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Govt may offload equity in OIL, NTPC in Jan-Feb
Biz talk
Tax Advice |
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NBFCs allowed to migrate to new standard cheques till March
‘Lobbying needs to be defined; cos should make disclosures’
Personal finance
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Govt may offload equity in OIL, NTPC in Jan-Feb
“We will come out with Oil India issue in January and in the next 3-4 weeks NTPC will hit the markets,” a government official said. The government plans to divest 10 per cent stake in Oil India which could fetch it around Rs 2,700 crore at the prevailing market price. Besides, a 9.50 per cent stake sale in NTPC could reap for the exchequer over Rs 12,000 crore. “We will meet the disinvestment target envisaged in the Budget,” the official said. With three months of the current fiscal remaining, the government has a mammoth task before it to achieve the Rs 30,000 crore target set in the Budget, 2012-13. So far this fiscal, it has managed to raise over Rs 6,900 crore through minority stake sale in Public Sector Undertakings (PSUs). While National Mineral Development Corporation (NMDC) issue has fetched Rs 6,000 crore, stake sale in Hindustan Copper got Rs 808 crore, with bulk of the equity being purchased by the state-run banks and LIC, to the government. It also generated interest among foreign investors, raising expectations that state-owned financial institutions will not have to bail out the PSU stake sale programme of the government. Earlier in April 2012, it had realised Rs 154 crore from NBCC initial public offer (IPO). The government has already identified 10 companies, including Oil India, Steel Authority of India Limited (SAIL) and Hindustan Aeronautics. It plans to sell 10 per cent stake each Rashtriya Ispat Nigam Ltd (RINL), Hindustan Aeronautics Ltd (HAL). Besides, it plans to offload 12.15 per cent in NALCO, 10.82 per cent in SAIL and 9.33 per cent in MMTC. Also, a 5 per cent stake sale in BHEL and another 4.01 per cent in Hindustan Copper is in the pipeline.
— PTI Disinvestment
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Goods & services tax can help boost GDP growth
Country Head of HSBC
India Naina Lal Kidwai is the first woman and professional manager to be
elected as president of FICCI, India's oldest apex chamber of commerce.
In an interview with Sanjeev Sharma, Kidwai talks about economic
reforms, the agenda for the forthcoming Budget, land acquisition issues
and the impact of the FDI in retail.
Q:
Has the recent reform push by the government improved the industry
sentiment? The government's decisive action on some of the long
pending bills has had a positive effect on sentiment. Post these
announcements; the Sensex has touched a 15-month high. There has also
been a visible increase in the FII inflows. For an instance, the FII
inflows between September and November 2012 amounted to about $ 8.6
billion. Q: What are some of the new measures needed for the
industry? A forward movement on goods and services tax (GST) should
now be the key agenda of the government. The GST will be a landmark
reform once introduced. It will be a permanent stimulus for overall
economic activity and can boost GDP growth by 2%. Special stress must
also now be laid on policies like National Manufacturing Policy and
National Electronics Policy, which have the potential of creating as
much as 100 million jobs in the coming decade. Q: How do you look
at the new Land Acquisition Bill? Is it industry-friendly? While we
have not seen the Cabinet approved version of the Bill, however, we have
been raising some of the fundamental concerns of the industry related to
the Bill. We feel that applying rehabilitation and resettlement
(R&R) provisions for private purchase transactions (not acquisition)
defies an economic logic. We understand that the Bill seeks to provide
R&R to affected families even for private purchase of land above a
particular size to be fixed by the state governments. We had also said
that the state must necessarily have a facilitating role in land
acquisition for the industry as in some cases where large pieces of land
are required there may be a problem for a marginal number who hold out.
