Numbers of senior citizen readers have written to us asking whether Governament of India's SCSS has been withdrawn ? Or is it still in vogue ? Do investments in the scheme are still profitable to retired persons even now?
I would like to emphatically state for any retired person, as on date, SCSS is one of the best scheme to invest, especially during he present time whem al he banks have lowered down the interest rates on deposits. Some of the senior citizen could not decide where to invest their money on maturity. One lady wrote that she stayed invested for last three years in a NATIONALIZED BANK wit an annual return of 9.5%. On maturity of the FD CERTIFICATE the same bank is offering her much lower rate of interest bringing her annual income. She is asking where she can invest with higher interest rate? Another gentleman was old by the BANK THAT Senior citizen scheme with higher interest is withdrawn. This not a fact .GOVERNMENT OF INDIA'S scheme is still in vogue and that is the best scheme gong in the market for retired persons.
The Senior Citizen Savings Scheme (SCSS) is often referred to as the best alternative for the elderly to invest their money. Is this justified? Here's a detailed look at all the features of the Senior Citizen Savings Scheme, and an analysis of whether you should invest in it or not.
The investment can be made only by people of 60 years of age or above.
People who have retired on superannuation or under a voluntary retirement scheme can also invest if they are at least 55 years old.
The account can be opened as a single account, or can be opened in joint names. The joint account holder can only be the spouse.
There is no age limit applicable for the joint account holder (spouse).
In case of the death of the primary account holder, the spouse can continue the account – this is subject to the condition that his / her total investment in SCSS should not exceed Rs. 15 Lakhs.
People retiring from defense services are eligible to invest in the scheme irrespective of the age limit, but there are some additional conditions applicable
The Senior Citizen Savings Scheme account can be opened only by individuals. It can not be opened by Non-Resident Indians (NRI), Persons of Indian Origin (PIO) and Hindu Undivided Families (HUF).
For people between 55 and 60 years of age, the amount invested in SCSS has to come from their retirement benefits.
For persons over the age of 60 years, there is no restriction on the source of funds invested. The Senior Citizen's Savings Scheme has a maturity of 5 years, which is extendable by 3 years.
The rate of interest offered on the investment is 9% per annum and account can be opened in post office or in nationalised. perhaps only icici is the only private sector bank that handles SCSS.
There is Section 80C income tax benefit on the investment made in SCSS, but there is no income tax benefit on the interest earned from it.
The investment made in the Senior Citizen Savings Scheme on or after 1st April, 2008 is deductible from your income under section 80C of the Income Tax Act. The interest earned on the deposit is fully taxable.
The income tax applicable is deducted at source. If your income is not taxable, you can provide form 15H or 15G so that no tax is deducted at source.
The tax is deducted at source only if the total interest in a year is over Rs. 5,000.
The account can be opened as a single account, or can be opened in joint names. The joint account holder can only be the spouse.
There is no age limit applicable for the joint account holder (spouse).
In case of the death of the primary account holder, the spouse can continue the account – this is subject to the condition that his / her total investment in SCSS should not exceed Rs. 15 Lakhs.
The interest is paid out every 3 months. This means that SCSS can provide a steady, periodic income. There is no provision for cumulative income.The SCSS is backed by the Government of India, and thus, carries a sovereign guarantee for principal and interest payments. Therefore, it is among the safest investment avenues available in India.
One reader has asked if he wants to invest more than fifteen lakh where should he invest? MY RECOMMENDATIONS WOULD BE ,without taking any risk, Monthly income plan with Bonus from post office. BUT one must remember that if you look for absolute safety a time would come when your money value would deplete and it may not possible sometime to buy even potato. So invest in equity also to take care of inflation.
Since the scheme is absolutely safe, and provides periodic payment of interest, retirees and senior citizens can invest a portion of their retirement corpus in the Senior Citizen Savings Scheme.
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Wednesday, December 16, 2009
BHOT JALOKIA : HOTEST CHILLIES OF HE WORLD
During my visit to USA DURING 2006 a Professor friend of mine, working in New Mexico State University, sent me an e -mail as to how Bhot Jolokia was making waves in the research laboratory of his university. I still remember his excitement till today. He excitedly informed me that the hottest of all spices is believed to be the “Bhut Jolokia”, belonging to the capsicum Chinese variety which was measured at 1,001,304 Scoville Heat Units (SHU), at the New Mexico State University, Las Cruces, New Mexico, USA, on September 9 2006.
Following the research results some folks got together for a taste test of the bhut jolokia and found out that it is indeed hot hot enough to use as a weapon Pepper sprays and elephant repellent. (It is reported that it keeps the large animals away from crops). I still remember his excitement. It was just the beginning. Today BHOT JOLOKIA IS wearing the crown of hottest chilies of the world following the reorganization by Guinness Book of World Records. Incidentally according to guineas record the spelling is ‘BHUT’ as against popularly known word of ‘bhot’. THE SPELLING WOULD BE VERY IMPORTANT AS THE TIME PASS BY and as the product gets greater trade value.
I can assume that in years to come capsicum Chinese could be a billion dollar business all over the world and the name must be protected from now onward. My request to AGRICULTURE DEPARTMENT of Assam would be to ensure the trade mark patent of bhot jalokia as soon as possible. Otherwise someone else in the world would cultivate the same variety in Mexico or in California and name it ‘Bhut Jolokia’ and try to patent it, as they did in case of Basmati rice. ( After a long protected battle matter was shorted out due to effort of punjub jat lobby.)
During my recent visit to California I READ THE FOLLOWING NEWS IN A BLOG :
“FIFTY bhut jolokia seeds arrive in the mail. Armed with a seedling heating pad and a small hothouse as well as a desire to burn my lips off, I plant the seeds in a seedling starter kit I bought at K-mart. During planting, a spot under my eye feels like it has battery acid on it. I must have rubbed some capsacicum on it. I think these seeds are the real deal”. From the above it is apparent that already experimentation for cultivators of ‘ BHOT JALOKIA in USA have started
It must be remembered that more than farming of any capsicum or Jalapeños the real money is made out of producing and extracting, oil, sauce and dry powders from the chilies, all over the world. The same will be the case with Bhot Jalokia. On my return from USA recently , it was nice to read from a news paper report of my friend Ajit Patowari that some of the Indian entrepreneurs have already started marketing various products produced out of BHOT JALOKIA and even started EXPORTING. My congratulations to local entrepreneurship. But my humble suggestion is to patent the name of the product so that no one can use the same brand name. Perhaps all of us are aware that wine produce out of grapes cultivated in the Particular district of France can only be sold as CHAMPAGNE. No one else can use that brand name even their wine is produced from better grapes from California or Bangalore.
