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Saturday, July 16, 2011
NAV as on July 15, 2011
Buy a Property With Home Loan
It is always advisable to buy a property with a home loan as you get tax benefits and the advantage of the bank carrying out a due diligence process.
Most homebuyers need a home loan to buy a residential property. There are some who prefer to buy using their own funds. But there are risks associated in such cases.
Many people have invested in vacant plots without seeking a site loan and there are instances where such investments have gone sour.
The process of seeking a home loan not only assists a homebuyer in tiding over the financial need, but also helps him to a great extent in the due diligence process.
NRIs get benefit of due diligence
For instance, take the case of NRIs who are away from home and who may have to go through the process of legal scrutiny while investing in a property.
They have to depend on their relatives or friends.
The best way to seek a home loan as the legal cell in the bank will scrutinise the documents and certify that the property is free from encumbrances before lending.
It is always wiser for such people to invest in projects approved by banks as that ensure that all due diligence process has been completed.
Incidentally, the Foreign Exchange Management Act (FEMA) rules prohibit NRIs from investing in agricultural land, farm land and plantation property.
Tax planning done
From a tax planning point of view as well, it would be better to buy a house with a home loan. It is also equally beneficial for those who have an investible surplus to invest in residential property through a home loan.
The interest on the loan up to Rs 1.5 lakhs is tax deductible for a self-occupied house. This means a tax saving of nearly Rs 45,000 per individual.
A housing loan of Rs 18.75 lakhs attracts around Rs 1.5 lakhs as interest at present.
The interest payment can also be adjusted against salary income, business or profession income, or any other income. A loan can be taken from a bank, financial institution, relative or friend.
There is no limit on the deductibility of interest in the case of let-out and commercial properties. It is advisable to go in for a home loan especially when the property is to be let-out. So, you can take as much loan as one you can get from the lending institution.
Here again, the interest payment is allowed as a deduction in full while computing 'income from house property'.
Further, capital repayments are eligible for deduction under Section 80C within the overall aggregate limit of Rs 1 lakh. Payments on account of stamp duty, registration fee and other expenses which have been incurred for the purpose of transfer of the house are available for deduction also.
Co-borrowers get benefits
Even while making a joint investment in property, every member gets a special deduction in respect of interest on the loan and also repayment of capital.
From the point of wealth tax planning as well, one property is exempt from the purview of wealth tax irrespective of the value of the property for every individual.
Avoid wealth tax
Above all, if an investor is holding more than one residential property, he can avoid payment of wealth tax if the residential properties are given on rent for more than 300 days in a calendar year.
Maximum marginal tax rate of 30 percent can be brought down to 21 percent in case the property owned is leased out.
So, go for a home loan while investing in property.
How to battle against inflation with your portfolio.
For most of us, inflation only conjures up images of sky-rocketing onion or milk prices that can throw the household budget into disarray.
But have you thought about the serious damage that inflation can inflict upon your long-term wealth?
Even a small but sustained increase in inflation rates can completely wreck your carefully constructed plans for buying a home, funding your daughter's engineering degree or even living it up after retirement (See table). Prepare for 8 per cent
The risk of inflation upsetting your financial plans is not theoretical; it is very real, for two reasons. One, inflation in India is usually discussed in terms of the Wholesale Price Index or WPI, which captures product prices at the factory level.
But it is the Consumer Price Index (CPI Industrial Workers) that better reflects products and services used by middle-class consumers.
Annual inflation in the CPI (8 per cent) has consistently stayed well above WPI (6 per cent) in the last five years. Two, inflation has climbed steadily in recent years, with a rising middle-class stoking demand for everything from apartment blocks to vegetables.
Therefore, while financial advisors in India have traditionally used a 5 per cent inflation rate to construct long-term investment plans, inflation today is already at twice that level. So what inflation rate should investors budget for over the next decade or so?
A study of inflation trends over the past 30 years shows that 8 per cent would be a realistic number. Studying 30-year data for CPI (using ten-year rolling returns) reveals that consumer prices rose at over 8 per cent annually almost sixty per cent of the time since 1980.
