The inflation is going up every day and all concerned are also worried about the fiscal deficit of India now. We feel this is the right time to control the fiscal deficit in case the country's actual development (not better growth rate) is expected. The government of India expected last year almost 9% growths. But in reality it has attained only 7.5%% growth till now. There was no improvement in condition of below poverty level people inspire of improved growth rate. We don’t care for better growth rate unless it improves the condition of BPL people. Under the circumstances it has become imperative to control fiscal deficit surely. Many people have asked what Fiscal Deficit is and why it creates problem for the economy of the country.
According to us fiscal deficit is an economic phenomenon, where the government’s total expenditure surpasses the revenue generated. It is the difference between the government's total receipts (excluding borrowing) and total expenditure. Fiscal deficit gives the signal to the government about the total borrowing requirements from all sources.
The primary component of fiscal deficit includes revenue deficit and capital expenditure. The capital Expenditure is the fund used by an establishment to produce physical assets like property, equipments or industrial buildings. Capital expenditure is made by the establishment to consistently maintain the operational activities.
In India , the fiscal deficit is financed by obtaining funds from Reserve Bank of India , called deficit financing. The fiscal deficit is also financed by obtaining funds from the money market (primarily from banks).
According to the view of renowned economist John Maynard Keynes, fiscal deficits facilitate nations to escape from economic recession. From another point of view, it is believed that government needs to avoid deficits to maintain a balanced budget policy.
According to Keynesian economic theories, running a fiscal deficit and increasing government debt can initially stimulate economic activity only when a country's output (GDP) is below its potential output. But when an economy is running near or at its potential level of output, fiscal deficits can cause high inflation. At that point FISCAL DEFICIT MUST BE CONTROLLED.
In order to relate high fiscal deficit to inflation, some economists believe that the portion of fiscal deficit, which is financed by obtaining funds from the Reserve Bank of India , directs to rise in the money stock and a higher money stock eventually heads towards inflation. IN India ACTUALLY THIS HAS HAPPPENED NOW.
We recommend that the government should not delay disinvestment process. Luckily the central government has taken up dis investment in right earnest. As soon as this action is taken fiscal deficit would come down. According to us Fiscal deficit can be reduced by bringing up revenues or by lowering expenditure. The ensuing budget can be tough. The finance minister may WITHDRAW SOME OF THE CONCESSION GIVEN LAST YEAR in direct and indirect taxes.
Fiscal deficit reduction has an impact over the agricultural sector and social sector. Government's investments in these sectors may have to be reduced be reduced, or alternatively new source of revenue generation must have to be sought through LARGE DISINVESTMENTS.
Finance Minister Pranab Mukherjee did say that India will not be able to sustain high fiscal deficit in the long run, but he did not give any timeframe for withdrawing the stimulus measures that inflated the deficit. Prime Minister Manmohan Singh shared expressed his government's intent to wind down stimulus measures next year. But would it be wise to exit the stimulous now?Mr. Mukherjee told reporters in St.Andrews, Scotland, that he had already told Parliament high fiscal deficit was not sustainable in the long run.
India's fiscal deficit is projected to be 6.8 per cent of GDP this fiscal, consequent to duty sops given last year to the industry to insulate it from the effects of the global economic crisis. This figure must be reduced now to 4%. During the ensuing budget surely FM would withdraw concessions granted last year in duties and in income tax. RBI is expected to take stringent measure by promoting dear money policy shortly to contained inflation.but inflation can not be controled alone by monetary policy unless backed by availabilty of commondities and reasonable cost.
In its pre-budget memorandum 2010-2011, Confederation of Indian Indsutry (CII) stressed on the importance of reducing the fiscal deficit to 5 per cent (of GDP) over the next fiscal versus the current level of 6.8 per cent.It advised the Ministry of Finance to aim at maintaining and further accelerating the recovery process, along with focusing on correcting the fiscal deficit which is at an undesirable level. Now the question is how to reduce Fiscal Deficit?
Our recommendations include rationalization of expenditure, augmentation in revenue, disinvestment of public sector undertaking, enhancing the efficiency of funds spent on various flagship programs like NREGA among others.
On the revenue front, CII suggested a system through which Rs 50,000 crore from Rs 2 lakh crore, held up in various disputes and litigations for a long time, could be unlocked by resolving one quarter of the existing disputes. CII suggests measures such as facilitating negotiations, out of court settlement, establishing fast trials Court to achieve this.
Besides this, Rs 40,000 crore can be raised through disinvestment. And the revenues from both these measures, along with that from higher tax collection and through 3G telecom auction Fiscal deficit could be expected to be reduced easily .According to CII, this can materialize a saving of 0.8 percentage point in fiscal deficit. We Largely AGREE WITH THE RECOMMENDATION OF CII.
CII's recommendations on indirect taxes include continuation of 10pc rate of peak customs duty, abolition of customs duty on inputs such as non-coking coal, PETROLEUM coke, scrap of non-ferrous metals, Ferro-nickel etc, and continuation of the general rate of excise duties at 8 per cent level.
On direct taxes, CII has asked for reduction in MAT rate along with demanding extension of sunset clause under section 10 A and 10 B beyond Mar 31, 2011 for next 5 years as IT/ITEs sector are key contributors to foreign exchnge earnings and many companies are in the process of setting up undertaking in these areas.
The pre-budget memorandum also mentions measures, such as the need for increase in depreciation rates on plant and machinery to 25 per cent and to extend the scope of investment--linked-tax-incentive, which was offered to select sectors during Union Budget 2009-10, to the entire manufacturing sector.
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Thursday, January 28, 2010
Sunday, January 24, 2010
IS SUDDEN TAXES ON PERKS OF EMPLOYEES JUSTIFIED?
The news of imposition of fresh taxes on perks of officers and executives have created great dissatisfaction among the salaried employees. Earlier when FBT( Fringe Benefit Tax) was removed everyone heaved a shy of relief. The FBT was imposed on the corporate entity. But the withdrawal of FBT has come back as boomerang to officers community as a whole. The biggest surprise is that taxes will be imposed with retrospective effect of April 2009. Salaried employees have already budgeted and spent more money during last nine months and now taxes on their perks shall have to be paid within the balance three months period. This would be really harsh on concerned persons. The taxes on perks would be all pervading on salaried employees both in private sector and also in public sector. There are strong possibilities of imposition of this tax on the perks of government employees too, the fact has yet to be clarified by the government’s notification.
The Government of India is now all set to impose tax on all perks Viz. residential accommodation, conveyance, club facilities, on the provision of gas and electricity. This imposition would surely create hole in the pockets of officers. The enhanced tax on perks however would not touch common employees, who may not be entitled to such facilities.
The perks were always taxed. R.k. Mehrotra, former vice president of a multinational company who retired during year 2000 said “ perks like residential accommodation and conveyance were always taxed. This is nothing new. But now the rate at which taxes would be imposed is phenomenal. During our times conveyance with drivers were taxed at the rate of Rs 360 per month. But now entire salary of the driver would be added to the salary of the executive and taxed.” This is going to be torture surely.
A few years back during the time of Chidambaram FBT was introduced and taxes on the perks were imposed on employers .but during the 2009-10 Pranab Mukherjee done away with the provision. Every executives and their employers were happy. But now the announcement has created a short of stare . Now salaries given to the gardeners and even to cook and sweeper would be would be added to the officers concerned. It is to be seen how the burocrates and police officials of the state government take this imposition as generally a specified numbers of orderly are allotted at their residence.
Some of the organization provide regular tuition fee to the children of employees. Those would be considered as perks in the hands of employees and would taxed. This would create a condition where officers would enjoy all facilities but may not have enough to provide for their monthly domestic expenses. Why such harsh taxes are imposed. Is it to bring down consumption? Or bring down the money supply? According to Mehrotra for such harsh taxes executives are to be also blamed partially. Despite high salary some of the officers used to exploit the companies and government. Whenever they used to go on tour, a few executives used invite their relatives from time to time for lavish food and almost all laundry expenses were debited to company accounts. Perhaps Government did not want to remain mute spectator to such exploitation.
Whatever be the reason the government is moving from one extreme to the another now. This may not be taken easily by officers. There would definitely be representation by Chambers of commence and the officers associations if such harsh tax measures are imposed. Either companies would have to enhance salary further or the Government organizations would find out ways and means to camouflage the method of providing facilities. The valuation rules , yet to be announced by the Finance Ministry, are likely to be applicable with retrospective effect from April 1 last year. That is where the shoe is biting presently. The Government should have imposed the taxes on perks just after the budget was announced. Imposition of fresh taxes on perks, however judicious it may be, is going to be harsh action. . According to us before imposing such taxes Government could have discussed with the Apex Chamber informally. Justice delayed is justice denied. None would have created a stare if taxes on perks would have been imposed just after the budget. But now this is going to be a nagging problem which would require in-depth handling by Finance Ministry.
---------------------------------------------
.
"
The Government of India is now all set to impose tax on all perks Viz. residential accommodation, conveyance, club facilities, on the provision of gas and electricity. This imposition would surely create hole in the pockets of officers. The enhanced tax on perks however would not touch common employees, who may not be entitled to such facilities.