During my stay in California this summer I read in a magazine that the quality of capsicum Chinese has tremendous medicinal values. I was not aware of these qualities:
Alternative Medicine practitioners are realizing that healing herbs should be part of their arsenal against disease. The newest touted natural herb is Capsicum, found in cayenne pepper. It has many benefits whether taken internally or externally. When taken internally, capsicum is an antibacterial which will encourage healing and deflect infections while slowing the absorption of fat in the intestines to help fight obesity. Because this natural herbal remedy is a stimulant, it improves circulation. Capsicum will also stabilize blood pressure and lower cholesterol. Herbalists are finding capsicum is useful in fighting a variety of ailments. I am told our tribal population located in foothills of northeast Himalayas knew of the medicinal values. BHOT JOLOKIAS ARE USED for treatment of stomach ailment by Assamese people also.
My humble suggestion to local entrepreneurs is to have tie up with someone from GERMANY, ITALY OR MEXICO FOR PRODUCTION OF VARIOUS bye- PRODUCTS OUT OF BHOT JALOKIA AND BUILD UP LASTING RELATIONS FOR MARKETING. If properly marketed sauce produce out of Bhot jolokia would be as popular as Tabasco, Capsico AND chirocha hot sauce. MAY BE it would be much MORE popular for its MEDICINAL VALUES.
--------------------------------------
Following the research results some folks got together for a taste test of the bhut jolokia and found out that it is indeed hot hot enough to use as a weapon Pepper sprays and elephant repellent. (It is reported that it keeps the large animals away from crops). I still remember his excitement. It was just the beginning. Today BHOT JOLOKIA IS wearing the crown of hottest chilies of the world following the reorganization by Guinness Book of World Records. Incidentally according to guineas record the spelling is ‘BHUT’ as against popularly known word of ‘bhot’. THE SPELLING WOULD BE VERY IMPORTANT AS THE TIME PASS BY and as the product gets greater trade value.
I can assume that in years to come capsicum Chinese could be a billion dollar business all over the world and the name must be protected from now onward. My request to AGRICULTURE DEPARTMENT of Assam would be to ensure the trade mark patent of bhot jalokia as soon as possible. Otherwise someone else in the world would cultivate the same variety in Mexico or in California and name it ‘Bhut Jolokia’ and try to patent it, as they did in case of Basmati rice. ( After a long protected battle matter was shorted out due to effort of punjub jat lobby.)
During my recent visit to California I READ THE FOLLOWING NEWS IN A BLOG :
“FIFTY bhut jolokia seeds arrive in the mail. Armed with a seedling heating pad and a small hothouse as well as a desire to burn my lips off, I plant the seeds in a seedling starter kit I bought at K-mart. During planting, a spot under my eye feels like it has battery acid on it. I must have rubbed some capsacicum on it. I think these seeds are the real deal”. From the above it is apparent that already experimentation for cultivators of ‘ BHOT JALOKIA in USA have started
It must be remembered that more than farming of any capsicum or Jalapeños the real money is made out of producing and extracting, oil, sauce and dry powders from the chilies, all over the world. The same will be the case with Bhot Jalokia. On my return from USA recently , it was nice to read from a news paper report of my friend Ajit Patowari that some of the Indian entrepreneurs have already started marketing various products produced out of BHOT JALOKIA and even started EXPORTING. My congratulations to local entrepreneurship. But my humble suggestion is to patent the name of the product so that no one can use the same brand name. Perhaps all of us are aware that wine produce out of grapes cultivated in the Particular district of France can only be sold as CHAMPAGNE. No one else can use that brand name even their wine is produced from better grapes from California or Bangalore.
During my stay in California this summer I read in a magazine that the quality of capsicum Chinese has tremendous medicinal values. I was not aware of these qualities:
Alternative Medicine practitioners are realizing that healing herbs should be part of their arsenal against disease. The newest touted natural herb is Capsicum, found in cayenne pepper. It has many benefits whether taken internally or externally. When taken internally, capsicum is an antibacterial which will encourage healing and deflect infections while slowing the absorption of fat in the intestines to help fight obesity. Because this natural herbal remedy is a stimulant, it improves circulation. Capsicum will also stabilize blood pressure and lower cholesterol. Herbalists are finding capsicum is useful in fighting a variety of ailments. I am told our tribal population located in foothills of northeast Himalayas knew of the medicinal values. BHOT JOLOKIAS ARE USED for treatment of stomach ailment by Assamese people also.
My humble suggestion to local entrepreneurs is to have tie up with someone from GERMANY, ITALY OR MEXICO FOR PRODUCTION OF VARIOUS bye- PRODUCTS OUT OF BHOT JALOKIA AND BUILD UP LASTING RELATIONS FOR MARKETING. If properly marketed sauce produce out of Bhot jolokia would be as popular as Tabasco, Capsico AND chirocha hot sauce. MAY BE it would be much MORE popular for its MEDICINAL VALUES.
--------------------------------------
hUNGER ON THE HORIZON: hOW TO FACE THE CHALLENGE ?
Hunger is seen on the horizon of the world by none other than UNO. It would engulf around one billion people unless common people of developed nations contribute personally in cash. The appeal for help has been circulated already.
It is now a fact that unless Public distribution system of our country is revamped and strong measures are taken to augment agriculture sector, as per the signals now received, a famine like situation may develop and devastate even our country. Assam would not be an exception to this scene. Till now though two neighboring states of Assam, were experiencing famine in the past, there was no record for Assam experiencing such a bleak situation. The time has changed. Assam has now negative growth rate in agriculture sector. It might trigger famine like situation unless government steps in. The world Food Programme, facing a fund shortage and UN has appealed to individual persons for cash donation for the first time of its existence. The Head of UN Food Body felt if one billion persons of developed world donate just RS. 69/- a week or one euro($1.50) it would be enough to end world’s hunger and famine. So WFP has issued internet appeal to all individual to contribute. If anyone , from our country, want to contribute WFP’S Delhi office can be contacted..
Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
"There is a need of generating strong domestic demand until the robust recovery all over the world, particularly in the developed world takes place.”
Mukherjee repeated his pledge for massive investments in agriculture sector and infrastructure, and acknowledged that it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. "It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.
The Food and Agriculture Organization (FAO) of United Nations has recently issued a report which reveals that currently there are 75 million (7.5 crore) people in the world are victim of famine and if the current crisis of price rise persists this count may reach the total of 920.25 million (92.25 crore )
India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. It is not interested in finding and disclosing the root cause of this havoc .
In such a situation it is a heartening to note the definite actions taken by Government of Assam to regulate farm products in the state.. In the time of scarcity it is not only production but supply system needs to be strengthened. THE SATE GOVERNMENT AT LEAST MADE SOME EFFORT to boost consumption, eliminating middle men from the market.
Indian government is of course desperate to stave off spiraling food price inflation atleast during this winter season.
Mr. Mukherjee during the meeting of world economic forum assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
ASSAM GOVERNAMEN MUST ENSURE THAT PRICE of THREE THINGS must NOT HIT THE ROOF. It must endeavor to contain the price of rice, vegetable and fish. The fish lobby, in Assam, is very strong. THE GOVERNMENT MUST BREAK THE NEXUS BETWEEN SUPPLIERS – MIDDLEMEN AND RETAILERS. UNLESS MIDDLEMEN ARE CONTAINED NO USEFUL PURPOSE WOULD BE SERVED only BY FIXING UP THE RETAIL PRICE .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
In spite of rising inflation and panic regarding food availability our government still believes that to sustain in world economy we need investment and support of corporate companies. The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
“The Unprecedented food scarcity is beginning to dictate the rules of a new political order where individual countries are scrambling to secure their own food supplies with little concern for the rest of the world, “says the founder of the Earth Policy Institute, LESTER Brown.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others.
India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine.
The worry here, according to Brown, is that "the more influential countries would be able to secure food supplies, leaving a number of low-income, less influential countries with no food to import".
Agricultural sector of India is mainly covered by small and marginal farmers, so our government should promote small scale agriculture. Corporate sector could be ushered in as an experiment in joint sector basis where land lord and cultivators would be partners with corporate on a selective basis. Can Assam experiment with this model?
--------------------------------------------------
It is now a fact that unless Public distribution system of our country is revamped and strong measures are taken to augment agriculture sector, as per the signals now received, a famine like situation may develop and devastate even our country. Assam would not be an exception to this scene. Till now though two neighboring states of Assam, were experiencing famine in the past, there was no record for Assam experiencing such a bleak situation. The time has changed. Assam has now negative growth rate in agriculture sector. It might trigger famine like situation unless government steps in. The world Food Programme, facing a fund shortage and UN has appealed to individual persons for cash donation for the first time of its existence. The Head of UN Food Body felt if one billion persons of developed world donate just RS. 69/- a week or one euro($1.50) it would be enough to end world’s hunger and famine. So WFP has issued internet appeal to all individual to contribute. If anyone , from our country, want to contribute WFP’S Delhi office can be contacted..
Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
"There is a need of generating strong domestic demand until the robust recovery all over the world, particularly in the developed world takes place.”
Mukherjee repeated his pledge for massive investments in agriculture sector and infrastructure, and acknowledged that it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. "It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.
The Food and Agriculture Organization (FAO) of United Nations has recently issued a report which reveals that currently there are 75 million (7.5 crore) people in the world are victim of famine and if the current crisis of price rise persists this count may reach the total of 920.25 million (92.25 crore )
India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. It is not interested in finding and disclosing the root cause of this havoc .
In such a situation it is a heartening to note the definite actions taken by Government of Assam to regulate farm products in the state.. In the time of scarcity it is not only production but supply system needs to be strengthened. THE SATE GOVERNMENT AT LEAST MADE SOME EFFORT to boost consumption, eliminating middle men from the market.
Indian government is of course desperate to stave off spiraling food price inflation atleast during this winter season.
Mr. Mukherjee during the meeting of world economic forum assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
ASSAM GOVERNAMEN MUST ENSURE THAT PRICE of THREE THINGS must NOT HIT THE ROOF. It must endeavor to contain the price of rice, vegetable and fish. The fish lobby, in Assam, is very strong. THE GOVERNMENT MUST BREAK THE NEXUS BETWEEN SUPPLIERS – MIDDLEMEN AND RETAILERS. UNLESS MIDDLEMEN ARE CONTAINED NO USEFUL PURPOSE WOULD BE SERVED only BY FIXING UP THE RETAIL PRICE .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
In spite of rising inflation and panic regarding food availability our government still believes that to sustain in world economy we need investment and support of corporate companies. The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
“The Unprecedented food scarcity is beginning to dictate the rules of a new political order where individual countries are scrambling to secure their own food supplies with little concern for the rest of the world, “says the founder of the Earth Policy Institute, LESTER Brown.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others.
India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine.
The worry here, according to Brown, is that "the more influential countries would be able to secure food supplies, leaving a number of low-income, less influential countries with no food to import".
Agricultural sector of India is mainly covered by small and marginal farmers, so our government should promote small scale agriculture. Corporate sector could be ushered in as an experiment in joint sector basis where land lord and cultivators would be partners with corporate on a selective basis. Can Assam experiment with this model?
--------------------------------------------------
INSECURITY GRIPS INDIAN INVESTORS
Despite very good Growth rate during this quarter most Indian are suffering from insecurity. Bellying all predictions of low growth rate Indian economy charged forward with a growth rate of 7.7% during this quarter. Naturally Government of India’s burocrats and ministers are happy at the turn of event. The finance minister though is very hopeful that growth for the year could be 7%, most of the economists are still not convinced.
According to a section of economist recession would not be over soon. The export is still all time low. The food articles have become costlier every day. Some of the essential commodities are selling at all time high. The selling price of potatoes was never reached so high in last one decade. It is selling at Rs 27 a kg now as against the last year’s price of Rs 8 a KG. Exports of jewelry and clothes have gone down. Only tea is maintaining its export status somehow. But there are strong possibilities that export figures may also go down further.
