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GMR airport glitch: Govt reviews ties with Maldives
biz talk |
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Ready to revisit ideal inflation target of 4-5%, says RBI
India Inc’s biz confidence dips
To stop insider trading, Sebi wants stricter monitoring
Stock markets to watch FDI vote in House: Experts
Tax Advice
Citibank plans ‘Cyber Monday’ in India
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GMR airport glitch: Govt reviews ties with Maldives
New Delhi, December 2 The Cabinet Committee on Security, chaired by Prime Minister Manmohan Singh, took into account the developments surrounding cancellation of the contract and its possible wider consequences, sources said. The meeting was told that anti-India sentiment exists in Maldives among a small section but such people are even in the government. In view of this, India is not ruling out the possibility of its interests being hurt ‘directly’, a reference to its citizens or assets being harmed, the sources said. It was noted that rule of law is weak and India will have to be ready with proportional response to deal with any contingency. Accordingly, various options were considered, which included stronger measures to protect India’s interests, the sources said. It was decided that this measure should not be resorted to as of now and the situation should be dealt with through diplomacy. The Maldivian government has given assurances that India’s interests would be protected, the sources said, adding however that ‘nothing can be ruled out’ considering the fact that small sections are raising anti-India sentiments. With regard to the GMR controversy, the meeting decided that the outcome of the legal process underway should be awaited, the sources said. The case related to cancellation of GMR’s contract will be heard on Monday in a court in Singapore, they said. The option of legal action in Singapore is provided in the contract GMR had signed with the Maldivian government which is being invoked, they said. Referring to the Airport Development Charge of USD 25 per internationally departing passenger, the apparent reason for the cancellation of the contract, the sources said the provision was part of the international tender quoted by the Maldivian government under the auspices of the World Bank. Despite that, GMR made an exception to exempt Maldivian nationals from it and it was conveyed to the Maldivian President in a letter on November 21. India is upset that the Waheed government is not reciprocating the gestures made towards the island nation over decades, which includes military intervention to foil a coup attempt in 1988 and substantial subsequent assistance. India feels that the Waheed government had hurt the interests of Maldivian people itself by cancelling the contract.— PTI
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Hindustan Sanitaryware eyes bigger market pie
Growing competition has never been an issue for Hindustan Sanitaryware & Industries Ltd (HSIL), the country’s largest sanitaryware manufacturer as it forces the firm to evolve further and cater to the growing modern needs of the Indian consumers. Having a 40 per cent market share, HSIL hopes to maintain its leadership. In an interview to Girja Shankar Kaura, HSIL president Santosh Nema explains the company’s fresh look at its marketing strategy. Q: How is the Indian sanitaryware market shaping up? A: The Indian sanitaryware market indicates an optimistic growth trend ahead. Estimated to be a Rs 2,000 crore market with the organised sector comprising 60% of the pie, it is growing at 15-16% on a year basis and several factors illustrate it will continue to retain this pace moving ahead. Rising urbanisation and population in the country will play a major role in shaping up the sanitaryware market. The government policies such as increased budget allocation to boost cross-country sanitation drive and literacy levels and100% FDI in the housing sector will also affect the market. These initiatives will augment demand in the housing sector as well bring in investment from international sanitaryware players, which in turn will aid and accelerate the progress. Another significant shift for the industry is the changing perception of the consumers. Previously 90% of the sanitaryware market consisted of new demand and rest is coming from replacement demand. This scenario is gradually changing with new designs, technologically smart products and growing consumer awareness. Q: What different approach have you been adopting to counter competition in India? A: HSIL had been operating in the market for five decades. We are the market leader with 40% share in the organised sector. The business approach has been strategic with focus on capacity building, expansion into new categories, strengthening the distribution network and periodically offering quality products as per market demand and trends. Building a strong service portfolio differentiates us with others. The after-sales service offers prompt assistance to our customers and with the introduction of annual maintenance contracts, we have strengthened our customer relation and a better understanding of the market needs. Q: How would you anticipate the sanitaryware market by 2020? A: The Indian sanitaryware market is in a great position. The market growth is 14-15 % on a year basis