HUNGER DUE TO PRICE RISE MAY CREATE RIOT IN OUR SOCIETY

The food prices have become prohibitive. There is definite sign in the society of less tolerance as the cost of pulses and vegetables have hit the roof. There is a strong possibility in the country of developing riot like situation out of hunger. The tolerance limit of Indian population for inflation is 10% maximum. In case we compare year to year rise in price from last year inflation has reached almost 19% up in food commodities. This is really intolerable for middle class and below. Why food prices have gone up so suddenly? Was it only due to drought condition and lower rainfall alone? The government has been holding Monsoon responsible for the rise in food prices! Is it the only cause of high food prices? We do not believe that. According to us failure of Monsoon is one of the main reasons no doubt. But it is not the only reason. The Government cannot be held responsible for the failure of Monsoon. It has no power to control failure of monsoon. It has no role to in ushering in draught. But Government’s failure was in not taking timely steps in abolishing import duties in food products. When they realized that failure of monsoon could hit the agriculture it was too late. Sugar prices went down as soon as import duties were lowered. The Deputy Chairman of planning commission, Montek Singh Ahluwalia recently said that Prices of Food product would come down in January 2010. No special measures are required to be taken. This observation is in variance with the observation of C Rangarajan, .chairman of prime Minister’s Advisory council who suggested RBI to take effective steps to recast CRR.


Hunger may engulf around one billion people unless common people of developed nations contribute personally in cash. The appeal for help has been circulated already by none other than UNO. Is there any remedy to bring down the food prices in India? Yes, government may consider a few urgent steps .Montek admitted that cost of vegetables are matter of concern but he said “rice and wheat can be kept stored but it is impossible to store vegetable longer”. He is right but we have a suggestion that to bring down the cost of vegetables, eggs and fish the state governments can withdraw inter state movement taxes, if any. Beside the state government can directly negotiate prices of Fish and eggs through Government and supply to retail venders. We are sanguine if Assam Government directly deals with Andhra government and with the main suppliers, the cost of fish and egg would come down immediately. If effective steps are taken immediately then States do not have to wait till January end. The Bengal Government has taken similar steps and the prices of potato have come down to Rs. 9/- a kg and is expected it would be Rs 7/- a kg soon when most of the Indian state are selling at Rs22 a kg.

The Public distribution system of our country need to be revamped and strong measures is taken to augment agriculture sector. The private sector should be allowed to import food grain and stock commodities for four months to distribute as per direction of states. It is now apparent that a famine like situation may develop and devastate our country. Assam would not be an exception to this scene. Assam never experienced famine in the past. But. The time has changed. Assam has now negative growth rate in agriculture sector. It might trigger famine like situation unless government steps in. Assam Government has taken some steps but are those enough? Certainly not. Had the steps taken by Government would have been successfully implemented there would not have been such rise in prices. Agriculture is the state subject. All the individual states have responsibility to augment supply of food staff. Yes, it is a fact that State Government cannot import food staff or it cannot bring down the tariff rates of imported staff. But it can certain tackle two most important issues. The state Government can abolish all the interstate taxes and rates, if any, on the movement of food commodities. Food commodities while traveling from Punjab and Hariyana get costlier by 15% to 18% by the time it reaches Mandis OF Delhi situated only few miles away. The eggs and fish get costlier while traveling from Andhra and from UP (Luckhnow) to Assam.

This is the time Government of India should consider declaring internal emergency on the basis of food shortages. It should urge state government to abolish all rates and taxes on agricultural commodities atleast for six month. Perhaps central government would not be able to handle the situation alone as the agriculture is the state subject. The commission on agricultural product is also as high as eight to twenty percent. The wholesale commission and retail commissions are as high as 30% percent. This issue is very much political sensitive. But respect6ive government must muster enough courage to tackle the issue in case states want to avoid riot like situation DURING NEXT YEAR. The government should have adopted proactive policy instead of reacting to helpless situation as is being done now.
If these policies would have been taken four five months earlier prices would have come down as the sugar prices have come down.

The question has been raised if central government is in a position to take effective steps to tackle the situation as the agriculture is a state subject. We would like to remind them that it is the central Government who ushered in green revolution despite the agriculture being a state subject. Why then in such emergent situation central Government would not be able to handle the situation NOW? The central Government can compensate the state Government for abolishing rates and taxes on movement of food products within the states, if any.

The questions have been asked as to why agriculture has gone down so badly in India after stable productions for
Years?