The perks were always taxed. R.k. Mehrotra, former vice president of a multinational company who retired during year 2000 said “ perks like residential accommodation and conveyance were always taxed. This is nothing new. But now the rate at which taxes would be imposed is phenomenal. During our times conveyance with drivers were taxed at the rate of Rs 360 per month. But now entire salary of the driver would be added to the salary of the executive and taxed.” This is going to be torture surely.
A few years back during the time of Chidambaram FBT was introduced and taxes on the perks were imposed on employers .but during the 2009-10 Pranab Mukherjee done away with the provision. Every executives and their employers were happy. But now the announcement has created a short of stare . Now salaries given to the gardeners and even to cook and sweeper would be would be added to the officers concerned. It is to be seen how the burocrates and police officials of the state government take this imposition as generally a specified numbers of orderly are allotted at their residence.
Some of the organization provide regular tuition fee to the children of employees. Those would be considered as perks in the hands of employees and would taxed. This would create a condition where officers would enjoy all facilities but may not have enough to provide for their monthly domestic expenses. Why such harsh taxes are imposed. Is it to bring down consumption? Or bring down the money supply? According to Mehrotra for such harsh taxes executives are to be also blamed partially. Despite high salary some of the officers used to exploit the companies and government. Whenever they used to go on tour, a few executives used invite their relatives from time to time for lavish food and almost all laundry expenses were debited to company accounts. Perhaps Government did not want to remain mute spectator to such exploitation.
Whatever be the reason the government is moving from one extreme to the another now. This may not be taken easily by officers. There would definitely be representation by Chambers of commence and the officers associations if such harsh tax measures are imposed. Either companies would have to enhance salary further or the Government organizations would find out ways and means to camouflage the method of providing facilities. The valuation rules , yet to be announced by the Finance Ministry, are likely to be applicable with retrospective effect from April 1 last year. That is where the shoe is biting presently. The Government should have imposed the taxes on perks just after the budget was announced. Imposition of fresh taxes on perks, however judicious it may be, is going to be harsh action. . According to us before imposing such taxes Government could have discussed with the Apex Chamber informally. Justice delayed is justice denied. None would have created a stare if taxes on perks would have been imposed just after the budget. But now this is going to be a nagging problem which would require in-depth handling by Finance Ministry.
---------------------------------------------
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"
THE UNION BUDGET OF INDIA 2010: WHAT TO EXPECT
ON 26TH FEBRUARY, 2010, THE FINANCE MINISTER IS EXPECTED TO PRESENT THE UNION BUDGET FOR THE YEAR 2010-11. This is a crucial year not only because f from the next year Direct Tax Code is going to be introduced but present high inflation is creating havoc in food front and fiscal deficit has increased disproportionately. At the same time economic growth rate has gone up more than expected yet development for below poverty level people has stagnated. Under the above climate it would be very difficult to manage a balanced budget. The finance minister shall have to do a tight rope walking for he would surely like to stress on growth yet would like to bring down the excess ;liquidity in the economy. To bring down the inflation he would have to increase the revenue receipt yet to curb fiscal deficit he has to control unproductive expenses. During this time expenses on infrastructure and social project shall have to be maintained in high volume.
LOWERING OF TAXES MAY BE POSSIBLE:
Yet common people as well as corporate are expecting reduction in taxes. It appears the Finance minister may increase the exception limit of individual taxes from Rs1.60 lakh to Rs 3 lakh for common individual income earners , from 1.80 lakh to 4 lakh for women and from rs 2 lakh to five lakh for senior citizen. Yet taxes on perks for salary class would be re fixed on much higher level. So while younger /junior employees and senior citizen might be satisfied people on the higher bracket would be dissatisfied.
ENHANCEMENT OF GRATUITY LIMIT IS A POSSIBILITY:
One great thing might happen. The gratuity limit of salaried persons was Rs3.5 lakh for a long time. This limit may get increased in the budget to Rs10 lakh.This would be substantial benefit to most of the middle and upper level executives. The gratuity is paid by the Government and by the corporate entities to their employees at the time of retirement. This amount is generally tax free. In case gratuity limit is increased it would surely help greatly the individual employees.
CENTRAL STIMULUS MAY BE PARTIALLY WITHDRAWN:
The central stimulus/subsidies introduced last year surely would be withdrawn selectively. The stimulus package was given to oil companies so that the loss incurred by them could be contained. Oil companies were not allowed to increase the cost of their product like kerosene and diesel so that common people do not have to pay higher prices. Increase in diesel and petrol prices create multiplier effect in transportation of food product etc. perhaps in view of such situation stimulus given to oil sector may not be withdrawn > If it is withdrawn to bring down the fiscal deficit it would be done partially. However the stimulus given to engineering industry and export oriented industry may be reduced or withdrawn.
LOWERING OF CORPORATE TAX:
I think is corporate tax rate will be lowered to 30%. This is in preparation of the Direct Tax Code (DTC) prescribing a 25% rate. This is consistent with the individual rate reduced to 30% last year as well. It is also because if you see some of the macro trends it would support such a move, if you look at the fiscal stimulus you referred to last year there were three legs to it - Social sector spending, rolling back on indirect taxes which impacted positively certain industries that was the second main and the monetary policy. I think there is a consensus that the subsidy required on monetary policy let us say for housing loans may not be required so that is going to be a revenue plus.
STRESS ON INFRASTRUCTURE AND SOICAL SECTOR WOULD CONTINUE:
Infrastructure could be major driver of the budget. The easing of monetary policy to give boost to infrastructure seems to be impossible. The scope of interest rate cut to increase the investment demand is not possible.
Possibility of inflation again coming back cannot be ruled out unless controlled vigorously by both monetary and fiscal policy implementation. The higher energy cost and commodity price will again haunt the economy.
So we rule out any possibility of easy money for investment.
DISINVESTMENT WILL BE MAJOR THRUST TO REDUCE FISCAL DEFICIT:
In order to tie the fiscal deficit the government does not have any option but resort to disinvestment. We expect disinvestment by sell of securities through IPO and FPO, where government will retain majority stake of 51% in the company.
Our calculation shows listed PSU companies disinvestment could fetch the government around $89 billion. There are several jewels in the crown that are not listed like Air India, BSNL, and Coal India. Any disinvestment of minority stake in these unlisted behemoths could fetch around another $60 to $70 billion.
So total disinvestment proceed could be around $150 billion. We don’t expect all the disinvestment to take place in single year but some will go in this fiscal. We expect government could easily meet its disinvestment target as there is expected to be no hurdle through this route.
PAYMENTS TO NON RESIDENTS & INDIRECT SHARES TRANSFER WOULD BE STREAMLINED:
We have a situation where every payment which India Inc makes today to a non-resident be it on capital account, be it on revenue account, suffers are with holding tax, unless you get a certificate from the tax officer that is ridiculous. It can not sustain. So I think there will be a clarification for sure which will at least restore the status quo to say that you can rely on a professional accountant to tell you what the withholding tax rate should be. I think that is required and that will come.
The indirect transfer of shares issue could be resolved... It has created a lot of uncertainty, lot of confusion while clearing Vodafone transfer issue. A few experts expect some kind of amendment hopefully on the positive side; however that is only a hope. But it will at least tell us the situations under which the revenue will chose to tax indirect transfers.
CAPITAL GIANS TAX WOULD REMAIN UNTOUCHED:
Many financial experts are expecting in the present budget capital gain tax would be tackled effectively. According to us the finance Minister may not handle the reform of capital gain taxes or incentive on profit. He would make it a part of the Direct Tax Code which would be introduced effective April 2011. It is not necessary for reform to be included in the annual budget.
RESTUCTURING OF TAX SLABS:
We have earlier written that tax slab may be raised from Rs1.60 to 3 lakh, for women Rs 4 lakh and for senior citzen is can be Rs 5 lakh. But most important revision would be in the second and third slab. Income above the first slab is taxed at 10% till the next slab.
The second slab may be increase to Rs 10 lakh (Rs 1 million) from the current Rs 3 lakh (Rs 300,000) for the taxation at 20%.
The third slab is expected to be raised to Rs 25 lakh (Rs 2.5 million) for the 30% tax rate. This is from an existing slab of Rs 5 lakh (Rs 500,000). The highest slab is expected to occur at Rs 50 lakh (Rs 5 million). This is an increase from the current slab of Rs 10 Lakh. If such thing happens it would be provide a great deal too well-known advocate and Doctors. Now a days some of the doctors, reported to have-not paid IT, have been taken to task by IT department. With revision in slab many self occupied individual would be greatly benefited.
SELF ASSESMENT SLAB MAY BE REVISED:
The self assessment slab is currently at Rs 40 lakh (Rs 4 million) for professionals and business people. This slab may be increased to Rs 1 crore (Rs 10 million). This will help to reduce the accounting burden for the self employed and professionals.
The most important change in the budget will re affirmation of mandatory use pan card in all financial transaction. This is most welcome. But our senior citizen and single mother and widow single lady may face inconvenience at first. They should make aware of these changes by public easily understandable advertisement in provincial language.