India's exports and imports have been in the red, as demand in both overseas and domestic markets nose-dived due to the global economic crisis. However, exports have been improving since April, even though it continues to be in the negative territory. "In about seven months we have recovered considerably," commerce minister An and Sharma had said last week. However, the dip in imports did not show any signs of improvement contracting in the range of 18 to 39% in the April-September period. The commerce ministry is reviewing the performance of the export sector and will soon be releasing an additional set of incentives for labour-intensive sectors.
Trade deficit the difference between exports and imports during October stood at $8.8 billion, nearly 26% below the figure of $11.73 billion seen in the year-ago month. In the period between April and October, India's exports stood at $91 billion, a dip of 26%, while imports were valued at $ 148.36 billion, a contraction of 29.6%.
According to officials in the commerce ministry, the overall reduced rate of contraction in exports seen in the past seven months indicate that the stimulus package and foreign trade policy measures arrested the rate of decline. A labour ministry survey showed that in the second quarter, export-oriented factories added over two lakh jobs, a first since the economic crisis hit India about a year back.
There may small glimmers of hope in the economy but most Indian citizens are not confident about their financial future and many think they are already poor, according to a new survey. Inflation is going up. The finance Minster said that inflation is not due to cost push inflation. It is due to non availability of food product in enough quantity. The government of India has announced that it would not allow Indian to starve. If required food product would be imported. Is it practicable? The shortage of food is not the problem of India alone. It is a global phenomenon. It would be impossible to buy rice in a cost effective manner since even China is trying to import rice from various countries. Even in America common people have stopped buying vigorously during this holiday season. The condition of market , during the Thanks Giving festivities, was disappointing.
More than 70 percent of Americans questioned in a Zogby International poll said they could imagine becoming poor or already think they are. Indian Consumer worry about sliding into poverty has already dampened the spirit this year . The gap between current difficulties and people's expectations for the future might be due to the economic crisis not being severe enough to fundamentally alter consumer behavior.
Despite inflation on food products share market is going up. But most investor in the market are FII. The market sensex have been fluctuating between 15,500 and 17,200. The market is not smooth at all. It is the
FII who are dominating the field. Indian investors have burnt their fingers while participating in volatile market. The undertone of the market is aggressive. In this aggressive and volatile market INDIAN INVESTORS are worried. They have not been able to recover their investment made during 2007. Our suggestion to risk averse investors would be to stay away from the market unless they are in a position to keep their money invested for at least for five years. Surprisingly debt market is also dormant. Banks are offering all time low interest rate. Equity market is volatile. Most Indian investors have failed to make money except for a few powerful traders. This is not the time for common people to enter in the equity market unless they invest through SIP method for at least for five years. Our research revealed that equity give best return not in short period but in the longer period. It is essential to keep it in mind that equity may not give any good return less than five years period. Indian investors are worried lots because they expected huge returns within a year . It is true that Indian middle class survive on hope without commensuration of patience. An American Economist aptly described this contradiction on following words:
"There is a contradiction playing out in front of us between hopefulness and hopelessness," said Jenny Darroch, a professor at Claremont's Graduate School of Management in California. This contradiction forces us to take steps which ultimately make us sad. Indian middle class investors, like their American counterpart are sad lots. The days are not far off when Indian market may fall further down. So do not invest in the market unless you can wait for five years.
-----------------------
According to a section of economist recession would not be over soon. The export is still all time low. The food articles have become costlier every day. Some of the essential commodities are selling at all time high. The selling price of potatoes was never reached so high in last one decade. It is selling at Rs 27 a kg now as against the last year’s price of Rs 8 a KG. Exports of jewelry and clothes have gone down. Only tea is maintaining its export status somehow. But there are strong possibilities that export figures may also go down further.
India's exports and imports have been in the red, as demand in both overseas and domestic markets nose-dived due to the global economic crisis. However, exports have been improving since April, even though it continues to be in the negative territory. "In about seven months we have recovered considerably," commerce minister An and Sharma had said last week. However, the dip in imports did not show any signs of improvement contracting in the range of 18 to 39% in the April-September period. The commerce ministry is reviewing the performance of the export sector and will soon be releasing an additional set of incentives for labour-intensive sectors.
Trade deficit the difference between exports and imports during October stood at $8.8 billion, nearly 26% below the figure of $11.73 billion seen in the year-ago month. In the period between April and October, India's exports stood at $91 billion, a dip of 26%, while imports were valued at $ 148.36 billion, a contraction of 29.6%.
According to officials in the commerce ministry, the overall reduced rate of contraction in exports seen in the past seven months indicate that the stimulus package and foreign trade policy measures arrested the rate of decline. A labour ministry survey showed that in the second quarter, export-oriented factories added over two lakh jobs, a first since the economic crisis hit India about a year back.
There may small glimmers of hope in the economy but most Indian citizens are not confident about their financial future and many think they are already poor, according to a new survey. Inflation is going up. The finance Minster said that inflation is not due to cost push inflation. It is due to non availability of food product in enough quantity. The government of India has announced that it would not allow Indian to starve. If required food product would be imported. Is it practicable? The shortage of food is not the problem of India alone. It is a global phenomenon. It would be impossible to buy rice in a cost effective manner since even China is trying to import rice from various countries. Even in America common people have stopped buying vigorously during this holiday season. The condition of market , during the Thanks Giving festivities, was disappointing.
More than 70 percent of Americans questioned in a Zogby International poll said they could imagine becoming poor or already think they are. Indian Consumer worry about sliding into poverty has already dampened the spirit this year . The gap between current difficulties and people's expectations for the future might be due to the economic crisis not being severe enough to fundamentally alter consumer behavior.
Despite inflation on food products share market is going up. But most investor in the market are FII. The market sensex have been fluctuating between 15,500 and 17,200. The market is not smooth at all. It is the
FII who are dominating the field. Indian investors have burnt their fingers while participating in volatile market. The undertone of the market is aggressive. In this aggressive and volatile market INDIAN INVESTORS are worried. They have not been able to recover their investment made during 2007. Our suggestion to risk averse investors would be to stay away from the market unless they are in a position to keep their money invested for at least for five years. Surprisingly debt market is also dormant. Banks are offering all time low interest rate. Equity market is volatile. Most Indian investors have failed to make money except for a few powerful traders. This is not the time for common people to enter in the equity market unless they invest through SIP method for at least for five years. Our research revealed that equity give best return not in short period but in the longer period. It is essential to keep it in mind that equity may not give any good return less than five years period. Indian investors are worried lots because they expected huge returns within a year . It is true that Indian middle class survive on hope without commensuration of patience. An American Economist aptly described this contradiction on following words:
"There is a contradiction playing out in front of us between hopefulness and hopelessness," said Jenny Darroch, a professor at Claremont's Graduate School of Management in California. This contradiction forces us to take steps which ultimately make us sad. Indian middle class investors, like their American counterpart are sad lots. The days are not far off when Indian market may fall further down. So do not invest in the market unless you can wait for five years.
