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Top 9 firms lose Rs 35,893 cr in market value
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Interest rate on PF unchanged at 8.5% in FY’14
Govt allows RIL to surrender SEZ in Haryana
SBI to hire 10,000 officers, employees in current fiscal
Woodland to expand footprint overseas
Tax Advice
Re slide will impact India’s credit profile: Moody’s
Term insurance: Till retirement or beyond?
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Top 9 firms lose Rs 35,893 cr in market value
Mumbai, June 23
HDFC Bank's m-cap dipped by Rs 6,977 crore to Rs 1,51,325 crore, while the value of ITC plunged Rs 6,756 crore to Rs 2,55,110 crore. The m-cap of RIL dropped by Rs 5,877 crore to Rs 2,56,936 crore, while TCS lost Rs 5,421 crore to Rs 2,78,424 crore and SBI's value tanked Rs 3,820 crore to Rs 1,36,150 crore. ONGC's market worth slipped by Rs 3,293 crore to Rs 2,63,509 crore, HDFC (Rs 2,045 crore to Rs 1,26,989 crore, CIL (Rs 1,137 crore to Rs 1,88,985 crore) and HUL (Rs 567 crore to Rs 1,27,732 crore). In contrast, Infosys saw an addition of Rs 1,390 crore to Rs 1,38,916 crore in its m-cap. In the list of top-10 companies, TCS stood at number one position, followed by ONGC, RIL, ITC, CIL, HDFC Bank, Infosys, SBI, HUL and HDFC. The BSE benchmark Sensex dropped for a third week in a row, losing 404 points or 2.1 per cent to end the week at 18,774.24. — PTI
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New Holland Fiat India, a majority owned subsidiary of Fiat Industrial - the world's largest agricultural equipment company - has lined up an aggressive growth strategy for tractors in the Indian market with focus on states like Punjab and Haryana among others. Rakesh Malhotra, Managing Director, New Holland Fiat India, talks to Sanjeev Sharma about the company’s plans, marketing strategy and prospects of the tractor market. Q: What is New Holland strategy for the tractor business? A: India is an important market for New Holland and we have an aggressive growth strategy planned for this market. With global technology leadership backed up by more than 100 years of R&D efforts and innovation, we have a wide range of tractors from 32 HP to 90 HP and also a complete range of farm mechanisation solutions available for the Indian market. In addition to the wide range of tractors, we will continue to offer customised farm mechanisation equipment and solutions for Indian farmers. NHFI has a plan to increase production capacity at its Greater Noida factory, which currently manufactures 40,000 tractors per year to 60,000 tractors and the expansion is nearing its final phase. In addition, the company assembles sugarcane harvesters in Maharashtra and and it has further plans for expansion in Maharashtra, offering more crop-specific advanced solutions to customers. Q: What are the investments in India? A: New Holland has currently invested over $15 million in the Indian market and over $15 million in R&D. Q: What is the market share for NHFI? A: New Holland currently commands a 5.2 per cent share of the overall market and 6.5 per cent in the relevant segment we represent, i.e. the 30 to 75 HP segment. We expect to achieve 7 per cent share of the overall market in next 3 years and 10 per cent market share in relevant segment. Q: What is the outlook for the tractor industry and farm sector growth? A: The tractor penetration in India is still very low and ownership restricted to only 5 per cent of agricultural households. The tractor penetration is now being driven by scarcity of labour, low-crop yields versus global levels, increase of tractor use for non-agricultural purposes and shortening of replacement cycles. The long-term growth of the tractor market will need sustained support of the government to the agriculture sector, ease of farm credit, structural shift to farm mechanisation, increased government spending on rural infrastructure, growth in non-farm usage of tractors, emerging trend of contract farming, new emerging applications and shortening of tractor replacement cycles. Q: What are the growth plans of the company? A: New Holland’s growth plans include expanding the capacity of the Greater Noida facility from 40,000 tractors per annum to 60,000 tractors. We are also planning to set up a manufacturing facility to make farm mechanisation equipment like sugarcane harvesters, cotton pickers and combines. Q: What are the plans for introducing trucks? A: It is too early to comment on this business vertical. We will announce it at the appropriate time. Q: What is the marketing and distribution focus? A: We will continue to develop new products and upgrades for existing products based on customer requirements. Apart from that, we regularly conduct training programmes for all our dealers, customers and mechanics to ensure that every possible customer need is fulfilled in a satisfactory manner. New Holland is among the first to introduce mobile service vans and motorcycles to be able to deliver doorstep delivery of solutions to customers. At present, we operate through a network of more than 750 customer touch points, which includes dealerships and authorised service centres. We are continuously growing this network to enhance our reach, response and relationship with the farmers. Our focus states are Punjab, Haryana, Rajasthan, Uttar Pradesh, Madhya Pradesh, Maharashtra and Gujarat.