PAN CARD WOULD BE MENDATORY:
The PAN (Personal Assessment Number) card is currently the prime card required for any financial transaction.
However, there are a number of missing links in the implementation. For example, bank deposits in different banks (private and public sector banks and cooperative banks) are not linked. This has been used (misused) by tax payers and tax evaders by having a number of accounts in different banks to avoid tax on interest.
The same is happening with mutual funds with different folio numbers to avoid getting a KYC (Know Your Client) certification.
Making a PAN card mandatory has not been enough. The accounts also need to be integrated based on the PAN card.
Good infrastructure is the only way India could achieve double digit GDP growth rate in future.
The boost in the infrastructure will be the major drivers of the market. Expert recognizes that road projects have come to stand still as they are not attracting sufficient interest from the private sector under the existing scheme.
REFORM IN AGRICULTURE SECTOR:
This time government is totally determined to bring the Indian agriculture from hibernation. We expect agriculture and allied sector to get major boost in the budget. Government keenness towards the sector could be gauged from the fact that for the first time FM invited farmers for pre-budget meet to see their need. Otherwise in earlier years it was the officers who would give suggestion to the FM about the needs of farmer. AGRICULTURE IS STATE SUBJECT PRIMARILY BUT GOVERNMENT OF INDIA MAY THIS TIME ADVICE STATE TO SELECTIVELY INTRODUCE COPORATE SECTOR TO GET INVOLVED IN AGRICULTURAL DEVELOP-MENT taking cultivators and landlords as joint partners.
Increase in subsidy to farming sector have been demanded always by farmers this may not be possible this time yet full implementation of Swami Nathan commission report can be considered. During the last year agriculture loans were waived this time central government my route the payment of subsidy to farmers.
.
FOCUS ON EDUCATION AND SKILL DEVELOPMENT:
We expect government to focus on education and skill development. As this is the only area which will help India competes in the global market. Today is the era intellectual capital. We at threshold of economic superpower can never ignore the importance of education.
We expect the government to continue its focus on education and skill development that have been the highlights of the previous budget. We have following expectation from the government regarding the issue:
Allocation for National Skill Development Corporation to increase.
Increasing R&D expenditure to at least 1% of the GDP.
The weighted deduction of 150% of the expenses incurred on scientific research should be extended to all the sectors.
PRE- BUDGET MARKET MOVEMENT:
At present market is trading at 16 thousand to 17 thousand ranges. The valuation seems to be overstretched. If we look at the Asian peers the India market looks overvalued.
The run up in the market due to excitement and liquidity has brought the market into overvalued territory. Too much of euphoria and expectation has been build in the price.
We are expecting too much from the government. Government has their limitation. So when there will be any short fall in the fulfilment of the expectation market will move into downward spiral. Any increase in interest in India and USA may bring down the price in first quarter.
.
POST-BUDGET MARKET MOVEMENT:
Post budget we expect market to come down to the rational level. We feel there could be correction of 20% post budget. As there could be no trigger post budget to feed the speculator.
The big bang disinvestment if got started after budget will suck liquidity from the market, which will lead to curtailment of funds available for the secondary market.
SECTOR TO BENEFIT FROM THE BUDGET:
We expect following sector to benefit from the budget:
Agriculture and allied activity
Education sector
Farm equipments
PSU
WHAT TO AVOID:
We feel investor should take extra caution while taking position in Index heavy weight and small cap sector at this juncture. Cash is always a good alternative because market always throws good opportunities. If one has cash he or she can avail the opportunity thrown.
CONCLUSION:
We expect post budget stock specific stories to rule. Market may not give return but good story on certain stock will add glitter to ones portfolio. The flow of news regarding certain company `s disinvestment will pull the interest of market participant rather than the Sensex or Nifty stock. Budget is going to usher in a new era of development. The budget is going to be a pragmatic budget which will try to bring down fiscal deficit at the same time reduce income tax burden.
-----------------------------------------------------------------
LOWERING OF TAXES MAY BE POSSIBLE:
Yet common people as well as corporate are expecting reduction in taxes. It appears the Finance minister may increase the exception limit of individual taxes from Rs1.60 lakh to Rs 3 lakh for common individual income earners , from 1.80 lakh to 4 lakh for women and from rs 2 lakh to five lakh for senior citizen. Yet taxes on perks for salary class would be re fixed on much higher level. So while younger /junior employees and senior citizen might be satisfied people on the higher bracket would be dissatisfied.
ENHANCEMENT OF GRATUITY LIMIT IS A POSSIBILITY:
One great thing might happen. The gratuity limit of salaried persons was Rs3.5 lakh for a long time. This limit may get increased in the budget to Rs10 lakh.This would be substantial benefit to most of the middle and upper level executives. The gratuity is paid by the Government and by the corporate entities to their employees at the time of retirement. This amount is generally tax free. In case gratuity limit is increased it would surely help greatly the individual employees.
CENTRAL STIMULUS MAY BE PARTIALLY WITHDRAWN:
The central stimulus/subsidies introduced last year surely would be withdrawn selectively. The stimulus package was given to oil companies so that the loss incurred by them could be contained. Oil companies were not allowed to increase the cost of their product like kerosene and diesel so that common people do not have to pay higher prices. Increase in diesel and petrol prices create multiplier effect in transportation of food product etc. perhaps in view of such situation stimulus given to oil sector may not be withdrawn > If it is withdrawn to bring down the fiscal deficit it would be done partially. However the stimulus given to engineering industry and export oriented industry may be reduced or withdrawn.
LOWERING OF CORPORATE TAX:
I think is corporate tax rate will be lowered to 30%. This is in preparation of the Direct Tax Code (DTC) prescribing a 25% rate. This is consistent with the individual rate reduced to 30% last year as well. It is also because if you see some of the macro trends it would support such a move, if you look at the fiscal stimulus you referred to last year there were three legs to it - Social sector spending, rolling back on indirect taxes which impacted positively certain industries that was the second main and the monetary policy. I think there is a consensus that the subsidy required on monetary policy let us say for housing loans may not be required so that is going to be a revenue plus.
STRESS ON INFRASTRUCTURE AND SOICAL SECTOR WOULD CONTINUE:
Infrastructure could be major driver of the budget. The easing of monetary policy to give boost to infrastructure seems to be impossible. The scope of interest rate cut to increase the investment demand is not possible.
Possibility of inflation again coming back cannot be ruled out unless controlled vigorously by both monetary and fiscal policy implementation. The higher energy cost and commodity price will again haunt the economy.
So we rule out any possibility of easy money for investment.
DISINVESTMENT WILL BE MAJOR THRUST TO REDUCE FISCAL DEFICIT:
In order to tie the fiscal deficit the government does not have any option but resort to disinvestment. We expect disinvestment by sell of securities through IPO and FPO, where government will retain majority stake of 51% in the company.
Our calculation shows listed PSU companies disinvestment could fetch the government around $89 billion. There are several jewels in the crown that are not listed like Air India, BSNL, and Coal India. Any disinvestment of minority stake in these unlisted behemoths could fetch around another $60 to $70 billion.
So total disinvestment proceed could be around $150 billion. We don’t expect all the disinvestment to take place in single year but some will go in this fiscal. We expect government could easily meet its disinvestment target as there is expected to be no hurdle through this route.
PAYMENTS TO NON RESIDENTS & INDIRECT SHARES TRANSFER WOULD BE STREAMLINED:
We have a situation where every payment which India Inc makes today to a non-resident be it on capital account, be it on revenue account, suffers are with holding tax, unless you get a certificate from the tax officer that is ridiculous. It can not sustain. So I think there will be a clarification for sure which will at least restore the status quo to say that you can rely on a professional accountant to tell you what the withholding tax rate should be. I think that is required and that will come.
The indirect transfer of shares issue could be resolved... It has created a lot of uncertainty, lot of confusion while clearing Vodafone transfer issue. A few experts expect some kind of amendment hopefully on the positive side; however that is only a hope. But it will at least tell us the situations under which the revenue will chose to tax indirect transfers.
CAPITAL GIANS TAX WOULD REMAIN UNTOUCHED:
Many financial experts are expecting in the present budget capital gain tax would be tackled effectively. According to us the finance Minister may not handle the reform of capital gain taxes or incentive on profit. He would make it a part of the Direct Tax Code which would be introduced effective April 2011. It is not necessary for reform to be included in the annual budget.
RESTUCTURING OF TAX SLABS:
We have earlier written that tax slab may be raised from Rs1.60 to 3 lakh, for women Rs 4 lakh and for senior citzen is can be Rs 5 lakh. But most important revision would be in the second and third slab. Income above the first slab is taxed at 10% till the next slab.
The second slab may be increase to Rs 10 lakh (Rs 1 million) from the current Rs 3 lakh (Rs 300,000) for the taxation at 20%.
The third slab is expected to be raised to Rs 25 lakh (Rs 2.5 million) for the 30% tax rate. This is from an existing slab of Rs 5 lakh (Rs 500,000). The highest slab is expected to occur at Rs 50 lakh (Rs 5 million). This is an increase from the current slab of Rs 10 Lakh. If such thing happens it would be provide a great deal too well-known advocate and Doctors. Now a days some of the doctors, reported to have-not paid IT, have been taken to task by IT department. With revision in slab many self occupied individual would be greatly benefited.
