Thursday, December 1, 2011


The demise of Dr. Indira Goswami alias Mamoni Roisam Goswami was a great loss to the world of letters. Mamoni was the lone writer from Assam who was known throughout India and abroad. She was acclaimed as most powerful writer by critic and common people of India alike. Once while visiting backwater of Kerala, the boatman who drove me around asked me if I belong to the land of Ms Goswami. Such was her reputation that even ordinary people of the country remembered her. To me Mamoni's best book was Dotal Hatir Uwe Khowa Hawoda (The Moth eaten Howdah of a Tusker). She was decorated with many awards. But most important were Jnanpth award, Principal prince Claus Laureate award beside Sahitya Akedami. I could not understand as to why Assam valley literary award could not be conferred on her despite her overwhelming popularity. I salute her for her spirit of humility, power of writing and concern for humanitarian cause.

She was a dear friend from our boyhood days. She was soft-spoken, shy but forthright person from her girlhood days. But she developed strong personality over the years. She was our contemporary in school and classmate in our Cotton college and Guwahati university days. We met each other when we were in class Eight. She started writing since then short stories under the guidance of Kirtinath Hazarika then editor of Natun Asomiya. In fact it was Tilak Hazarika and Kirtinath Hazarika who motivated us to write. I started writing poetry and Mamoni took to short stories. Sooner we realized that Mamoni was far too superior to all of us and she wrote some of the excellent short stories during 1956 and 1957. She wrote poems too. Once in Cotton College She wrote a stage play which was enacted by here all girls College mates as a rejoinder to male dominated College week cultural extravaganza. The drama was a thumping success in 1959. Once while visitng her Delhi House , I enquired:

“: Mamoni, what is the motivation behind your writing career?

: Writing was never my career. It was a passion. Teaching is my profession.

: What compels you to write really?

: My life. I write to enjoy my life. Without writing I would have been a dead Person! Almost all my books reflect my own experience of life.”

During our school days National Boys scout and Girls guide Jamboree was held in Jaipur. Both Mamoni and I were included in the Assam contingent along with few more fellow scouts and guides from all over Assam and Meghalaya under the leadership of Late Rameswar Kalita, a senior official from Scout and Guide movement.. During this journey we developed friendship from a mere acquaintance and it continued till today. Beside attending jamboree we were taken to various other cities of Northern India as a part of sight seeing. We went to luckhnow, Agra and Delhi. On return, I still remember, both of us wrote a few travel stories which were published in “Natun Asomiya” then edited by kirtinath Hazarika. Mamoni became a prolific writer there after, and wrote some of the trend setting stories of life that influenced Assamese society. She was the darling of youth and was blessed by senior for her humility. She moved up with great stories and reached pinnacle of success very early in life. We were proud of her.

The news of her death has devastated us. She has been a great writer, great humanitarian and devoted friends. She talked to me from Guwahati just two days before she fell ill this year and went into coma soon. I regret not visiting her in Delhi or at Guwahati. when she was in her senses. I pay my condolences and pray God for the peace of the departed soul.

She was also well known for her attempts to structure social change both through her writings and through her role as mediator between the banned secessionist group ULFA and the Government of India. Her involvement led to the formation of the People's Consultation Group, a peace committee. She used to refer herself as an "observer" of the ongoing peace process rather than a mediator or initiator.

Her work has been performed on stages and in celluloid. The film Adajya is based on her novel won international awards. Jhanu Barua made a film on her entitled "WORDS FROM THE MIST'. She was a member of the Girls Guide movements while in school. S

Mamoni Raisom Goswami slowly emerged as the Mamoni “bedew’ (elder sister) to thousands of Asomiya language readers. Her stint in Delhi University helped her to build up her reputation as a writer who read her scintillating works in translation. Amrita Pritam was her one of the best friends among others. Her departure from this world has left a void in the literary circle of the country that would be hard to fill. Though we knew She is gravely sick but never thought that she would depart so suddenly. Mamoni used love people. She would not disappoint any one who approaches here for an autograph. She encouraged young writers especially girls.

Mamoni was a Sitar player in her youth. The sight of her graceful walking along the M.C. Road, Guwahati with a Sitar on her hand is still fresh in my memory. She used to come over to the residence of Bharalis, next to our house, and accompanied Minati Bharali sometime who was also a co-Sitar player. Both learnt Sitar from Late Sunder Bordoloi at Kumar Bhaskar Natya Mandir at uzanbazar.

Mamoni was born into a privileged family and her early education was in Pine Mount, a premier English medium school in Shillong. Later She came to Guwahati and took admission in T. C. School. The headmistress of the school, Indira Devi was at first hesitant to admit her, coming from an English medium school. But soon mamoni proved how intelligent she was. She not only picked up the vernacular language but mastered it in such way that her teacher were awe struck. As Ranjita Biswas puts it “Ms Goswami writings focused on the suffering of the disadvantaged section of society. She understood the joy and pathos of the common people. Her novels and short stories reflected her empathy for them whether the setting of the plot was Kashmir, Uttar Pradesh or the green landscape of the Brahmaputra”.

She championed the cause of women throughout her career. Brought up in a conservative Brahmin family, Mamoni never compromised with the artificial diktat of the social norms, — be it while marrying someone out of the community, or in the way she wrote.

Mamoni always relished everything good in life. She loved good food, loved to attire well and was always well-groomed like French ladies. She was great in conversations and enjoyed the company of her friends always. Always mamoni had lot of time for her close friends. Mamoni loved Kolkata and used to visit often for lecture programme and for release of books. She is to write for “The Telegraphs” from time to time. Her latest writing was published as late as in November this year on Dr. Bhupen Hazarika’s death. The article must have been written 10 month before when she went into coma.

I feel her most of writing were great. But to me best novel of here were “Dotal Hatir Une Khowa Howda”> In that novel, she chronicles the saga of a young Brahmin widow Giribala who, since the death of her husband, had eaten only rice and boiled pulses and now shocks the society by eating meat surreptitiously.

The defiance of the protagonist Giribala, as she challenges the norms set by society for Brahmin widows in 19th century Assam is echoed again in Nilkonthi Braja depicting a much later period (the 1960s) in holy Vrindavan. In one of the earliest contemporary novels on the plight of widows in the religious circuit, it reflects on the suffering of thousands of Bengali widows living on the edge.

Mamoni’s stories reflect in the basic goodness of human beings, though it is constantly challenged by opposite forces. Her writing has a basic honesty, even when talking about herself. In the autobiographical Adha Lekha Dastavej (Life is no Bargain), she talks openly about her obsession, since she was young. Description of love making and sex was not a taboo in her writing.

Her reputation as a Ramayana scholar is well-known. Though she was in Delhi for a long stint as professor of Assamese literature in the Delhi University she never lost touch with her native land. A few years ago, going out of her literary world she took the initiative to try build a bridge between the outlawed ULFA faction and Assam’s administration to bring peace to the insurgent ridden land. Her heart was always in the well-being of the state. Her works have been widely translated into English and Bengali Languages.

With the demise of Mamoni Assam, nay Indian literature has lost a writer and humanist extraordinaire. I met Mamoni when I was young boy of 14 years; today I am Seventy years old. I had same admiration for her when she was also young. I have seen how strong willed persons she was in her life. I invoke the blessings of God for the peace of the departed soul. She has gone today but her writing would remind us her strength of mind. She possessed a beautiful mind. It always worked for the betterment of humanity.


Tuesday, November 15, 2011



“Music is the highest art, and to those who understand, is the highest worship”
Swami Vivekananda
The departure of Bhupenda created a void in the world of music, culture and human warmth. But greatest loss would be to the value for which he strived most, the human brother hood and for a field of integration (Somonoyer Khetra). His all lyric, stories, personal essays and even music were to achieve this purpose of emotional integration amongst the humanity of the world. He traveled and traversed from Ottawa to Columbia, Brahmaputra to Volga ,Sunghphoo to Padma with only one intent in mind. Unification of human mind .He lead the life of a gypsy but embraced the entire world as his family. . It is almost impossible to bind Hazarika’s personality to any dogma. He is free as a bird yet he would always like to live amidst the humanity like Wordsworth’s Cuckoo. It is not important where he lives now. But for whom he stands today? The answer is simply he wants to live for the wellbeing of humanity.
In strict sense of the term he was not a family man. He had no fixed relatives but had only relations with humanity. In his broader vision, he had neither wife, nor son; not even his brothers and sisters. They were his friends along with the timing millions who lived in this world. Once in my Kolkata home, during the planning session of poetry recording in 1977 we were discussing mundane things as always and I suddenly asked him …