Inflation stayed at 5 per cent or less only five per cent of the time. If inflation itself is to reduce the value of money by 8 per cent every year, how should you reign your portfolio to keep ahead of it?
Here are some ideas that may help investors win the battle against inflation.
Stop shunning stocks
Whether inflation hurts or actually helps stock prices has been the subject of a wide academic debate. However, a study of real-life trends in the Indian stock market shows that stocks are the only asset class that have done a decent job of delivering ‘inflation-plus' returns to their investors, with any degree of consistency, over the last 30 years.
A rolling-return analysis of the BSE Sensex vis-Ã -vis the consumer price index shows that for investors who held on for ten years at a time, the BSE Sensex beat the consumer price index on nearly 80 per cent of the occasions.
Yes, there were certain ten-year periods (for instance, between 1992-93 and 2002-03) where stocks actually declined and left investors high and dry.
But the big gains notched up in the good years would still have left investors in a comfortable position had they waited a couple of years to cash out.
In contrast, gold, the retail favourite did not match inflation nearly 50 per cent of the time! Investors who bought gold for the extended period between 1987 and 1995 would have found the value of gold holdings not keeping pace with inflation rates over the next ten years.
In recent years, however, gold has done a splendid job of beating inflation, thanks to the spurt in returns on the yellow metal. Fixed deposits, where most people park the bulk of their savings, have not delivered positive ‘real' returns on most occasions.
All this suggests that stocks are a must-have in the portfolio for anyone saving money towards any 10-year plus financial goal. For a person with a debt-only portfolio earning a return of 8 per cent now, allocating 20 per cent to stocks may lift returns to a respectable 10 per cent, assuming stocks deliver 16 per cent over the next ten years. Beating inflation by a bigger margin will require a bigger stock component.
Debt-plus funds
Those not comfortable dabbling directly in stocks can take the mutual fund route. Monthly income plans that add a dash (15-20 per cent) of equity to a debt portfolio are one option.
However, only a handful of them have trounced inflation over the past five years — the category as a whole has managed a 8.4 per cent return. Reliance Monthly Income Plan, CanRobeco Monthly Income and HDFC Monthly Income Plan are a few funds that registered a 11-12 per cent annual return.
Though they come with higher risk, balanced funds (which use a 65:35 combination of equity and debt) seem a much better option for conservative investors seeking to beat inflation.
One, all of the 15 balanced funds that have a ten-year record have comfortably beaten a 9 per cent inflation rate, their returns ranges between 13 and 27 per cent and averaged 17 per cent for ten years.
Two, returns from balanced funds, as they are treated as ‘equity-oriented funds', suffer lower tax compared to monthly income plans. Thus they may yield higher effective returns for investors in the higher tax slabs.
Yes, balanced funds will see their values plummet in any stock market meltdown. But regulated equity exposures and a 10-year plus holding period should mitigate this risk to a good extent.
Real estate & rents
Though there is no ‘property index' to support this, inflationary periods in India have usually been accompanied by rising prices of real estate. Real estate investments help you keep ahead of inflation in two ways. One, as a home tops the ‘must-buy' list for most Indian salary-earners, property prices usually move in step with income levels (a key inflation driver) over the long term.
Two, rents on residential property, especially in the cities, also tend to march with inflation. Therefore, owning a second home and renting it out, ensures that a portion of your monthly income is automatically benchmarked to inflation over the next decade or so.
Most Indians already have a sizeable portion of their wealth locked up in property, thanks to the value of their own homes. A self-occupied home allows the owner to protect himself against inflation in his monthly rent outgo.
However, those who have little or no investments in property should actively consider real estate investing to counteract the impact of inflation.
Buying plots of land, an affordable home in the suburbs or real estate funds to participate in property price appreciation are options. However, investors keep tabs of their overall portfolio structure while doing this — having over 50 per cent of your total wealth invested in property would be tantamount to putting all your eggs in one basket!