In case of large projects, there is going to be a problem for the
private sector in the last mile purchase. In such cases, if the
government does not facilitate acquisition then in all possibility the
projects may not take off. Hence, in those cases where 75% of the land
has been purchased, the Bill could provide for acquisition by the
government for the private sector if requested by the industry. Q:
What are the main recommendations in FICCI's pre-budget memorandum to
the government? Some of the important issues raised in the FICCI's
pre-budget memorandum are implementation of the recommendations made by
the Shome Committee and the Rangachary Committee and avoid imposition of
Inheritance Tax, introduce measures to avoid litigation and improve the
dispute resolution process, grant pending refund claims of all taxes and
duties, restrictions on availment of Cenvat credit under the new service
tax regime should be removed, provide clarity on the scope of service
tax based on the concept of a negative list, do away with tax on
dividends from investments made overseas. Q: The FDI in retail has
been vigorously debated in Parliament and passed. How do you see its
implementation and effect on the economy? With the opening up of
the FDI in multi-brand retail, we may be standing on the anvil of a
retail revolution. Moreover, several studies have shown that the advent
of the 'big' retailers will benefit consumers, farmers or suppliers of
food products. There will be a multiplier effect in terms of employment
generation and domestic manufacturers will benefit as they integrate
with the supply chains of global retail majors. Additionally, with
greater investments coming in, we will see infusion of new technology
across the agriculture chain as well as improvement in the back-end
infrastructure and a reduction in wastage. Not only farmers will get
better prices for their produce but also access to better quality
inputs. If we get this right, India could become a major supplier to the
world using large corporations as a conduit to offshore markets.
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Interest up to Rs
10,000 on savings account attracts tax deduction
by S.C. Vasudeva Q: I purchased a policy from ICICI Prudential under 'life time pension' plan in 2003. I paid Rs 90,000 as the amount of nine yearly instalments of premium. Instead of getting life-time pension benefits, now I have surrendered this policy and received Rs 1,18,000 as full surrender value of the policy. How much of the received amount is taxable? — Sukhdev Singh You have not indicated in your query whether the deduction under Section 80C of the Income Tax Act 1961 was claimed in respect of premium paid by you under the life time pension plan of the company. In case deduction was sought, the limits laid down under Section 80C of the Act will have to be followed for the purpose of ascertaining the amount, which is not taxable. In case no deduction has been claimed under Section 80C, the amount received as surrender value of the policy would not be taxable. Q: I am a senior citizen and a government pensioner. My sources of income are pension, interests from fixed deposits (FDs) and interests from bank savings fund account. The annual interest from the bank savings account for 2012-13 is likely to come to Rs 11,000. What will be the tax treatment of this amount? — Surinder Singh Under the provisions of Section 80TTA of Income Tax Act 1961, you are entitled to a deduction in respect of interest on a deposit in the savings account to the extent of Rs 10,000. Therefore, you can include Rs 1,000 in the taxable income and claim a deduction of Rs 10,000 under the aforesaid section. The aforesaid deduction is available to all individual assessees.
