Dr. Amrit Baruah, a former Associate Professor at Yell university and Chairman of the department of public Administration etc of Maryland State University and one of the best -known social scientist based in Baltimore, U.S.A. once told it was good to provide a fish meal to a hungry person but it is far too important to teach the hungry persons as to how fish could be caught for their livelihood. The first action was a compassionate deed but the second action was an act of empowerment. The second action was far too superior to the initial action. Mr. Pradip Sharma really took up the second action and empowered a whole lot of persons who were deprived lot.
I am very happy to learn that Sharma started his enterprise singly first and involved lot of persons later. Today not only local Gramin( Rural) Banks are involved in his projects but also nationalized banks , well-known educational institutions of the world, including MIT are involved to crate a climate of self help.
Mr. Sharma’s Project model is simple yet has far reaching consequences. He does not spoon feed but empowers a group to be responsible to pay back the debt incurred by the individual members of the group. It brings about a sense of social responsibility. His project is in low tech areas, but have high social values and relevance. Sharma should be congratulated for his venture. We are proud of his effort that has been able to motivate western intellectual to stand beside him to help crate economic rejuvenation of a group of citizen from below poverty level. It is an act of emancipation. His project did elevate a section of people who were struggling to meet both the ends of their life to be a socially responsible entrepreneur. It is this effort of his which is most meaningful to the society.
Sharma has brought in a new sense of responsibility to the society. This act of his has motivated, I understand, a section of people to reach out to empower poorer section of society. I came to know of this project from the writing and a promo film by Mr. and Mrs Ankur Borah. I did suggest that to earn extra few rupees by promoting organization a tie up could be thought of with some of the cold drink companies for advertisement space on the back of the rickshaw.Even Rickshaws can be designed to install a small battery cum solar paneled cooling machine to store cold drinks through promotional efforts from Pepsi or Coke.In hot summer days travelers may like to buy cold drinks while traveling, buy a book or take an on line accident and medical policy. Insurance companies could be made a partner in supporting the project in lieu of advertisement on the back of the rickshaw.
My congratulations to Mr.Pradip Sharma not only for doing a socially responsible work but for the encouragement he has provided to others of the international community to get involved with third world country’s community for economic empowerment.
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Friday, September 16, 2011
Monday, June 6, 2011
FMPS OR BANK FD ARE EFFICENT WEALTH CREATOR ?
Since equity plans not doing very well over the last years people are seeking alternative avenues for investment now. Most people are investing their money in Fixed deposits of Banks and in Fixed Maturity Plans. In investment horizon there are many plans to invest our money in the market.. There are equity fund, index funds, debt fund, ELSS and fixed maturity funds beside fixed deposit of Banks. Among all the funds fixed maturity funds are less risky. One thing must be kept in mind that fixed maturity funds are not risk proof as generally made out to be.. It however is next best to the fixed deposit in bank, PPF, SCSS etc as far as security of money is concerned. Fixed Maturity Plan protects capital but is open to interest rate risk. It provides better return most of the time than fixed deposit. This fund is popularly known as “FMP”
The reason investors choose FMPs is for their high returns which are also indicated but not guaranteed. In order to give assured returns, FMPs opt for very secure investment options like AAA rated corporate bonds whose maturity tenure matches the maturity tenure of FMP. However in the recent times, some of these FMPs started investing in commercial paper from real estate and finance companies, in order to give higher returns on their investors. The long term FMPs become more tax efficient as it does not attract income tax due to double indexation.
The investing in FMPs allows an investor to earn higher returns while minimizing their exposure to the risk. As a result, many fund houses have introduced their FMPs to entice investors to invest with them. But what are FMPs? Are they safe as they seem to be? If not, what are their pitfalls? We explained in the beginning of the article about the myth surrounding the FMPS. It is not always safe like Bank FDAs the name implies; these plans have a certain maturity period. They are closed-ended funds, meaning you can invest in them only when they are open for purchase. This is only during NFO period. To redeem your investment, you need to wait for the pan to mature or pay a stiff 2% exit load. Generally FMPS are for around 13 to 18th month’s period. Incase you can survive the period a handsome gain could be expected. If you take out during midstream you loose money as there is high exit load.