THOUGH DROUGHT IS A TRUE STORY YET INVESTMENT IN AGRICULTURE WAS TOO LOW. In India the subsidy amount is very high and investment is too low. The investment in Agriculture is only 20% of Agriculture GDP. The Government has always considered increasing the subsidy but did not care enough for the enhancement of investment. The procurement prices were revised from time to time. The cultivator should get fair price no doubt. But market should be allowed to settle the Fair prices when subsidy have been given .More importantly the role of middlemen could be controlled. The need of the Day now is to see that AGRICULTURAL COMMODITIES FLOW DIRECTLY FROM Cultivator to market without much intervention of the middlemen. Perhaps elimination of middlemen would be impossible task for State Government due to political compulsion .This is the reason why in some of the states large scale grocery stores have become unsuccessful despite involvement of big industrial houses...

Addressing WORLD ECONOMIC FORUM’ in New Delhi recently, Mr. Pranab Mukherjee admitted:
“The massive investments in agriculture sector and infrastructure would be required without which it would not be easy for Asia's third largest economy to compensate for the loss in exports through domestic demand. It is not easy for us to diversify the market overnight and make up the loss so we shall have to wait for some time," he said.

India at present is facing the very harsh situations where poorest of the poor of our country have to go to bed hungry. But at this crucial time when the country expects some stringent steps from the government’s side, it is defending itself by saying that food crisis is a global problem. Some how the central Government has waken up now to take effective steps. The Government assured that none should be worried about the availability of food grains for the government would continue to import food items to meet any supply shortfall and scarcity food.
We wrote earlier also that .Assam’s population survived famine like situation in the past mainly due to frugal food habits and due to non dependence on outside supplies. With the increase in population food habits have changed and dependence on outside supplies have increased. The government must strengthen public distribution system, crack nexus of middlemen in fish supplies and develop storage space for sufficient food grains and help small growers to produce green vegetables, rice and fish. THE ARRANGEMENT CAN Be MADE TO BRING IN FISH FROM Andhra government’s fishery department and distribute to retailers at pre determined price and also distribute through area wise Kiosk of Assam’s fishery department.
The Economic Advisory Council to the Prime Minister advocates the role of corporate sector in agriculture and says that activities other than food grain production like commercial crops, horticulture etc. have contributed most to agricultural GDP. The council recommends removal of subsidies related to grain procurement and REVAMPING of Public Distribution System.
"We are in the midst of the most severe food crisis in the world’s history," Brown said. "This is not your mother’s food shortage... but a chronically tight food situation, a serious and long-term problem.’’
From Africa to Asia, countries are scrambling to buy or lease land overseas to grow crops and feed their people. China, which has to feed the world’s largest population, has taken the lead by contracting land in Tanzania, Laos, Kazakhstan, Brazil and others. India has set its eyes on Uruguay and Paraguay, while South Korea is looking for farming deals in Sudan and Siberia. Libya and Egypt for their part have been negotiating deals to lease land in Ukraine. Assam Government must protect Farm land. The large entrepreneurs must be encouraged to0 cultivate in collaboration with local land lords and cultivators. Agricultural sector of India is mainly covered by small and marginal farmers, so our government should promote small scale agriculture. Corporate sector could be ushered in as an experiment in joint sector basis where land lord and cultivators becoming partners with corporate HOUSES on a selective basis. Can Assam can experiment with this model and outshine Hariyana and Punjab.
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SOME OFTEN ASKED QUESTIONS BY YOUNG INVESTORS OF INDIA

ALL INVESTORS ARE INQUISITIVE . THEY HAVE LOTS OF QUESTIONS IN THEIR MIND. Some ASK OPENLY BUT A FEW DO NOT ASK DIRECTLY BUT WAIT FOR SOMEONE TO ASK THE QUESTIONS ON THEIR BEHALF. HERE ARE SOME OF THE OFTEN ASKED QUESTIONS. ACCOMPANYING ANSWERS ALSO GIVEN HEREUNDER. BUT MORE KNOWLEDGEABLE CAN ANSWER IT BETTER. WE WELCOME WELL THOUGHT OUT ANSWER AS MEASURE OF SERVICE TO NEW YOUNG INVESTORS. HERE WE GO:


QUESTION:

WHETHER INVESTMENT IN DIVERSIFIED MUTUAL FUND IS BETTER THAN ULIP ?

ANSWER :

Ulip and Diversified Mutual fund are belong to two different class of asset base : Ulip is not an investment product.It is an insurance product.So itis a costly product compared to any mutual fund.Ulip is very good if taken for longer period say tfor ten to fifteen years.It is ideal for saving money for children's education or marriage.In short term it does not give adequate return.So if ulip is redeemed within three to four years there is every possibility of incurring loss . Diversified Mutual fund is investment product and is less costly. Now a days ther4e is no entry load.ther4e are exit load if redeemed before one year. The administration charges are lower at around 2 to 2.%5 only. So somebody wants to invest for four to five years only it should be Diversified equity fund. Ulip also provide security which mutual fund does not give. ULIP is good for long term planing.