: Bhupenda, don’t you feel the absence of a family now?
: Not really! My family extends to my friends like you and beyond… to the struggling people in the field and plants.
: You are kidding Bhupenda, I replied
: No, I am not. I am a restless man, you know. I resigned my jobs at the university and Radio for my soul need to remain unbound.
: What about your relations with your parent?
: I greatly love my Mom! I dreamt her often. But I have been a worthless son, a worthless husband, a bad father too. I even could not play with my son during his formative period.
: But you have been a loving brother, by you own admission!
: Even I could not take care of them fully except for initial education for sometime. I could not help my father during his retired life. He did so much to settle me down. Actually, I am not really destined for a planned and bgugdmd/lifikwtyle. I am a roving minstrel ….. And Bhupenda suddenly started reciting aloud…..
“I am a gipsy
I scour the ends of the earth
But wouldn’t look for a home
From Luit to the Mississippi
I marveled at the Volga
From Ottawa through Austria
I made Paris my own.”
(Moi ek jajabar)
Many of his friends knew that Bhupenda was a great in recitation. He used to recite poem of joytiprasad “ JUGANTORER MOI , KALANTORER MOI” with his husky voice to a great effect . He however had not recorded too many recitation of poetry, either of his own or of others. In 1976 when Gramophone Company of India had cut the first ever poetry recitation record of Assamese poets, Bhupenda’s natural choice was the poem composed by Joytiprasad Aggarwala. Other declaimers like Ishan Barua, Manjumla Das, Amarjooyti Chowdhury and Arunima Saikia, who also participated in the recording, were thrilled to hear his recitation. It was an unique experience for them and his way of recitation brought out goose pimples on them .No sooner he finished recording, unknowingly all of them, including the sound recordist Mallabuzar Barua, clapped in unison. The name of the record was “Saptarshi”. The record was produced by me and music was scored by Dr. Bhupen Hazarika. The record is not easily available now. But some of the Assamese families have kept that record as their prized passion. I recommend to every admirer to listen to the recitation of the poem by Bhupen Da. It would be a unique experience. In fact this recitation could be reproduced and rerecorded by any of his admirer for the posterity, before the last copy is lost in oblivion“
Give me a white man whose blood is white
Give me a Black man whose blood is black
You would get whatever you want
If you can give me in return”
(Jonab Fakir of Bangladesh)
This song reverberated from the voice of Dr. Bhupen Hazarika of Assam long before Dr. Martin Luther King was assassinated in America. Dr. Hazarika was a true disciple of the great Saint Sankardeva of Assam and was later influenced by the philosophy of the greatest cult singer Paul Robson of USA. He transcended the walls of his classroom at the University of Gauhati, India in fifties of the last century and took the high road to various corners of the world. He traveled the world from Arunachal to Chicago, from Ottawa to Austria. He spoke of Gorky while sitting at the grave of Mark Twain.
More than his life, he got tumultuous ovation on his death from common men of the street. People came from every walk of life to pay their homage to the soul of the man whom they loved from the core of their hearts. It was a unique scene. There were tremendous people on the street of Guwahati, at his residence, at judges field where his body was kept to enable his ardent admirers to pay respect and also during the cremation ceremony at Guwahati University campus. Altogether more than million persons physically paid homage to Bhupenda at Guwahati. I was in Los Angeles in 2009 and was witness to the human euphoria of mourning the death of Michel Jackson. I was in Kolkata when legendary Satayjit Ray died . There were seas of humanity in all these mourning. But love and affection for Bhupenda drew much bigger crowd at Guwahati. Approximately 1.5 million people came out to pay their last respect. It was a rare sight to find that many people kept on visiting the place of cremation even after a week. Incidentally, his first job was in the same campus. Here he wrote one of the finest songs of the century which was sung as chorus on the inaugural day of the university.
“The Banks of the Luit will brighten
Breaking the barrier of darkness
In Pragjoyotish flows
The fountains of light
Hundreds of light .
In a Depawali of wisdom
Will brighten the banks of Luit
The parchment will give us words
The siphung hope
And the Ranghar will open the doors
Society will embrace
Mighty humanity
And science will bring a tide.” (Jilekaba Luitore Par)

A cult figure to us:
I met Bhupen Dada, for the first time, in 1955 at Calcutta Movie tone Studio. He was in Calcutta those days to score the music of “Piyali Phookan”, a film directed by another giant Phani Sharma. I was brought to Calcutta by Lakshydhar Chowdhury to act in his film “Nimila Anka”. From that day onward I became a fan of Bhupenda and our association lasted till date. Like him I settled in Kolkata later in my life and we were neighbour when I started living at Thana House of Tollygung .
To many people in India he has been a great singer. To some people he was a wonderful film maker, to some he was an excellent lyricist. For some he was a dear and respected teacher. But to us he has been a cult figure who empowered our generation with his voice, deeds and writings. Whenever the country is in turmoil he has been there to raise his voice for the upliftment of the downtrodden. He is a humanist per excellence. The lyrics are his bullets and his voice is the machine gun. He has inspired several generations in India through his lyrics, songs, films and writings. His greatest weapon is his system of communication. He can communicate with everyone of every age and can persuade to his point of view at ease. The mother and the daughter, the father and the son are always competing with each other to have a share of Dr. Hazarika vocal tonic, companionship and friendship. Always Bhupen Hazarika had remained a youth full persona : an eternal Dada. He has retained the eternal youthful vigor. Even a child can communicate with him as Dada but we have became “grandfather”. Often we marveled at how he managed his time. He was sought after by the communists in West Bengal, the Congress always wanted him and the BJP asked him to come to their side. But Bhupenda always remained with the mass. No freshman social was a resounding success in Bengal with his participation. In Calcutta all the employees associations of merchant offices wanted Dr. Hazarika in their cultural shows. On many occasions I was approached by the McLeod Russell cultural association to put a word to Bhupenda so that he can accept the invitation to their cultural bash. Bhupenda always obliged.
Once in 1975 Bhupenda and I had to share a room at Kaziranga Tourist lodge. I was on my way to visit Jorhat and stayed back at the tourist lodge. In the evening when I returned back from the inner sanctuary then Tourist officer came and met me. He told me that Bhupenda is on his way to Guwahati and had to stay for the night and there was no room. Would I min if he share the room for the night. I told him that it would be pleasure to spend the night together. That night was a great night for we talked many things of his life.
: Bhupenda, you have been activist of IPTA. Some says you are communist. Is it true? I asked
: I am a Marxist. I read Marx and Angel and that inspired my mind to elevate downtrodden.
: But you have been visiting Kamakhya temple too. Are you a religious person?
: Yes I am religious. My religion is service to humanity. I do not worship God with flowers. My flowers are my lyrics. I believe in Divinity. To me, Religion is the expression of divinity in human being. You know my music is my offerings to God. I have no personal God. I worship with music to empower downtrodden, he replied.
:Do you feel elevated when you sing.
: I feel greatly happy when I compose a poem, a lyric and when I sing
: I have already written that my songs harbour no destructive vision. it envisages an unprecedented peace.
His songs empowered us to raise our voice. We were motivated to fight back against corruption, terrorism and social degeneration and poverty. For last few years, Dr. Hazarika was mostly in Bombay in the loving care of Kalpana Lazmi and his Doctors.. He felt reassured there. But his mind always travels to Assam. Physically he feels sometime very weak but mentally as strong as steel. Bhupenda is as iconic to Assam as Rabindranath is to Bengal and Robert Burns is to Scotland, Tolstoy to Russian and Mark Twain to America. He is a phenomenon which arrives once in a blue moon in a society. To me his most outstanding song is: “Bimurta Nishate”…
“This my ethereal Night
Is a blue scarf
Woven of silence
In its folds
Tender breathing
And live warmth”.
This is the song Bhupen Da also loves most. He loves all his creations. But this song appeals to him the most.
He was 85 years young man when he died. None of his blood relations were present, except “Toto”(Sanjib Hazarika) his favourite nephew, near his death bed. He however was surrounded by his soul mates of life. From Kalpana to Anuradha, Pradip to Manjula beside Manisha Hazarika (his
Sister in law) Rajshri and Baba were also present. Anuradha gave the vivid account of the last moments of Maestros life in the hospital at Bombay. …..(sADIN)
“When I reached his room in the hospital his eyes were closed. Kalpana whispered to the semi conscious Bhupenda “, look Bhup who has come! It is Anuradha from Guwahati”. There was no response for a while. A moment later his eyes opened up for a moment and closed down again! Jayashri( Marthi friend of Kalpana) shouted “ look he responded. .His sixth sense must have realized some one nearer to him has come”…. I knew that these were only expression of optimism. In fact I turned stone seeing his conditions with three pipes entering into his throat and host of monitors recording his physiological data. Bhupenda who always hated gadgets, even cell phones, is now struggling with such artificial help!
On 5th November Dr. Sailendra Goyal came to examine him. We all were outside his room only pradip and Baba were inside the cabin along with the Doctor. His blood count seemed ok but platelets was falling down. --- Those were the most of agonizing moment. Maha Mritunjoy Slokas were played for his wellbeing. I asked Joyoshri, why not his own songs? Doctors came next day, examined and told to stop these songs. This is the time to play Hazarika’s own creation. He would understand that better. Doctors kept on examining him. We were out side the room but his body monitors were visible to us.
It is around 11.30 am Dr. Goyal visited his chamber. Examined him for twenty minutes.
He came out, aftr examinations and told Kalpana his blood pressure is falling rapidly. It will be difficult to stimulate him any more. You may loose him sooner or later. We all felt depressed. Monitors in front of us were fluctuating rapidly.
Whenever blood pressure came up we hoped for good news. We could realise he was fighting. He was a great fighter always. Kalpana started her prayers aloud…. Suddenly we saw on the monitor blood pressure and pulse rate were loosing grip. It was falling rapidly. The curves on the monitor reflected the depression and right in front of our eyes the moving graphs on monitors became straight lines.. …. He was no more”
The news of his departure was conveyed to me immediately by a friend of mine. Anuradha flew back next day from Bombay via Kolkata. She gave me the full description. My mind filled with emotion and nostalgia of yester years. I remembered his lyric “When I’ll have gone from this life”……
When I‘ll have gone from this life
Breaking all tie and bonds
I hope by my pyre I‘ll find
Your solicitude.
I do not want memorial services
Nor false eulogies
A drop of tear from you
And I’ll have had my due. (Moi Jetia ei jivnor)
Kalpana is misunderstood by most, but is admired by Bhupen Dada. She has been a friend philosopher and companion all combined together to Bhupenda. Bhupenda was her guide. Let us accept the reality. Despite opposition of a section of well wisher Bhupenda admires her relations with him. That is the truth and whole truth. Let us honour his feelings and emotion, if we love him.
Bhupenda had gone but his values would always remain alive with timing millions. Building up of a memorial edifice does not always make a person immortal. It is the love of people which make a person everlasting. The culture of “ Bhupendra Sangeet”, if taught to our children, would perhaps be able to keep Bhupenda alive in the heart of timing millions even after hundreds of years, like Rabindra Nath was kept alive not by government but by the effort of his admirers. That would be a real tribute to Bhupenda ;s Legacy who made world his home. Let every district of Assam have an institute of Bhupendra Culture. Can this work be taken up by AASU with concurrent grant from Government of Assam? If one Million mourners who came to pay respect contribute Rs 100/- a person organizers would be able to gather Rs 5crore with matching grant from Govern met and NRI from Assam a good amount will be available to start the work. Would someone take the lead? Otherwise posterity would say Assamese is a race of “Memoriall Service Attendees” only (in the language of Homen Borgohain Soradh Khowa Jati: Amar Asom of 12th November).
Aftermath of demise of Bhupenda the responsibility of our society has increased by manifold. We must protect whatever values he has built up over the years. Mostly all the mourners of the country have shown commendable discipline while his body was lay in estate .Only sad incident which marred the cremation ceremony was uncivilized behavior of one of the well-known artist who, perhaps was considered by some ,as successor to Bhupenda . There were large scale condemnations of such behavior. Our society must be vigilant that such incident does not occur again for that would be an act of disrespect to the great soul whom everyone considers as an icon of love and tranquility. While he was alive he declared…
“Let my songs be
A profound assurance
Against the pervading lack of trust.
Let my songs be
A hymn to truth
Against false imaginings “