How FMPS could provide better return than bank F. D.? In order to give assured returns, FMPs opt for very secure investment options like AAA rated corporate bonds whose maturity tenure matches the maturity tenure of FMP It is however a myth that there is no risk in FMP. Despite their claims of being one of the safest investment options around, FMPs do have their own share of risks. A few of them are as under:
Those FMPs offering higher yield can afford to do so by investing in risky investment options. This has been evident in 2008, when these funds faced liquidity crisis due to their exposure to real estate and finance companies. . In the recent times, some of the FMPs started investing in commercial paper from real estate and finance companies, in order to give higher returns to their investors. When the finance and realty companies landed in trouble during the recent economic downturn, their offerings also lost value Investors pulled out in panic. With the investors pulling out their investments from these FMPS, the funds were forced to offload their investments in the illiquid markets, thereby causing liquidity crisis. But ultimately investors who stayed invested did not loose at the end of the period and go almost assured returns. The actual yield will depend on the yield on the debt instruments at the time of actually investing your money. In reality the FMPs offer safety of their capital, but they do not offer protection against interest rate risk. As the interest rate rises, the value of the bonds goes down. This sometime can affect the returns of the fund.
What precaution investors should take while opting for FMPS. To get the best out of FMP certain precaution should be taken. Always check the indicative portfolio of the funds. In case you find any non AAA security avoid the particular FMPs. The assured yields are on the indicative yield as the actual return indicative and suggestive and should not confuse with guarantee. Sometime there are wide gap between yield shown while launching and actual yield at the time maturity. Sometime it is more but sometime it can lower.
The golden rule is to stick to the maturity period of the plan. Don’t withdraw half way through as it will force the fund manager to redeem investments at any available price, thereby causing losses to you as well as other investors. The FMPs are good investment for risk adverse people of middle age group. But do not put all the eggs in one basket. You can invest 10% of the total investment in fixed maturity plan and earn better returning compared with the Fixed Deposit of Bank. But for persons who don't come under income tax ambit fixed deposit of bank at the rate of 10.5% are more paying than FMP now. It would be for individual persons to choose what suits them best.
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The reason investors choose FMPs is for their high returns which are also indicated but not guaranteed. In order to give assured returns, FMPs opt for very secure investment options like AAA rated corporate bonds whose maturity tenure matches the maturity tenure of FMP. However in the recent times, some of these FMPs started investing in commercial paper from real estate and finance companies, in order to give higher returns on their investors. The long term FMPs become more tax efficient as it does not attract income tax due to double indexation.
The investing in FMPs allows an investor to earn higher returns while minimizing their exposure to the risk. As a result, many fund houses have introduced their FMPs to entice investors to invest with them. But what are FMPs? Are they safe as they seem to be? If not, what are their pitfalls? We explained in the beginning of the article about the myth surrounding the FMPS. It is not always safe like Bank FDAs the name implies; these plans have a certain maturity period. They are closed-ended funds, meaning you can invest in them only when they are open for purchase. This is only during NFO period. To redeem your investment, you need to wait for the pan to mature or pay a stiff 2% exit load. Generally FMPS are for around 13 to 18th month’s period. Incase you can survive the period a handsome gain could be expected. If you take out during midstream you loose money as there is high exit load.
How FMPS could provide better return than bank F. D.? In order to give assured returns, FMPs opt for very secure investment options like AAA rated corporate bonds whose maturity tenure matches the maturity tenure of FMP It is however a myth that there is no risk in FMP. Despite their claims of being one of the safest investment options around, FMPs do have their own share of risks. A few of them are as under:
Those FMPs offering higher yield can afford to do so by investing in risky investment options. This has been evident in 2008, when these funds faced liquidity crisis due to their exposure to real estate and finance companies. . In the recent times, some of the FMPs started investing in commercial paper from real estate and finance companies, in order to give higher returns to their investors. When the finance and realty companies landed in trouble during the recent economic downturn, their offerings also lost value Investors pulled out in panic. With the investors pulling out their investments from these FMPS, the funds were forced to offload their investments in the illiquid markets, thereby causing liquidity crisis. But ultimately investors who stayed invested did not loose at the end of the period and go almost assured returns. The actual yield will depend on the yield on the debt instruments at the time of actually investing your money. In reality the FMPs offer safety of their capital, but they do not offer protection against interest rate risk. As the interest rate rises, the value of the bonds goes down. This sometime can affect the returns of the fund.