and it is projected to continue this trend over the coming years. The major demand drivers from the housing sector, government impetus and urbanisation are boosting the industry. This scenario is driving growth from the B2B and B2C segments. Additionally, the replacement market in India is also on the rise with rising consumer awareness. Q: What are the various product offerings by HSIL? A: The HSIL product offering from the building products division constitutes of ceramics, faucets, kitchen appliances and tiles catering across all the socio economic strata of the Indian consumers. Under each category, we offer a variety of product series based on design, technology and theme such as the kids range, PONCHO and green products, aqua free urinal and NANO. Recently, select water closets under brand Hindware received the water efficient product (WEP) star rating from IAPMO, the international plumbing body. The star rating is a stamp of quality and technological supremacy, which will help consumer decision making. The container glass division is primarily targeted for institutional sales. Under the brand AGI, we offer glass containers catering the pharmaceutical and food and beverage sector. The PET bottle subsidiary under the garden polymers also operates in the same space. Q: Do you see the Indian market evolving into luxury sanitaryware at some time? And What are your future prospects for the next five years? A: The luxury sanitaryware market is about Rs 400 crore at present and is growing at 25% per annum, an indication that the market is already moving towards meeting consumer demands for premium and luxury products. At HSIL, we are in tune with changing shift in consumer demand and trends. On the similar thought process, we are introducing luxury brand Queo of Barwood, UK. Overall our performance has been a result of market leadership for both building products and container glass. Besides, the company is constantly moving up the value change to capture demand at each stage. We are aiming to be a Rs 5,000 crore company in the next five years.
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Ready to revisit ideal inflation target of 4-5%, says RBI
Mumbai, December 2 “I am not saying that we would definitely change the number, but we will certainly revisit our strategy,” Subbarao said during a function. At a panel discussion on the ‘Country's economic prospects,’ Subbarao was prodded by his predecessor YV Reddy to have a relook at the 4-5% inflation level, which RBI had set before the crisis and is still holding on to as the ideal price level. According to Reddy, a lot has changed on multiple fronts like the integration of the domestic economy with the global economy and the rising government borrowing, which has resulted in inflation being consistently at high levels. The comment comes in the wake of a decadal low in GDP growth at 5.3% in the second quarter of this fiscal and shrill calls from the government and industry for a benign monetary policy regime to prop the fragile economy. The RBI will announce the mid-quarter review of the monetary policy on December 18. At the last policy, though he did not cut interest rates, Subbarao had hinted at a rate cut in the January policy. It can be noted that despite 13 successive rate hikes between March 2010 and October 2011, inflation has been treading close to double-digits, with the sole exception of a few months in 2009 when it had fallen into the negative territory. “You (Reddy) have been prophetic on many things, perhaps you will be prophetic on this also. Normal inflation post-crisis will be higher than pre-crisis,” Subbarao said. However, Subbarao's announcement of revisiting the ideal levels did not find support from Prime Minister's Economic Advisory Council chairman (and former RBI governor) C Rangarajan, who said the central bank should continue to bring inflation under the 5 per cent mark. "I don't think we should alter the indicative number very much beyond what we already have...I don't think there is a case for revising the inflation numbers," he said. — PTI
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India Inc’s biz confidence dips
New Delhi, December 2 According to the NCAER-MasterCard Worldwide Index of Business Confidence, India Inc level in the July-September quarter declined to 125.4 from 126.6 in the previous quarter. A number of indicators support this weak business environment — the domestic economy is growing at a significantly lower pace than its potential . “Moderation in economic growth along with high and stubborn inflation appears to be the main concern in business operation,” the report said. — PTI
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To stop insider trading, Sebi wants stricter monitoring