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Interest rate on PF unchanged at 8.5% in FY’14
New Delhi, June 23 "The rate of interest on PF deposits is unlikely to be changed for the current fiscal at 8.5 per cent," a source privy to the development said. Employees' Provident Fund Organisation (EPFO) paid 8.5 per cent interest rate to its subscribers in 2012-13 which was higher than 8.25 provided in the 2011-12 fiscal. The source further revealed that the EPFO office has already worked out the income projections and the feasible rate of return to be provided on PF deposit in the current fiscal. As per the practice, the EPFO would have to place the proposal before its advisory body Finance and Investment Committee (FIC) after which it is considered by the apex decision making body Central Board of Trustees (CBT)headed by the Labour Minister for taking final call on the matter. Once approved, the proposal is put before the Finance Ministry for its concurrence. According to the source, the CBT meeting is likely to be convened next month as the new Central Provident Fund Commissioner, K K Jalan, who is executive head of EPFO has taken charge. — PTI
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Govt allows RIL to surrender SEZ in Haryana
New Delhi, June 23 The decision to denotify Reliance Haryana SEZ Ltd, a unit of RIL, was taken by Board of Approval, headed by Commerce Secretary SR Rao, in its meeting on June 12. "After deliberations, the Board decided to approve the proposal...for de-notification of the sector specific SEZ for multi services. "The approval is subject to...a certificate that the developer has either not availed or has refunded all the tax benefits availed under SEZ Act/Rules in respect of the area to be de-notified, there are either no units in the SEZ or the same have been debonded, the state government has no objection to the de-notification proposal etc," the minutes of the SEZ BoA meeting said. — PTI |
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SBI to hire 10,000 officers, employees in current fiscal
Mumbai, June 23 "We will be hiring 10,000 people this year, including 1,500 probationary officers, the process for which started in April. Around 7,500 will be retiring this fiscal," SBI Chairman Pratip Chaudhuri said. "We have upgraded our branches, all have become air-conditioned. We have adequately staffed our branches. In the last quarter, we recruited 20,000 assistant grade employees at front office," he said. The bank plans to open about 1,200 branches in the country and another eight branch offices overseas, including China and the UK, in the current
fiscal. — PTI |
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Woodland to expand footprint overseas
Chandigarh, June 23 The company will also strengthen its presence in the west Asian and eastern European countries, besides expanding operations in China. However, unlike in India where the company retails through its own stores, its overseas business is being carried out through multi-brand stores and shop-in-shops. With this overseas expansion, the company is targeting a significant jump in revenue. Talking to The Tribune, Harkirat Singh, managing director of Woodland Shoes, said the company was looking at investing Rs 100 to 150 crore. “Though a major portion of the investment will go into domestic expansion, where we are opening 60 company-owned stores this year, we will invest another Rs 80 crore for expanding our production capacities”. He said, “We clocked a turnover of Rs 850 crore in 2012-13 and in the current financial year, we will cross the Rs 1,000-crore mark.”