What precaution investors should take while opting for FMPS. To get the best out of FMP certain precaution should be taken. Always check the indicative portfolio of the funds. In case you find any non AAA security avoid the particular FMPs. The assured yields are on the indicative yield as the actual return indicative and suggestive and should not confuse with guarantee. Sometime there are wide gap between yield shown while launching and actual yield at the time maturity. Sometime it is more but sometime it can lower.
The golden rule is to stick to the maturity period of the plan. Don’t withdraw half way through as it will force the fund manager to redeem investments at any available price, thereby causing losses to you as well as other investors. The FMPs are good investment for risk adverse people of middle age group. But do not put all the eggs in one basket. You can invest 10% of the total investment in fixed maturity plan and earn better returning compared with the Fixed Deposit of Bank. But for persons who don't come under income tax ambit fixed deposit of bank at the rate of 10.5% are more paying than FMP now. It would be for individual persons to choose what suits them best.
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ALL WAGE EARNERS SHOULD PLAN FOR PENSION
I am not aware of any country, except perhaps Arab world, where pension received by a retiree is free of income tax. Enormous tax benefit are available while contributing to a fund. But all senior citizens of western countries pay Income tax when they receive their pension amount monthly or weekly. Of course citizens of those countries receive social security which our citizens do not receive. Perhaps to mitigate this shortcoming the union Government is planning to make pension free of income tax when Tax code is going to be introduced next year for Indian citizen.
The annuity and PPF are two great schemes which would usher in a great time for retired and senior citizen and tax paying rich single women. At present there are a few guaranteed fixed income schemes like bank FD, post office monthly saving schemes and senior citizen scheme in our country .The return on the capital is 7.75% to 9% in those entire schemes with applicable income tax provision. Incase revised Tax code is implemented both deferred and immediate annuity would not be taxed and hence investors would be more inclined now on ward to invest in pension schemes. The great thing it would not only cheers older citizen but motivate greatly young and mid aged person too to save more and more for their future...
Till now school teachers to senior bureaucrats, who have been receiving pension, had to pay income tax. Now since no income tax would be required to pay naturally they would feel happy. Young people opting for deferred payment option would also be greatly benefited. Widows and older citizen who were not willing to save money in pension scheme would be interested since immediate annuity benefit like “Jeevan Akshay” scheme of LIC would get a boost. Now an older person of 65 years and above can invest Rs.10 Lakh during 2010 year and started getting pension from 2011 at the rate of 7.5% return with out tax. . This means a retiree would be able to get Rs 75,000/- annually without tax..
Any persons of above 40 years would be able to save and get the similar return and start a systematic investment plan of Mutual fund from the money received as interest. If they keep this investment system till he/she retires at 60 years of age she would be able to gather at least Rs 49 lakh even if a moderate return of 10% is considered for the period of twenty years. This amount would be free of income tax as on date. But may attract capital gains tax at the applicable rate after twenty years.
The immediate annuities have been around for last few years in our country. But most of the people were not interested due to heavy income tax rate and lower annuity value. The LIC has a very decent immediate annuity policy in Jeevan Akshay. It was one of the most successful policy till 1992. The growth of this policy along with Jeevan Dhara (deferred policy) was phenomenal. Both the policy went by way side since 1993 till date as no tax benefit was available. With the intended tax benefit from 2012 the Jeevan Akshya policy could be a marvelous policy for senior citizen. If senior citizen has lump sum money to spare, after investing in SCSS and PPF, I would rather recommend our readers to invest in this product provided they are already tax payers. The amount received from immediate annuity would be tax free in the hands of Senior citizen. The rate of return annually would be 7.60% till his/her demise with return of capital to her / his nominee. This is a fantastic return after taking advantage of SCSS , Post office monthly income scheme and PPF..
I am also sure with such great benefit the new Pension scheme would be a great product for younger generation. Senior citizen would not be so benefited from NPS for it has no immediate annuity facilities. It would be wise for senior citizen and tax paying rich widows or single women to concentrate on single annuity based product like Jeevan Akshya for their decent livelihood without tax burden.