New Delhi, December 2 While SEBI has recently announced various additional disclosures required to be made by listed firms and intermediaries like brokers, investment bankers and mutual funds, it is looking at stricter norms for compliance, as also further necessary details required to be made public. In this regard, SEBI is looking at regulations in various countries, including major Asian financial markets like Singapore and Hong Kong, to fine-tune its own disclosure norms, a senior official said. SEBI might find regulations within Asian markets more relevant for disclosures to be made by market intermediaries, although norms similar to those in Western countries like the US and UK could be considered when it comes to disclosures regarding 'price sensitive information' by listed companies. The steps are being taken amid a growing trend of companies announcing some key business developments outside the regulatory framework, while many companies also failing to make the routine disclosures like quarterly results, board meeting announcements and shareholding patterns in time. The existing norms provide for largely a generic set of disclosure requirements for listed companies and are contained in the 'Listing Agreement' they sign with the stock exchanges. The Listing Agreement has six categories of 'price sensitive information' required to be disclosed by companies. —PTI |
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Stock markets to watch FDI vote in House: Experts
The Rajya Sabha has decided to have a discussion on December 6 and 7 on the issue under a rule that entails voting, soon after the Lok Sabha which will have a similar discussion on December 4 and 5. After the BSE stock market benchmark Sensex last week registered 833.33-point gain, the index closed at a 19-month high level. There are high chances of profit booking ahead of an eventful week, they added. On Monday (December 3), markets are expected to see stock-specific movements as investors react to monthly sales data for auto and cement companies, brokers said. So far, the festive season this year has turned out to be a mixed bag for the automobile industry in November. Political talk on the imminent voting may lead to volatile trading patterns, said analysts. “For the Indian markets, the vote on FDI in multi brand retail which is scheduled this week may act as a big trigger,” Alex Mathews, Head Research, Geojit BNP Paribas Financial Services said. While BJP has expressed confidence that the Left parties, NDA allies-JD(U), SAD and Shiv Sena, as well as AGP, TDP, AIADMK, INLD, TMC, BPF, JMM will vote against the FDI decision, key UPA supporter SP has sent mixed signals. BSP supremo Mayawati has also kept up the suspense on her party’s stand on the voting in Rajya Sabha. “If the government is able to push through some of the important reform initiatives, the markets will gain further, especially beaten down sectors like infrastructure, capital goods, public sector banks,” said Dipen Shah, Head of Private Client Group Research, Kotak Securities. Later on Monday, European finance ministers will meet to try and approve the latest aid payment to Greece, after failing to agree last week with the IMF over those conditions. Global investors will also focus on continued negotiations over the so-called 'US fiscal cliff', said experts. If there are no nasty surprises locally or globally, the bullish sentiment in the Indian market is likely to continue as FII inflows have topped Rs 1 lakh-crore mark in 2012. Globally, this week will see three market-moving data releases in the US —ISM Manufacturing Index (December 3), Jobless Claims (December 6) and Employment Situation (December 7). In Europe, a spate of manufacturing, services and government economic data releases across different nations throughout the week will be keenly watched. The outcome of the ECB governing council meeting in Frankfurt on Thursday will also keep investors on the edge, said traders. — PTI
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I-T return must if total income above threshold limit
By S.C. Vasudeva
— Rajesh A: As per the provisions of Section 139 of the Income Tax Act 1961, if the total income of an individual in respect of which he is assessable under the Act exceeds the maximum amount which is not chargeable to tax without giving effect to the provisions of Chapter VI-A (which covers the deduction allowable under Section 80C of the Act) then he is required to furnish a return of income on or before the due date as applicable to him in accordance with aforesaid section. Accordingly, you will have to file you a tax return for the assessment year 2013-14 even though your total income would be less than Rs 2.5 lakh after claiming deductions. Q: I am doing my last year in doctor of medicine and getting Rs 12, 000 per month stipend and paying Rs 20,000 per year towards my education fee. Should I pay tax for the stipend earned? What is the minimum amount for which we have to pay tax? — Naveen A: The stipend of Rs 12,000 per month earned by you would not be taxable for the assessment year 2013-14 as your income would be below Rs 2,00,000 (if the same constitutes of stipend only), which is the maximum amount not chargeable to tax in case of an individual. In case your total income, including stipend, is below the aforesaid limit you need not file an income-tax return. In case your income exceeds the limit specified above you will be liable to file a return.
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Citibank plans ‘Cyber Monday’ in India
New Delhi, December 2 Although restricted to Citibank’s customers, it would provide discounts of up to 60% across various product categories on 17 well-known internet shopping platforms within a time frame of 24 hours on December 5, — making it the country’s first-ever ‘Cyber Sunday’ event. — PTI |
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personal finance
The greatest obstacle to discovery is not ignorance but illusion of knowledge.”