Friday, September 16, 2011


Dr. Amrit Baruah, a former Associate Professor at Yell university and Chairman of the department of public Administration etc of Maryland State University and one of the best -known social scientist based in Baltimore, U.S.A. once told it was good to provide a fish meal to a hungry person but it is far too important to teach the hungry persons as to how fish could be caught for their livelihood. The first action was a compassionate deed but the second action was an act of empowerment. The second action was far too superior to the initial action. Mr. Pradip Sharma really took up the second action and empowered a whole lot of persons who were deprived lot.

I am very happy to learn that Sharma started his enterprise singly first and involved lot of persons later. Today not only local Gramin( Rural) Banks are involved in his projects but also nationalized banks , well-known educational institutions of the world, including MIT are involved to crate a climate of self help.

Mr. Sharma’s Project model is simple yet has far reaching consequences. He does not spoon feed but empowers a group to be responsible to pay back the debt incurred by the individual members of the group. It brings about a sense of social responsibility. His project is in low tech areas, but have high social values and relevance. Sharma should be congratulated for his venture. We are proud of his effort that has been able to motivate western intellectual to stand beside him to help crate economic rejuvenation of a group of citizen from below poverty level. It is an act of emancipation. His project did elevate a section of people who were struggling to meet both the ends of their life to be a socially responsible entrepreneur. It is this effort of his which is most meaningful to the society.

Sharma has brought in a new sense of responsibility to the society. This act of his has motivated, I understand, a section of people to reach out to empower poorer section of society. I came to know of this project from the writing and a promo film by Mr. and Mrs Ankur Borah. I did suggest that to earn extra few rupees by promoting organization a tie up could be thought of with some of the cold drink companies for advertisement space on the back of the rickshaw.Even Rickshaws can be designed to install a small battery cum solar paneled cooling machine to store cold drinks through promotional efforts from Pepsi or Coke.In hot summer days travelers may like to buy cold drinks while traveling, buy a book or take an on line accident and medical policy. Insurance companies could be made a partner in supporting the project in lieu of advertisement on the back of the rickshaw.

My congratulations to Mr.Pradip Sharma not only for doing a socially responsible work but for the encouragement he has provided to others of the international community to get involved with third world country’s community for economic empowerment.


Monday, June 6, 2011


Since equity plans not doing very well over the last years people are seeking alternative avenues for investment now. Most people are investing their money in Fixed deposits of Banks and in Fixed Maturity Plans. In investment horizon there are many plans to invest our money in the market.. There are equity fund, index funds, debt fund, ELSS and fixed maturity funds beside fixed deposit of Banks. Among all the funds fixed maturity funds are less risky. One thing must be kept in mind that fixed maturity funds are not risk proof as generally made out to be.. It however is next best to the fixed deposit in bank, PPF, SCSS etc as far as security of money is concerned. Fixed Maturity Plan protects capital but is open to interest rate risk. It provides better return most of the time than fixed deposit. This fund is popularly known as “FMP”

The reason investors choose FMPs is for their high returns which are also indicated but not guaranteed. In order to give assured returns, FMPs opt for very secure investment options like AAA rated corporate bonds whose maturity tenure matches the maturity tenure of FMP. However in the recent times, some of these FMPs started investing in commercial paper from real estate and finance companies, in order to give higher returns on their investors. The long term FMPs become more tax efficient as it does not attract income tax due to double indexation.

The investing in FMPs allows an investor to earn higher returns while minimizing their exposure to the risk. As a result, many fund houses have introduced their FMPs to entice investors to invest with them. But what are FMPs? Are they safe as they seem to be? If not, what are their pitfalls? We explained in the beginning of the article about the myth surrounding the FMPS. It is not always safe like Bank FDAs the name implies; these plans have a certain maturity period. They are closed-ended funds, meaning you can invest in them only when they are open for purchase. This is only during NFO period. To redeem your investment, you need to wait for the pan to mature or pay a stiff 2% exit load. Generally FMPS are for around 13 to 18th month’s period. Incase you can survive the period a handsome gain could be expected. If you take out during midstream you loose money as there is high exit load.

How FMPS could provide better return than bank F. D.? In order to give assured returns, FMPs opt for very secure investment options like AAA rated corporate bonds whose maturity tenure matches the maturity tenure of FMP It is however a myth that there is no risk in FMP. Despite their claims of being one of the safest investment options around, FMPs do have their own share of risks. A few of them are as under:

Those FMPs offering higher yield can afford to do so by investing in risky investment options. This has been evident in 2008, when these funds faced liquidity crisis due to their exposure to real estate and finance companies. . In the recent times, some of the FMPs started investing in commercial paper from real estate and finance companies, in order to give higher returns to their investors. When the finance and realty companies landed in trouble during the recent economic downturn, their offerings also lost value Investors pulled out in panic. With the investors pulling out their investments from these FMPS, the funds were forced to offload their investments in the illiquid markets, thereby causing liquidity crisis. But ultimately investors who stayed invested did not loose at the end of the period and go almost assured returns. The actual yield will depend on the yield on the debt instruments at the time of actually investing your money. In reality the FMPs offer safety of their capital, but they do not offer protection against interest rate risk. As the interest rate rises, the value of the bonds goes down. This sometime can affect the returns of the fund.

What precaution investors should take while opting for FMPS. To get the best out of FMP certain precaution should be taken. Always check the indicative portfolio of the funds. In case you find any non AAA security avoid the particular FMPs. The assured yields are on the indicative yield as the actual return indicative and suggestive and should not confuse with guarantee. Sometime there are wide gap between yield shown while launching and actual yield at the time maturity. Sometime it is more but sometime it can lower.

The golden rule is to stick to the maturity period of the plan. Don’t withdraw half way through as it will force the fund manager to redeem investments at any available price, thereby causing losses to you as well as other investors. The FMPs are good investment for risk adverse people of middle age group. But do not put all the eggs in one basket. You can invest 10% of the total investment in fixed maturity plan and earn better returning compared with the Fixed Deposit of Bank. But for persons who don't come under income tax ambit fixed deposit of bank at the rate of 10.5% are more paying than FMP now. It would be for individual persons to choose what suits them best.



I am not aware of any country, except perhaps Arab world, where pension received by a retiree is free of income tax. Enormous tax benefit are available while contributing to a fund. But all senior citizens of western countries pay Income tax when they receive their pension amount monthly or weekly. Of course citizens of those countries receive social security which our citizens do not receive. Perhaps to mitigate this shortcoming the union Government is planning to make pension free of income tax when Tax code is going to be introduced next year for Indian citizen.

The annuity and PPF are two great schemes which would usher in a great time for retired and senior citizen and tax paying rich single women. At present there are a few guaranteed fixed income schemes like bank FD, post office monthly saving schemes and senior citizen scheme in our country .The return on the capital is 7.75% to 9% in those entire schemes with applicable income tax provision. Incase revised Tax code is implemented both deferred and immediate annuity would not be taxed and hence investors would be more inclined now on ward to invest in pension schemes. The great thing it would not only cheers older citizen but motivate greatly young and mid aged person too to save more and more for their future...

Till now school teachers to senior bureaucrats, who have been receiving pension, had to pay income tax. Now since no income tax would be required to pay naturally they would feel happy. Young people opting for deferred payment option would also be greatly benefited. Widows and older citizen who were not willing to save money in pension scheme would be interested since immediate annuity benefit like “Jeevan Akshay” scheme of LIC would get a boost. Now an older person of 65 years and above can invest Rs.10 Lakh during 2010 year and started getting pension from 2011 at the rate of 7.5% return with out tax. . This means a retiree would be able to get Rs 75,000/- annually without tax..

Any persons of above 40 years would be able to save and get the similar return and start a systematic investment plan of Mutual fund from the money received as interest. If they keep this investment system till he/she retires at 60 years of age she would be able to gather at least Rs 49 lakh even if a moderate return of 10% is considered for the period of twenty years. This amount would be free of income tax as on date. But may attract capital gains tax at the applicable rate after twenty years.