-----------------------
Sunday, November 15, 2009
HUNGER ON THE HORIZON : IT IS TIME TO WAKE UP
It is now a fact that unless Public distribution system is revamped and strong measures are taken to augment agriculture sector, as per the strong signals now received, a famine like situation may develop and devastate the country. Assam would not be an exception to this scene. Till now though two neighboring states of Assam, were experiencing famine in the past, there was no record for Assam experiencing such a bleak situation. The time has changed. Assam has now negative growth rate in agriculture sector. It might trigger famine like situation unless government steps in. The world Food Programme, facing a fund shortage and UN has for the first time appeal to individual persons for cash donation for the first time of its existence. The Head of UN Food Body felt if one billion persons of developed world donate just RS. 69/- a week or one euro($1.50) it would be enough to end world’s hunger and famine. So WFP has issued internet appeal to all individual to contribute. If any one want to contribute contact WFP’S Delhi office.
Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
"There is a need of generating strong domestic demand until the robust recovery all over the world, particularly in the developed world takes place.”
Mukherjee repeated his pledge for massive investments in agriculture sector and infrastructure, and acknowledged that it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. "It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.
The Food and Agriculture Organization (FAO) of United Nations has recently issued a report which reveals that currently there are 75 million (7.5 crore) people in the world are victim of famine and if the current crisis of price rise persists this count may reach the total of 920.25 million (92.25 crore )
India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. It is not interested in finding and disclosing the root cause of this havoc .
In such a situation it is a heartening to note the definite actions taken by Government of Assam to regulate farm products in the state.. In the time of scarcity it is not only production but supply system needs to be strengthened. THE SATE GOVERNMENT AT LEAST MADE SOME EFFORT to boost consumption, eliminating middle men from the market.
Indian government is of course desperate to stave off spiraling food price inflation atleast during this winter season.
Mr. Mukherjee during the meeting of world economic forum assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
ASSAM GOVERNAMEN MUST ENSURE THAT PRICE of THREE THINGS must NOT HIT THE ROOF. It must endeavor to contain the price of rice, vegetable and fish. The fish lobby, in Assam, is very strong. THE GOVERNMENT MUST BREAK THE NEXUS BETWEEN SUPPLIERS – MIDDLEMEN AND RETAILERS. UNLESS MIDDLEMEN ARE CONTAINED NO USEFUL PURPOSE WOULD BE SERVED only BY FIXING UP THE RETAIL PRICE .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
In spite of rising inflation and panic regarding food availability our government still believes that to sustain in world economy we need investment and support of corporate companies. The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
“The Unprecedented food scarcity is beginning to dictate the rules of a new political order where individual countries are scrambling to secure their own food supplies with little concern for the rest of the world, “says the founder of the Earth Policy Institute, LESTER Brown.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others.
India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine.
The worry here, according to Brown, is that "the more influential countries would be able to secure food supplies, leaving a number of low-income, less influential countries with no food to import".
Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
"There is a need of generating strong domestic demand until the robust recovery all over the world, particularly in the developed world takes place.”
Mukherjee repeated his pledge for massive investments in agriculture sector and infrastructure, and acknowledged that it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. "It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.
The Food and Agriculture Organization (FAO) of United Nations has recently issued a report which reveals that currently there are 75 million (7.5 crore) people in the world are victim of famine and if the current crisis of price rise persists this count may reach the total of 920.25 million (92.25 crore )
India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. It is not interested in finding and disclosing the root cause of this havoc .
In such a situation it is a heartening to note the definite actions taken by Government of Assam to regulate farm products in the state.. In the time of scarcity it is not only production but supply system needs to be strengthened. THE SATE GOVERNMENT AT LEAST MADE SOME EFFORT to boost consumption, eliminating middle men from the market.
Indian government is of course desperate to stave off spiraling food price inflation atleast during this winter season.
Mr. Mukherjee during the meeting of world economic forum assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
ASSAM GOVERNAMEN MUST ENSURE THAT PRICE of THREE THINGS must NOT HIT THE ROOF. It must endeavor to contain the price of rice, vegetable and fish. The fish lobby, in Assam, is very strong. THE GOVERNMENT MUST BREAK THE NEXUS BETWEEN SUPPLIERS – MIDDLEMEN AND RETAILERS. UNLESS MIDDLEMEN ARE CONTAINED NO USEFUL PURPOSE WOULD BE SERVED only BY FIXING UP THE RETAIL PRICE .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
In spite of rising inflation and panic regarding food availability our government still believes that to sustain in world economy we need investment and support of corporate companies. The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
“The Unprecedented food scarcity is beginning to dictate the rules of a new political order where individual countries are scrambling to secure their own food supplies with little concern for the rest of the world, “says the founder of the Earth Policy Institute, LESTER Brown.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others.
India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine.
The worry here, according to Brown, is that "the more influential countries would be able to secure food supplies, leaving a number of low-income, less influential countries with no food to import".
Friday, November 13, 2009
PAN CARD WOULD BE A NECESSITY FOR ALL INCOME EARNERS '
'
Perhaps every citizens by now know that in the recent budget a provision has been incorporated that any persons having invested money in fixed deposit would require to quote the pan number. This provision will be applicable to all persons irrespective of the fact that he or she is not even income tax payers. The banks ar being advised to deduct money if no pan numbers are quoted even by non income tax payers from April next. In case wrong mentionning of Pan card number by depositors there would be 20% deduction of tax, as a penalty.
Till recently Pan card was a necessity for the income tax payers who submit income tax returns annually. now a days pan card is necessary for buying a car, or owning a cell phone number. Now pan card would be necssary for Fix Deposit in Bank even if he not a tax payer.
A few years ago pan card was also necessary whosoever makes foreign travel. Even for those people it was necessary to submit IT returns even if he was non income tax payers.( It was necessary for such person to submit nil return). While submitting nil return he had to quote his pan number. This provision has been abolished a few years back. Now Pan card is required for any kind of financial transaction..