SELF ASSESMENT SLAB MAY BE REVISED:
The self assessment slab is currently at Rs 40 lakh (Rs 4 million) for professionals and business people. This slab may be increased to Rs 1 crore (Rs 10 million). This will help to reduce the accounting burden for the self employed and professionals.
The most important change in the budget will re affirmation of mandatory use pan card in all financial transaction. This is most welcome. But our senior citizen and single mother and widow single lady may face inconvenience at first. They should make aware of these changes by public easily understandable advertisement in provincial language.
PAN CARD WOULD BE MENDATORY:
The PAN (Personal Assessment Number) card is currently the prime card required for any financial transaction.
However, there are a number of missing links in the implementation. For example, bank deposits in different banks (private and public sector banks and cooperative banks) are not linked. This has been used (misused) by tax payers and tax evaders by having a number of accounts in different banks to avoid tax on interest.
The same is happening with mutual funds with different folio numbers to avoid getting a KYC (Know Your Client) certification.
Making a PAN card mandatory has not been enough. The accounts also need to be integrated based on the PAN card.
Good infrastructure is the only way India could achieve double digit GDP growth rate in future.
The boost in the infrastructure will be the major drivers of the market. Expert recognizes that road projects have come to stand still as they are not attracting sufficient interest from the private sector under the existing scheme.
REFORM IN AGRICULTURE SECTOR:
This time government is totally determined to bring the Indian agriculture from hibernation. We expect agriculture and allied sector to get major boost in the budget. Government keenness towards the sector could be gauged from the fact that for the first time FM invited farmers for pre-budget meet to see their need. Otherwise in earlier years it was the officers who would give suggestion to the FM about the needs of farmer. AGRICULTURE IS STATE SUBJECT PRIMARILY BUT GOVERNMENT OF INDIA MAY THIS TIME ADVICE STATE TO SELECTIVELY INTRODUCE COPORATE SECTOR TO GET INVOLVED IN AGRICULTURAL DEVELOP-MENT taking cultivators and landlords as joint partners.
Increase in subsidy to farming sector have been demanded always by farmers this may not be possible this time yet full implementation of Swami Nathan commission report can be considered. During the last year agriculture loans were waived this time central government my route the payment of subsidy to farmers.
.
FOCUS ON EDUCATION AND SKILL DEVELOPMENT:
We expect government to focus on education and skill development. As this is the only area which will help India competes in the global market. Today is the era intellectual capital. We at threshold of economic superpower can never ignore the importance of education.
We expect the government to continue its focus on education and skill development that have been the highlights of the previous budget. We have following expectation from the government regarding the issue:
Allocation for National Skill Development Corporation to increase.
Increasing R&D expenditure to at least 1% of the GDP.
The weighted deduction of 150% of the expenses incurred on scientific research should be extended to all the sectors.
PRE- BUDGET MARKET MOVEMENT:
At present market is trading at 16 thousand to 17 thousand ranges. The valuation seems to be overstretched. If we look at the Asian peers the India market looks overvalued.
The run up in the market due to excitement and liquidity has brought the market into overvalued territory. Too much of euphoria and expectation has been build in the price.
We are expecting too much from the government. Government has their limitation. So when there will be any short fall in the fulfilment of the expectation market will move into downward spiral. Any increase in interest in India and USA may bring down the price in first quarter.
.
POST-BUDGET MARKET MOVEMENT:
Post budget we expect market to come down to the rational level. We feel there could be correction of 20% post budget. As there could be no trigger post budget to feed the speculator.
The big bang disinvestment if got started after budget will suck liquidity from the market, which will lead to curtailment of funds available for the secondary market.
SECTOR TO BENEFIT FROM THE BUDGET:
We expect following sector to benefit from the budget:
Agriculture and allied activity
Education sector
Farm equipments
PSU
WHAT TO AVOID:
We feel investor should take extra caution while taking position in Index heavy weight and small cap sector at this juncture. Cash is always a good alternative because market always throws good opportunities. If one has cash he or she can avail the opportunity thrown.
CONCLUSION:
We expect post budget stock specific stories to rule. Market may not give return but good story on certain stock will add glitter to ones portfolio. The flow of news regarding certain company `s disinvestment will pull the interest of market participant rather than the Sensex or Nifty stock. Budget is going to usher in a new era of development. The budget is going to be a pragmatic budget which will try to bring down fiscal deficit at the same time reduce income tax burden.
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Sunday, January 17, 2010
SAVING HABITS OF WOMEN NEEDS EMPOWERMENT
During Twenty-first century more women are working than twentieth century. Now a days women are heading organization like Coco cola , HSBC banks HDFC banks and also insurance companies. Many women have become successful lawyers , Doctors , advocates and teachers. With women occupying such senior position it is natural for them to save more and more. But it has not happened. In a survey recently conducted it was revealed that women are mor4 of a spender than saver. Women spend more for the family than on her self.. But this habits needs to reversed. Because in a family children idolize the mother rather than the father.
They keep the father in high esteem no doubt but children are generally scared of father and friendly with mother. Sons are closer to mother and daughters are closer to father is a myth really. Why women spend more money than the saving. This emanates from the feeling that she is natural guardian of the family. Any shortfall in the budget and life style is picked up by working mother than the father. Even in the office, it is found that female employees don’t hesitate to buy Tiffin for colleagues compared to male officers.
Many studies have shown that women lag behind men in saving for retirement. In a 2008 survey of more than 1,300 workers or retirees over age 25 by nonpartisan Employee Benefit Research Institute (EBRI) and Matthew Greenwald & Associates, 68% of women and 76% of men said that they "had" saved for retirement; 59% of women and 70% of men said they were currently saving; and 58% of women and 64% of men said they were contributing to a workplace retirement account. Two recent studies of participants in large-company plans show similar results. This is not only the case in India. Even in America women save lower than men folks. The Vanguard, a mutual fund company that also manages retirement plans in USA, reported that in 2007 the average account balance of more than three million participants in their 401(k) plans was $56,723 for women, compared with $95,447 for men. More recently, Hewitt Associates consultants surveyed nearly 2 million participants in large-company 401(k) plans the company manages and found that women had an average of $56,320 in their accounts, compared with over $100,000 for men.
This is the time our society need to empower women so that they can save better for the rainy days. Working single women need to think specifically about saving habits. The saving in banks or in Government plans are safest option but it would not support them fully due to inflationary pressure. A women who could manage their monthly budget with Rs10,000 per month a decade back have found it most diffiult to carry on unless she can earn more than double the amount. This is the effect of inflation.
The potato which used to cost Rs 3 a kilogram then is now costing Rs 28 a kg. What is the way out? If she would have kept all the saving in Nationalized bank her money would have been safe alright but now she would have to depend on borrowed money or depend on the alms of others. Fortunately She kept a portion of her money in mutual fund that gave her a return of 25% of money saved. Every single women and single mother must keep it in mind that safe keeping of asset is not enough. The asset must be capable of providing inflation adjusted return for atleast twenty years. What should women do? They need to invest and save early and judiciously. Where women need to invest ? the investment in EPF is a must. Those who do not have EPF they should start saving PPF surely from the beginning of their career. PPF can be started with Rs 500 per annum. Investment in PPF would not be enough. To beat the inflation it would be mandatory for a person to invest first in Mutual fund. Investment in mutual fund is not as safe as the bank fixed deposit. But women must learn to take little risk in case they want to lead a satisfying life style through out their life. Which are the mutual fund they need to select and how long they need to keep investing?
It would be prudent to study investment journals. Many may not be able to do so.. In that even they need to approach a well-known bank. The banks have their own investment desk. SBI has their own persons. Similarly Standard Chartered has their own investment advisor. These advisors may be able to guide new investors. I would highly recommend that all investor should try to study the website of “Money control.com and value research .com. and invest in four star and five star mutual funds. Any women above fortyfive years of age should be able to reduce the risk buy avoiding full diversified equity funds. They need to subscribe atleast sixty percent of their saving in debt fund. Alternatively they can opt for balanced fund so that risk can be divided.
Single mother has greater responsibility towards their children. So it would be prudent to subscribe to insurance policies so that their children are not handicapped in case of emergent situation. The education and marriage are two important components of life. In order to sail smoothly single mother must plan for correct ULIP policies. India have started of late great ULIP policies though they are costly compared to investment plans of mutual fund. ULIp policy should be subscribe after learning the details of the plan .Each policy tries to be different. Being different is not the solution. It should be cost effective for women folks.
----------------------------------------------------
They keep the father in high esteem no doubt but children are generally scared of father and friendly with mother. Sons are closer to mother and daughters are closer to father is a myth really. Why women spend more money than the saving. This emanates from the feeling that she is natural guardian of the family. Any shortfall in the budget and life style is picked up by working mother than the father. Even in the office, it is found that female employees don’t hesitate to buy Tiffin for colleagues compared to male officers.