The immediate annuities have been around for last few years in our country. But most of the people were not interested due to heavy income tax rate and lower annuity value. The LIC has a very decent immediate annuity policy in Jeevan Akshay. It was one of the most successful policy till 1992. The growth of this policy along with Jeevan Dhara (deferred policy) was phenomenal. Both the policy went by way side since 1993 till date as no tax benefit was available. With the intended tax benefit from 2012 the Jeevan Akshya policy could be a marvelous policy for senior citizen. If senior citizen has lump sum money to spare, after investing in SCSS and PPF, I would rather recommend our readers to invest in this product provided they are already tax payers. The amount received from immediate annuity would be tax free in the hands of Senior citizen. The rate of return annually would be 7.60% till his/her demise with return of capital to her / his nominee. This is a fantastic return after taking advantage of SCSS , Post office monthly income scheme and PPF..

I am also sure with such great benefit the new Pension scheme would be a great product for younger generation. Senior citizen would not be so benefited from NPS for it has no immediate annuity facilities. It would be wise for senior citizen and tax paying rich widows or single women to concentrate on single annuity based product like Jeevan Akshya for their decent livelihood without tax burden.

What is immediate annuity? When a person buys an immediate annuity, he pays the life insurance company a lumpsum amount up front and the insurer gives a guarantee of paying him a fixed amount at regular intervals(depending on payment option chosen by him) as long as he lives. On his demise the principal amount is returned back to his spouse or children .The spouse may also continue to get same amount till her life time. The present rate of annuity is around 7.60%.per annum. Once upon a time during twentieth century it was much higher. Before 2001 LIC was the sole company who issued immediate annuity policy. Now also there are very few companies who provide these facilities. With new tax provision surely more and more companies may start single premium immediate annuity plans as it is going to be a hot product for middle aged persons, senior citizen and tax paying rich single women. The great news is though immediate annuity plans are insurance products it does not require any medical check ups. The return is not market related yet the rate of annuity is higher than regular insurance product and fully assured like bank product. What is better than bank FD it has no tax tag to oblige. So get prepared and start investing in a great product of your life time. Do it soon because tax benefit can be withdrawn as it was done in 1992. But once you invest during the currency of the scheme you would continue to get the benefit for the life time.


Saturday, April 30, 2011


Despite great optimism of Government of India for achieving country’s 8.5% growth rates it is now apparent that it would be an impossible target to achieve. Many professional economists, including foreign banks, feel that the growth rate will rather come down to 8%. as inflation and high cost of borrowing would impact production. The finance Minister’s expectation of 9% growth, within three years, would remain a futile dream. We feel, as the inflation would remain the dominant force during this period. India is in trouble. It is facing the highest non-food inflation in two months. Professional Economist now recommends that Government should build up strategic stockpiles of staples to cool prices, in medium term. Warren Buffet replying to journalist in India told that the present problem of world, including India, is not liquidity or the functioning of markets and capitals. It is the inflation that may constraint growth for a while. But ultimately inflation is bound to go down and growth would take place as productivity increases. The growth is bound to take place but may not be in a hurry, he added.

The Governor of RBI, D. Subba Rao has categorically stated that monetary policy is not that effective when it comes to inflation driven by supply side factors as is evident at present. The upper echelon of secretaries and officials has deliberated very recently to control the supply side of inflationary pressure. They felt that the inflation could be controlled through three ways. Firstly , through monetary measures, secondly, by bringing down deficit financing on one hand and, thirdly, by improving supply side either by increased production or by rationalizing supply line.

The Government is convinced that RBI has taken enough monetary measures already and now is the time for administration to improve the supply side of goods and services. The chief Economic Advisor of government of India feels that inflation has started coming down and in another six months it would reflect his optimism in practice. But most economist feel that inflation is not going to come down before 2012 and even the economic growth would not be more than 8% despite high hope of the Finance Minster and his team. While current inflation levels certainly need to be brought down, this year’s Economic Survey has a radical suggestion – inflation may be here to stay with us if we want a high-growth economy. Using crude instruments to bring down inflation could have unpalatable consequences – such as loss of output and jobs, factories closing down and farms becoming less productive. If that is the case, rather than curbing inflation radically, an alternate course would be to work out ways of shielding the poor from the effects of inflation.

The Economist of HSBC bank feel inflation n India is not going to come down in a hurry. India shall have to depend on import of crude oil. The value of crude is not going to come down soon. Neither corruption of the society is going to evaporate overnight. The lethal combination of these two components would force the country to pass through a great inflationary pressure. The growth story is intact but with moderation. According to private professional economists the economic growth rate of the country is not going above 8% till 2012.

. India, the second-biggest grower of rice, wheat and sugar, may buy some supplies from overseas, boosting prices of commodities including palm and soybean oils. Inflation is a casualty of high vegetable prices and the government may need to import some essential commodities to cool costs The buffer stocks created should be rotated regularly or else we’ll be doing more harm to prices. Today, we have no hesitation to recommend starting of retail movement through local corporate with foreign participation like in case of Insurance management. India does not have expertise on retail distribution system. The system can be developed with foreign participation.

Given extreme weather patterns across the globe -- floods in Australia, snowstorms in the northern hemisphere and turmoil in middle east and Africa beside natural caloaminit3s of Japan -- price rises could persist in the coming months. This poses upside risks to our inflation forecasts.

. Kaushik Basu said that India is a huge country in terms of population and land area. It is utter mistake to think that it is fully within the control of the government to move prices of food up and down. Despite our high regards for Mr. Basu we do not agree with these arguments. China is a bigger country than India with greater population .How China is controlling food prices? China is controlling through long term planning of stock piling and eradicating corruption and by managing public distribution system with greater vigilance. This is where Indian politician cum administrators failed.

Palm oil, which accounts for 80 percent of India’s annual cooking oil imports worth $8.4 billion, have surged 57 percent in the past six months in Malaysia, while soybean oil climbed 43 percent in 2010 for a second straight year, because of adverse weather in the producing nations. Did Government of India ever thought of stock piling these products knowing well that onion could be avoided but for Indian kitchen cooking oil is a must.

Reserve Bank of India Governor Duvvuri Subbarao has raised interest rates Eight times in a year, the most by any central bank in Asia. Monetary action alone won’t help cool inflation.

Basu, however, cautioned against using any blunt instrument like arbitrary fixing of prices to tame exceptionally high prices, as such a move results in shortage of commodities and retard growth. We are entirely in agreement with Basu. But let the first stop be taken locally to control unscrupulous traders and hoarder and cartel of fish market at least for Assam and vegetable cartel in Delhi and west Bengal. Unless oil prices stabilize and international situation in Japan ,Africa and Middle east improve lurking fear of inflation would be there and growth rate would be dependent on these factors indirectly.


Warren Buffet’s visit to India generated spectacular enthusiasm and created sensation. Not only Indian investors but also Indian industrialists, Media, investors, teachers and students have made a beeline to listen to his advice. But Buffet himself has said that he has not come here to teach Indian. They are not required to be taught. Indian is one of the most intelligent groups of the world. Ajit Jain, his prodigy, is one of the most valuable gift of India to him, accompanied him and also participated in discussion with students.. Today’s Indian know exactly how to confront problems and dig out prospect much better than most Nations of the world, he added.

Buffet was born in 1930 in Omaha, Nebraska, the son of a stockbroker and Congressman. Nobody, including himself, thought in his early years that he would be the world’s most successful investor in future.. As a boy, irrespective of his family background, he delivered newspapers to make extra money and this probably sparked his interest in the media where he has made several successful investments including the Washington Post Company, a stock that has made him a lot of money and which he vows never to sell. Buffet is loved and respected not only because he is one of the richest persons of the world but for his humanitarian attitude towards life. His humility, sincerity of purpose and compassion has won respect throughout the world. Speaking to Business school students of India Buffet mentioned that to be a successful investor terrific IQ is not necessary. The most important requirement for an investor is sensible temperament and robust common sense. A successful investor must learn to value business. His preference for value stock is wellknown.

From his young age Buffet was a determined person. Imbued with a determination to make good and an entrepreneurial nature, Warren dabbled in several part time businesses but his destiny was chartered early in the piece when, after graduating from the University of Nebraska, he studied business at the Columbia Graduate Business School .His Guru was Benjamin, Graham who shaped up his foresight. About India, where his presence is comparatively minuscule and includes recent tie-up with Bajaj Allianz for distribution of motor insurance products, Buffet said that he was looking at investments in large countries like India., Buffet said that he was looking at investments in large countries like India. Saying away from Indian enterprise so long was a mistake , Warren Buffet said. But he also conceded that none from India also contacted him so long.. Sooner or later the mistake would be surely rectified but no time frame has been fixed yet, he added.

Like many legend his first attempt to get a job ended in failure. He tried to get a position with Graham’s firm and was at first unsuccessful. Finally he got the job and learned a lot about stock investment from the Master. Graham eventually retired and Buffet started a limited partnership in Omaha, using capital contributed by family and friends. The partnership was a great success and Buffet is said to have averaged an annual rate of return for the partnership in excess of 23 per cent, far in excess of the market. Buffet was born and raised during the time of great depression. By the time he grew up, USA was returning back to normalcy and was getting ready to jump to prosperity. Buffet availed the opportunity with meticulous discipline. He never overspent. His philosophy of life was money earned by him was not meant for him alone. It is to be shared with the society. To him society did not mean America but the world of have-not this attitude of his endeared him with mass and class.