Make use of leverage
Ever thought about why the EMI (equated monthly installment) on the flat you bought five years ago seems so manageable today? That's because of inflation too. One of the key side-effects of inflation is that, by steadily nibbling away at the value of a rupee, it puts the borrower at a distinct advantage over the saver in the long run.
The EMI of Rs 30,000 a month on the home loan you took five years ago may have amounted to 50 per cent of your monthly salary in 2005.
But if your salary itself has kept pace with inflation (growing at 8 per cent a year), then you would today be shelling out only one-third of your monthly salary as loan repayment. The appreciation in the market price of your home would also have increased your comfort levels in paying off your debt.
Yes, higher inflation may push up the interest rates if you have a floating rate home loan. However, the tax incentives on home loan repayments, on top of the relatively low interest rates on home loans, still make leverage a particularly good option to fund your property purchases.
Now, we are not suggesting that maxing out your credit card while shopping or borrowing to bet on IPOs is an inflation-beating idea! However, judicious use of loans to fund long-term goals such as acquiring a degree or purchasing property does help you win the battle against inflation.
Stock up to win the inflation battle when it comes to beating inflation, all stocks is not equal.
The following points may help investors choose stocks that can inflation-proof their portfolio.
Stick to blue-chips:
Though mid-cap stocks tend to deliver bigger returns than large caps in a bull market, mid-sized companies in India have historically proved more vulnerable to rising raw material prices than large ones.
That makes them less well-placed to deliver profit growth in high inflation scenarios.
For instance, the Sensex companies in India have traditionally enjoyed over twice the profit margins of their mid-sized peers, given their market leadership, procurement strengths and pricing power.
Thus, investors looking to add a stock component to their mainly-bond portfolios may add Sensex/Nifty ETFs or funds to get the equity exposure.
Lean towards commodity processors:
A scenario of high global inflation usually puts commodity processors (like Tata Steel or a Hindalco) at an advantage over converters of commodities (like a Welspun Gujarat or an Apollo Tyres).
The former benefit from high commodity prices while the latter usually lose.
Look for pricing power: A high inflation scenario usually forces companies to look for avenues to pass on higher input costs to their customers without hurting demand.
Companies that have high pricing power usually hold a monopoly or dominant market shares in their category operate in niche markets or offer premium products that are in high demand.
In recent times, companies that market products directly to consumers (consumer durable and auto makers) have enjoyed good pricing power even in an inflationary scenario, owing to strong consumer demand.
Industrial product makers who sell to other businesses have been forced to absorb higher costs. A company's operating profit margins are the best test of pricing power.
Note: This article came in Hindu Business Line on 5th December 2010.I I have changed the article headline and edited the original content to some extent.
Friday, July 15, 2011
Six tips to make the most of your PPF
The stock market, despite the probability of giddy returns, can give you the heebie-jeebies due to the wild swings in share prices. Fixed deposits can be a turnoff because the interest earned is taxable. For investors seeking the best of both worlds, there is the Public Provident Fund (PPF). Wrapped in safety and free of tax, the PPF is almost a godsend for risk-averse investors.
PPF is an excellent tool for long-term investment. It is risk-free as it is backed by the government. It is especially suitable for self-employed professionals and small businessmen who are not covered by the Employees' Provident Fund. Those who don't have access to an organised setup can realise long-term goals through the PPF.
Don’t think of your PPF account as a stodgy investment option where you put away something once in a year. With a little planning, it can be an important part of your financial portfolio. Here are a few tips that will help you make the most of this option:
PPF is an excellent tool for long-term investment. It is risk-free as it is backed by the government. It is especially suitable for self-employed professionals and small businessmen who are not covered by the Employees' Provident Fund. Those who don't have access to an organised setup can realise long-term goals through the PPF.
Don’t think of your PPF account as a stodgy investment option where you put away something once in a year. With a little planning, it can be an important part of your financial portfolio. Here are a few tips that will help you make the most of this option:
Maximize limit:
The 8% compounding interest you earn on the balance can work wonders for you, especially because a PPF account is a long-term investment. There is an annual limit of Rs 70,000 that one can invest in the PPF.