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Leave encashment not part of total income
by SC Vasudeva
You have clarified in The Tribune dated 16.4.2013 that no income tax deduction should be made on leave encashment of state/central employee. Being a state government employee, it should be applicable to me and how can I claim it. — Malkiat Singh A. Section 10(10)AA(i) of the Act provides that any payment received by an employee of the Central Government or State Government as the cash equivalent of the leave salary in respect of the period of earned leave at his credit at the time of retirement whether superannuation or otherwise will not form part of the total income. In other words, such amount would be exempted from the levy of tax. A person who is employed with a state government undertaking is not considered to be an employee of the State Government. It is on account of this reason that the Disbursing Officer would have deducted tax on the amount exceeding Rs 3 lakh. As per Section 10(10)AA(ii), in case of employees other than the Central Government and the State Government employees, the exemption is available for a sum of Rs 3 lakh only in respect of cash received in lieu of the earned leave. Q. One of the minor children in my family had got an FD made from SBI under the guardianship of her grandfather. The grandfather, unfortunately, died in a road accident. The FD did not have nomination. We are in search of solution, which permits premature encashment and purchase of an FD from the same bank under child's father as a guardian. Our interaction with the bank has drawn a blank. It appears they don’t have a procedure to deal with the situation. Please advise us to find a way to efficiently run the investment? Letting the Money rot in the bank till the child attains majorhood is no solution. Again under a different situation, had there been a nominee in the FD, could a nominee act as a guardian and take action for efficient investment. The child is only a six-year-old. — Krishan Dev Uppal A. The problem raised by you in the query is a bank-specific matter for which a solution can be provided by a banker. Therefore, it would be advisable to have an interaction with the head office of the bank so as to find a solution to the problem being faced by you. Q. Please let me know income tax exemption limits and rates of income tax after exemption for retired male and female government servants in the age group of senior citizen of above 70 years for the period 01.04.2012 to 31.03.2013: a) Without any saving b) With saving up to what limit. — Brijendar Kumar A. The maximum amount up to which tax is not payable by a senior citizen for assessment year 2013-14 is Rs 2.50 lakh. This limit is applicable to both male and female assessees. The above limit will increase by the following amounts: (i) Deduction allowable to the extent of Rs 1,00,000 under Section 80C of the Act in respect of insurance premium, Public Provident Fund contribution, etc. (ii) Investment made under equity saving scheme to the extent of one half of Rs 25,000. This deduction will be available for three assessment years, beginning assessment year 2013-14. (iii) Deduction allowable under Section 80TTA of the Act in respect of interest not exceeding Rs 10,000 on a savings account with a bank or Post Office. (iv) Deduction allowable under Section 80D of the Act in respect of health insurance premium paid to the extent of Rs 15,000.
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Re slide will impact India’s credit profile: Moody’s
New Delhi, June 23 "... It (Rupee slide) is a reflection of macro-economic challenges, which do affect the country's credit profile," Moody's Investors Service Analyst (Sovereign Risk Group) Atsi Sheth said. Weakened Rupee touched a lifetime low of 59.93 to a dollar last week. However, it will not impact India's sovereign debt repayment capacity, she said. "Given the very low level of foreign currency debt owed by the Indian government, rupee depreciation does not significantly affect sovereign debt repayment capacity," Sheth said. She attributed the rupee fall to India's Current Account Deficit (CAD) and lower capital flows due to slower domestic growth as well as global factors, including the recent announcement of the US Federal Reserve. Last week, the US dollar strengthened against major currencies, including Indian Rupee, on comments by Federal Reserve Chairman Ben Bernanke that the US Fed may start scaling back its monetary stimulus programme later this year. — PTI
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Steps to avoid personal debt traps
Debt needs to be used responsibly with clarity on the repayment capability. Once debts pile up, it takes some fiduciary discipline coupled with prudent measures to avoid or come out of the debt trap Sanjay Agarwal
Debt trap is a situation where a person continues to borrow money, but doesn’t have enough cash flows to make the loan repayments, so he takes out another loan — with its own interest payments — to cover the first loan's payments. Such individual is likely to borrow again to pay off the second loan, creating a crippling cycle. Individuals can avail wide spectrum of loans; from mortgage loans to personal loans, gold loans, education loan, and loan against shares and credit card loans. ‘Buy now, pay later’ is something most Gen-X seems comfortable with now. The urge to acquire upmarket apartments, premium vehicles, expensive gadgets and overseas vacations by using easy credit facility is growing stronger. Debt needs to be used responsibly, with clarity on the repayment capability. Once debts pile up, it takes some fiduciary discipline coupled with prudent measures to avoid or come out of the debt trap. In such a situation, professional help from debt counsellors is often useful. Loans so availed should be utilised in either ‘building up assets’ or ‘buying liabilities’. Assets like property show tendency to appreciate and hence are termed as appreciating assets. Loans utilised to buy depreciating assets or to meet ‘ego expenses’ could spell trouble. Further, any setback due to economic downturn, personal With credit bureaus becoming active, all loans repayment records, including credit card repayments, are captured. All financial institutions sanctioning loans check with these bureaus about your credit behaviour before approving the loan. This means in case of default or delay, you may be denied any further credit by the banking system, and if someone sanctions also, it may come at higher interest rate and additional collaterals due to higher risk associated with you. With technology and new laws like SARFAESI, it is not only difficult to avail a loan and not repay it; cost of non-repayment is also going to be severe. Soon, insurance policies, phone connections, new jobs etc. will get adversely impacted if your credit history is bad. How to avoid a debt trap?