What is immediate annuity? When a person buys an immediate annuity, he pays the life insurance company a lumpsum amount up front and the insurer gives a guarantee of paying him a fixed amount at regular intervals(depending on payment option chosen by him) as long as he lives. On his demise the principal amount is returned back to his spouse or children .The spouse may also continue to get same amount till her life time. The present rate of annuity is around 7.60%.per annum. Once upon a time during twentieth century it was much higher. Before 2001 LIC was the sole company who issued immediate annuity policy. Now also there are very few companies who provide these facilities. With new tax provision surely more and more companies may start single premium immediate annuity plans as it is going to be a hot product for middle aged persons, senior citizen and tax paying rich single women. The great news is though immediate annuity plans are insurance products it does not require any medical check ups. The return is not market related yet the rate of annuity is higher than regular insurance product and fully assured like bank product. What is better than bank FD it has no tax tag to oblige. So get prepared and start investing in a great product of your life time. Do it soon because tax benefit can be withdrawn as it was done in 1992. But once you invest during the currency of the scheme you would continue to get the benefit for the life time.
-------------------------------------------
The annuity and PPF are two great schemes which would usher in a great time for retired and senior citizen and tax paying rich single women. At present there are a few guaranteed fixed income schemes like bank FD, post office monthly saving schemes and senior citizen scheme in our country .The return on the capital is 7.75% to 9% in those entire schemes with applicable income tax provision. Incase revised Tax code is implemented both deferred and immediate annuity would not be taxed and hence investors would be more inclined now on ward to invest in pension schemes. The great thing it would not only cheers older citizen but motivate greatly young and mid aged person too to save more and more for their future...
Till now school teachers to senior bureaucrats, who have been receiving pension, had to pay income tax. Now since no income tax would be required to pay naturally they would feel happy. Young people opting for deferred payment option would also be greatly benefited. Widows and older citizen who were not willing to save money in pension scheme would be interested since immediate annuity benefit like “Jeevan Akshay” scheme of LIC would get a boost. Now an older person of 65 years and above can invest Rs.10 Lakh during 2010 year and started getting pension from 2011 at the rate of 7.5% return with out tax. . This means a retiree would be able to get Rs 75,000/- annually without tax..
Any persons of above 40 years would be able to save and get the similar return and start a systematic investment plan of Mutual fund from the money received as interest. If they keep this investment system till he/she retires at 60 years of age she would be able to gather at least Rs 49 lakh even if a moderate return of 10% is considered for the period of twenty years. This amount would be free of income tax as on date. But may attract capital gains tax at the applicable rate after twenty years.
The immediate annuities have been around for last few years in our country. But most of the people were not interested due to heavy income tax rate and lower annuity value. The LIC has a very decent immediate annuity policy in Jeevan Akshay. It was one of the most successful policy till 1992. The growth of this policy along with Jeevan Dhara (deferred policy) was phenomenal. Both the policy went by way side since 1993 till date as no tax benefit was available. With the intended tax benefit from 2012 the Jeevan Akshya policy could be a marvelous policy for senior citizen. If senior citizen has lump sum money to spare, after investing in SCSS and PPF, I would rather recommend our readers to invest in this product provided they are already tax payers. The amount received from immediate annuity would be tax free in the hands of Senior citizen. The rate of return annually would be 7.60% till his/her demise with return of capital to her / his nominee. This is a fantastic return after taking advantage of SCSS , Post office monthly income scheme and PPF..
I am also sure with such great benefit the new Pension scheme would be a great product for younger generation. Senior citizen would not be so benefited from NPS for it has no immediate annuity facilities. It would be wise for senior citizen and tax paying rich widows or single women to concentrate on single annuity based product like Jeevan Akshya for their decent livelihood without tax burden.
What is immediate annuity? When a person buys an immediate annuity, he pays the life insurance company a lumpsum amount up front and the insurer gives a guarantee of paying him a fixed amount at regular intervals(depending on payment option chosen by him) as long as he lives. On his demise the principal amount is returned back to his spouse or children .The spouse may also continue to get same amount till her life time. The present rate of annuity is around 7.60%.per annum. Once upon a time during twentieth century it was much higher. Before 2001 LIC was the sole company who issued immediate annuity policy. Now also there are very few companies who provide these facilities. With new tax provision surely more and more companies may start single premium immediate annuity plans as it is going to be a hot product for middle aged persons, senior citizen and tax paying rich single women. The great news is though immediate annuity plans are insurance products it does not require any medical check ups. The return is not market related yet the rate of annuity is higher than regular insurance product and fully assured like bank product. What is better than bank FD it has no tax tag to oblige. So get prepared and start investing in a great product of your life time. Do it soon because tax benefit can be withdrawn as it was done in 1992. But once you invest during the currency of the scheme you would continue to get the benefit for the life time.