QUESTION :

SHOULD WE TAKE INSURANCE COVER FIRST OR INVEST IN MUTUAL FUND FIRST ?

ANSXWER :

THIS ISSUE WOULD DEPEND ON THE REQUI8REMENT OF THRE PERSON CONCERNED. iN CASE THE PERSON HAS GOT FAMILY RESPOSNSIBILITY HE NEEDS TO TAKE INSURANCE SURELY. bUT IN CASE PERSON DOES NOT HAVE HAVE FAMILY OBLIGATION HE CAN OPT FOR INVESTMENT FIRST. INSURANJCE IS NOT AN INVESTMENT .iT PROVIDES SECURITY AND SAFETY OF THE FAMILY. THIS IS VERY IMPORTANT SOCIAL REQUIREMENTS FOR A PERSON WHO IS 'kARTA". A BACHELOR, WITHOUT FAMILY OBLIGATION, CAN START HIS LIFE WITH INVESTMENT OPTION .BUT AS SOON AS HE GETS MARRIED AND CHILDREN ARE BORN HE NEEDS TO PROTECT THE FAMILY WITH INSURANCE OPTION.


QUESTION ;

FOR ANY INVESTMENT ON WHOM SHOULD WE DEPEND. ? SHOULD WE DEPEND ON AGENTS, BROKERS OR SHOULD WE STUDY OURSELVES ?

ANSWER :

The best thing is to study yourself. The money belongs to you. You are the best person to protect your own money. Knowledge is power. So you need to acquire knowldge. In case due your professional business or due to lack of opportunity you cannot study you should depend on educated and wise professional advisers. All regurlar brokers and agents may not be as reliable as you want.So you need to selct your own reliable professional adv8sors. Some of the good banks have their own investment department. You can depend on tHem. You can depend on qualified, knowledgabl;e Chartered accountant or economists. but the best is study and then to invest.



QUESTION;

HOW MUCH ONE SHOULD INVEST ?

ANSWER:

THERE IS NO DEFINITE ANSWER TO THIS QUESTION. AFTER MEETING YOUR FAMILY OBLIGATION WHATEVER AMOUNT IS AVAILABLE CAN BE INVESTED AFTER SETTING ASIDE A PORTION OF IF FOR EMERGENCY REQUIREMENTS. May PEOPLE SAVE AROUND 30% OF THEIR ANNUAL EARNING.


QUESTION ;

WHERE SHOULD WE INVEST IN SHARES, MUTUAL FUND OR IN GOLD ?

ANSWER ;

EVERYONE SHOULD BEGINNING INVESTING REGULARLY IN BANK, FOLLOWED BY IN PPF AND SMALL SAVING SCHEMES. SLOWY INVESTMENT SHOULD BE MADE IN DIVERSIFIED MUTUAL FUND AND LATER IN SHARES. NONE SHOULD BEGIN INVESTING IN SHARE MARKET.IT WOULD BE DANGEROUS.


QUESTION:

HOW LONG SHOULD ONE PLAN TO INVEST IN MUTUAL FUND OR IN SHARE ?


aNSWER:

nONE NEED TO INVEST IN EQUITY FOR A SHORT TERM. IT WOULD BE SUICIDAL TO INVEST FOR ONE YEAR OR TWO YEARS. ANY INVESTMENT IN EQUITY SHOULD BE MADE IF THE PERSON CONCERNED CAN KEEP THE MONEY INVESTED AT LEAST FOR FOUR TO FIVE YEARS.

QUESTION ;

WHICH ARE THE BEST FUND WHERE INVESTMENT COULD BE MADE NOW:

ANSWER:
tHIS WOULD BE TOLD TO YOU BY YOUR PERSONAL financial ADVISERS. YOU CAN STUDY REGULARLY PERSONNEL FINANCE PAGE OF BUSINESS STANDARD, ECONOMIC TIMES AND IN ASSAM TRIBUNE AND IN THE HINDU. MOSTLY EVERY MONDAY ARTICLES ON INVESTMENT APPEARS ON THESE NEWS PAPERS. YOU CAN ALSO READ MONEY MAGAZINE OF OUTLOOK AND VIEW CNBC TV. YOU CAN ALSO VISIT "VALUE RESEARCH.CM" AND 'MONEY CONTROL.COM" AND SELECT FIVE STAR AND FOUR STAR FUNDS.

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HOW TO INVEST IN 2010 ESPECIALLY BY YOUNGER GENERATION

We welcomed the New Year with joy and happiness. Let us hope the new year would bring, for all of us, peace , prosperity and happiness.In Indian culture four tenants have been specified for a successful life on the earth for human being.. Those are Dhrama, Artha, Kama and ultimately Muksho. For a peaceful and successfully life on earth these four things are most required. Very interestingly among all the important virtues "Artha" has been given an important place.It's place is just after the concept of "Dharma". Now what is "Dharma"? The Dharma is the expression of divinity in the human body and soul. The "Artha" is one of the basic requirements on earth to keep body and the soul together.Yet least importance is given to Artha or "money management " by most people of Northeast India.





