming a buzzword in our industry too and we’ve to plan our marketing strategies accordingly. Q: How do you plan to bridge the consumer’s perception of Akai being a price warrior brand to your thrust on technology? A: Our focus is to provide technology at an affordable price with value being the keyword. Today we are positioning ourselves as a mass premium brand. Our biggest legacy over the past few decades has been the trust and recall of our customers and this will help us move forward. Our USP is our technologically advanced products coupled with great consumer offerings and our focus is to provide high-end consumer electronics at an affordable price with value being the keyword. Today we’re positioning ourselves as a mass premium brand”. — Pranay Dhabai, Akai India managing director
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Stock exchanges see cash market turnover slide 25% last fiscal
"The turnover of all stock exchanges in the cash segment declined by 25.6 per cent from Rs 46,85,034 crore to Rs 34,84,381 crore in 2011-12," SEBI said. The regulator, in its annual report, noted the decline in trading volumes and turnover was "in consonance with the declining trend in equity prices". Going by the data, turnover at the NSE and BSE fell by 21.4% and 39.6%, respectively, in 2011-12 compared to the previous fiscal. — PTI |
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Cancellation of, amendments in PAN card
By S.C. Vasudeva Q: Is there any specific procedure to get an income tax Permanent Account Number number cancelled or to get changes/corrections made in it? I am not an income tax payee and have never filed tax returns. My daughter’s date of birth has been incorrectly entered in her PAN card. How can the date be corrected? — R.K. Bakshi A: For cancellation of your Permanent Account Number a letter should be addressed to your assessing officer of the income tax department . The card issued by the department should be attached along with the said letter. An acknowledgement should Xbe obtained from the income tax department in respect of such letter. The department will then take steps to cancel the PAN number. Any changes or correction required in income tax PAN details and the relevant card would be requiring filing a correction form with the department. The required form has been prescribed by the Income Tax Rules, 1962 for this purpose.
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SEBI to sign bilateral MoUs to attract more foreign investors
New Delhi, October 14 At the same time, SEBI will request market regulators in various countries to allow the Indian market intermediaries operating in their jurisdictions to solicit business from interested Qualified Foreign Investors at those places. The steps are being taken by SEBI pursuant to suggestions made by the finance ministry in this regard and would help attract more overseas investments through the QFI route, a senior official said. The QFI framework was first put in place about a year ago and individuals, groups or associations from 45 countries, including Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland, UAE, UK and the US, are currently eligible to invest through the QFI route. Foreign investors are allowed to invest directly through QFI route in stocks, mutual funds and corporate bonds through demat accounts opened with SEBI-registered depository participants, after meeting KYC (Know Your Client) norms applicable in the Indian markets. — PTI |
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Financial planning for this momentous event should start right from the beginning - a few years after your child's birth. The first important step is to determine the amount of expenditure that would be incurred, counting the remaining years for the wedding and then adjust it with inflation
Planning for your child’s wedding Vishwajeet Parashar
During the process of financial planning we always advise our clients to identify their financial goals well in advance. This is done so that one can start planning for them at an early stage in order to ensure their smooth accomplishment, as arranging a lump sum amount immediately on the arrival of your goal can be too difficult. It allows you to spread the cost over time, giving your savings a chance of significant growth. Thus, financial planning for this momentous event should start right from the beginning (a few years after the child's birth), in order to fulfill your and your child's expectations about getting married.
Moreover, it is important to spread your investments among different asset classes, i.e., to have a right asset allocation - a right mix of debt and equity in your portfolio, which covers each aspect of the goal. While equity can provide growth of capital, fixed income will provide you stability and insurance will give you the necessary security cover. As far as equity is concerned, we advise you to take the Systematic Investment Plan (SIP) route, which can be done by investing in SIPs of diversified equity mutual funds. For investments in debt, you could include some fixed income options like company FDs, bonds, debt funds, PPF, etc, as they are low-risk instruments.
Also, it would be prudent to buy small quantities of gold and silver in pure form (coins or biscuits) from time to time when there are serious dips in prices, or may be on each birthday of your child, so that they can be converted into ornaments at the time of his/ her marriage. As a thumb rule, the total investment in gold or gold related securities at any given point of time should be around 10%-15% of one's total portfolio. It is a good hedge against inflation, as it has a natural tendency to appreciate and catch up with inflation in the economy over a long period of 5 to 7 years. Please remember that when your goal is about 2-3 years away from arrival, make sure that you shift/ move your investments from equity to debt, in order to safeguard your amount and avoid risks, as the equity markets are highly volatile by nature. Thus, by creating a diversified portfolio, you can ensure a substantial corpus for your child's marriage. Lastly, it is important to keep track of your investments by reviewing it and making any necessary adjustments if required. This can be done annually or biannually as well. Or, more importantly, it is advisable that when planning for your financial present and future, it's important to seek a qualified professional, such as a certified financial planner, who can help you accomplish your dreams and goals. Thus, in these modern times, where the marriage of a girl and a boy are equally costly affairs, the responsibility lies with all the parents, (irrespective of having a boy child or a girl child), to make their child's marriage truly memorable. So, it's about time that you go ahead and plan for their future. This is the best gift you can give her or him. The author is senior vice president - marketing at Bajaj Capital. The views expressed in this article are his own
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Avoid traditional insurance plans
Don't fret — you aren't the only one, there are many like you. In spite of the media putting its might to spread financial literacy, we end up buying plans that turn out to be dud products later. And a traditional plan is one such product.