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Saturday, April 30, 2011
INFLATION WOULD OVERRIDE THE GROWTH EXPECTATION OF INDIA
Despite great optimism of Government of India for achieving country’s 8.5% growth rates it is now apparent that it would be an impossible target to achieve. Many professional economists, including foreign banks, feel that the growth rate will rather come down to 8%. as inflation and high cost of borrowing would impact production. The finance Minister’s expectation of 9% growth, within three years, would remain a futile dream. We feel, as the inflation would remain the dominant force during this period. India is in trouble. It is facing the highest non-food inflation in two months. Professional Economist now recommends that Government should build up strategic stockpiles of staples to cool prices, in medium term. Warren Buffet replying to journalist in India told that the present problem of world, including India, is not liquidity or the functioning of markets and capitals. It is the inflation that may constraint growth for a while. But ultimately inflation is bound to go down and growth would take place as productivity increases. The growth is bound to take place but may not be in a hurry, he added.
The Governor of RBI, D. Subba Rao has categorically stated that monetary policy is not that effective when it comes to inflation driven by supply side factors as is evident at present. The upper echelon of secretaries and officials has deliberated very recently to control the supply side of inflationary pressure. They felt that the inflation could be controlled through three ways. Firstly , through monetary measures, secondly, by bringing down deficit financing on one hand and, thirdly, by improving supply side either by increased production or by rationalizing supply line.
The Government is convinced that RBI has taken enough monetary measures already and now is the time for administration to improve the supply side of goods and services. The chief Economic Advisor of government of India feels that inflation has started coming down and in another six months it would reflect his optimism in practice. But most economist feel that inflation is not going to come down before 2012 and even the economic growth would not be more than 8% despite high hope of the Finance Minster and his team. While current inflation levels certainly need to be brought down, this year’s Economic Survey has a radical suggestion – inflation may be here to stay with us if we want a high-growth economy. Using crude instruments to bring down inflation could have unpalatable consequences – such as loss of output and jobs, factories closing down and farms becoming less productive. If that is the case, rather than curbing inflation radically, an alternate course would be to work out ways of shielding the poor from the effects of inflation.
The Economist of HSBC bank feel inflation n India is not going to come down in a hurry. India shall have to depend on import of crude oil. The value of crude is not going to come down soon. Neither corruption of the society is going to evaporate overnight. The lethal combination of these two components would force the country to pass through a great inflationary pressure. The growth story is intact but with moderation. According to private professional economists the economic growth rate of the country is not going above 8% till 2012.
. India, the second-biggest grower of rice, wheat and sugar, may buy some supplies from overseas, boosting prices of commodities including palm and soybean oils. Inflation is a casualty of high vegetable prices and the government may need to import some essential commodities to cool costs The buffer stocks created should be rotated regularly or else we’ll be doing more harm to prices. Today, we have no hesitation to recommend starting of retail movement through local corporate with foreign participation like in case of Insurance management. India does not have expertise on retail distribution system. The system can be developed with foreign participation.
Given extreme weather patterns across the globe -- floods in Australia, snowstorms in the northern hemisphere and turmoil in middle east and Africa beside natural caloaminit3s of Japan -- price rises could persist in the coming months. This poses upside risks to our inflation forecasts.
. Kaushik Basu said that India is a huge country in terms of population and land area. It is utter mistake to think that it is fully within the control of the government to move prices of food up and down. Despite our high regards for Mr. Basu we do not agree with these arguments. China is a bigger country than India with greater population .How China is controlling food prices? China is controlling through long term planning of stock piling and eradicating corruption and by managing public distribution system with greater vigilance. This is where Indian politician cum administrators failed.
Palm oil, which accounts for 80 percent of India’s annual cooking oil imports worth $8.4 billion, have surged 57 percent in the past six months in Malaysia, while soybean oil climbed 43 percent in 2010 for a second straight year, because of adverse weather in the producing nations. Did Government of India ever thought of stock piling these products knowing well that onion could be avoided but for Indian kitchen cooking oil is a must.