Buffett, after several years, decided to wind up the partnership, returning the lucky investors their capital and their share of the profits, and bought an interest in Berkshire Hathaway, a textile company, giving his original investors the chance to invest. The smart ones joine3d him. This attitude reflected Buffet’s sincerity towards his friends and colleagues. Contrary to popular belief his early days at Berkshire Hathaway were not great. The company was in an industry facing real challenges from exports and high manufacturing costs. Warren Buffett had not, however, forgotten what he had learned under Graham, and arranged for the company to buy out two Nebraska insurance companies that changed his business fortune. The business of insurance is a hard one but under Buffett, the company has become, not only a successful share investor, but a leading provider of insurance. Buffet always look for shares of solid companies with tremendous future prospect, having capable and honest management with a difference. His favourites enterprises are mostly large value based companies with service orientation and mass based. He preferred Insurance, Media, infrastructure, cold drinks and finance companies. Despite his great regards for the business acumen of Bill gates Buffett never owns any stock of Microshoft. However he donated most of his money for charity to be managed by Bill and Melinda gates.

Buffett ,, struck up a friendship with Charles T Munger, a lawyer and investor and Charlie Munger eventually joined Warren at Berkshire Hathaway as his Vice-Chairman, alter ego, and friend. Warren Buffett is always the first to acknowledge the contribution that Charlie Munger has made to Berkshire Hathaway. Under Buffett and Munger, Berkshire Hathaway has become an investment giant that wholly owns a number of successful companies that include, Geico corporation, Nebraska Furniture Mart and See’s Candy Shop. Warren Buffet is known for his lavish praise on his colleague. He recently told that Ajit Jain, his colleague at Berkshire, is the greatest gift of India to him. Ajit Jain has most intelligent Business Mind much better than his own, he declared in a meeting in India.


Warren Buffet has become a legend and is generally ranked, along with his mentor, Benjamin Graham, first in a stellar cast of investors that includes Peter Lynch, John Neff, and Philip Fisher. Buffet, however, was different from his master for his exceptional philosophy of life. He also earned money, created vast wealth but used very little out of that and felt happy. He did not keep his enormous wealth for himself or for his family . he distributed it to the people wo need it most. He excelled his Master for his philosophy towards life. He earned his billions and, in his life time, donated most of it for charity. He donated his wealth to a Charitable Trust to be managed by Melinda Gates and Bill Gates , another richest person of the world. Warren Buffet is not going to invest in India immediately. He has come here to study the environment and to request his fellow Indian rich persons to spare at least fifty percent of their personal wealth for the cause of poverty. Buffet advised not to buy share of any enterprise unless investors understand the dynamics of that business. During great Dot Com boom he kept himself away from tech companies . Many of his share holders expressed reservation for his aloofness from the tech world. But later on when the boom was burst they heave the sigh of relief understanding his vision well. Perhaps Buffet would start investment in India in future after he understand business philosophy of Indian businessmen and Government’s attitude towards business enterprise. The greatest thing is Buffet is bullish in US economy followed by India and China. He wanted investors to make money not only for their personal gain but for the gain of the world economy and to eradicated poverty. His investing advice to people is to select value stock and value mutual fund and keep it for decade to get benefit.


The New Ulip is not the Best insurance Product

The new ULIP scheme is an excellent product provided insured have a goal or objectives in front of him . The new ULIP could be a sought after product for Children’s education, marriage of daughter or to create wealth for initial down payment for home loan. It is neither a pure investment nor a pure insurance product worthy for middle class. Many readers of AT asked whether it would be prudent to buy new ULIP product for the sake of insurance or investment. My views are loud and clear. It is a good product with an objective or goal in mind for the wellbeing of the family. It is neither a cost effective life insurance product nor an efficient investment product, unless continued for long term. It has 80 c tax benefits for the insured. But it has yet to receive tax free status under section 10d of finance Act.

The Unit linked Insurance Plan(ULIP) is a type of life insurance product under IRDA having an investment overtone.. The cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder.

ULIP came into play in the 1960s and is popular in many countries in the world. Now in India once ULIP is taken cannot be surrender till fifth year of subscription is over. ULIP once subscribed must be maintained till full policy term in order to gain benefit.


In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment and insurance by the same instrument was challenged by the market regulator SEBI which took up the matter to the Supreme court of India .The Indian government brought down curtains on the two-month long tussle between the regulators by ruling that Unit-linked Insurance Products (Ulips) will be governed by the IRDA

If you use life insurance as an investment instrument, be prepared for slightly lower yields because of increased taxation. The ULIP product is not tax efficient despite it provides 80 C benefit. The service tax on ULIP is now 1.5 percent against 1% on Life insurance.

For example, if you paid an annual premium of Rs 10,000, the service tax (of 10 per cent) was charged on Rs 100. Now, the tax will be charged on Rs 150. “These will be adjusted in the premiums and accordingly the yield will fall,” said a senior official of a life insurance company.

Similarly, the finance minister has also brought all unit-linked insurance plan (Ulip) charges under the gamut of service tax. Until now, only mortality and fund management charges were subjected to service tax. This means, policy administration charge and policy allocation charge, too, would come under the service tax net. According to Nageswara Rao, CEO and managing director, IDBI Federal Life Insurance Company, guaranteed Ulips would attract higher charges, too, after the Budget modification in the service tax.

However, the insurers were waiting for the finance minister to clarify on the continuation of the exempt-exempt-exempt (EEE) tax regime on life insurance products once the Direct Tax Code is implemented from April 1, 2012. “EEE is an important incentive to invest in long-term savings instruments such as life insurance and hence should be retained. However, the speech did not give any clear indication on it,” , commented by an insurance expert.

In the new guidelines, which took effect from September 1, Irda increased the lock-in period for Ulips from the existing three years to five years. And, all Ulips other than pension and annuity products were to provide a minimum mortality cover or health cover. This has resulted in a sharp drop in sales of Ulips, which once had constituted more than 90 per cent of the sales of life insurance companies.

“All products under the new guidelines have been performing very well and this shows if a proper product can be developed, sales will not be an issue,” said an LIC official.Private life insurance companies, on the other hand, have seen sluggish growth in the financial year so far. In the first 10 months, they collected Rs27,865 crore by selling new policies, a modest 5.8 per cent increase as against Rs26,328 crore collected a year before.

Why ULIP plans are avoided now a day by most people? This is due to the fact that in earlier regime most ULIP plans were improperly sold. The insurance officials did hide the fact that it is a long term product and would not yield any profit for at least for seven years, though product could be exited after three years. Many insurance agents sold the product on the basis one time payment . Agents also never clearly mentioned that if policy is exited before seven years a penalty would be charged as the surrender value. If the insurance companies would have trained their agents properly this kind of miss information would not have occurred. Instead of imparting proper training to their agents, insurance companies pressurised their agents to achieve higher target every months. This was done for ULIPS were the bread and butter for insurance companies then. Difference between two regulators forced the government to recast the ULIP. The product is of great value now provided it is understood properly. The ULIP could be bought by young parents while they are in their late Thirties. This would provide them with great satisfaction while sending their children for higher education and during marriage.


Thursday, March 17, 2011


It is a fact that Northeast is a land of earthquake. Our population hav to learn to live with it like Japanese and Californian have learnt. We have experienced earthquake every year .
The most of those earth quake are smaller magnitude . Yet Northeast has experienced two great earthquakes in the year 1897 and in the year 1950. These two earthquakes were amongst the most violent earthquakes in the world. The intensity earth quake of 1897 was 8.7 . the earthquake of 1950 had the intensity of 8.6. It could be noticed that the occurrence of both the earth quakes were during summer months. The first one was in the month of June and the second one was in the month of August. According to a few geophysicists Northeast may experience great earth movement within fifty to sixty years. Now the question is are we ready for it?

The last great earthquake occurred on August 15, 1950, and had a magnitude of 8.6. The epicenter was actually located near Rima, in Tibet . However, the earthquake as destructive in both Assam and Tibet, and 1,526 people were killed.
In an attempt to further uncover the seismic history of Northeast India, field studies were conducted by scientists with the NGRI, Bhubaneswar discovered signs of soil liquefaction including sills and sand volcanoes inside of at least twelve trenches in alluvial fans and on the Buri Dihing River Valley that were formed by past seismic activity. Radiocarbon dating identified the deposits at roughly 500 years old, which would correspond with a recorded earthquake in 1548 .
An article in Science, published in response to the 2001 Bhuj earthquake, calculated that 70 percent of the Himalayas could experience an extremely powerful earthquake. The prediction came from research of the historical records from the area as well as the presumption that since the 1950 earthquake enough slippage has taken place for a large earthquake to occur. The 1898 earth quake was still bigger though loss of human life was minimal the damage to the property was enormous as pr records. 1898 devastated lower Assam including kamrup and Goalpara the earth quake of 1950 devastated upper Assam.
This time we have to be prepared for both the areas to experience earthquake .Though according to experts Meghalaya and Lower Assam could be worst victim this time. Keeping aside the technicalities of earth movements to geologists let us concentrate what are the precaution human need to adhere to. In earlier earth quake though loss of human life was not very high any earth quake now may result in huge loss of life due to increase in population. As per the calculation Assam may experience again a great earth quake sooner or later this summer or next. We need to be prepared for that.
We need to learn from the experience of Japan. In Assam whenever earthquake comes every boy runs out of house to open to save themselves. In Japan such behaviors has been a taboo. From the childhood every child is taught to behave in a discipline manner. They are taught not to rush out of house. In India every year lots of people die for every body tries to rush out whenever pandemonium breaks out. the most death occurs due to suffocation and trampling by others feet.. Since earth quake is imminent all the schools from primary level to College level should now teach the student how to behave when earthquake strikes.
The most of the Assam type house has fewer hazards to fall apart compared to concrete houses. The concrete houses are also safe provided that have been built to withstand earth quake shocks. It is imperative to get the construction of the house checked up soon. People need to take insurance cover for earthquake. During earth quake cooking of food should be suspended. It is also told that people should keep away from overhand fans and false ceiling etc. In the house much more unsecured places are open car garages which are not fortified by walls.
Perhaps our architects have studied the problems of earthquake. In many countries where earth quakes are frequently felt most houses avoid brick and mortar interior walls. Whether similar construction would help in Assam or not could be studied. Earth quake anfd its cause should be compulsorily taught from primary level to higher secondary level. In all engineering colleges earthquake engineering should be compulsory in the first two years. There is almost no awareness among people of Northeast as to how to behave when earthquake struck. The mock earthquake drill should be introduced in al educational institute now.
If we take seriously prediction of Geologist and Geophysicists that North east would be visited by a powerful earth quake every fifty to sixty years this is the time for a major earthquake. We need to seriously think how to survive such catastrophe. It is not only government but also NGOS and educational institute need to play a proactive role in educating mass to safeguard them from earth quake menace.


