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.