Reserve Bank of India Governor Duvvuri Subbarao has raised interest rates Eight times in a year, the most by any central bank in Asia. Monetary action alone won’t help cool inflation.
Basu, however, cautioned against using any blunt instrument like arbitrary fixing of prices to tame exceptionally high prices, as such a move results in shortage of commodities and retard growth. We are entirely in agreement with Basu. But let the first stop be taken locally to control unscrupulous traders and hoarder and cartel of fish market at least for Assam and vegetable cartel in Delhi and west Bengal. Unless oil prices stabilize and international situation in Japan ,Africa and Middle east improve lurking fear of inflation would be there and growth rate would be dependent on these factors indirectly.
------------------------------------------
The Governor of RBI, D. Subba Rao has categorically stated that monetary policy is not that effective when it comes to inflation driven by supply side factors as is evident at present. The upper echelon of secretaries and officials has deliberated very recently to control the supply side of inflationary pressure. They felt that the inflation could be controlled through three ways. Firstly , through monetary measures, secondly, by bringing down deficit financing on one hand and, thirdly, by improving supply side either by increased production or by rationalizing supply line.
The Government is convinced that RBI has taken enough monetary measures already and now is the time for administration to improve the supply side of goods and services. The chief Economic Advisor of government of India feels that inflation has started coming down and in another six months it would reflect his optimism in practice. But most economist feel that inflation is not going to come down before 2012 and even the economic growth would not be more than 8% despite high hope of the Finance Minster and his team. While current inflation levels certainly need to be brought down, this year’s Economic Survey has a radical suggestion – inflation may be here to stay with us if we want a high-growth economy. Using crude instruments to bring down inflation could have unpalatable consequences – such as loss of output and jobs, factories closing down and farms becoming less productive. If that is the case, rather than curbing inflation radically, an alternate course would be to work out ways of shielding the poor from the effects of inflation.
The Economist of HSBC bank feel inflation n India is not going to come down in a hurry. India shall have to depend on import of crude oil. The value of crude is not going to come down soon. Neither corruption of the society is going to evaporate overnight. The lethal combination of these two components would force the country to pass through a great inflationary pressure. The growth story is intact but with moderation. According to private professional economists the economic growth rate of the country is not going above 8% till 2012.
. India, the second-biggest grower of rice, wheat and sugar, may buy some supplies from overseas, boosting prices of commodities including palm and soybean oils. Inflation is a casualty of high vegetable prices and the government may need to import some essential commodities to cool costs The buffer stocks created should be rotated regularly or else we’ll be doing more harm to prices. Today, we have no hesitation to recommend starting of retail movement through local corporate with foreign participation like in case of Insurance management. India does not have expertise on retail distribution system. The system can be developed with foreign participation.
Given extreme weather patterns across the globe -- floods in Australia, snowstorms in the northern hemisphere and turmoil in middle east and Africa beside natural caloaminit3s of Japan -- price rises could persist in the coming months. This poses upside risks to our inflation forecasts.
. Kaushik Basu said that India is a huge country in terms of population and land area. It is utter mistake to think that it is fully within the control of the government to move prices of food up and down. Despite our high regards for Mr. Basu we do not agree with these arguments. China is a bigger country than India with greater population .How China is controlling food prices? China is controlling through long term planning of stock piling and eradicating corruption and by managing public distribution system with greater vigilance. This is where Indian politician cum administrators failed.
Palm oil, which accounts for 80 percent of India’s annual cooking oil imports worth $8.4 billion, have surged 57 percent in the past six months in Malaysia, while soybean oil climbed 43 percent in 2010 for a second straight year, because of adverse weather in the producing nations. Did Government of India ever thought of stock piling these products knowing well that onion could be avoided but for Indian kitchen cooking oil is a must.
Reserve Bank of India Governor Duvvuri Subbarao has raised interest rates Eight times in a year, the most by any central bank in Asia. Monetary action alone won’t help cool inflation.