There is a paradigm shift in financial planning over the years from “What if I die” to “What if I live”. The recent efforts of the regulators, especially Securities and Exchange Board of India (SEBI), have been to channelise the investments to mutual funds, which can in turn be invested in capital markets. A major portion of household investments getting invested in non-productive assets like gold, real estate etc. is a concern for the policymakers and it is a challenge to convert the investors from financially phobic to financially savvy. Investor awareness in India
With a household saving rate of over 30 per cent, India understands the merits of saving over current consumption. Unlike much of the west, where getting people to save is an issue, the bottleneck for India is the efficient conversion of this saving into an investment. A large part of this money is in low-yielding assets like bank deposits and traditional insurance, other than gold and real gold, but there is a clear trend of individuals preferring security-based investments as they go up the income ladder. Culturally and religiously, the attitude towards money and wealth seem to be one that projects money as a taboo, which has to be avoided. The emphasis was to avoid wealth accumulation rather than use wealth as a means to achieve one’s financial goals. Another aspect of financial literacy programmes is to make the investors see the future. Transform investors who seem to be living in ‘permanent present’, trapped forever in a perpetual now, a world without end and a time without later— to prospection —the act of looking forward in time or considering the future. Is financial literacy alone sufficient?
“The depressing truth is that financial literacy is impossible, at least for many of the big financial decisions all of us have to take,” says Richard Thaler, a behavioural economist at the University of Chicago. He advocates defining more carefully and simply the financial choices that people have to make, and building ‘sensible default options’ into the design of financial products, so that the do-nothing option is ‘financially literate’. Today, the best choice typically requires some working out and an active decision. Better product design and financial education need not be alternatives. They can work in tandem. Financial education is much more effective when it is connected to something real that is happening. Teachers will be able to talk about money realistically, if one has ownership of wealth. Consumers are sometimes only as literate as the products the financial services industry chooses to sell them. While most of the manufacturers in the Indian financial services industry, including mutual fund, have focused on accumulation plans, investors have been allowed to fend themselves as far as decumulation management is concerned. There is need to project Systematic Withdrawal Plans as solution through the retirement date. Advertising and the agent network have worked positively to create awareness, but not knowledge. A coordinated approach is needed to convert this awareness into knowledge. The RBI has taken a lead in the financial literacy space, and its efforts are mainly in the banking space. However, for the consumer, there is need for a holistic approach. While buying a product, they need to have a big-picture view of their portfolio and how diversified it is rather than individual pieces of information regarding the products. The rural consumer possibly needs the literacy effort even more urgently, though at a different scale and content level. While more than 80 per cent of the agricultural wage labour is still unbanked due to reasons of location, society, caste, and poverty. The committee on Investor awareness and protection in its consultative paper opines: A review of most current financial education initiatives shows that they are largely in the linear, structured space, where teaching is around defining a stock market, a mutual fund, a bank and so on. Could non-linear, concept and utility-based learning work better in financial education? Recent academic work in financial education from the US shows that the utility-based learning is more useful in changing behaviour. Unless the recipients of financial education are clear about how this material and training will help them, and they are able to connect it to what they are doing in their lives, the retention is usually low. Merely learning the structure of a market or how a mutual fund works is alienating. The other reason for taking a concept-centric route is that constant innovation in the financial sector. To sum up, the success in investor awareness campaign lies in making investors realise that they do not know what the future holds and focus on an approach that balances risk aversion and the pursuit of return. The policymakers should act as “choice architects” to organise the context in which people make decisions, thereby nudging people to invest in productive assets. The author is SVP & head-products of UTI Mutua Fund. The views expressed in this article are his own |
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Goal setting: Begin with end in mind