The matter of obtaining a pan card for individual has gained importance now because from now onward for even if a person's total income is less than taxable income and he keeps money in bank's fixed deposit he would be required to have Pan card. This is going to be the law from next April. I would there fore like to recommend all persons having fixed deposit in bank or in Government or non Government organisation to apply for PAN number for his own benefit. What is a PAN CARD ?
I will try to answer like a lay man. The PAN is the abbreviation of Permanent Account Number . Actually this is a unique number allotted to individual or a corporate entity by department of income tax, Government of India. It is more an identification number . The PAN card is a plastic coated/laminated card containing an alphanumeric number, mentioning name, father's name, date of birth, the signature, person's photo and, of course, the PAN number and logo of government. of India and dept. of IT. By default , a PAN number has five letters first, then four digits and then one letter again. The uses of Pan card was for mainly following reasons.
1 Till now, it is mandatory to have one and only one fore every Indian who's income exceeds tax free limit. ( this provision is being changed from next April)
2. It serves as an photo-identity card as an Indian citizen .
With the new change in law pan number become necessary for everyone who has FD account in Bank including a widow who may earn an income of below Rs one lakh ninety thousand.. The threshold limit for payment of income tax for all categories of persons have recently been upwardly revised and most of the retired senior citizen and some of the ladies have become out of income tax net. From next April a widow earning below the threshold limit ,even if she has submitted the form 15 , income tax would be deducted by bank for her fixed saving in bak, in case Pan number is not submitted. In certain case if pan numbers are wrongly quoted, may be due to inadvertence, then tax will be deducted at the double the rate. This is where shoe would pinch for a widow or a lone lady or for a senior citizen. The persons having bank FD etc must be very vigilant if they want to avoid unnecessary deduction of tax and penalty from now onward.
Even this provision would be applicable to ordinary common salary earners also unless he submits pan card number. Many senior citizen never is to apply for pan card thinking that they were beyond the ambit of income tax hence no pan card was required. This was a valid argument till now. But from next April onward if pan card number is not submitted to the Bank or any other other authorities income tax would be deducted on payment of interest.
My humble suggestion is not to panic . There are ample time to apply fopr a pan card. In any case the provision would be applicable from next April only. We have one years time to get organised for a pan number. Having a pan card is very useful and easy. It can be used as a photo identity card also beside using for all financial transaction. This number is actually isued by income tax department to track any financial transaction and also to ensure non evasion of tax by eligible citizen. The pan card is very useful for all the citizens, for our country donot have a Social security number like devlop countries of the world.. The importance of PAN card would continue till unique Identification number is issued by the central Government to each citizen. The project has already been taken up recently. A few persons recently wrote to me asking as to how and where PAN card could be applied?
The Income tax Department has authorised UTI investors services Limited to manage and issue pan card for smooth issuance of the card.. It can be applied on line also through internet ascility for the application form. There is a specific application form and that should be filled up to enable UTI Invetors Services Limted to issue PAN number with phoogtraph. A small fee is also charged for the fascility. The pan card can be issued to NRI also.
There are enough time now and all perons having income out of bank fixed deposit, company fixed deposit and having fixed deposit from any other governmental and non govrnmental organsation should apply for PAN number though they might not be income tax payers. In case they donot take PAN Card and donot submit on time the authorities would deduct income tax at the rate of 10% to 20% at the time of payment of interest in due course. Hence it is recommended that steps should be taken up by all concerned not only to apply and obtain the Pan number but to submit the same to the authrities concerned at the earliest.
---------------------------------------------------------------------------
Perhaps every citizens by now know that in the recent budget a provision has been incorporated that any persons having invested money in fixed deposit would require to quote the pan number. This provision will be applicable to all persons irrespective of the fact that he or she is not even income tax payers. The banks ar being advised to deduct money if no pan numbers are quoted even by non income tax payers from April next. In case wrong mentionning of Pan card number by depositors there would be 20% deduction of tax, as a penalty.
Till recently Pan card was a necessity for the income tax payers who submit income tax returns annually. now a days pan card is necessary for buying a car, or owning a cell phone number. Now pan card would be necssary for Fix Deposit in Bank even if he not a tax payer.
A few years ago pan card was also necessary whosoever makes foreign travel. Even for those people it was necessary to submit IT returns even if he was non income tax payers.( It was necessary for such person to submit nil return). While submitting nil return he had to quote his pan number. This provision has been abolished a few years back. Now Pan card is required for any kind of financial transaction..
The matter of obtaining a pan card for individual has gained importance now because from now onward for even if a person's total income is less than taxable income and he keeps money in bank's fixed deposit he would be required to have Pan card. This is going to be the law from next April. I would there fore like to recommend all persons having fixed deposit in bank or in Government or non Government organisation to apply for PAN number for his own benefit. What is a PAN CARD ?
I will try to answer like a lay man. The PAN is the abbreviation of Permanent Account Number . Actually this is a unique number allotted to individual or a corporate entity by department of income tax, Government of India. It is more an identification number . The PAN card is a plastic coated/laminated card containing an alphanumeric number, mentioning name, father's name, date of birth, the signature, person's photo and, of course, the PAN number and logo of government. of India and dept. of IT. By default , a PAN number has five letters first, then four digits and then one letter again. The uses of Pan card was for mainly following reasons.
1 Till now, it is mandatory to have one and only one fore every Indian who's income exceeds tax free limit. ( this provision is being changed from next April)
2. It serves as an photo-identity card as an Indian citizen .
With the new change in law pan number become necessary for everyone who has FD account in Bank including a widow who may earn an income of below Rs one lakh ninety thousand.. The threshold limit for payment of income tax for all categories of persons have recently been upwardly revised and most of the retired senior citizen and some of the ladies have become out of income tax net. From next April a widow earning below the threshold limit ,even if she has submitted the form 15 , income tax would be deducted by bank for her fixed saving in bak, in case Pan number is not submitted. In certain case if pan numbers are wrongly quoted, may be due to inadvertence, then tax will be deducted at the double the rate. This is where shoe would pinch for a widow or a lone lady or for a senior citizen. The persons having bank FD etc must be very vigilant if they want to avoid unnecessary deduction of tax and penalty from now onward.