The 8% compounding interest you earn on the balance can work wonders for you, especially because a PPF account is a long-term investment. There is an annual limit of Rs 70,000 that one can invest in the PPF.
You may feel it is a waste to be investing Rs 70,000 in this option when your Rs 1 lakh tax saving limit under Section 80C has already got exhausted. But don't let the tax savings alone guide your decision. Invest as much in PPF as you can afford to.
If you contribute Rs 70,000 a year to your PPF for 15 years, your investment would grow to a gargantuan Rs 22.92 lakh on maturity.
And remember, this is tax-free money. In the 30% tax bracket, this is equivalent to receiving almost 11.5% interest on a bank fixed deposit. The PPF offers the highest post-tax returns among all fixed income options since no tax is levied on the investment, income and withdrawals
And remember, this is tax-free money. In the 30% tax bracket, this is equivalent to receiving almost 11.5% interest on a bank fixed deposit. The PPF offers the highest post-tax returns among all fixed income options since no tax is levied on the investment, income and withdrawals
Distribute income:
There are benefits in store if you open a PPF account in the name of your spouse or child. Tax laws say that if any money gifted to a spouse is invested, the income from that investment is clubbed with the income of the giver.
There are benefits in store if you open a PPF account in the name of your spouse or child. Tax laws say that if any money gifted to a spouse is invested, the income from that investment is clubbed with the income of the giver.
However, since PPF income is tax free, it will not push up his tax liability. This way, you can invest more than Rs 70,000 a year in this tax-free haven and benefit from its various advantages.
This strategy does not work in case of minor children though. You can open a PPF account in the name of a minor child but the combined contribution to you and your child's account cannot exceed Rs 70,000 a year.
Invest for children:
However, if the child is over 18 years, up to Rs 70,000 a year can be invested in his name separately. The taxman insists on clubbing the income of minor children with that of the parent. But once they turn 18, they can have a separate income.
This strategy does not work in case of minor children though. You can open a PPF account in the name of a minor child but the combined contribution to you and your child's account cannot exceed Rs 70,000 a year.
Invest for children:
However, if the child is over 18 years, up to Rs 70,000 a year can be invested in his name separately. The taxman insists on clubbing the income of minor children with that of the parent. But once they turn 18, they can have a separate income.
A PPF is an ideal way of building a fund for your child's educational needs instead of falling for all the ‘high-commission-paying’ child plans of insurers. In a child plan, you are not sure of the final returns.
Invest before cut-off:
It’s important to keep an eye on the calendar when you make your contribution to the PPF. The interest on your investment is compounded annually but the calculation is monthly.
It’s important to keep an eye on the calendar when you make your contribution to the PPF. The interest on your investment is compounded annually but the calculation is monthly.
The interest is calculated on the lowest balance between the 5th and last day of every month. So, if you invest before the 5th, the contribution will earn interest for that month too. Otherwise, it's like an interest-free loan to the government for a month.
Withdraw for emergencies:
The PPF can also be your emergency fund. Although it is not a good idea to dip into long-term savings for consumption, if you are faced with a terrible cash crunch, you can withdraw from your PPF account. It will be far cheaper than going in for a personal loan at 17-18%.
Withdraw for emergencies:
The PPF can also be your emergency fund. Although it is not a good idea to dip into long-term savings for consumption, if you are faced with a terrible cash crunch, you can withdraw from your PPF account. It will be far cheaper than going in for a personal loan at 17-18%.
Withdrawals are allowed after the sixth year. But you can withdraw only once in a year and only up to a specified limit.
Also, be sure to put back the amount you have withdrawn at the earliest. As we said earlier, this is not a good strategy if you do it frequently. Some investors use this tack to claim tax deduction.
Also, be sure to put back the amount you have withdrawn at the earliest. As we said earlier, this is not a good strategy if you do it frequently. Some investors use this tack to claim tax deduction.