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NBFCs allowed to migrate to new standard cheques till March
New Delhi, December 23 In a circular the RBI said it has been decided to extend the time for NBFCs up to March 31, 2013 “to ensure withdrawal of Non-CTS 2010 standard compliant cheques and replace them with CTS-2010 standard compliant cheques”. In a move to standardise and enhance security features on cheque leaflets, the central bank had asked all banks to migrate to 'CTS-2010' standard cheques by December 31, 2012, which was later extended till March 31, 2013. In effect to this, NBFCs accepting cheque payments for future instalments from their customers were asked to get it replaced with the new standard cheques. “However, it may be noted that the residual Non-CTS-2010 standard compliant cheques that get presented in the clearing system beyond the extended period, will continue to be accepted for the clearing but will be cleared at less frequent intervals,” the RBI circular added. — PTI
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‘Lobbying needs to be defined; cos should make disclosures’
New Delhi, December 23 “I think that time has come to define what is acceptable and what is not. What is legal and what is not legal. I think, in most countries we have that definition, but in India, it is pretty vague. It is wrong to assume that lobbying means bribery, but some people allege that it is bribery," Pilot said. There has been a heated debate within Parliament and outside in the recent past on lobbying after it came to light that various global companies, including Walmart, lobbied with the US lawmakers to push for their entry in the Indian
markets. — PTI |
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Stuck in a natural calamity? Travel insurance
can be your saviour
Amit Bhandari To get protection against unexpected disasters and emergencies, many travellers have turned to an international travel insurance. But before you go out and add to the cost of your getaway, make sure you understand what is covered and what is not Two of the most important nations on this planet recently had to witness the wrath of the nature destabilising lives of millions of their populace. Despite being aided to some extent by the technological advancements and early warning systems, residents of the US and India and beyond had to face the damaging impact of the nature. More than 100 people lost their lives due to hurricane ‘Sandy’ in addition to this it incurred damages of more than Rs 2,50,000 crore. Similarly cyclone Nilam which struck the southern parts of India resulted in damages to the tune of Rs 285 crore along with loss of many lives. Also making news headlines was the extent of flight delays or cancellations. The hurricane ‘Sandy’ resulted in as many as 14,000 flights being cancelled and more than 12 million passengers stranded across several airports. The impact was not limited to travellers flying into or out of New York but spread to far-flung destinations like France, the UK and even India. Stranded fliers had to wait out the storm, incurring additional expenses on food, accommodation, medical treatment, rescheduled flights etc. Foreign trips need planning International travel, which involves certain amount of risk, is becoming a common phenomenon among Indians. Limited to business travel till recently, more and more Indians are flying abroad on vacation, to meet family members or for higher studies. Embarking on an international trip irrespective of its duration requires meticulous planning. Apart from the statutory things like passport, visa (wherever applicable) you need to ensure that you are equipped with a requisite travel insurance policy, which is in fact mandatory in several countries today. One can experience several unexpected incidents when on an international trip. Lost baggage, cancelled flights, unexpected accidents, natural calamity or a medical eventuality are some events which could turn your leisure trip abroad into a chaotic experience. Availing an international travel insurance policy can help you mitigate the impact of these eventualities. A common perception related to travel insurance is that it provides cover only for flight delays or cancellations and lost baggage. In reality, the cover provided spans a lot more areas, including expenses incurred on availing medical facilities. As you might be aware, medical facilities tend to be very expensive abroad and even the smallest of treatments could cost you a sizeable sum of money. If you have availed of an international travel insurance, which covers unplanned medical treatment during the trip abroad, you can easily claim the expenses towards the treatment or even avail a cashless facility. Benefits There are several other benefits of enrolling for an international travel insurance policy: Travel cancellation and interruption: The insured is reimbursed for forfeited or non-refundable prepaid payments for the travel that is delayed or cancelled. It also reimburses the additional transportation expenses incurred to return to India or to rejoin the trip. Travel delay: Reimbursement for additional expenses (meals and lodging) that the insured may incur. Missed connection: In case of inclement weather conditions causing cancellation or delay, the insured is reimbursed for additional transport expenses to join the trip, meals and accommodations. Political & catastrophic evacuation and extended hotel booking: The travel policy also extends benefits like political and catastrophic evacuation where the insured is migrated from the affected area. The policy also provides cover for extended hotel booking during such situations. Concierge services: Few insurers have expanded the scope of insurance to offer concierge services to the insured’s dependents in India. E.g. ICICI Lombard International Travel Insurance offers medical concierge, automotive assistance, lifestyle services like gifts or flower delivery assistance, home movers assistance, plumbing or electrical assistance etc. It also provides cover pertaining to political Risk and catastrophic evacuation. Given the above benefits, it makes sense for you to avail an international travel insurance policy on your next trip abroad. However, you should check that all the benefits being offered are mentioned in the plan along with the terms and conditions and applicable exclusions. Often we do not bother about knowing the claims procedures until actually faced with the situation. In such a scenario, you need to intimate the claim to the insurer at the telephone numbers or the email address provided on the policy document at the earliest. Documents required
for claim You should also ensure that you possess all the relevant documents such as receipts of prepaid expenses, receipts for additional expenses incurred, an authentication letter from the common carrier indicating delay etc. These documents will need to be submitted for processing the claim once you return to India. As you plan for your next international trip, get one more companion to accompany you - your international travel insurance policy. ‘Bon
Voyage’!!! The author is VP-health underwriting &products at ICICI Lombard GICLltd. The views expressed in this
article are his own |
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What about non-performing schemes, dear
SEBI?