For a long time the importance of money was never used to be discussed in the family get together, as it was considered indecent to discuss money matters in front of the children by parents.This culture has changed of l ate and people have become conscious of importance money. Yet full power of money has not been realised as yet.

In fact, money does not have any strong intrinsic value of its own. It acquires value as it is handled by people . If coins are kept stored in a pitcher or in a box or in a locker for a few years it looses value.Once upon a time, during Sixties, people of Assam used to buy ten eggs for a rupee. With the same amount of money today even one egg is not available.If a person saved that one rupee in his box, today it would have become almost valueless. But if he would have saved that one rupee in a bank (earning ten percent interest) the value of that Re One would have become Rs128/- .With that money even in today's market he would been able to buy three dozens of of eggs. So it is the human being who would have to be responsible to increase the value of money if he needs to survive even in today's market condition. How the value of money was increased in the instant case? It is the habit of saving and investment that generated the value of money. So in today's life whatever we earn should not be consumed during the month itself. A portion of earned income must be saved. Why? Because people can earn money only for thirty five to forty five years but they may survive up to eighty years of age. To keep their body and soul together they need to save and invest money. In to days situation earning money is not easy. But saving and investing money is still more difficult. So we need to make special efforts to save money and train our children to realise the importance of money as soon as they are ten years old.

The most investors are planning now as to how to go about investing in the New Year. A few of our readers conveyed us that the year 2009 brought luck to them. They invested wisely when market was down and could gain almost 28 % returns within a period of eleven months. Naturally they were happy and expressed their satisfaction. Actually they gained only for their own boldness and judicious decision making capacity. It was nice to hear that some of our readers could get satisfying returns during the last year. But it must be kept in mind that in short term generally equity market does not provide excellent returns. Perhaps an element of luck also helped our investors, beside their own strength. The 2009 was an unusually good year.( The investment of Rs. one lakh on First January gave a return of Rs 1,78,597 on BSE sensex, Rs. 1,29,953 on Gold, Rs 160,991 on silver, Rs 1,08,243 on Bank fixed deposit, Rs 1,22,027 in Debt oriented hybrid fund and Rs. 1,86,090 on equity Mutual fund, as on 28TH December 2009.) The highest return came from equity , followed by silver and Gold and the lowest was bank fixed deposit.



Everyone expect that in 2010 also such good returns would be available. According to our calculations year to year returns during the New Year may not be as alluring as it was during 2009. The inflation is getting higher every day. Though America and Europe is out of severe recession actually unemployment figures have not gone down. The banks are not giving enough loans as before. Under the circumstance market is expected to remain volatile. Unless FII invest in Indian share market stocks do not move steadily upward. Indian investors remain shy till market makes bold upward movements. There is a strong possibilities that Indian share market may move upward during first few months of the first quarter but as the year marches ahead THE CORRECTION MAY SET IN AND MARKET MAY GO DOWN AT-LEAST BY 20% PERCENT. Mark Faber predicts 30% correction from present high of 17,800 sensex. Everyone is asking now the following question:



What’s in store for us in 2010? The answer is: The recessions stemming from financial crises tend to be severe and are usually followed by relatively anemic economic recoveries. This time will be no exception, with one of the feeblest recoveries -- maybe 6% to 7% growth in GDP in 2010 – there could be a steep decline of market after a few months. But investors should not worry. In last ten years (from year 2000 to First January, 2010) the best return came from equity, (despite big crash of 2008) followed by gold, silver, real estate, debt oriented balance fund and lastly Bank Fixed Deposit. The equity is the king ion the long run .So younger investors should concentrate on equity, Mid aged investors on Balance fund and old investors on SCSS , PPF and bank.



The stock-market rally of 2009 had an artificial feel. It owed more to a sea of liquidity than to an improvement in the nation’s basic economic condition. Shadow of such depressing situation market may behave erratically. What should be done under such circumstances?