The key to getting out of debt efficiently is first clear the loans that charge the highest interest while paying at least the minimum due on all your other debt. Once the high-interest debt is completely repaid, tackle the next highest, and so on. Some experts suggest that your total monthly long-term debt payments, including your mortgage and credit cards, should not exceed 36% of your gross monthly income though I feel that there can’t be any fixed formula and it depends on your disposable income after factoring in your expenses and loan repayments. Borrowing should be ‘responsible’ leaving you with decent disposable income after paying for your expenses and EMIs so that you have adequate cushion to sail through periods of sudden and unplanned expenses. Credit card payments: If you can't afford to pay off your monthly bill in full in a month or two there's no faster way to fall into debt. Don't fall into the minimum payment trap as what the card issuers tell you is that you can pay the minimum amount and continue to use your cards but what they don’t tell you simultaneously is that you will end up paying huge interest not only on the balance 95% amount but also on all fresh purchases. If you just pay the minimum due on credit card bills, it will take you years to pay off your balance and you'll end up spending much more than the original amount actually spent on the card. Mortgage loan: This is the only loan where you not only create an asset but the value of asset appreciates with time in India. It is always advisable to take housing loan early in life as while the EMI remains largely the same (despite an occasional increase due to increase in interest rates), income as well as property value have a tendency to increase with time. It is normally seen that buying a second house is easier for people who have taken the first housing loan early in life, by either selling old house and buying a bigger house or making another investment. In case of more than one property, with time you not only stop paying EMIs, you start earning rent on them apart from enjoying the benefit of appreciation in prices. Home loans, since they are backed by tangible collateral, are also the cheapest loans. However, one should be careful in these loans since they have longer repayment tenure and it is essential to maintain financial discipline over a longer period. Also, it is prudent to avail insurance policies like ‘loan protect’ to repay the loan in the unfortunate event of death of the borrower. Don't pour all your cash into pre-paying a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debts and should be the last debt to be pre-paid. In case your mortgage has a high rate and you want to lower your monthly payments, consider loan transfer to a bank that is offering cheaper rates of interest. Car and two-wheeler loans: Car loans have made it easier for a number of people to own a car who could only dream of it earlier. It is important to remember here that while house is an appreciating asset, car is a depreciating asset. So our first priority should be to buy a house and only when we have comfortable means to pay the EMIs should we go for a car loan. More so, since the cost of owning a car is not only EMIs but also expenses towards fuel, maintenance and insurance of the car. While the same can also be said for a two-wheeler, since it a utilitarian loan one may consider buying it early in life for improving the mobility. Important tips: Loans once taken must be repaid. Just as they help in growth of the economy and the individual, they may have an adverse impact if a large number of borrowers decide not to repay their loans. This may lead to stress on the entire banking system. As a matter of caution, it is always advisable to keep some liquid investments to pay few EMIs in case of emergencies or unforeseen circumstances like job loss etc. In case of high value and long-term loans like home loans, one must take loan protect insurance policies which repay the loan in case of unfortunate death of the borrower so that the family and heirs don’t go through embarrassment and hardships. Also, if you have more debt than you can manage, get professional help before your debt breaks your back. There are reputable debts counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. The author is Head, Retail Business Group, Asset Reconstruction Co. (India) Ltd. The views expressed in this article are his own |
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Term insurance: Till retirement or beyond?