They withdraw from the PPF and then reinvest the money after sometime. This is a flawed investment strategy. They only look at their gross savings but their net savings do not grow.
Other helpful tips:
A PPF account matures in 15 years. Though you are allowed to open only one PPF account, you can extend it after it matures. Accounts can be extended in blocks of five years indefinitely. Even if you don't have a large sum to invest in the PPF, don't forget to invest the minimum Rs 500 in a financial year.
Other helpful tips:
A PPF account matures in 15 years. Though you are allowed to open only one PPF account, you can extend it after it matures. Accounts can be extended in blocks of five years indefinitely. Even if you don't have a large sum to invest in the PPF, don't forget to invest the minimum Rs 500 in a financial year.
There's a small but troublesome penalty of Rs 50 levied if you fail to do so. Don't invest more than the Rs 70,000 a year. The excess amount, even if credited to your account by mistake, will not earn any interest.
Plan your Retirement properly
Every one dreams about a comfortable retired life but how many actually Plan.
Why not turn this dream into reality?
There was a time when people gave little thought to planning for their retirement. They were somehow able to manage with their PF Receipts and other savings or they had their children to look after them.
Now, the scenario has changed radically. We do not want to compromise on our lifestyles even post retirement, competition is immense and joint family has become a rare phenomenon. Many people postpone their wishes to retirement. For e.g., going for a foreign tour or for a pilgrimage, buying a vacation home and so on.
In the light of these factors, Retirement Planning has emerged as one of the most important goals for one and all. Irrespective of the age bracket or work area we may belong to, Retirement Planning is certainly relevant for each one of us. While some of us may be self employed professionals aiming to work till we live, but it is important that we understand that as we age, our stamina goes down and so does our work capacity and there is no exception to this law of nature.
I have missed the bus, or There are many years before I retire, both these schools of thought are inadmissible and just another way to procrastinate. By thinking this way, you will never be able to make your retirement years, the golden years of your life, where you do not retire from work but also from worries, tensions and any form of anxiety.
So, what are you waiting for?
To start with, you can earmark a part of your monthly income towards funding your retirement. If there are over 10-15 years to your retirement, invest this amount in a growth portfolio with equity as the dominant asset class.
If there are less than 10 years for you to retire, increase the monthly savings amount and invest it in a moderate portfolio so that you do not bear high risk on your investments.
The retirement plan would differ case by case depending upon client specific situation in terms of portfolio size, intermediate goals, risk appetite, years to retirement, retirement contributions, etc.
So go ahead and start now. It will surely be worthwhile.
Set Realistic Goals:
Decide how much money you will require to live the retirement lifestyle you want. With good health and increasing life expectancy, you could even live for more than 30 years after retirement.
Earmark a Part of the Monthly Inflow to Retirement:
Make sure that a part of your monthly income is earmarked to retirement. For the exact amount that you should be saving towards your retirement, you just have to log on the Just Plan Section on this website.
Informed & intelligent Investing:
Following a well devised investment strategy can work wonders towards timely and efficient realization of your goals. Make sure that your investments are not concentrated in one asset class and are indeed diversified towards optimizing the overall return.
So, if you are all geared up to invest towards your retirement, go to the Just Plan Section and Plan Now.
Personal loan trap: Flat rate no better than reducing one
Placed at the entrance of the office, the big banner proclaimed the USP of the non-banking finance company (NBFC)—“No disclosure of the purpose of the loan.” I was grateful. Despite racking my brains for hours, I hadn’t come up with an urgent reason for a Rs 3-lakh personal loan.
All the options seemed clichéd—illness in family, debtors threatening to sue or capitation fee for a sibling’s education. Weekend doses of potboiler movies were taking their toll. The relationship manger (RM) lived up to the NBFC—not once did he ask why I wanted Rs 3 lakh. The questions were basic.
All the options seemed clichéd—illness in family, debtors threatening to sue or capitation fee for a sibling’s education. Weekend doses of potboiler movies were taking their toll. The relationship manger (RM) lived up to the NBFC—not once did he ask why I wanted Rs 3 lakh. The questions were basic.