Many studies have shown that women lag behind men in saving for retirement. In a 2008 survey of more than 1,300 workers or retirees over age 25 by nonpartisan Employee Benefit Research Institute (EBRI) and Matthew Greenwald & Associates, 68% of women and 76% of men said that they "had" saved for retirement; 59% of women and 70% of men said they were currently saving; and 58% of women and 64% of men said they were contributing to a workplace retirement account. Two recent studies of participants in large-company plans show similar results. This is not only the case in India. Even in America women save lower than men folks. The Vanguard, a mutual fund company that also manages retirement plans in USA, reported that in 2007 the average account balance of more than three million participants in their 401(k) plans was $56,723 for women, compared with $95,447 for men. More recently, Hewitt Associates consultants surveyed nearly 2 million participants in large-company 401(k) plans the company manages and found that women had an average of $56,320 in their accounts, compared with over $100,000 for men.
This is the time our society need to empower women so that they can save better for the rainy days. Working single women need to think specifically about saving habits. The saving in banks or in Government plans are safest option but it would not support them fully due to inflationary pressure. A women who could manage their monthly budget with Rs10,000 per month a decade back have found it most diffiult to carry on unless she can earn more than double the amount. This is the effect of inflation.
The potato which used to cost Rs 3 a kilogram then is now costing Rs 28 a kg. What is the way out? If she would have kept all the saving in Nationalized bank her money would have been safe alright but now she would have to depend on borrowed money or depend on the alms of others. Fortunately She kept a portion of her money in mutual fund that gave her a return of 25% of money saved. Every single women and single mother must keep it in mind that safe keeping of asset is not enough. The asset must be capable of providing inflation adjusted return for atleast twenty years. What should women do? They need to invest and save early and judiciously. Where women need to invest ? the investment in EPF is a must. Those who do not have EPF they should start saving PPF surely from the beginning of their career. PPF can be started with Rs 500 per annum. Investment in PPF would not be enough. To beat the inflation it would be mandatory for a person to invest first in Mutual fund. Investment in mutual fund is not as safe as the bank fixed deposit. But women must learn to take little risk in case they want to lead a satisfying life style through out their life. Which are the mutual fund they need to select and how long they need to keep investing?
It would be prudent to study investment journals. Many may not be able to do so.. In that even they need to approach a well-known bank. The banks have their own investment desk. SBI has their own persons. Similarly Standard Chartered has their own investment advisor. These advisors may be able to guide new investors. I would highly recommend that all investor should try to study the website of “Money control.com and value research .com. and invest in four star and five star mutual funds. Any women above fortyfive years of age should be able to reduce the risk buy avoiding full diversified equity funds. They need to subscribe atleast sixty percent of their saving in debt fund. Alternatively they can opt for balanced fund so that risk can be divided.
Single mother has greater responsibility towards their children. So it would be prudent to subscribe to insurance policies so that their children are not handicapped in case of emergent situation. The education and marriage are two important components of life. In order to sail smoothly single mother must plan for correct ULIP policies. India have started of late great ULIP policies though they are costly compared to investment plans of mutual fund. ULIp policy should be subscribe after learning the details of the plan .Each policy tries to be different. Being different is not the solution. It should be cost effective for women folks.
----------------------------------------------------
Thursday, January 14, 2010
HUNGER DUE TO PRICE RISE MAY CREATE RIOT IN OUR SOCIETY
The food prices have become prohibitive. There is definite sign in the society of less tolerance as the cost of pulses and vegetables have hit the roof. There is a strong possibility in the country of developing riot like situation out of hunger. The tolerance limit of Indian population for inflation is 10% maximum. In case we compare year to year rise in price from last year inflation has reached almost 19% up in food commodities. This is really intolerable for middle class and below. Why food prices have gone up so suddenly? Was it only due to drought condition and lower rainfall alone? The government has been holding Monsoon responsible for the rise in food prices! Is it the only cause of high food prices? We do not believe that. According to us failure of Monsoon is one of the main reasons no doubt. But it is not the only reason. The Government cannot be held responsible for the failure of Monsoon. It has no power to control failure of monsoon. It has no role to in ushering in draught. But Government’s failure was in not taking timely steps in abolishing import duties in food products. When they realized that failure of monsoon could hit the agriculture it was too late. Sugar prices went down as soon as import duties were lowered. The Deputy Chairman of planning commission, Montek Singh Ahluwalia recently said that Prices of Food product would come down in January 2010. No special measures are required to be taken. This observation is in variance with the observation of C Rangarajan, .chairman of prime Minister’s Advisory council who suggested RBI to take effective steps to recast CRR.
Hunger may engulf around one billion people unless common people of developed nations contribute personally in cash. The appeal for help has been circulated already by none other than UNO. Is there any remedy to bring down the food prices in India? Yes, government may consider a few urgent steps .Montek admitted that cost of vegetables are matter of concern but he said “rice and wheat can be kept stored but it is impossible to store vegetable longer”. He is right but we have a suggestion that to bring down the cost of vegetables, eggs and fish the state governments can withdraw inter state movement taxes, if any. Beside the state government can directly negotiate prices of Fish and eggs through Government and supply to retail venders. We are sanguine if Assam Government directly deals with Andhra government and with the main suppliers, the cost of fish and egg would come down immediately. If effective steps are taken immediately then States do not have to wait till January end. The Bengal Government has taken similar steps and the prices of potato have come down to Rs. 9/- a kg and is expected it would be Rs 7/- a kg soon when most of the Indian state are selling at Rs22 a kg.
The Public distribution system of our country need to be revamped and strong measures is taken to augment agriculture sector. The private sector should be allowed to import food grain and stock commodities for four months to distribute as per direction of states. It is now apparent that a famine like situation may develop and devastate our country. Assam would not be an exception to this scene. Assam never experienced famine in the past. But. The time has changed. Assam has now negative growth rate in agriculture sector. It might trigger famine like situation unless government steps in. Assam Government has taken some steps but are those enough? Certainly not. Had the steps taken by Government would have been successfully implemented there would not have been such rise in prices. Agriculture is the state subject. All the individual states have responsibility to augment supply of food staff. Yes, it is a fact that State Government cannot import food staff or it cannot bring down the tariff rates of imported staff. But it can certain tackle two most important issues. The state Government can abolish all the interstate taxes and rates, if any, on the movement of food commodities. Food commodities while traveling from Punjab and Hariyana get costlier by 15% to 18% by the time it reaches Mandis OF Delhi situated only few miles away. The eggs and fish get costlier while traveling from Andhra and from UP (Luckhnow) to Assam.
This is the time Government of India should consider declaring internal emergency on the basis of food shortages. It should urge state government to abolish all rates and taxes on agricultural commodities atleast for six month. Perhaps central government would not be able to handle the situation alone as the agriculture is the state subject. The commission on agricultural product is also as high as eight to twenty percent. The wholesale commission and retail commissions are as high as 30% percent. This issue is very much political sensitive. But respect6ive government must muster enough courage to tackle the issue in case states want to avoid riot like situation DURING NEXT YEAR. The government should have adopted proactive policy instead of reacting to helpless situation as is being done now.
If these policies would have been taken four five months earlier prices would have come down as the sugar prices have come down.
The question has been raised if central government is in a position to take effective steps to tackle the situation as the agriculture is a state subject. We would like to remind them that it is the central Government who ushered in green revolution despite the agriculture being a state subject. Why then in such emergent situation central Government would not be able to handle the situation NOW? The central Government can compensate the state Government for abolishing rates and taxes on movement of food products within the states, if any.
The questions have been asked as to why agriculture has gone down so badly in India after stable productions for
Years?
THOUGH DROUGHT IS A TRUE STORY YET INVESTMENT IN AGRICULTURE WAS TOO LOW. In India the subsidy amount is very high and investment is too low. The investment in Agriculture is only 20% of Agriculture GDP. The Government has always considered increasing the subsidy but did not care enough for the enhancement of investment. The procurement prices were revised from time to time. The cultivator should get fair price no doubt. But market should be allowed to settle the Fair prices when subsidy have been given .More importantly the role of middlemen could be controlled. The need of the Day now is to see that AGRICULTURAL COMMODITIES FLOW DIRECTLY FROM Cultivator to market without much intervention of the middlemen. Perhaps elimination of middlemen would be impossible task for State Government due to political compulsion .This is the reason why in some of the states large scale grocery stores have become unsuccessful despite involvement of big industrial houses...
Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
“The massive investments in agriculture sector and infrastructure would be required without which it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.
India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. Some how the central Government has waken up now to take effective steps. The Government assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
We wrote earlier also that .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others. India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine. Assam Government must protect Farm land. The large entrepreneurs must be encouraged to0 cultivate in collaboration with local land lords and cultivators. Agricultural sector of India is mainly covered by small and marginal farmers, so our government should promote small scale agriculture. Corporate sector could be ushered in as an experiment in joint sector basis where land lord and cultivators becoming partners with corporate HOUSES on a selective basis. Can Assam can experiment with this model and outshine Hariyana and Punjab.