Our recommendation would be to stick to old faithful stocks so far as shares market is concerned. If you have to buy stock buy only promising shares of the emerging categories like communication, IT etc and shares of good old industrial products like steel, oils & chemical, banking and medicine. Investor could also rely more on ULIP and diversified Mutual Fund. During the year thematic funds should be avoided. It is a fact that all the investment should not be kept in single basket of equity only. For creation of wealth different asset class should be subscribed. What is the other asset class that could be relied upon? During past ten years only one asset class had surpassed the equity market- I.e. “ART “segment. But to buy art work investor must be knowledgeable. Art of Hussein or Ganesh Pain and Bikash Bhattachajee are real asset but those are very costly for common investors. The art work of new artists is available at reasonable cost. The silver, Gold and land are other two asset Classes that could be relied upon provided it can be kept protected. Gold ETF are easy to handle but realty sector have not inspired confidence. So the best bet for 2010 would be the Diversified equity and PPF for young investor and for senior citizen it could be balanced funds and SCSS. During the year of 2010 the market is sure to correct. That would be time to enter the market who can organize lump sum amount. My recommendation would be to take the route of SIP or STP from now onward for a period of two years. .If money could be kept invested atleast for four years from now there is a strong possibility of a high return by 2012. Making money is not easy. Many people broke down when their hard earned money, invested for children, became half almost, in 2008, but those persons reaped greatest benefit who kept the money invested throughout 2008 and 2009 and did not redeem despite great psychological pressure from family and friends.

The greatest virtue for the investors of 2010 would be Caution, Patience and Boldness. None need to invest who are weak heart. The year of 2010 would be going to be a landmark year for it would provide the base for a successful earning in 2012-2015. Investor should fix their vision judiciously, keeping in their earning capacity in mind, and wait for the opportunity to invest when opportunity knocks at the market door in 2010.



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THE TIME TO INVEST IN TAX SAVING SCHEME

This is the right time for the salaried persons to invest in tax saving scheme, who have not thought of availing tax benefit, through saving and investment during the year. The government of India has given some concession to tax paying public in case they subscribe to certain specified schemes. This includes schemes launched by Government of India through bank and small saving schemes through post offices. The scheme introduced by private as well as public Mutual fund and Insurance companies are also allowed to provide 80 c benefit to income earners. The maximum investment, under the provision of 80 c of IT Act, could be made up to is Rs. One Lakh. This gives them tax concession up to Rupees Thirty thousand. In case benefit of health insurance is added the tax benefit becomes much more.


The month of December is coming to an end now and almost all salaried employees must be busy evaluating how to save taxes out of their earned income. Those who work in companies must be reminded by their account department to submit proof of their investment in specified scheme which they might have subscribed. Many employees started investing in systematic way and they would not have any difficulties in submitting the proof of their investment to avail tax benefit. But most of the employees do not subscribe to those schemes till last moment. Now is the time for those employees who want avail tax benefit through investment. Ofcourse now investment shall have to be in lump sum amount. Had they planned earlier it could have been much easier as they could have taken the benefit by installment payments. Now there is only three month more to complete the financial year and any investment to avail tax benefit shall have to be in lump sum amount only. The amount of investment for tax benefit for the year is maximum Rs One lakh. The investment for this purpose can be done through EPF, PPF, Insurance, SCSS, and Bank FD for five years and through post office instruments. Many of our readers have asked as to which investment instruments they should select to reap the best benefit.

This is a difficult questions to answer. Every salaried person may have their own priorities. All regular confirmed employees, whether in Government or in Private sector and public sector, would have EPF. Those who have taken loan for construction of home would also get tax concession. A portion of 80C would be covered by these contributions. So they might have to depend on other forms of instrument partly. But self employed persons like Doctors, Advocate, business women, artists ,who do not have PF shall have to depend on Post office instruments or on PPF and or ULIP, Life insurance or on Mutual funds. Our recommendations would be first to avail the benefit of 80c through PPF. It is completely safe, interest rate is high, and no income tax is required on earnings. But it has longer period to get back the money. In fact National saving certificate, Bank Fixed Deposit have shorter maturity period. The investment in PPF can be made only unto Rs.70,000/-.So for the balance Rs. 30,000/- investors would have to depend on other instruments. At this point of time the investment in ELSS of mutual fund or ULIP could be thought of. But one thing must be kept in mind that ULIP and ELSS are equity based so a risk element would always be there. No chicken hearted investors should invest in ELSS. Those who are young and brave they can invest in Mutual fund and reap higher benefit if they can remain invested for atleast five years. What about senior citizen who do not have salaried income but get higher pension and need to invest to make their income totally free from income tax? Senior citizen can invest in Senior Citizen saving Scheme. This is the best instrument for them. Why? Because SCSS provides highest interest in today’s market. It provides now 9% percent return per annum and that is the highest interest in the market. Those who have PPF could opt for it, for it gives interest free return. In case their account is more than fifteen years old then the money lying in the account could be taken out whenever they need. I do not recommend ELSS for senior citizen who is above 75 years. Younger persons can first subscribe to ELSS and keep it there for more than five years and reap good benefit. The maturity period of ELSS is three years.