The Securities Exchange Board of India (SEBI) thinks that after increasing the expense ratio, the mutual fund business will get a big boost and there will be long queues outside mutual fund offices. But, this is unlikely to happen because the most important thing is that traditionally, majority of the people in India want safety of their funds and fixed interest or income on their investments. Therefore, they invest their surplus money either in fixed deposits, postal schemes or contractual life insurance traditional plans. People are not yet looking mutual fund schemes as a safe investment option as they are market-linked and returns on them are not guaranteed. Investors should be educated first about the risk involved in the schemes and how each scheme can deliver them returns depending on the scheme selected by them. By merely increasing commissions, people will not change their mindset overnight. SEBI should also be aware that after the entry load is banned, a large number of IFAs exited from the distribution channel. It is hard fact that less than 10% of the Indian population invest in equity either directly or through a mutual fund. Majority of the investors have lost their hard earned money because investing in equity requires a depth knowledge and research which is not possible for many unless they are putting their full time efforts in studying all the parameters, which drives the stock market. Forget about the direct investment, people also have bad experience while investing in the mutual fund schemes. There are hundreds of schemes which are not even able to perform in line with the benchmark, which SEBI has also admitted few months ago. The market regulator has also promised to take some actions against these schemes but no such activities have been seen till date. An increase in commission once again will lead to pushing of products, which gives higher commissions and asset management companies (AMCs) have already increased commissions for fresh investments. This is also reality that commissions on non-performing schemes will go up as well. We may also see new schemes being launched with higher upfront commissions. When entry load was banned, SEBI had argued they want to protect the interests of the investors and let an investor pay for the best advice. If the objective is to protect the interests of the investors then what is the point in increasing charges in the mutual fund schemes. This clearly shows that revival of the mutual fund industry is a priority even if it happens at the cost of the investors’ interest. A debt fund investor will suffer more as the return will reduce further. The major reason, according to me, why debt funds are not popular is that they are market-related and returns on them are not guaranteed. The returns normally come in a single digit and do not beat traditional instruments like FDs and postal schemes. People are not smart enough to understand the interest rate cycle to take the advantage of falling interest rate scenario. Further higher charges in the debt mutual fund will badly hit the investors. Non-performing schemes have thousands of crores of assets under management (AUM) and the investors’ interest needs to be protected. Looking at all these facts, the market regulator SEBI must take immediate action against the non-performing schemes and also penalise them. The need of the hour is that there should be written guidelines for the mutual fund products relating to performance of the scheme compared to its benchmark. If schemes continuously remain under performer as compared to benchmark then the scheme should not be allowed to continue and even the AMC should be penalised by not allowing them to launch new fund offering in that particular category. Unless and until the confidence of the investors is restored, the mutual fund industry is unlikely to revive by mere increasing expense ratio. The author is head financial planning at ApnaPaisa.com. The views expressed in this article are his own
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Country Head of HSBC
India Naina Lal Kidwai is the first woman and professional manager to be
elected as president of FICCI, India's oldest apex chamber of commerce.
In an interview with
Sanjeev Sharma
, Kidwai talks about economic
reforms, the agenda for the forthcoming Budget, land acquisition issues
and the impact of the FDI in retail.
To get protection against unexpected disasters and emergencies, many travellers have turned to an international travel insurance. But before you go out and add to the cost of your
getaway, make sure you understand what is covered and what is not
New Delhi, December 23