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“Do you own a credit card or have you taken any other loan?” he began. “No,” I replied. My credit record was clean. In fact, I had no record at all. Most investors think this is a good thing. Would the RM let on the truth? He did: “We need to examine your credit record with Credit Information Bureau India Limited for the past one year. If you have no loan or credit card, there is no record. We can’t give you a loan.” I was stumped.
My application had been turned down within five minutes. Where were the false promises to ensure I took a loan? They were coming. The first one was a lame attempt. “Take a credit card. Don't use it if you are uncomfortable. After one year, we will give the loan,” said the RM. What about the emergency for which I needed the money? Would it wait for one year? Of course, I had forgotten.
The NBFC didn’t ask for the purpose of the loan, so they couldn’t be bothered. I murmured something about an emergency and started to get up. “Wait,” ordered the RM. I sat down again. “Does anyone in your family have a credit card? Or has anyone taken a loan?” he asked His second attempt hit pay dirt. I told him that my husband had a credit card and was servicing a home loan. Would that do? “Of course. Take the loan in his name.
What is his annual income?” he asked. I gave a random figure. He tinkered with a calculator and said my husband was eligible for a personal loan up to Rs 6 lakh. It wasn’t his business that my husband’s cash flow could not accommodate another EMI. It was time to ask the most important question: “What is the interest rate on my loan?” The RM excused himself to discuss it with his senior.
Within five minutes he had the answer: "Your EMI will be Rs 10,696." Alarm bells ought to have started clanging. Instead of revealing the loan rate, the RM was talking about the EMI. Why? I pushed him to tell me the loan rate. He hemmed and hawed but seeing no way out, gave me the figure: 9.45% It wasn't shocking. As expected, the NBFC was charging 7-15% lower interest than banks. This is why people go to them: lesser paperwork and cheaper rates. Also, most don't know the difference between a flat rate and a reducing balance rate.
I wasn't supposed to know either. Continuing to play a naïve investor, I asked: "What will be the rate in the way banks calculate interest?" The RM was not ready for the poser. He stared at me, his computer screen and again at me. Finally, he said reluctantly: 17%. The cat was out of the bag. Banks advertise loan rates calculated on reducing balance, while NBFC's rate was applicable on the entire loan.
I wasn't supposed to know either. Continuing to play a naïve investor, I asked: "What will be the rate in the way banks calculate interest?" The RM was not ready for the poser. He stared at me, his computer screen and again at me. Finally, he said reluctantly: 17%. The cat was out of the bag. Banks advertise loan rates calculated on reducing balance, while NBFC's rate was applicable on the entire loan.
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In absolute terms, the EMIs would not be very different. I asked the RM to explain why the second figure was higher. "It has been calculated on a reducing balance whereas ours is a flat loan rate. Double the flat rate and you get the reducing rate," he said. In that case, twice 9.45 should be 17, right? Even ordinary investors would have seen through his sham. The RM knew he had messed up. Quickly, he moved to plan B. If you can't convince, confuse. "In a flat rate loan, you have to pay the entire amount if you pre-pay within six months.
In a reducing balance loan rate, you don't have to pay anything except the principle." Did the RM realise he was favouring banks and not the NBFC? Trying to rush, the RM explained the sanctioning of loan. I had to give photocopies of some documents. EMIs would start from 3 February. "So I won't pay anything for the month of January, right?" I asked. The RM's smile slipped a notch. "You will be charged a pre-EMI interest of Rs 10,000 up to 3 February 2011.
I can't set up the direct debit from 3 January as it is only two working days from sanction date (30 December). But don't worry. The amount will be deducted from the loan cheque," he said. What about the processing fee? It was 2% of the loan and would be deducted from the loan cheque as well. I insisted on paying pre-EMI interest and processing fee—totaling Rs 25,000 in cash. But the RM didn't budge.