Thus taking life insurance on the breadwinner is an absolute must. But there is a probability to play with the tenure of the life insurance. As a rule, you should only insure people whose death would mean a financial loss to you. Most financial advisers, across the world, advise their clients to take pure term life insurance till the earning phase of the person on whom the family is dependent. The purpose of life insurance should always be that if the breadwinner of the family dies, his/her family shouldn’t miss him financially i.e. the insurance sum assured should be of such value so that the income the breadwinner was earning, is generated even after his death. This income would be generated through the sum assured received from the life insurance. Suppose, one’s annual income is Rs 5 lakh p.a., now his/her insurance cover should be of such value which when invested in a risk-free instrument should generate return of somewhere around Rs 5 lakh p.a. After the retirement, the regular income stops, hence it is advised to choose the term of the insurance cover till the retirement age. This is how the ideal term of the life insurance is calculated: Suppose there is a person of age 30 and he will retire at say 60, then the ideal term of his pure insurance cover would be 60 minus 30, which is 30 years. No doubt this is the perfect and ideal way to calculate the term of the insurance, but if the same individual discussed above gets term of 40 years i.e. cover till age 70 with nominal higher premium, shouldn’t he go for the 40-year term plan? There are some pure term insurance available in the Indian insurance market that are providing insurance till longer term (40 years term, age 30 years, sum assured — 1 crore, non-smoker, non-drinker, healthy individual) and charging additional premium of only between Rs 225-700 annually. Same products with difference of premium in the same range (Rs 225 to 700) are available for 31 to 40-year-old individuals also. This nominal difference of Rs 225 for 30-year-old person would cost him additionally only Rs 6,750 till he is 60. This extra Rs 6,750 paid would actually give him numerous benefits. If you are taking longer term i.e. term till age 70 instead of retirement age: nIn the current competitive scenario and age of ever increasing wants, a person may choose to work beyond his normal retirement age and may share the weight of financial burden with his family beyond his retirement age. If such a situation arises, he will be able to continue the same policy till he actually stops earning. Thus having an option to continue the policy beyond retirement is worth considering. nVery few people enjoy thinking about the inevitability of death. But sooner or later it is bound to happen. The probability of death is directly related to age, the higher the age, higher the probability of death. Hence, there is higher probability of actually getting the sum assured, in the phase of life between ages 60 to 70. nThe person has the option to discontinue the policy if he thinks the sum assured doesn’t carry much value for him in that particular phase of life. nHe has the option to discontinue the policy after the earning phase by simply not paying the premiums or he may continue the policy till the expiry. Surprisingly, this nominal difference of premium of the increased term of the term insurance holds true for a 50-year-old person also, where he can take a insurance till age 70 instead of 60 and pay extra premium of around Rs 3,800 annually for a sum assured of Rs 1 crore. But this extra premium would give him all the advantages as mentioned above. This approach of increased tenure after the retirement age may be viewed as gamble on your death, but doesn’t it looks like smart buying. Thus, next time when you inquire about a term insurance or your financial adviser advises you to take insurance till your retirement age, you may choose to take insurance beyond the retirement age, provided the difference of premium is not very high. All the above calculation holds true for online term plans. It is advised to take life insurance as early as possible, that is as soon as you have dependents because life insurance is like wine; the older you get, the more it costs. The author is a research analyst, Apnapaisa.com. The views expressed in this article are his own Life cover
Taking life insurance on the breadwinner is an absolute must. But there is a probability to play with the tenure of the life insurance. As a rule, you should only insure people whose death would mean a financial loss to you. Most financial advisers, across the world, advise their clients to take pure term life insurance till the earning phase of the person on whom the family is dependent. The purpose of life insurance should always be that if the breadwinner of the family dies, his/her family shouldn’t miss him financially i.e. the insurance sum assured should be of such value so that the income the breadwinner was earning, is generated even after his death. This income would be generated through the sum assured received from the life insurance. |
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Life
Insurance — Pure Term Insurance Premiums as on june 13, 2013
"How to use this data: The premiums above are for a 30-year-old healthy non-smoker male for 30 years tenure, for a 40-year-old for 20 years tenure and for a 50-year-old male for 10 years tenure for various sum assured. Note: As per the age, tenure and sum assured the above mentioned plans are the cheapest in that category which can be purchased online only." Source: Apnapaisa Research Bureau; www.apnapaisa.com
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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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Amid a weak stock market last week, blue-chips such as TCS, ONGC, RIL, ITC and HDFC Bank saw losses in their market capitalisation (m-cap), while bucking the trend IT major Infosys witnessed rise in its value.
Q. I retired on April 30, 2011 as Additional Superintending Engineer on attaining the age of superannuation (i.e. 58 years) from Punjab State Power Corporation Ltd. On retirement date, I was working in Bhakra Beas Management Board at Bhakra Power House circle Nangal on deputation on the basis of state share quota. On my retirement, income tax was deducted from the leave encashment exceeding Rs 3 lakh paid to me by my Drawing & Disbursing Officer (i.e. Resident Engineer, Bhakra Power house Division BBMB P.W. Nangal) and the exceeding amount (i.e. Rs 6,13,100) was included in my annual income for the year of 2011-12 due to which all exceeding amount came in the tax slabs of 30 per cent.
Everyone needs some life insurance at some point of time during his or her lifetime. There are families whose breadwinner had died without adequate coverage and they had to suffer financially, thus forcing them to compromise on various aspects of life.