-------------------------------------------
Hunger may engulf around one billion people unless common people of developed nations contribute personally in cash. The appeal for help has been circulated already by none other than UNO. Is there any remedy to bring down the food prices in India? Yes, government may consider a few urgent steps .Montek admitted that cost of vegetables are matter of concern but he said “rice and wheat can be kept stored but it is impossible to store vegetable longer”. He is right but we have a suggestion that to bring down the cost of vegetables, eggs and fish the state governments can withdraw inter state movement taxes, if any. Beside the state government can directly negotiate prices of Fish and eggs through Government and supply to retail venders. We are sanguine if Assam Government directly deals with Andhra government and with the main suppliers, the cost of fish and egg would come down immediately. If effective steps are taken immediately then States do not have to wait till January end. The Bengal Government has taken similar steps and the prices of potato have come down to Rs. 9/- a kg and is expected it would be Rs 7/- a kg soon when most of the Indian state are selling at Rs22 a kg.
The Public distribution system of our country need to be revamped and strong measures is taken to augment agriculture sector. The private sector should be allowed to import food grain and stock commodities for four months to distribute as per direction of states. It is now apparent that a famine like situation may develop and devastate our country. Assam would not be an exception to this scene. Assam never experienced famine in the past. But. The time has changed. Assam has now negative growth rate in agriculture sector. It might trigger famine like situation unless government steps in. Assam Government has taken some steps but are those enough? Certainly not. Had the steps taken by Government would have been successfully implemented there would not have been such rise in prices. Agriculture is the state subject. All the individual states have responsibility to augment supply of food staff. Yes, it is a fact that State Government cannot import food staff or it cannot bring down the tariff rates of imported staff. But it can certain tackle two most important issues. The state Government can abolish all the interstate taxes and rates, if any, on the movement of food commodities. Food commodities while traveling from Punjab and Hariyana get costlier by 15% to 18% by the time it reaches Mandis OF Delhi situated only few miles away. The eggs and fish get costlier while traveling from Andhra and from UP (Luckhnow) to Assam.
This is the time Government of India should consider declaring internal emergency on the basis of food shortages. It should urge state government to abolish all rates and taxes on agricultural commodities atleast for six month. Perhaps central government would not be able to handle the situation alone as the agriculture is the state subject. The commission on agricultural product is also as high as eight to twenty percent. The wholesale commission and retail commissions are as high as 30% percent. This issue is very much political sensitive. But respect6ive government must muster enough courage to tackle the issue in case states want to avoid riot like situation DURING NEXT YEAR. The government should have adopted proactive policy instead of reacting to helpless situation as is being done now.
If these policies would have been taken four five months earlier prices would have come down as the sugar prices have come down.
The question has been raised if central government is in a position to take effective steps to tackle the situation as the agriculture is a state subject. We would like to remind them that it is the central Government who ushered in green revolution despite the agriculture being a state subject. Why then in such emergent situation central Government would not be able to handle the situation NOW? The central Government can compensate the state Government for abolishing rates and taxes on movement of food products within the states, if any.
The questions have been asked as to why agriculture has gone down so badly in India after stable productions for
Years?
THOUGH DROUGHT IS A TRUE STORY YET INVESTMENT IN AGRICULTURE WAS TOO LOW. In India the subsidy amount is very high and investment is too low. The investment in Agriculture is only 20% of Agriculture GDP. The Government has always considered increasing the subsidy but did not care enough for the enhancement of investment. The procurement prices were revised from time to time. The cultivator should get fair price no doubt. But market should be allowed to settle the Fair prices when subsidy have been given .More importantly the role of middlemen could be controlled. The need of the Day now is to see that AGRICULTURAL COMMODITIES FLOW DIRECTLY FROM Cultivator to market without much intervention of the middlemen. Perhaps elimination of middlemen would be impossible task for State Government due to political compulsion .This is the reason why in some of the states large scale grocery stores have become unsuccessful despite involvement of big industrial houses...
Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
“The massive investments in agriculture sector and infrastructure would be required without which it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.
India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. Some how the central Government has waken up now to take effective steps. The Government assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
We wrote earlier also that .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others. India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine. Assam Government must protect Farm land. The large entrepreneurs must be encouraged to0 cultivate in collaboration with local land lords and cultivators. Agricultural sector of India is mainly covered by small and marginal farmers, so our government should promote small scale agriculture. Corporate sector could be ushered in as an experiment in joint sector basis where land lord and cultivators becoming partners with corporate HOUSES on a selective basis. Can Assam can experiment with this model and outshine Hariyana and Punjab.
-------------------------------------------
Sunday, January 3, 2010
SOME OFTEN ASKED QUESTIONS BY YOUNG INVESTORS OF INDIA
ALL INVESTORS ARE INQUISITIVE . THEY HAVE LOTS OF QUESTIONS IN THEIR MIND. Some ASK OPENLY BUT A FEW DO NOT ASK DIRECTLY BUT WAIT FOR SOMEONE TO ASK THE QUESTIONS ON THEIR BEHALF. HERE ARE SOME OF THE OFTEN ASKED QUESTIONS. ACCOMPANYING ANSWERS ALSO GIVEN HEREUNDER. BUT MORE KNOWLEDGEABLE CAN ANSWER IT BETTER. WE WELCOME WELL THOUGHT OUT ANSWER AS MEASURE OF SERVICE TO NEW YOUNG INVESTORS. HERE WE GO:
QUESTION:
WHETHER INVESTMENT IN DIVERSIFIED MUTUAL FUND IS BETTER THAN ULIP ?
ANSWER :
Ulip and Diversified Mutual fund are belong to two different class of asset base : Ulip is not an investment product.It is an insurance product.So itis a costly product compared to any mutual fund.Ulip is very good if taken for longer period say tfor ten to fifteen years.It is ideal for saving money for children's education or marriage.In short term it does not give adequate return.So if ulip is redeemed within three to four years there is every possibility of incurring loss . Diversified Mutual fund is investment product and is less costly. Now a days ther4e is no entry load.ther4e are exit load if redeemed before one year. The administration charges are lower at around 2 to 2.%5 only. So somebody wants to invest for four to five years only it should be Diversified equity fund. Ulip also provide security which mutual fund does not give. ULIP is good for long term planing.
QUESTION :
SHOULD WE TAKE INSURANCE COVER FIRST OR INVEST IN MUTUAL FUND FIRST ?
ANSXWER :
THIS ISSUE WOULD DEPEND ON THE REQUI8REMENT OF THRE PERSON CONCERNED. iN CASE THE PERSON HAS GOT FAMILY RESPOSNSIBILITY HE NEEDS TO TAKE INSURANCE SURELY. bUT IN CASE PERSON DOES NOT HAVE HAVE FAMILY OBLIGATION HE CAN OPT FOR INVESTMENT FIRST. INSURANJCE IS NOT AN INVESTMENT .iT PROVIDES SECURITY AND SAFETY OF THE FAMILY. THIS IS VERY IMPORTANT SOCIAL REQUIREMENTS FOR A PERSON WHO IS 'kARTA". A BACHELOR, WITHOUT FAMILY OBLIGATION, CAN START HIS LIFE WITH INVESTMENT OPTION .BUT AS SOON AS HE GETS MARRIED AND CHILDREN ARE BORN HE NEEDS TO PROTECT THE FAMILY WITH INSURANCE OPTION.
QUESTION ;
FOR ANY INVESTMENT ON WHOM SHOULD WE DEPEND. ? SHOULD WE DEPEND ON AGENTS, BROKERS OR SHOULD WE STUDY OURSELVES ?
ANSWER :
The best thing is to study yourself. The money belongs to you. You are the best person to protect your own money. Knowledge is power. So you need to acquire knowldge. In case due your professional business or due to lack of opportunity you cannot study you should depend on educated and wise professional advisers. All regurlar brokers and agents may not be as reliable as you want.So you need to selct your own reliable professional adv8sors. Some of the good banks have their own investment department. You can depend on tHem. You can depend on qualified, knowledgabl;e Chartered accountant or economists. but the best is study and then to invest.
QUESTION;
HOW MUCH ONE SHOULD INVEST ?
ANSWER:
THERE IS NO DEFINITE ANSWER TO THIS QUESTION. AFTER MEETING YOUR FAMILY OBLIGATION WHATEVER AMOUNT IS AVAILABLE CAN BE INVESTED AFTER SETTING ASIDE A PORTION OF IF FOR EMERGENCY REQUIREMENTS. May PEOPLE SAVE AROUND 30% OF THEIR ANNUAL EARNING.
QUESTION ;
WHERE SHOULD WE INVEST IN SHARES, MUTUAL FUND OR IN GOLD ?
ANSWER ;
EVERYONE SHOULD BEGINNING INVESTING REGULARLY IN BANK, FOLLOWED BY IN PPF AND SMALL SAVING SCHEMES. SLOWY INVESTMENT SHOULD BE MADE IN DIVERSIFIED MUTUAL FUND AND LATER IN SHARES. NONE SHOULD BEGIN INVESTING IN SHARE MARKET.IT WOULD BE DANGEROUS.
QUESTION:
HOW LONG SHOULD ONE PLAN TO INVEST IN MUTUAL FUND OR IN SHARE ?
aNSWER:
nONE NEED TO INVEST IN EQUITY FOR A SHORT TERM. IT WOULD BE SUICIDAL TO INVEST FOR ONE YEAR OR TWO YEARS. ANY INVESTMENT IN EQUITY SHOULD BE MADE IF THE PERSON CONCERNED CAN KEEP THE MONEY INVESTED AT LEAST FOR FOUR TO FIVE YEARS.