Wednesday, March 16, 2011


Nobody can live under the sun without making provisions for food, shelter and cloth. For human being to provide for above provisions money is necessary .Even monks need money for sustenance. The great prophet like Ramakrishna Paramhangsha once said that no proper worship would be possible with empty stomach. To keep feedings one’s own self human beings would need money even when they stop earning. To enable people to meet both the ends it is imperative to invest money keeping in view risk adjusted return. People, now a day, have become a part of longer life. This necessitated the emergence of Personal Finance in creation of wealth.
This book is an attempt to make our young citizens much more investment savvy. It is not a book for spoon feeding. It is a book to empower young investors to start saving and ultimately become a Millionaire. This is not just a copy book or book of notes which would make investors millionaire automatically. No, it would not. This is a book of empowerment.
The saving and investment are not an easy task. The patience, robust common sense and capability to take risk would be the most required virtues to be a successful Millionaire. This book is meant for inculcating those virtues.. It narrates the example of successful persons. The stories need to be read carefully and develop own skill. If you are serious this book will inspire you to develop a balanced and beautiful mind.

The risk taking capacity of each individual is unique. While making investment this virtue of risk adjusted return for each individual shall have to be calculated depending on the individual capacity. No coaching class will be able to create a common platform for all types of saving and investment. This book would act as the compendium for empowerment for personal finance. The book has case studies as stories so that young investors understand steps to be taken in lucid manner. There is no short cut to become a millionaire unless you are a magician, inheritor of wealth, owner of lottery or a black marketer. This book proves wealth can be created in an honest way. Even a domestic help can become a millionaire, with strong will force and proper guidance.

So read this blog, try to understand the implication and create your own strategies and model and go ahead and make money. For making money you need self restrain & wisdom .No outsider can make money for you. It would be your own perception that would help you to become wealthy.



We have grown up in an atmosphere of command economy. During our younger days all the important decision of our life were taken by our parents. What would we be when we grow up was also decided by our parent The decision of whether we should take Arts, Commerce or Science was also taken by our parents. Whether a young boy would be a Doctor or Advocate or IAS officer was really dependent on our parents mainly. We had almost no say in creating and shaping our life . In fact during our childhood and there after we were scared of our parents. Time has changed now. Now parents are scared of their children. The young children have now mental attitude to decide on their future. But yet no children are taught by parents value of creation of wealth, or developing the habit of saving from childhood.
This needs to be done. Now a days even in school, children are taken out to market and taught how to spend money , how to make a budget and also how to save money. But the best education on creation of wealth should come from the guardian or parents at home.

Use real-life experiences to demonstrate everything you want to teach. Learning by observing and doing is the most powerful tool. Such as when you go grocery shopping, and can use the opportunity to showcase planned spending, or how to recognise value for money. Or if you decide to use a credit card at a restaurant, you could show your child how a credit card works, when it can be used, and how to calculate a tip! Why the children of Industrialists are so money savvy from childhood? This is essentially because they are taught about the value of money at dinner table. The best time to teach the value of money to children is at the dinner table and while on holidays. The most of industrialists mother taught them how to make their family budget. In our family budgeting is never done. The money is spent as it comes. the time has changed and the practice of budgeting should be taught in our family now a days.

How important is it to teach your children about money, its place, and its value? Considering that money does, in a lot of ways, make the world go round, you might think it one of life’s obvious lessons, gained through experience. Or you might assume that money management is tackled in school. Think again. Arming your child with the right attitude and necessary skills at the right time will afford them with the greatest possible advantage: the opportunity and power to make decisions.

How, and when to communicate money values to children is, however, one of the toughest challenges that parents face. Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend.

Discuss money openly. So many parents do not discuss finances within the family either because it’s considered inappropriate, or personal. Consider this: if you don’t actively provide the correct information to your child, how is he/ she to know, understand and inculcate your values? Therefore, as soon as your child can count, introduce him/ her to money. Observation and repetition are two important ways in which children learn. As they grow older, have frank discussions about how to save it, how to make it grow, and how to spend it wisely.

We need to help our children to distinguish between needs and wants. These are habits that die hard, and influence how your child will approach money and its place in his/ her life. If they can differentiate between need-to-have and nice-to-have, then they’re halfway to a solid and secure future.

It is imperative to help our child to set his/ her own goals. If it’s a toy that they must have, then regard this as a good opportunity to teach our child how to be responsible with money, and prioritise between what they want, and mindless spending This would help developing the concept of family budget. Allow your child to make spending decisions, which means that they will learn from the choices they make. And learn that it’s to their advantage to do a little homework before buying, waiting for the right time to buy, and actually deciding if the product selected is what they really want.

As the child steps into first teen age at the age of Thirteen it would be great to take them to bank and open a joint account of his with you as guardian. Take him to ATM when you withdraw money and explain how does it work. Begin simply, though your parents might or might not have done, with a piggy bank. If you do give your child an allowance, get them to set aside a small portion of it every time. Explain and demonstrate the concept of earning interest income on savings. Provide an incentive; offer to match what your child saves on his/ her own. while paying child from time to time you can

use 12 envelopes, 1 for each month, with a larger envelope to hold all the envelopes for the year. Encourage your child to save receipts from all purchases in the envelopes and keep notes on what he/ she does with his/ her money.

The children would always Learn by observing as to how his parents keeps record, spend money .So we need to be an example for the family. when we go for grocery shopping, we can use the opportunity to showcase planned spending, or how to recognise value for money. Or if you decide to use a credit card at a restaurant, you could show your child how a credit card works, when it can be used, and how to calculate a tip! Do not forget to tll him that credit card payments must be made immediately and that credit card should not be given to anyone not even to his mother.

It should be taught to your child that that spending money can be fun and very productive when spending is well-planned, and that a penny saved is, indeed, a penny earned!. Take your child to Post office and show him how you saved your initial money in a post office account. Take him to bank and make him understand what is the credit card and what is the debit card. The world is changing fast. In case you don't teach your children value of money the world will pass by and children would remain old fashioned. Would you really like this to happen to your children ?



One of the most decisive acts of the Government in recent years on Economic front is to introduce the new WPI. Many critics felt that the Government is taking up the project just to keep away from the embarrassment of high rate of inflation .But this is not really true. The old system was getting tired with changing habits of consumers. The government has revamped the way it calculates inflation rate to effectively capture variation in prices in tune with the changing times. A number of new products have been included in the new series of Wholesale Price Index (WPI), while about 200 redundant items have been dropped. The new WPI augurs well for the country and for its citizens.

The new WPI series for August with additional 241 items and change in the base year from 1993-94 to 2004-05 has been released on 14th September 2010. The comparison of old WPI with that new WPI did not bring striking difference though new WPI is little lower than before. It is 8.5% against the inflation rate of 9%. This is not hailed by the industrial workers for they get increased compensation on the basis of consumer’s price index.

In twenty first century every modern middle class House hold uses the consumer items of the like ice-cream, mineral water, flowers, microwave oven, washing machine, gold and silver will be reflected in the new series. While during our youth in Guwahati hardly people sported air conditioners at home. They were hesitant to use ACs in their residential homes because neighborhood habits were frugal. The use of Air conditioners in the parental houses of many in Assam was almost taboo though they could afford it. This environment has changed. The cost of House building has changed. The interior decoration of house is now much more costly compared to cost of the building. With old index it never uses to get reflected.

Over the years even food habits of Assamese people have undergone tremendous change. In most middle class now a day’s red, yellow and green capsicum, baby corn and button mushroom are common. It was unheard in fifties in the kitchen of Assamese household. The use of white oils was unheard. Only mustard oil ruled the kitchen in Assam. These new product must form the core of the food index. This would really keep the changing habits in reckoning so far as consumer’s price index is concerned. We welcome it surely.

The WPI inflation was 9.97% in July. August inflation data released on 14th September was 8.5%. With these items, the WPI will measure a total of 676 items against existing 435. "This would give better picture of the price variation. The weights assigned to commodity baskets such as primary articles, food & fuel and manufactured items have also been slightly tweaked. The number of quotations selected for collecting price data for the above items is 5482, up from 1918 quotations in the old series.

Readymade food, computer stationary, refrigerators, dish antenna, VCD, crude petroleum and computers would also be part of new series. Under primary article group of the new WPI, there would be 102 items against existing 98 while fuel and power category would remain static at 19. There is substantial increase in the number of items in manufactured products. In the new series, there would be 555 items compared to 318 items at the moment.