"We are doing this for you. How does it matter whether you pay now or through the loan?" he asked. It didn't matter to him. I would be the one paying 17% interest on Rs 3.25 lakh instead of Rs 3 lakh.
When I confronted him with this, the RM offered another deal: "If you take this loan from me, I will reduce the interest to 16% and the processing fee to 1.5%." I had to give him credit: He was a lousy RM but a relentless salesman. It is a pity that most people can't make out the difference.
Courtesy- By Khyati Dharamsi,ET Bureau
Mobile Number Portability: Frequently Asked Questions
The long-awaited mobile number portability finally became reality in India, empowering consumers to change providers conveniently. Here is some FAQ.
What is mobile number portability?
Allows subscriber to opt for service provider of his choice but retain his mobile number. The number gets ported to the new provider.
Mobile Number Portability: Does it allow a technology switch?
Subscriber can stay with same technology, GSM/CDMA. Also change to CDMA or vice versa. Both post-paid & prepaid subscribers can use it.
How long will it take to port a number?
Seven working days. Fifteen days in J&K, North-east
How expensive?
Will cost Rs 19, to be collected by new service provider.
Can you retain your number in another city?
No. You can’t change circles.
How frequently can you switch service providers?
A subscriber must be with a provider for at least three months.
Step 1
To switch, send the following text PORT mobile number to 1900.
You’ll get an eight-digit alphanumeric code and expiry date for it. This is the unique porting code.
You’ll get an eight-digit alphanumeric code and expiry date for it. This is the unique porting code.
Step 2
Approach service provider you have opted for with unique code. Carry address & ID proof/ photograph/ application form with unique code & mobile number. Complete this process within the expiry date that came with unique code
Operator will take request to mobile portability clearing house. Clearing house will get your number deactivated from existing provider and activate new one.
Operator will take request to mobile portability clearing house. Clearing house will get your number deactivated from existing provider and activate new one.
Step 3
You’ll then get text from new provider mentioning date & time when phone will go through a no-service period.
This is when switching of service providers will happen. Phone will be out of use for couple of hours — between 12 pm and 5 am.
This is when switching of service providers will happen. Phone will be out of use for couple of hours — between 12 pm and 5 am.
Thursday, July 14, 2011
Retail FDI norms within next week
India may soon open the doors of multi-brand retail to global chains such as Walmart and Carrefour. A Committee of Secretaries is slated to meet next week to finalise the amount of FDI in the sector and set conditions to protect local grocers.
The committee is also likely to lay down stringent norms for back-end infrastructure such as cold storage, soil testing labs and seed farming.
The clearance will be subject to tough riders as there are apprehensions about the impact on local grocers, sources said.
On July 22, the Committee of Secretaries (CoS), headed by cabinet secretary Ajit Kumar Seth, will try to resolve inter-ministerial differences and then prepare a cabinet note for clearance.
Differences persist between the Department of Industrial Policy and Promotion and the Ministry of Consumer Affairs (MCA) over the FDI cap. While the department favours 51 per cent FDI, the MCA is pitching for a ceiling of 49 per cent to ensure that the control resides in the hands of Indians.
At present, the government does not allow FDI in retail, which employs 33 million people and is dominated by local grocers. However, 51 per cent FDI are permitted in single brand retail, and global chains such as Nike and Louis Vuitton have set up shops. There are no restrictions on foreign investments in wholesale cash and carry format business.
Global multi-brand retail chains have been pushing India to open up the sector to FDI. Walmart, Carrefour and Metro have opened cash-and-carry stores to tap the market.
The other difference that the secretaries have to sort out is the quantum of investment that retail chains have to earmark for back-end infrastructure.
Of the $100-million minimum investment proposed, the DIPP feels at least 50 per cent have to be earmarked for back-end infrastructure. However, the consumer affairs ministry wants a larger share of 75 per cent of FDI to be invested in back-end supply chains.
India annually loses more than Rs 1 lakh crore in farm products, including fruits and vegetables, because of a lack of proper infrastructure such as cold chain storage and warehousing.
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