QUESTION ;
WHICH ARE THE BEST FUND WHERE INVESTMENT COULD BE MADE NOW:
ANSWER:
tHIS WOULD BE TOLD TO YOU BY YOUR PERSONAL financial ADVISERS. YOU CAN STUDY REGULARLY PERSONNEL FINANCE PAGE OF BUSINESS STANDARD, ECONOMIC TIMES AND IN ASSAM TRIBUNE AND IN THE HINDU. MOSTLY EVERY MONDAY ARTICLES ON INVESTMENT APPEARS ON THESE NEWS PAPERS. YOU CAN ALSO READ MONEY MAGAZINE OF OUTLOOK AND VIEW CNBC TV. YOU CAN ALSO VISIT "VALUE RESEARCH.CM" AND 'MONEY CONTROL.COM" AND SELECT FIVE STAR AND FOUR STAR FUNDS.
---------------------------------------
QUESTION:
WHETHER INVESTMENT IN DIVERSIFIED MUTUAL FUND IS BETTER THAN ULIP ?
ANSWER :
Ulip and Diversified Mutual fund are belong to two different class of asset base : Ulip is not an investment product.It is an insurance product.So itis a costly product compared to any mutual fund.Ulip is very good if taken for longer period say tfor ten to fifteen years.It is ideal for saving money for children's education or marriage.In short term it does not give adequate return.So if ulip is redeemed within three to four years there is every possibility of incurring loss . Diversified Mutual fund is investment product and is less costly. Now a days ther4e is no entry load.ther4e are exit load if redeemed before one year. The administration charges are lower at around 2 to 2.%5 only. So somebody wants to invest for four to five years only it should be Diversified equity fund. Ulip also provide security which mutual fund does not give. ULIP is good for long term planing.
QUESTION :
SHOULD WE TAKE INSURANCE COVER FIRST OR INVEST IN MUTUAL FUND FIRST ?
ANSXWER :
THIS ISSUE WOULD DEPEND ON THE REQUI8REMENT OF THRE PERSON CONCERNED. iN CASE THE PERSON HAS GOT FAMILY RESPOSNSIBILITY HE NEEDS TO TAKE INSURANCE SURELY. bUT IN CASE PERSON DOES NOT HAVE HAVE FAMILY OBLIGATION HE CAN OPT FOR INVESTMENT FIRST. INSURANJCE IS NOT AN INVESTMENT .iT PROVIDES SECURITY AND SAFETY OF THE FAMILY. THIS IS VERY IMPORTANT SOCIAL REQUIREMENTS FOR A PERSON WHO IS 'kARTA". A BACHELOR, WITHOUT FAMILY OBLIGATION, CAN START HIS LIFE WITH INVESTMENT OPTION .BUT AS SOON AS HE GETS MARRIED AND CHILDREN ARE BORN HE NEEDS TO PROTECT THE FAMILY WITH INSURANCE OPTION.
QUESTION ;
FOR ANY INVESTMENT ON WHOM SHOULD WE DEPEND. ? SHOULD WE DEPEND ON AGENTS, BROKERS OR SHOULD WE STUDY OURSELVES ?
ANSWER :
The best thing is to study yourself. The money belongs to you. You are the best person to protect your own money. Knowledge is power. So you need to acquire knowldge. In case due your professional business or due to lack of opportunity you cannot study you should depend on educated and wise professional advisers. All regurlar brokers and agents may not be as reliable as you want.So you need to selct your own reliable professional adv8sors. Some of the good banks have their own investment department. You can depend on tHem. You can depend on qualified, knowledgabl;e Chartered accountant or economists. but the best is study and then to invest.
QUESTION;
HOW MUCH ONE SHOULD INVEST ?
ANSWER:
THERE IS NO DEFINITE ANSWER TO THIS QUESTION. AFTER MEETING YOUR FAMILY OBLIGATION WHATEVER AMOUNT IS AVAILABLE CAN BE INVESTED AFTER SETTING ASIDE A PORTION OF IF FOR EMERGENCY REQUIREMENTS. May PEOPLE SAVE AROUND 30% OF THEIR ANNUAL EARNING.
QUESTION ;
WHERE SHOULD WE INVEST IN SHARES, MUTUAL FUND OR IN GOLD ?
ANSWER ;
EVERYONE SHOULD BEGINNING INVESTING REGULARLY IN BANK, FOLLOWED BY IN PPF AND SMALL SAVING SCHEMES. SLOWY INVESTMENT SHOULD BE MADE IN DIVERSIFIED MUTUAL FUND AND LATER IN SHARES. NONE SHOULD BEGIN INVESTING IN SHARE MARKET.IT WOULD BE DANGEROUS.
QUESTION:
HOW LONG SHOULD ONE PLAN TO INVEST IN MUTUAL FUND OR IN SHARE ?
aNSWER:
nONE NEED TO INVEST IN EQUITY FOR A SHORT TERM. IT WOULD BE SUICIDAL TO INVEST FOR ONE YEAR OR TWO YEARS. ANY INVESTMENT IN EQUITY SHOULD BE MADE IF THE PERSON CONCERNED CAN KEEP THE MONEY INVESTED AT LEAST FOR FOUR TO FIVE YEARS.
QUESTION ;
WHICH ARE THE BEST FUND WHERE INVESTMENT COULD BE MADE NOW:
ANSWER:
tHIS WOULD BE TOLD TO YOU BY YOUR PERSONAL financial ADVISERS. YOU CAN STUDY REGULARLY PERSONNEL FINANCE PAGE OF BUSINESS STANDARD, ECONOMIC TIMES AND IN ASSAM TRIBUNE AND IN THE HINDU. MOSTLY EVERY MONDAY ARTICLES ON INVESTMENT APPEARS ON THESE NEWS PAPERS. YOU CAN ALSO READ MONEY MAGAZINE OF OUTLOOK AND VIEW CNBC TV. YOU CAN ALSO VISIT "VALUE RESEARCH.CM" AND 'MONEY CONTROL.COM" AND SELECT FIVE STAR AND FOUR STAR FUNDS.
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HOW TO INVEST IN 2010 ESPECIALLY BY YOUNGER GENERATION
We welcomed the New Year with joy and happiness. Let us hope the new year would bring, for all of us, peace , prosperity and happiness.In Indian culture four tenants have been specified for a successful life on the earth for human being.. Those are Dhrama, Artha, Kama and ultimately Muksho. For a peaceful and successfully life on earth these four things are most required. Very interestingly among all the important virtues "Artha" has been given an important place.It's place is just after the concept of "Dharma". Now what is "Dharma"? The Dharma is the expression of divinity in the human body and soul. The "Artha" is one of the basic requirements on earth to keep body and the soul together.Yet least importance is given to Artha or "money management " by most people of Northeast India.
For a long time the importance of money was never used to be discussed in the family get together, as it was considered indecent to discuss money matters in front of the children by parents.This culture has changed of l ate and people have become conscious of importance money. Yet full power of money has not been realised as yet.
In fact, money does not have any strong intrinsic value of its own. It acquires value as it is handled by people . If coins are kept stored in a pitcher or in a box or in a locker for a few years it looses value.Once upon a time, during Sixties, people of Assam used to buy ten eggs for a rupee. With the same amount of money today even one egg is not available.If a person saved that one rupee in his box, today it would have become almost valueless. But if he would have saved that one rupee in a bank (earning ten percent interest) the value of that Re One would have become Rs128/- .With that money even in today's market he would been able to buy three dozens of of eggs. So it is the human being who would have to be responsible to increase the value of money if he needs to survive even in today's market condition. How the value of money was increased in the instant case? It is the habit of saving and investment that generated the value of money. So in today's life whatever we earn should not be consumed during the month itself. A portion of earned income must be saved. Why? Because people can earn money only for thirty five to forty five years but they may survive up to eighty years of age. To keep their body and soul together they need to save and invest money. In to days situation earning money is not easy. But saving and investing money is still more difficult. So we need to make special efforts to save money and train our children to realise the importance of money as soon as they are ten years old.
The most investors are planning now as to how to go about investing in the New Year. A few of our readers conveyed us that the year 2009 brought luck to them. They invested wisely when market was down and could gain almost 28 % returns within a period of eleven months. Naturally they were happy and expressed their satisfaction. Actually they gained only for their own boldness and judicious decision making capacity. It was nice to hear that some of our readers could get satisfying returns during the last year. But it must be kept in mind that in short term generally equity market does not provide excellent returns. Perhaps an element of luck also helped our investors, beside their own strength. The 2009 was an unusually good year.( The investment of Rs. one lakh on First January gave a return of Rs 1,78,597 on BSE sensex, Rs. 1,29,953 on Gold, Rs 160,991 on silver, Rs 1,08,243 on Bank fixed deposit, Rs 1,22,027 in Debt oriented hybrid fund and Rs. 1,86,090 on equity Mutual fund, as on 28TH December 2009.) The highest return came from equity , followed by silver and Gold and the lowest was bank fixed deposit.