At the same time, weight of manufactured products would go up to 64.9% compared to 63.7% while primary articles group including food have come down to 20.1% against existing 22.02%.

The system dissemination with weekly release of primary (including food index) and fuel index would continue with the new base. Depending on the relevance of articles in the present economic condition about 200 items have been dropped from the new series, despite modernization of index. All India index does not provide a true picture of inflation in Northeast. In northeast vegetable and fish price are much more than compared to Kolkata, Madras, Kerala and even Chandigargh. The industrial workers are obviously not properly compensated by industrial houses because official consumer price index did not reflect the true inflation level of Northeast. It would be appropriate if a proper weight- age system is devised for calculating inflation rate of Northeast.

Some of the items like type-writers, video cassette recorders (VCRs) etc would not find place in the new series. A Committee of Secretaries in August, 2010 approved the release of new series of WPI with 2004-05 as its base. Inflation had been in double digits for five months till June. Planning Commission deputy chairman Montek Singh Ahluwalia said on Monday inflation would remain high in August but would start declining in subsequent months to reach a level of 6% by December-end.

Some of items included in the new series basket are flowers, lemon and crude petroleum in primary articles.

Items such as ice cream, canned meat, palm oil, ready made/ instant food powder, mineral water, computer stationary and leather products have been included in manufactured products. We welcome the change.



The new year has brought lots of hope for everybody. Yet it most market specialists predicted a dormant year for the investor.Should middle class invest or not? It is a big question and we must address the issue with lot of foresight. According to me none should invest this year if they are investing only for two to three years. in case they ar prepared to keep the money aside for at least five years it would be good year to carry out investment programme through systematic investment plan. Although making resolutions to improve your financial situation is a good thing to do at any time of year, many people find it easier at the beginning of a new year. Regardless of when you begin, the basics remain the same. So, let us resolve during the first week of the year that we need to plan for personal financial goal to secure a great future! Though the year 2009 provided very good return on investment and 2010 provided somewhat good return beaware the current year may not as rewarding. Yet we should not stop saving and investment and plan for better tomorrow. The new year has brought lots of hope for everybody. Yet it most market specialists predicted a dormant year for the investor.Should middle class invest or not? It is a big question and we must address the issue with lot of foresight. According to me none should invest this year if they are investing only for two to three years. in case they ar prepared to keep the money aside for at least five years it would be good year to carry out investment programme through systematic investment plan

Make sure you know what your job is worth in the market place. No matter how much or how little you earn, you'll never get ahead if you spend more than you earn. Often it's easier to spend less than it is to earn more, and a little cost-cutting effort in a number of areas can result in big savings. It doesn't always have to involve making big sacrifices. Have you ever thought of how you want to be financially placed in the coming year and not repeat your mistakes? Would you like to be free from debt and still fulfill your goals and dreams? This New Year, resolve to be financially planned and independent, to avoid making the same mistakes you made last year.

According to me, the most important resolve should be to plan for a budget. You need to know how much you are earning and where your Money is going. Unless you budget you would not know where money is going. How can you set spending and saving unless you budget? The most important resolve needs to be to stick to the budget. Keep it in mind not to spend more than you earn in a month. Even do not take a loan to build your house f you have to struggle to pay the Equated Monthly Installment. Spending does not mean only monthly expenses for the family. It includes saving for your retirement, building your own house, own and children’s marriage expenses, education of your children, insurance for security of the family, occasional holiday break, medical care for parents and occasional charity for peace of mind.

The second most important resolve for the year should be to clean the debt. The Credit card debt is the number one obstacle to getting ahead financially. Those little pieces of plastic are so easy to use, and it's so easy to forget that it's real money we're dealing with when we whip them out to pay for a purchase, large or small. Despite our good resolves to pay the balance off quickly, the reality is that we often don't, and end up paying far more for things than we would have paid if we had used cash. Pay the full amount immediately and do not pay in instilments. It is hugely expensive.

If you are a self employed , doctor, advocate or artist, think of a retirement plan. If your are an employee like journalist, private sector employee and have no retirement plan subscribe to NPS or Retirement of Insurance company or Mutual funds. If you're already contributing, try to increase your contribution from 10% to 20%. If your employer doesn't offer a retirement plan, consider NPS, pension plus of L:IC or Templeton pension plan. These are great product.

You've heard it before: Pay yourself first! Before you think of your children’s higher education think of yourself. If you wait until you've met all your other financial obligations before seeing what's left over for saving, chances are you'll never have a healthy savings account or investments. Resolve to set aside a minimum of 5% to 10% of your salary for savings BEFORE you start paying your bills. Better yet, have money automatically deducted from your paycheck and deposited into a separate account. Resolve to invest in tax saving instruments first like PPF, life insurance, NSC and pension funds to maximize your earnings.

If you have a family to support life insurance is a must. If you have none do it this year .To economize your expenses take a term insurance combined with pension plan That would be cost effective now. All self employed persons including traders, contractors and doctors must have Health insurance plan, during the year. Do not ignore illness may strike without notice.

Have you written a will? The 90% people of Northeast India don't have a will. If you have dependents, no matter how little or how much you own, you need a will. If your situation isn't too complicated you can even do your own with software like WillMaker from Nolo Press. Protect your loved ones. Write a will. Think of your spouse first even before considering children.

Make financial planning a priority and understand the importance of the same. This will be the first step that will pave the way for you to achieve goals that you and your partner plan to fulfil. Not every want is a need. Distinguish between the two and accordingly plan your finances. A need is a necessity; something that you cannot do without, everything else is a desire or want. If you set out to fulfill every want you have, you will find yourself in a dilemma, as you then won't be able to satisfy the goals and dreams that will make you happy.
Involve your family and children in financial planning. Teach your children the importance of money and planning, as this will lead to greater financial responsibility for them in the future. Discuss and debate your financial goals with your spouse for the coming year as this will help ma king a cohesive plan that will help attaining family goals. Consult a financial planner to begin the process with the entire family.

Be frugal when it comes to spending. You don't always have to buy expensive things all the time. Usually, there is an alternative. Avoid the debt trap. Often, we take loans to finance that big dream house or car without considering the impact of the loan on regular finances. If the burden of the loan becomes too large, you cannot enjoy your life at all, since you will be using your money to only pay off debts/loans.

The path to your financial freedom lies in your hands. So, this New Year, create your own freedom; from the daily hassles of planning your money and watch yourself fulfill your dreams and desires! Remember, failing to plan is planning to fail.


Literacy of investor is a must before starting investment

All investors are not always literate. Even a postgraduate in science, technology and arts may not be well versed in saving and investment. Before starting investment everyone must know where not to invest and where you must invest. Investment is a personal requirements depending on the goals of life. Beside investing in debt instrument it become imperative to invest some money in equity to beat the inflationary pressure. Befo9re jumping into share market all investors must learn to invest in equity through Mutual funds. Investment in equity is a long term requirement. No investment in equity should be done for short term. This is my sincere advice to keep away from Share market in March 2011 as a big fall is eminent. Let the fall start and stablise at lower value of Sensex and Nifty. Then investment should be done through Systematic Investment Route

We all tend to look at the returns of the mutual fund before taking a decision to invest our hard-earned money in it. The returns actually denote the appreciation/depreciation of the NAV of the fund. Unfortunately, NAV (Net Asset Value) of the fund is grossly misunderstood. Here we attempt to clear the myth surrounding NAV. More and more people have started investing in Mutual funds now a days. This is a good habit. But generally many investors make mistake by choosing low NAV product thinking that lower the the NAV greater is the return. This is a wrong perception. The NAV of a mutual fund is grossly misunderstood by the investors as well as the mutual fund distributors.The Low NAV does not indicate the fund is cheap, nor does it impact the returns in any way. So always remember this when selecting fund for investment. Rather focus on the quality of fund, which will greatly impact your returns. Always choose a fund house with long standing history of dividend and growth.Whenever a new fund is launched it cannot have past record or history of performance hence it is always better to rely on old faithfully fund who have done reasonably well over the years. Many investors subscribe to the new fund thinking low NAV is highly prized unit. It is not correct. It is to be understood that even high NAV might give better return most of the time. What is more important is to choose such a fund who have given consistent returns months after month and year after year.

The NAV or Net Asset Value is the aggregate of the market price of all the shares contained in the portfolio, inclusive of cash after deducting the liabilities divided by the sum of units issued. It can also be called as the book value of the unit of the fund.

NAV = sum of the shares in portfolio + cash - liabilities / sum of units issued .

Many people tend to think that the fund with low NAV is much cheaper than the NAV of fund with higher NAV. So people tend to think that if a fund has a NAV of Rs. 50, it is cheaper than the similar fund with the NAV of Rs. 80. This misconception stems from the fact that most people tend to equate NAV with the market price of the share. As a result, there have been instances when people have redeemed their investments in well performing funds to invest in NFOs. Even many mutual fund salesmen tend to mislead people by telling them that funds with low NAV are cheaper than those with high NAVs, thus enticing them to invest in the funds that they are selling.

There is a big difference between NAV of mutual fund and market price of the share market. In case of the share of the company, its market price is decided by the stock exchange. While deciding the price of the share, the company fundamentals, view of the company’s future performance and the demand-supply situation. Due to this, the market price of the share normally differs from its book value. But in case of a mutual fund, the concept of market value is absent. So when you purchase mutual fund units, you are buying at NAV, which is simply the book value. So it implies you are paying the correct price of the assets. This price could be Rs. 50 or Rs. 500, but the concept of higher or lower price is non-existent.