No wonder, this is also the time when mutual fund houses and distributors aggressively push equity-linked savings schemes (ELSS) because one gets tax relief under section 80C for investing in these schemes. Returns from these schemes have been at par with the Sensex returns in the last three-five years. According to data from Value Research, a mutual fund rating agency, these schemes have returned almost 83 per cent in the last one year, as against 76 per cent by the Sensex. In the last three and five years, while these schemes have returned 9 and 21 per cent, the Sensex has returned 8 and 22 per cent, respectively.
The greatest benefit of ELSS is, if invested properly and for longer period, it provides market related returns. My recommendation would be to have a disciplined approach for availing tax benefit. Income earner should invest systematically from the beginning of the year a fixed amount for eleven month. This way it would not trouble them at the end of their year and they would be able to ride the volatility of the share market. It is true that ELSS gives better return in a longer term and can give dividend too without any income tax. This suggestion is for young investor only as long term investment may not suit the seniors.

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RBI NEEDS TO TAKE EFFECTIVE STEPS TO CONTAIN UNFLATION

The RBI is now in between two horns of a dilemma. It needs to decide whether growth is important or the tackling of inflation. The month of November has given sleepless night to both finance Ministry as well as RBI.After a stable October it was found that inflation has jumped up and it become 4.78%.The RBI has viewed the position seriously and is getting ready to take control of the situation. But how much monetary measures would be able to help in-case of such massive inflation. In fact much more fiscal measures would be required to chain in such unbridled inflation.
The finance Minister again stated that"there is inflationary pressure on food items>it is a matter of concern"The central government for the first time recommended the state Government to ensure that the public distribution system provides food grains at controlle3d rates to the poor people.In our column it was recommended that not only price of wheat and rice the price of vegetable and fish sould be chained in by state government.The food price index has gone up by16.71 percent during the month compared to last year. It is time to control inflation on food products especially before it gets our of control. A public outcry may develop n case prices don't go down during festive month of January. It is understood that RBI is set to issue a float rater bond shortly,after a gap of four years.according to informed source this is an indication that interest rates will rise sooner rather than later.

It is also a fact the prices of manufactured goods have also gone up as economic activities have gone up.The government is concerned of the inflation yet the Finance secretary said"it is not as if we are taken by surprise or there is any cause for any special emergency action",added Mr. Chawla , the finance secretary.

We however donot agree with the contention of the Finance secretary.We feel RBI would tighten key interest rates since the central Bank has revised the inflation forecast to 6.5% by ensuing march. But measures taken by central Bank would not be able to contain the inflation unless fiscal measures are taken. The availability of food products at a reasonable cost would be most important. how would that be possible?

The availability of food product has become world wide problem .Hence import of food product would not be easy at all. The government should have taken timely steps in allowing corporate sector to get into agriculture in collaboration with landlords and cultivators as their partners. This is measures were discussed in our column months earlier number of times.
Despite recommendations of Prime Minister's advisers most of states have not taken timely steps in this regards perhaps due to socio- political compulsion. This apathy of state Government would prove to be a costly mistake, now.
In the meantime, inflation more than trebled to 4.78 per cent during November on account of rising prices of food items like potato, sugar and pulses, and may prompt the Reserve Bank to squeeze money supply to tame price rise.
The wholesale price-based inflation jumped to nearly 5 per cent from 1.34 per cent in October, according to the monthly inflation data released recently.
Attributing rising prices to supply side constraints, Suresh Tendulkar, former chairman of the Prime Minister's Economic Advisory Council (PMEAC), said the RBI could take steps to withdraw liquidity to tame rising prices. But the apex bank is slated to announce review of its annual credit policy next month.

.
The monthly data, which was released by the government for the second time, shows that potato prices have surged by a whooping 141 per cent during the past eight months, followed by sugar 37 per cent, pulses 32 per cent and onion 20 per cent.
On the other hand, minerals, edible oils and leather products have become cheaper since March 2009.
The international raw material prices are rising so domestic prices are also seeing a movement upward. it is imperative now that the government needs to manage supply shortages.
The central bank has been increasing money supply for industry to tide over the global financial crisis.
The rising prices are an issue of concern for the government as a worried Congress President Sonia Gandhi had earlier said during the week that "price rise of essential commodities continues to be a matter of highest concern to us."
Among the manufactured products, textiles rose by 1.4 per cent, paper and paper products by 0.1 per cent, while chemical and chemical products increased by 0.1 per cent.
Commenting on the price rise Yes Bank's chief economist Suhubhda Rao said, "a sharper rise in manufacturing clearly indicates that the pricing power is gradually returning as the broad group within manufacturing products have registered month-on-month increase in the index numbers."
Rao added that firming inflation will be on the RBI radar where the CRR could be hiked in December by 25-50 basis points.
The new year would not become a great year initially but from the month os March things would start happening. The new financial year may usher in a stabler economy so far as India ,china and Brazil is concerned.The share market is expected to boom despite inflation and despite higher rate of interest to be fixed by RBI. USA would not increase the interest as the economy would take time to revive.Citibank has returned back government's money as it has become self sufficient . Yet the condition of many banks are still in weak.Recently the President of America has appealed to bankers to distribute more money to business sector especially medium scale industries continuously. In India a similar type of help could be organized for development of micro sector and for modernization of agriculture.We have been recommending through our column to state government to allow entry of corporate sector into the field of agriculture.This would be a great step.Always Assam need not follow other agriculturally vibrant states. Sometime it can lead the country into a new agricultural development through introduction corporate sector as the prime mover in joint sector.This was what has been done in China with amazing results. Would Assam Government think it over soon?