Everyone expect that in 2010 also such good returns would be available. According to our calculations year to year returns during the New Year may not be as alluring as it was during 2009. The inflation is getting higher every day. Though America and Europe is out of severe recession actually unemployment figures have not gone down. The banks are not giving enough loans as before. Under the circumstance market is expected to remain volatile. Unless FII invest in Indian share market stocks do not move steadily upward. Indian investors remain shy till market makes bold upward movements. There is a strong possibilities that Indian share market may move upward during first few months of the first quarter but as the year marches ahead THE CORRECTION MAY SET IN AND MARKET MAY GO DOWN AT-LEAST BY 20% PERCENT. Mark Faber predicts 30% correction from present high of 17,800 sensex. Everyone is asking now the following question:
What’s in store for us in 2010? The answer is: The recessions stemming from financial crises tend to be severe and are usually followed by relatively anemic economic recoveries. This time will be no exception, with one of the feeblest recoveries -- maybe 6% to 7% growth in GDP in 2010 – there could be a steep decline of market after a few months. But investors should not worry. In last ten years (from year 2000 to First January, 2010) the best return came from equity, (despite big crash of 2008) followed by gold, silver, real estate, debt oriented balance fund and lastly Bank Fixed Deposit. The equity is the king ion the long run .So younger investors should concentrate on equity, Mid aged investors on Balance fund and old investors on SCSS , PPF and bank.
The stock-market rally of 2009 had an artificial feel. It owed more to a sea of liquidity than to an improvement in the nation’s basic economic condition. Shadow of such depressing situation market may behave erratically. What should be done under such circumstances?
Our recommendation would be to stick to old faithful stocks so far as shares market is concerned. If you have to buy stock buy only promising shares of the emerging categories like communication, IT etc and shares of good old industrial products like steel, oils & chemical, banking and medicine. Investor could also rely more on ULIP and diversified Mutual Fund. During the year thematic funds should be avoided. It is a fact that all the investment should not be kept in single basket of equity only. For creation of wealth different asset class should be subscribed. What is the other asset class that could be relied upon? During past ten years only one asset class had surpassed the equity market- I.e. “ART “segment. But to buy art work investor must be knowledgeable. Art of Hussein or Ganesh Pain and Bikash Bhattachajee are real asset but those are very costly for common investors. The art work of new artists is available at reasonable cost. The silver, Gold and land are other two asset Classes that could be relied upon provided it can be kept protected. Gold ETF are easy to handle but realty sector have not inspired confidence. So the best bet for 2010 would be the Diversified equity and PPF for young investor and for senior citizen it could be balanced funds and SCSS. During the year of 2010 the market is sure to correct. That would be time to enter the market who can organize lump sum amount. My recommendation would be to take the route of SIP or STP from now onward for a period of two years. .If money could be kept invested atleast for four years from now there is a strong possibility of a high return by 2012. Making money is not easy. Many people broke down when their hard earned money, invested for children, became half almost, in 2008, but those persons reaped greatest benefit who kept the money invested throughout 2008 and 2009 and did not redeem despite great psychological pressure from family and friends.
The greatest virtue for the investors of 2010 would be Caution, Patience and Boldness. None need to invest who are weak heart. The year of 2010 would be going to be a landmark year for it would provide the base for a successful earning in 2012-2015. Investor should fix their vision judiciously, keeping in their earning capacity in mind, and wait for the opportunity to invest when opportunity knocks at the market door in 2010.
--------------------------------------
For a long time the importance of money was never used to be discussed in the family get together, as it was considered indecent to discuss money matters in front of the children by parents.This culture has changed of l ate and people have become conscious of importance money. Yet full power of money has not been realised as yet.
In fact, money does not have any strong intrinsic value of its own. It acquires value as it is handled by people . If coins are kept stored in a pitcher or in a box or in a locker for a few years it looses value.Once upon a time, during Sixties, people of Assam used to buy ten eggs for a rupee. With the same amount of money today even one egg is not available.If a person saved that one rupee in his box, today it would have become almost valueless. But if he would have saved that one rupee in a bank (earning ten percent interest) the value of that Re One would have become Rs128/- .With that money even in today's market he would been able to buy three dozens of of eggs. So it is the human being who would have to be responsible to increase the value of money if he needs to survive even in today's market condition. How the value of money was increased in the instant case? It is the habit of saving and investment that generated the value of money. So in today's life whatever we earn should not be consumed during the month itself. A portion of earned income must be saved. Why? Because people can earn money only for thirty five to forty five years but they may survive up to eighty years of age. To keep their body and soul together they need to save and invest money. In to days situation earning money is not easy. But saving and investing money is still more difficult. So we need to make special efforts to save money and train our children to realise the importance of money as soon as they are ten years old.
The most investors are planning now as to how to go about investing in the New Year. A few of our readers conveyed us that the year 2009 brought luck to them. They invested wisely when market was down and could gain almost 28 % returns within a period of eleven months. Naturally they were happy and expressed their satisfaction. Actually they gained only for their own boldness and judicious decision making capacity. It was nice to hear that some of our readers could get satisfying returns during the last year. But it must be kept in mind that in short term generally equity market does not provide excellent returns. Perhaps an element of luck also helped our investors, beside their own strength. The 2009 was an unusually good year.( The investment of Rs. one lakh on First January gave a return of Rs 1,78,597 on BSE sensex, Rs. 1,29,953 on Gold, Rs 160,991 on silver, Rs 1,08,243 on Bank fixed deposit, Rs 1,22,027 in Debt oriented hybrid fund and Rs. 1,86,090 on equity Mutual fund, as on 28TH December 2009.) The highest return came from equity , followed by silver and Gold and the lowest was bank fixed deposit.
Everyone expect that in 2010 also such good returns would be available. According to our calculations year to year returns during the New Year may not be as alluring as it was during 2009. The inflation is getting higher every day. Though America and Europe is out of severe recession actually unemployment figures have not gone down. The banks are not giving enough loans as before. Under the circumstance market is expected to remain volatile. Unless FII invest in Indian share market stocks do not move steadily upward. Indian investors remain shy till market makes bold upward movements. There is a strong possibilities that Indian share market may move upward during first few months of the first quarter but as the year marches ahead THE CORRECTION MAY SET IN AND MARKET MAY GO DOWN AT-LEAST BY 20% PERCENT. Mark Faber predicts 30% correction from present high of 17,800 sensex. Everyone is asking now the following question:
What’s in store for us in 2010? The answer is: The recessions stemming from financial crises tend to be severe and are usually followed by relatively anemic economic recoveries. This time will be no exception, with one of the feeblest recoveries -- maybe 6% to 7% growth in GDP in 2010 – there could be a steep decline of market after a few months. But investors should not worry. In last ten years (from year 2000 to First January, 2010) the best return came from equity, (despite big crash of 2008) followed by gold, silver, real estate, debt oriented balance fund and lastly Bank Fixed Deposit. The equity is the king ion the long run .So younger investors should concentrate on equity, Mid aged investors on Balance fund and old investors on SCSS , PPF and bank.
The stock-market rally of 2009 had an artificial feel. It owed more to a sea of liquidity than to an improvement in the nation’s basic economic condition. Shadow of such depressing situation market may behave erratically. What should be done under such circumstances?
Our recommendation would be to stick to old faithful stocks so far as shares market is concerned. If you have to buy stock buy only promising shares of the emerging categories like communication, IT etc and shares of good old industrial products like steel, oils & chemical, banking and medicine. Investor could also rely more on ULIP and diversified Mutual Fund. During the year thematic funds should be avoided. It is a fact that all the investment should not be kept in single basket of equity only. For creation of wealth different asset class should be subscribed. What is the other asset class that could be relied upon? During past ten years only one asset class had surpassed the equity market- I.e. “ART “segment. But to buy art work investor must be knowledgeable. Art of Hussein or Ganesh Pain and Bikash Bhattachajee are real asset but those are very costly for common investors. The art work of new artists is available at reasonable cost. The silver, Gold and land are other two asset Classes that could be relied upon provided it can be kept protected. Gold ETF are easy to handle but realty sector have not inspired confidence. So the best bet for 2010 would be the Diversified equity and PPF for young investor and for senior citizen it could be balanced funds and SCSS. During the year of 2010 the market is sure to correct. That would be time to enter the market who can organize lump sum amount. My recommendation would be to take the route of SIP or STP from now onward for a period of two years. .If money could be kept invested atleast for four years from now there is a strong possibility of a high return by 2012. Making money is not easy. Many people broke down when their hard earned money, invested for children, became half almost, in 2008, but those persons reaped greatest benefit who kept the money invested throughout 2008 and 2009 and did not redeem despite great psychological pressure from family and friends.
The greatest virtue for the investors of 2010 would be Caution, Patience and Boldness. None need to invest who are weak heart. The year of 2010 would be going to be a landmark year for it would provide the base for a successful earning in 2012-2015. Investor should fix their vision judiciously, keeping in their earning capacity in mind, and wait for the opportunity to invest when opportunity knocks at the market door in 2010.
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