Even this provision would be applicable to ordinary common salary earners also unless he submits pan card number. Many senior citizen never is to apply for pan card thinking that they were beyond the ambit of income tax hence no pan card was required. This was a valid argument till now. But from next April onward if pan card number is not submitted to the Bank or any other other authorities income tax would be deducted on payment of interest.
My humble suggestion is not to panic . There are ample time to apply fopr a pan card. In any case the provision would be applicable from next April only. We have one years time to get organised for a pan number. Having a pan card is very useful and easy. It can be used as a photo identity card also beside using for all financial transaction. This number is actually isued by income tax department to track any financial transaction and also to ensure non evasion of tax by eligible citizen. The pan card is very useful for all the citizens, for our country donot have a Social security number like devlop countries of the world.. The importance of PAN card would continue till unique Identification number is issued by the central Government to each citizen. The project has already been taken up recently. A few persons recently wrote to me asking as to how and where PAN card could be applied?
The Income tax Department has authorised UTI investors services Limited to manage and issue pan card for smooth issuance of the card.. It can be applied on line also through internet ascility for the application form. There is a specific application form and that should be filled up to enable UTI Invetors Services Limted to issue PAN number with phoogtraph. A small fee is also charged for the fascility. The pan card can be issued to NRI also.
There are enough time now and all perons having income out of bank fixed deposit, company fixed deposit and having fixed deposit from any other governmental and non govrnmental organsation should apply for PAN number though they might not be income tax payers. In case they donot take PAN Card and donot submit on time the authorities would deduct income tax at the rate of 10% to 20% at the time of payment of interest in due course. Hence it is recommended that steps should be taken up by all concerned not only to apply and obtain the Pan number but to submit the same to the authrities concerned at the earliest.
---------------------------------------------------------------------------
THE BEST TIME TO TEACH CHILDREN VALUE OF MONEY
The lots of mail were received , during the month, from our readers asking for the best time to teach their wards the value of money. Some of the young parents mentioned that in their family the discussions on family silvers, wealth and money earned by parent were never discussed. In fact it was considered as bad manners if children tries to take part in money matters of the family. Children were expected to study and play and parent always need to fend for them. But the perception has changed in twenty first century. It is now required that children should know the value of money early in Life. Now the question arises how early children should start hands on training on money management?
It is now felt that children should have hands on experience of handling money from early age. But why? It is because the req an> an>uirment of money has multiplied. The life style of people have undergone tremeddous change. The life on earth have beccome competitive. This competitivnes have increased the necessity of money. Thee earning have not multiplied. But expenses have gone up tremedously. In sam mariage of a daughteer was not veery expensive affairs. Today it has changed . In fifties of tweentyeth century birth of the clebration ws completed with offering to God and feeding "para manna" to all his neighbour friends of the birthday boy. Today birth day is big affairs and cost enormously. the expectation of children have gone up. If children are allowed to have hand son experience of handling money they would at least get an opportunity to learn of the value of money. So at what time the concept of money should be introduced to the life of children?
This is not a easy question. Different societies have different approach to money. Children are allowed to handle money from the early childhoodd in Rajasthan, MP andd Up but in south India and in Northeast India children handles money after going to college only. However many citizens have been forced to talk openly now to their children as the money has become dearer due to price rise, non availability of cash flow duee to recession, pay cuts and job loss. According to a reecent survey by T. Rowe Price Group, nearly hlaf of the parents of school going children have used the recession as the catalyst to talk about money to their children.
The question when children should be allowed to handle money. The answer is as soon as the children start exploring outside world. According to an expert on child psychology children should be introduced to money matters as soon as he develops his want for any product or object like toy, chocolate, book, etc. What could be age ? The children start his demand when he becomes four years of age. This is would be the right age to introduce him to money. Till this age children feels that whatever he desires would come from anywhere. He develops a desire and that would be fulfilled. How it gets fulfilled is not his
outlook. This is the time a healthy outlook needs to be developed in child, as per expert on the child psychology.
Indian parents are much hesitant to talk about money to their children .Parents feel like sex education money education should start at school .This is inherent hesitation of indian parents.According Laura Levline, an expert on Finaical literacy said "parent feel they are not qualified.But kinds learn most of their money lessons from their parents best. you just need to talk about it ."
Really it is not hard, expert agree, if you take step by step. The best way to introduce the concept of money managmeent is to give children some money to manage,said Janet Bodnar, author of world famous book "Raising Money Smart Kids". What is the advise of Bodnar?
Bodnar suggests setting a weekly allownace that equates to half the age of children at the rate of Rs 2/- for a four year old and Rs 5/- when a child hits 10 th year. According to me, for Indian parents there need not be any particular formula to be followed on the amount. Parent can simply shift some money that they were spending on him monthly for his toys and snacks and story books etc.- and allow them to decide how to spend it. The most important thing is for the children to see that manging money is all about making choices. If you buy one thing costly you would not have money to buy another. It is like teaching children about healthy eating.You donot force children to taste from food pyramid- arather you cook for them to experience it. Likewise parents need to make money experiences a part of their childrens living. Perhaps this would help children to realise the value of saving . Of course guardian has to be strict in allotment of amount to be paid .
N.R. Srinivasan, an astute acountant started giving his teen aged son Rs10/- a day and asked him to divide this allowance into three parts at the rate of Rs 3/- each for his T shirts,,CDs, Tiffins and balance one rupeee for daily saving for buying whatever he wants like an extra pair of shoes or shocks or a cap etc. The formula developed in him a sense of saving and developed respect for money value . In later years his son became an investmeent expert when he grew up after completing his MBA.
His friend Bibek Talukdar gave his young son Paban whatever he wanted. He even purchased a shoe costing Rs four thousand on demand, whereas he himself was wearing a shoe costing Rs 800 only. He never taught the valuee of money to his son. When his son , Paban was in the last year of the college he demanded from his father a Motor Cycle which was refused. He told his father if he was unable to meet his demand why did he gave birth to him. He threatned to commit suicide for loss of prestige in front of his classmates. .Ultimately father had to agree. Later years, his son became a vagabond. According to expert, it is the parents who can incuclaate the best money value in children's mind by his deed or by example.
In case parents do want their children to become money savvy then start their life with a simple piggy bank . This would develop the concept of "Spend, save and share" early in life.This concept should be started with the kids because most of them otherwise keep on harping and whining " give me , give me and give me" while visiting stores and exhibiton etc.