The idea of setting goals enables you to realise where you are today and where you want to be in your life. By knowing what you want to achieve in your life, you know where you have to concentrate more and put your efforts. If you do not know how to make best use of money in your hand, you will find your money going waste month after month. It is rightly said “Don’t work for money, let your money work for you”. Knowing exactly about your goals and dreams is the first step in the process of financial planning. Goals and dreams provide focus and direction for the financial planning process. Setting financial goals is something that would catch the interest of everyone in the country. These days, having financial goals is more important; especially when we have limited resources and multiple objectives. In this way, you can better determine if you are setting realistic goals or you are simply day dreaming of accumulating crores of rupees by the time you retire. Take note that the financial goals you are setting are meant to be achieved, and not to be left as mere dreams. While setting these goals, it is important that you devote time with yourself and think. Try to ask yourself how much money you would want to have in your hands to meet particular goal. One thing that you will need to be sure about is whether or not you are really serious about achieving your financial goals. Steps for setting financial goals
1) Identify and listing down the financial goals: The most important goals and dreams are:
2) Categorise the goals: Break each and every financial goal down into, short-term (less than 1 year), medium-term (1 to 3 years) and long-term (5 years or more) goals, which will make this process a little easier. 3) Prioritise the goals: Break each and every financial goal down into high, medium and low priority; which will help you to decide which is more important and which can be delayed for future. SMART goals
A useful way of making goals more powerful is to use the SMART strategy. SMART usually stands for: S - Specific: Your goal should be specific, clear and simple to understand. Instead of setting a goal to buy a house, set a specific goal to buy 1 BHK house in Mumbai. M - Measurable: Goal you set should be measurable. If it is not measurable, then it is not manageable. When you measure your goal, you stay on track. A - Attainable: Goal should also be attainable. It should not be far from reach or impossible. R - Realistic: Your goal can be realistic only if you truly believe that it can be achieved. Setting unrealistic goals disturbs the entire process of the financial planning. T -Time-bound: Your goal must be completed in certain time frame. A goal without any time frame is of no importance. The first step in the personal financial planning is controlling your day-to-day expenses so that you can do the things rightly. It also gives you financial freedom and helps you in achieving your goals in time. This can be achieved by proper financial planning, budgeting, saving more for future, and investing in the right instrument for the future, depending on time horizon and risk appetite. These are all important aspects of financial planning, but these things mean nothing if you don’t have specific goals that you’re trying to achieve. In order to live a happy and joyful life, you need to have specific and stated goals so that you can plan accordingly. If you ask me what is the right time to prepare a financial plan, the answer is as soon as possible. It’s never too late to develop and prepare a financial plan. However, the earlier you start to plan, the better it is for you and your family. Early planning can ensure you financial freedom when you retire, help you to save more money, and improve your quality of life. Goal setting is a major component of the financial planning without it you cannot start a proper financial journey. The author is head financial planning at ApnaPaisa.com. The views expressed in this article are his own |
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What are Options & Futures*
An option gives you the right to buy or sell the underlying asset . A call option gives you right to buy the underlying asset while a put option gives you the right to sell. An option contract specifies the strike price, that is, the price at which you can buy or sell the underlying asset. In Futures, you buy a contract which will have a specific lot size of shares. When you buy a Futures contract, you don’t pay the entire value of the contract but just the margin. Open interest is the the total number of contracts not closed or delivered on a particular day. |
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In the backdrop of cancellation of GMR’s airport contract by Maldives, the government has reviewed overall relationship with it at the highest
level and discussed various options in view of anti-India sentiment that could hurt India’s interests ‘directly’.
Growing competition has never been an issue for Hindustan Sanitaryware & Industries Ltd (HSIL), the country’s largest sanitaryware manufacturer as it forces the firm to evolve further and cater to the growing modern needs of the Indian consumers.
New Delhi, December 2
Q: I am a senior citizen and my only source of income is interests on investments like fixed deposits in banks, PO senior citizen saving schemes, MIS etc. My annual income after allowing deductions under Section 80C of the Income Tax Act is less than the threshold limit (for senior citizens) of Rs 2.5 lakh. Do I need to file an IT return for AY 2013-14?
Financial planning and financial literacy are the recent buzzwords. True, the need to plan your resources for optimal utilisation during the winter of your life has always been there. What has changed is the increasing life span, the family structure - from joint family to nucleus, pension from defined benefit to defined contribution and investment choices from simple to varied and complex.
Goal setting is the most important step in personal financial planning. It can also be described as a gateway to the financial planning. It is a powerful process for thinking about your ideal future, and for motivating yourself to turn this vision of the future into reality.