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A Messiah for distressed humanity :Dr. M.C. Bhuyan

During Mid Sixties of last century, Guwahati was not as proud of HEALTH CARE FASCILITIES as it is now. Cardio- logical treatments were almost in non existence. Dr. M. C. Bhuyan’s arrival in the city brought about a change in the healthcare scenarios of the city as far as cardiology was concerned. Heart patients of greater Guwahati areas heaved a sigh of relief. His presence was like a fresh air to the society. A most cultured human being his motto of life was “Be good and do well” to distressed humanity.

He joined Guwahati Medical College as an Assistant professor and later founded the department of Cardiology. The department grew under his caring eyes and lots of brilliant Cardiac Doctors were born in due course. Dr. Bhuyan was not only known as a great teacher and medical practitioner but he was known for his humanistic approach towards needy patience. He always looked younger to his age and had an electrifying personality. A person of few words yet he was approachable. His greatest quality was compassion.

I came into his contact in early sixties. We were his neighbour. At that time, while completing my Master in Economics I was awaiting for placement calls. Dr. Bhuyan was first to advise me to pursue further studies in management and to visit USA for higher education and training. It was also he who advised me to compete for Rotary International’s Scholarship for business managers. I still feel indebted to him for his sane advice during my early years of life. In effect, my entire career in private sector enterprise was built up on his empowerment and advice. Except at the fag end of my career, in RBI, I had not accepted any lucrative public sector governmental jobs despite several offers. This was possible for the empowerment of Dr. Bhuyan. He emphatically told us that twentieth century would be the time for private sector enterprises and to swim during this period in private business environment would be greatly rewarding. It was he who could be considered as our mentor in business management though he himself was an academician and a Doctor.

A few friends of mine, who are established lawyers, Doctors and painters today, were also beneficiary of his advice. They confided me that whatever their contribution to the society today were only due to the practical advice of Dr. Bhuyan, in their formative period.
“For a strong mental strength you need strong physical stamina. So in younger age, you need to build up physical strength first, to enable you to build up mental prowess which ultimately will trigger self confidence”. These were the remark of Dr. Bhuyan. He advised us to be frugal in our eating habits. As Soon as we touched forty years, he advised us to stop having omelets in the morning with four eggs.
”One egg a week would keep you healthy. Why waste food by eating more and become unhealthy as you grow up in age”. We remembered his advised till date.

During 1963 well known entrepreneurs PC Goenka and late B Himmatsingka had set up India Carbon in collaboration with Great Lakes Carbon Corporation of USA. They wanted to ensure an ideal health care system for the enterprise, despite existence of ESI, of its own. It was Dr. M.C. Bhuyan who gave them the model of an ideal Health care system. Slowly from a Medical Consultant Dr. Bhuyan became friend and philosopher to industry. Industrialists in and around Guwahati were benefited by his quality advices.

Dr. Bhuyan was a humanist. Once I urged him to provide medical advice to then well-known planter BhabendraNath Baruah of Golaghat WHO WAS GOING THROUGH a SERIOUS HEALTH PROBLEM. As the health condition of Mr. Baruah deteriorated it was impossible for him to travel to Guwahati from Golaghat . Observing the predicament of the family he decided to travel to Golaghat to examine the patient .That showed his rare quality of human concern. He was then the professor of Medical College at
Guuwhati and traveled to Golghat on a Sunday and came back the same evening. He only accepted hospitality and transportation. When fee was given, he refused to accept and told that he came to examine the patient and also to learn more of the sickness. This kind of behaviour is rarely found in professionals of today. There are however a few Doctors even now keeping the flag of self less service flying.

Dr. Bhuyan was a gentleman physician. He had no enemy. Everyone respected him and he also gave full honour to his patients. He endeared himself from his friends,students and patients for his immaculate behaviour. He maintained himself with grace and discipline. He always looked much younger to his age. When he died on 25th November he was 84 years old but really he looked 74 years or younger. Dr. Bhuyan’s departure would create a void not only among medical fraternity but also within the civil society of Assam. Today he is no more but his quality of dedicated service, loving care to his patience, humanistic approach have survived showing the path of compassion and value creating service. Almighty would give peace to his soul .we salute to his humanistic attitude towards life.