As the children reach adulescent they should be introduced to banking procedure and asoon as theeir pass out of the high school they need to be introduce to credit card system.The most of our boys after passing go to college other than at their own home town. This habit of credit card/Debit card would help them to mangement their fiance while in hostel. Parents can deposit money in his acccount in home town and he can take out money in the town where his college is situated in south India. or else where.
According to me,parents need to explain their teenaged children that money is a tool that provides both enjoyment and security when used wisely. Srinivasan oncce told mee that his grandfather grew up poor and was never able enjoy his money. He grew up affluent and lacked awareness of the cost and value of money in young age.He wants his son Hari to have respect for money but not love it too much nor fear it too much. A healthy attitude towards money would make his son a balanced human being-that is what is needed in life, he added.
All parents must remember the words of Einstein that the mystery of compounding of money is far more complex to him than the complexity of the laws of universe. Ask your four year old child to save Rs five per day in bank and ask him to count the sum when he is sixty years old. It would be difficult for him to count the number of zeros then.The recession is the best time for you to introduce the money management concept to your child for only then you can feel the real pinch and power of money.
-----------------------------------
It is now felt that children should have hands on experience of handling money from early age. But why? It is because the req an> an>uirment of money has multiplied. The life style of people have undergone tremeddous change. The life on earth have beccome competitive. This competitivnes have increased the necessity of money. Thee earning have not multiplied. But expenses have gone up tremedously. In sam mariage of a daughteer was not veery expensive affairs. Today it has changed . In fifties of tweentyeth century birth of the clebration ws completed with offering to God and feeding "para manna" to all his neighbour friends of the birthday boy. Today birth day is big affairs and cost enormously. the expectation of children have gone up. If children are allowed to have hand son experience of handling money they would at least get an opportunity to learn of the value of money. So at what time the concept of money should be introduced to the life of children?
This is not a easy question. Different societies have different approach to money. Children are allowed to handle money from the early childhoodd in Rajasthan, MP andd Up but in south India and in Northeast India children handles money after going to college only. However many citizens have been forced to talk openly now to their children as the money has become dearer due to price rise, non availability of cash flow duee to recession, pay cuts and job loss. According to a reecent survey by T. Rowe Price Group, nearly hlaf of the parents of school going children have used the recession as the catalyst to talk about money to their children.
The question when children should be allowed to handle money. The answer is as soon as the children start exploring outside world. According to an expert on child psychology children should be introduced to money matters as soon as he develops his want for any product or object like toy, chocolate, book, etc. What could be age ? The children start his demand when he becomes four years of age. This is would be the right age to introduce him to money. Till this age children feels that whatever he desires would come from anywhere. He develops a desire and that would be fulfilled. How it gets fulfilled is not his
outlook. This is the time a healthy outlook needs to be developed in child, as per expert on the child psychology.
Indian parents are much hesitant to talk about money to their children .Parents feel like sex education money education should start at school .This is inherent hesitation of indian parents.According Laura Levline, an expert on Finaical literacy said "parent feel they are not qualified.But kinds learn most of their money lessons from their parents best. you just need to talk about it ."
Really it is not hard, expert agree, if you take step by step. The best way to introduce the concept of money managmeent is to give children some money to manage,said Janet Bodnar, author of world famous book "Raising Money Smart Kids". What is the advise of Bodnar?
Bodnar suggests setting a weekly allownace that equates to half the age of children at the rate of Rs 2/- for a four year old and Rs 5/- when a child hits 10 th year. According to me, for Indian parents there need not be any particular formula to be followed on the amount. Parent can simply shift some money that they were spending on him monthly for his toys and snacks and story books etc.- and allow them to decide how to spend it. The most important thing is for the children to see that manging money is all about making choices. If you buy one thing costly you would not have money to buy another. It is like teaching children about healthy eating.You donot force children to taste from food pyramid- arather you cook for them to experience it. Likewise parents need to make money experiences a part of their childrens living. Perhaps this would help children to realise the value of saving . Of course guardian has to be strict in allotment of amount to be paid .
N.R. Srinivasan, an astute acountant started giving his teen aged son Rs10/- a day and asked him to divide this allowance into three parts at the rate of Rs 3/- each for his T shirts,,CDs, Tiffins and balance one rupeee for daily saving for buying whatever he wants like an extra pair of shoes or shocks or a cap etc. The formula developed in him a sense of saving and developed respect for money value . In later years his son became an investmeent expert when he grew up after completing his MBA.
His friend Bibek Talukdar gave his young son Paban whatever he wanted. He even purchased a shoe costing Rs four thousand on demand, whereas he himself was wearing a shoe costing Rs 800 only. He never taught the valuee of money to his son. When his son , Paban was in the last year of the college he demanded from his father a Motor Cycle which was refused. He told his father if he was unable to meet his demand why did he gave birth to him. He threatned to commit suicide for loss of prestige in front of his classmates. .Ultimately father had to agree. Later years, his son became a vagabond. According to expert, it is the parents who can incuclaate the best money value in children's mind by his deed or by example.
In case parents do want their children to become money savvy then start their life with a simple piggy bank . This would develop the concept of "Spend, save and share" early in life.This concept should be started with the kids because most of them otherwise keep on harping and whining " give me , give me and give me" while visiting stores and exhibiton etc.
As the children reach adulescent they should be introduced to banking procedure and asoon as theeir pass out of the high school they need to be introduce to credit card system.The most of our boys after passing go to college other than at their own home town. This habit of credit card/Debit card would help them to mangement their fiance while in hostel. Parents can deposit money in his acccount in home town and he can take out money in the town where his college is situated in south India. or else where.
According to me,parents need to explain their teenaged children that money is a tool that provides both enjoyment and security when used wisely. Srinivasan oncce told mee that his grandfather grew up poor and was never able enjoy his money. He grew up affluent and lacked awareness of the cost and value of money in young age.He wants his son Hari to have respect for money but not love it too much nor fear it too much. A healthy attitude towards money would make his son a balanced human being-that is what is needed in life, he added.
All parents must remember the words of Einstein that the mystery of compounding of money is far more complex to him than the complexity of the laws of universe. Ask your four year old child to save Rs five per day in bank and ask him to count the sum when he is sixty years old. It would be difficult for him to count the number of zeros then.The recession is the best time for you to introduce the money management concept to your child for only then you can feel the real pinch and power of money.
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