While it is commonly believed that funds with lower NAVs will yield better returns, it is not true. Suppose there are 2 funds, with NAVs of Rs. 50 and Rs. 100 respectively. You invest Rs. 1000 in both of them. So you get 20 and 10 units respectively. Assume both the funds give a return of 50% after one year. So the new NAVs of these funds become Rs. 75 and Rs. 150 respectively. Now the value of your investment in first fund becomes Rs. 1500 and that in the second fund also becomes Rs. 1500. Hence the returns in both the cases are same, irrespective of the NAV of the fund. Instead, it the quality of fund that will greatly impact your returns.

NAV of a mutual fund is grossly misunderstood by the investors as well as the mutual fund. Low NAV does not indicate the fund is cheap, nor does it impact the returns in any way. So always remember this when selecting fund for investment. Rather focus on the quality of fund, which will greatly impact your return.

The mutual fund is a good way of developing investment habits.Always mutual fund should be bought in terms of their star rating and not in the recommendation of brokers.Always depend on the recommendation of your advisers. But the best thing is to study and decide what is good for you. Always buy diversified mutual fund instead of thematic funds. Some time thematic funds give high return .The power sector once gave very high return but suddenly it might come down. The wise decision would be to rely on the value analysis of the rating agencies.The most neutral and wise agencies are Value and Money control .com. Before investing study their rating and take a conscious decision. We need to keep it in mind low NAV don't provide us the scope of high return always!



The expectations that there will be changes in the taxation avenues and their slabs, in the recent budget , have not been met. The Union Budget 2011-12 has given a marginal benefit on the tax slab for individuals. However, unexpectedly the benefits for very senior citizens are much higher.

The basic slab for income tax has been proposed to be raised to Rs 1.8 lakh (Rs 180,000) from the current Rs 1.6 lakh (Rs 160,000). This leads to a savings of Rs 2,000 for all tax payers. Yet most of the taxpayers are not a happier lot today.

Also for senior citizens the slab has been increased from Rs 2.4 lakh (Rs 240,000) to Rs 2.5 lakh (Rs 250,000).

The slab for women has not been changed from the earlier Rs 1.9 lakh (Rs 190,000). Though the finance Minister did not mention this in his Budget Speech, this has been included in the documents submitted along with the budget statement.

For the first time the finance ministry has aligned with other departments and has reduced the age for senior citizens from 65 years to 60 years. All the people who are in the verge of retirement and who are bellow sixty-five years of age are very happy. The Finance Minister has brought parity in finance bill this year redefining the age of senior citizen. For all other purpose the age for senior citizen was already considered as sixty save and except in Finance bill. Till now the age for senior citizens has been 60 for all departments (think about railway ticket booking, and senior citizens fixed deposit at banks) except the Income Tax Department.

Also the finance minister has created a new slab for Very Senior Citizens -- for people who are aged eighty years and above. The income tax exemption limit proposed for this group is Rs 5 lakh (Rs 500,000). T^his is an useless exercise for there are very few tax payers of significance above Eight years. It would have been real beneficial if this benefit could have started at 75 years. Alternately limit of benefit could have been staggered for senior citizens at the rate Rs. Two lakh fifty thousand at Sixty years, Rs. Three lakh from 70 years, Rs Four Lakh from 75 years and Rs Five lakh for 80 years and above. A little practicale approach would have helped one of the largest segment of gray citizen of the society.

The finance minister has not proposed to change any of the tax savings instruments this year before the DTC gets implemented next year. This is understandable .

The investment in infrastructure bonds upto Rs 20,000 over and above the Rs 1 lakh (Rs 100,000) limit in Section 80C, which was introduced last year, continues for the next year too.

The finance minister has proposed to allow selected government undertakings to borrow up to Rs 30,000 crore (Rs 300 billion) for the development of infrastructure.

These borrowings will be in the form of tax free bonds. Individuals can look to investing in these bonds for tax free returns. The limits set for different government organizations are: Railway Finance Corporation -- Rs 10,000 crore (Rs 100 billion); National Highways Authority of India -- Rs 10,000 crore (Rs 100 billion); HUDCO -- Rs 5,000 crore (Rs 50 billion) and Ports -- Rs 5,000 crore (Rs 50 billion).

For self employed professionals and small business people, the process of doing an audited filing is very time consuming.

The finance minister has recognised this and has extended the limit of self assessment to Rs 60 lakh (Rs 6 million). This will be a big relief to many professionals and proprietorship companies.

To extend the benefit further, the finance minister has proposed to forgo the interest penalty on delayed filing of taxes to an extent of 3%.

Though there were many expectations in the personal income tax front from the budget, the finance minister has been docile in not changing much.

There have not been any significant changes either in the personal income tax slabs or in tax saving avenues.

However introduction of the very senior citizen category and reducing the age for the senior citizens' slab are welcome measures. We felt instead of the giving tax benefit to eighty years and above the finance Minister could have given all the citizen two important benefits. Those benefits are higher tax benefit on the policy of Health Insurance p remium and secondly one percent higher return on deposit of PPF. If Government of India can concede to pay higher interst rate to EPF and GPF why not they can consider the case of senior citizens subscribing to PPF. Perhaps vast majority of senior citizens of country do not have a common platform to raise their weak voice.



The Gold at present rules the monetary system of the world only indirectly. All the countries though depend on the deposit of gold in their vault to produce legal tender required by them yet pure gold standard is almost obsolete now.. The world has abandoned the gold standard in favour of so-called "paper money," and only a diminishing group on the far right continues to call for its return. However, if mainstream economists (on both the left and the right) have anything to say about it, there will never be a return to "that barbarous relic," as John Maynard Keynes called gold over 60 years ago. However, many countries buy and sale gold as the situation demands. India once sold out their Gold deposit to meet the monetary contingency and recently it did buy gold twice from Russia to strengthen its power to produce more legal tender. Though there are costlier commodities like diamond and platinum yet only Gold has become synonym with power. The Gold has reached this position of strength due to both practical and psychological value. Many people also relate with Gold better than any other commodities. If Gold is require by most nations, it is also favorites of vast number of Indian population

Now, the questions arises whether buying of Gold is a better personal investment strategy as the share market is not doing well for sometime now. On the contrary the gold prices have steadily gone up. Many investors have asked whether to buy Gold coins or Gold ETF... I always recommended individual citizens that for investment purpose the buying of GOLD ETF is better than buying solid Gold. It remains secure at least cost. But in case of marriage and life style enhancement, it is better to buy solid Gold.

Now, it is quite likely that most advisers do brief investors that gold prices never fall; it is an ultra safe investment. The countries around the world have positioned their currencies on Gold exchange parity by printing money, therefore gold will never fall in value, and by virtue of these operation gold ETF is risk free. But, you need to be aware that these are merely opinions.

It is surely a fact that Gold prices could continue to rise, or they can drop like a stone.Investors can make money, but they can lose money as well. However, most times investors would make money – of course with moderate gains. It cannot match the return of equity in long run. So individual investors can invest in Gold only about 10% to 15% of your total investment portfolio

How much profit should be expected from Gold over a period of five years? My wild guess is 10% to 18%.The history and statistics told us that in ten years equity and art form are the best investment followed by houses and Gold.

There are several gold ETF in our country. With the exception of Quantum – 1 unit of every gold ETF represents 1 gram of gold. If that’s the case then why does the price of these gold ETFs differ?

Gold ETF owns Gold, debt and other liquid instruments and cash. The combined value of these assets divided by the number of units in the gold ETF constitutes the NAV of the ETF. The NAV of gold ETF can be seen on its website, so you can see that the Benchmark gold ETF GOLDBEES had a NAV of 20000 in March 2011 .However, since an ETF trades in the stock exchange and there is a different price at every tick the price of the ETF can be different from its NAV. The NSE website shows that the last traded price on that day for GOLDBEES was Rs.20010/-

This means that the ETF was going at a discount of about Rs. 10 at that point. There are big market participants who are engaged in actively trading the ETF to bring the market price closer to the NAV and gain from any arbitrage opportunities available.

All ETFs have expenses that are paid out by selling gold holdings or using the income from their debt holdings, so although theoretically one unit of gold ETF represents a gram of gold – in reality the gold holdings are slightly lower due to the expenses. The higher the expenses, the lower would be the NAV, and consequently the trading price of the ETF.

A good example of this is the Reliance gold ETF which had a NAV of 1920.20 on 13th Feb 2011, and was trading at Rs. 1913 on that date.So, expenses eat into the NAV of the various ETFs, and affect their prices.

This question keeps popping up from time to time which is the best gold ETF in India. According to me right now the Gold BeeS ETF from Benchmark Funds has the lowest expense ratio of 1%. Quantum Funds comes second with 1.25%. All the other funds charge higher expenses. The lower the expenses – the better it is because it leaves more on the table for investors.

I found that – Gold BeeS, which has the lowest expenses, also has the highest volume, and by a large margin too. If I had to invest in a Gold ETF – it would be this. In case someone does not have d’mat account then he should buy Gold funds from HDFC, Reliance or UTI. He can also think of buying Gold Coins as well from banks. However, the bank don’t buy back Gold. Investors need to sale it to Jewelers at lower than market cost despite its great purity.

Continued international depression has made Gold a hero presently. But a time may come when countries may not be required to depend on GOLD for their monetary policies a new commodity may take its place in future. What would be that product is not known to anyone yet. So the gold bugs would have to resolve historical and theoretical challenges of King-Midas proportions before they could ever reinstate the gold standard. But if a workable gold standard requires a tremendous amount of design, effort, regulation and safeguards, we might as well use fiat money, which is already simple and enjoys a successful track record.