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MIDDLE CLASS TURNS MILLIONAIRE

THE MILLIONAIRE: CHANGING FACE OF MIDDLE CLASS

G.P.BAROOWAH

During my four months stay in USA I have done some research to find out how most people have become millionaire here ? Is it through business and through investment only? Or through regular habits of saving and investment? To my utter surprise I had to conclude that most of the millionaire in USA have become millionaire now , not from high family business cconnectionnbsp; , inheritance through land lord community's assets and from shares of Industrial investment but from working as a serviceman and through regular saving and investment habit. Approximately 33% millionaire today came from middle class who never inherited fortune from their parents. Even Bill gates and Warren buffet's wealth were created during their life time and not from inheritance. This is a very good news for aspiring midle class of India.



It is a fact that the United States booms when it comes to creating millionaires.Amrica has highest number of millionaires in the world since last fewyears.The nation counted 8.9 million millionaire households in 2005 -- that's more American millionaires than ever before, according to British market researcher TNS Financial Services. It was the third consecutive year the number of U.S. millionaire households rose, and the total number of millionaires has jumped 62 percent since 2002. The study defined a millionaire as anyone who has a net worth of $1 million or more, excluding a primary residence. Even during the period of recession though number of millionaire has reduced by 10% yet America boast highest number oi millionaire.I was pleasently surprised to find that One third of these millionaire are self made scientist, professors, consultant, lawyers, Doctors and Business executives and cinema stars and players.



What are the most important qualities that made them millionaire? We asked a few working persons, who are millionaire at San Jose. They wanted to remain anonymous but confided to us that two most important characteristics could be (a) capacity to dream big and (b) to cultivate the habit of enormous patience. There are a few other qualities that are necessary for building up fortune. they added. Those are frugal habits, avoidance of impulsive decision making, development of courage, to become optimist and understanding the qualities of self discipline. In modern times,the most millionaire cannot be recognised by their appearance as they remain frugal in habits. Even billionaires like Warren Buffet and Narayan Murthy live in modest Houses and drive ordinary commoners automobiles.


In our quest very interesting data was revealed that the average millionaire household in USA had a net worth of roughly $2.2 million, and about half of the heads of these households are 58 years or older. Forty-five percent of millionaires are retired persons.
The highest number of millionaire residents of USA are located in California. It's no surprise that Los Angeles County topped the list of millionaire with 262,800 households qualifying for millionaire status. While the label "millionaire" may conjure images of business moguls like Bill Gates and Warren Buffet, the TNS study found that just 19 percent of U.S. millionaires made their wealth through all or part of a private business or professional practice. Apparently, the lion's share of the country's millionaires made their money the old-fashioned way, working, saving and investing. This result inspired me to write this article for our readers because in case our readers also try sincerely that can become millionaire. How much time middle class( working class) took to become a millionaire ?The most of the millionaire took Thirty year to become millionaire out of their regular saving and investment habits. What for they have been accumulating wealth?



TNS reported that the most common goal mentioned by the millionaires in the survey was to "assure a comfortable standard of living during retirement." Lesser financial goals listed included leaving a big inheritance to children and charitable giving.


One of the millionaire technocrat said that to become a millionaire, beside his own qualities described above, it is necessary to have a mentor. Many people have become millionaire because they had good guidance from their mentor.The most important example is the driver of Narayan Murthy who became also a millionaire due to coaching of his mentor.



The united states have 8.9 million millionaire where as Russa has 87,000 millionaire and China ha 300,000 millionaire. In my research it was found one of the highest concentration of millionaire is in Silicon valley. In Santa Clara county of silicon valley where I visited found that one out of twelve persons are millionaire. It is a well known fact that Santa Clara is a county of service class population who work as consultant, teachers, office executives , bankers or IT and communication professional. How much salary these professional were making? The most of them made yearly 36,000 dollar initially after five years 1,,50,000 dollar per year and later salary rose to 2.60,000 or more per year beside royalty etc.They regularly paid taxes amounting to 40%(both state and federal).



Before world war 1 most millionaire were from landowner community. Before and after world war 11 most of the millionaire were from business community. Since last sixty years
profile of millionaire changed to middle class. By the end of twentieth century one third of the millionaire came from middle class. During this time millionaire included, scientist, teachers, IT and communication engineers, Business executives, lawyers, Doctors, and architect . I, therefore like to conclude that middle class people of Assam can become also a millionaire in terms of Rupees in-case they save and invest well in thirty years.Our aim however should not be only to become a millionaire but to make fortune while remaining in the path of truth by dint of their education and beautiful mind. For whom do they need money?. Initially for their livelihood, then to live comfortably during days of retirement and there after for the charity of the society, who fostered them.



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