People are unaware of where their money (premium) is invested, what returns they are going to earn on it and most importantly how much is the life cover (sum assured) in these traditional plans. Today if you ask someone how much life insurance cover you have, his answer will be "I pay Rs X premium every year". Most people have the same answer. The reason behind this is misselling done by the insurance agents or Bancassurance executives. The traditional Indian psychology to receive something in return after paying the premiums for certain period is also one of the reasons why people buy traditional plans and not pure term plan. People are misled with the benefit illustration shown to them by the insurance agents with the expected returns on the policy ranging from 6% to 10%. People get influenced by looking at the large number - the maturity amount which is assured to them and they assume that they will receive such amount in the future. I know people who have been sold a number of endowment policies with different maturity periods as a retirement plan, with a promise to provide regular income after a specific age. Bancassurance executives sell expensive traditional insurance policies not only to common people and but also to HNI clients who do not have much knowledge about such plans. Moreover agents/executives know insurance is a long-term contract and it is quite unlikely that client will be in touch till the insurance policy matures. Also, the executive himself is not going to work with the same bank for such a long period. People are also unaware that the tax benefit is available only if the life insurance cover is ten times of the annual premium, as per the fiscal 2012-13 budget. A few traditional plans with a limited premium payment option do not satisfy this condition. So on which premise are these plans being sold? In most of the endowment or child plans you get the sum assured along with bonus. Depending on its performance and growth the insurance company declares the bonus rate every year. In pension plans, you have to compulsorily buy an annuity of minimum 67% of the accumulated corpus under the policy, throughout the policy period. The bonus rate is declared in per thousand terms and it gets accumulated every year throughout the policy period. On an average basis, the IRR (internal rate of return) on such policies are not more than 5% to 6% returns. Are you happy with such returns? Does this return beat inflation rate? Will maturity amount suffice to meet the goals like child's education and marriage or your retirement, for which you had bought the policy? What should you do if you have already bought a traditional insurance policy? You should review the plan on the basis of surrender value today; future premiums payable and the approximate maturity value and calculate the IRR. If the returns are poor, i.e., below the prevailing inflation rate, then you should consider surrendering the policy, else you should continue the policy and keep it as a debt portfolio. You should surrender it even if you are making a loss by surrendering the policy now. What should you do if you already have a traditional plan? You should buy an online term plan for yourself, since the premiums are cheapest here. The online term plan covers the risk of death only. Thus, the sum assured is paid only incase of death of the policy holder during the term of the policy. As a thumb rule, you should have life cover equal to 10 to 12 times of your annual income. The balance amount left, as surplus should be invested in an equity mutual fund, PPF or gold for building a corpus for your financial goals. You should never mix insurance and investments by buying traditional insurance plans. You should stay away from fancy traditional insurance policies and should not get carried away by large numbers and fall prey to such policies. It is always better to seek professional advice for calculating your exact insurance needs and reviewing your existing insurance and investments. This will go a long way in meeting your financial goals. The author is a research analyst at ApnaPaisa.com. The views expressed in this article are his own |
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Tokyo, October 14
One of the largest Japanese home electronics brands, Akai has been present in India for over two decades. In 1990’s, Akai changed the dynamics of the Indian consumer electronics industry through its great pricing strategy. Akai's Indian product portfolio includes consumer electronics, appliances, home entertainment, telecom, IT & digital products. In an interview to Girja Shankar Kaura, Akai India managing director Pranay Dhabhai talks to about the company’s growth plans.
New Delhi, October 14
An ideal marriage for one's child is a cherished dream of every parent and it is their wish to make this special event memorable and grand. However, realization of this dream in the current scenario is not is not an easy task, as events like weddings have become very expensive with the rising income levels, lifestyle, aspirations, and soaring inflation. These expenses, without offering us any choice, are going to rise continuously in the coming years.
The first important step here is to determine the amount of expenditure which would have to be incurred in the marriage, counting the remaining years for the wedding, and then adjust it with inflation, because what you get for a rupee today, may cost you more tomorrow because of inflation. For example, if the cost of X's daughter's marriage is Rs 30 lakh today, then assuming an inflation of 6%, this cost will rise to approx Rs 57 lakh after 15 years. Hence, one needs to invest keeping in mind the inflation adjusted future expenditure.
Insurance has to be a vital ingredient in the asset mix, while investing for your child's marriage, as it will ensure that the marriage goes as planned, even in case of any unfortunate event like death of parents, etc. You can either take a ULIP to get the benefits of flexibility, transparency and the opportunity to avail market linked returns and life insurance protection, or a term plan, that provides protection to your family and covers death benefits.