Basu, however, cautioned against using any blunt instrument like arbitrary fixing of prices to tame exceptionally high prices, as such a move results in shortage of commodities and retard growth. We are entirely in agreement with Basu. But let the first stop be taken locally to control unscrupulous traders and hoarder and cartel of fish market at least for Assam and vegetable cartel in Delhi and west Bengal. Unless oil prices stabilize and international situation in Japan ,Africa and Middle east improve lurking fear of inflation would be there and growth rate would be dependent on these factors indirectly.
------------------------------------------
WARREN BUFFET:HIS LIFE,ACHIEVEMENTS AND PHILOSOPHY
Warren Buffet’s visit to India generated spectacular enthusiasm and created sensation. Not only Indian investors but also Indian industrialists, Media, investors, teachers and students have made a beeline to listen to his advice. But Buffet himself has said that he has not come here to teach Indian. They are not required to be taught. Indian is one of the most intelligent groups of the world. Ajit Jain, his prodigy, is one of the most valuable gift of India to him, accompanied him and also participated in discussion with students.. Today’s Indian know exactly how to confront problems and dig out prospect much better than most Nations of the world, he added.
Buffet was born in 1930 in Omaha, Nebraska, the son of a stockbroker and Congressman. Nobody, including himself, thought in his early years that he would be the world’s most successful investor in future.. As a boy, irrespective of his family background, he delivered newspapers to make extra money and this probably sparked his interest in the media where he has made several successful investments including the Washington Post Company, a stock that has made him a lot of money and which he vows never to sell. Buffet is loved and respected not only because he is one of the richest persons of the world but for his humanitarian attitude towards life. His humility, sincerity of purpose and compassion has won respect throughout the world. Speaking to Business school students of India Buffet mentioned that to be a successful investor terrific IQ is not necessary. The most important requirement for an investor is sensible temperament and robust common sense. A successful investor must learn to value business. His preference for value stock is wellknown.
From his young age Buffet was a determined person. Imbued with a determination to make good and an entrepreneurial nature, Warren dabbled in several part time businesses but his destiny was chartered early in the piece when, after graduating from the University of Nebraska, he studied business at the Columbia Graduate Business School .His Guru was Benjamin, Graham who shaped up his foresight. About India, where his presence is comparatively minuscule and includes recent tie-up with Bajaj Allianz for distribution of motor insurance products, Buffet said that he was looking at investments in large countries like India., Buffet said that he was looking at investments in large countries like India. Saying away from Indian enterprise so long was a mistake , Warren Buffet said. But he also conceded that none from India also contacted him so long.. Sooner or later the mistake would be surely rectified but no time frame has been fixed yet, he added.
Like many legend his first attempt to get a job ended in failure. He tried to get a position with Graham’s firm and was at first unsuccessful. Finally he got the job and learned a lot about stock investment from the Master. Graham eventually retired and Buffet started a limited partnership in Omaha, using capital contributed by family and friends. The partnership was a great success and Buffet is said to have averaged an annual rate of return for the partnership in excess of 23 per cent, far in excess of the market. Buffet was born and raised during the time of great depression. By the time he grew up, USA was returning back to normalcy and was getting ready to jump to prosperity. Buffet availed the opportunity with meticulous discipline. He never overspent. His philosophy of life was money earned by him was not meant for him alone. It is to be shared with the society. To him society did not mean America but the world of have-not this attitude of his endeared him with mass and class.
Buffett, after several years, decided to wind up the partnership, returning the lucky investors their capital and their share of the profits, and bought an interest in Berkshire Hathaway, a textile company, giving his original investors the chance to invest. The smart ones joine3d him. This attitude reflected Buffet’s sincerity towards his friends and colleagues. Contrary to popular belief his early days at Berkshire Hathaway were not great. The company was in an industry facing real challenges from exports and high manufacturing costs. Warren Buffett had not, however, forgotten what he had learned under Graham, and arranged for the company to buy out two Nebraska insurance companies that changed his business fortune. The business of insurance is a hard one but under Buffett, the company has become, not only a successful share investor, but a leading provider of insurance. Buffet always look for shares of solid companies with tremendous future prospect, having capable and honest management with a difference. His favourites enterprises are mostly large value based companies with service orientation and mass based. He preferred Insurance, Media, infrastructure, cold drinks and finance companies. Despite his great regards for the business acumen of Bill gates Buffett never owns any stock of Microshoft. However he donated most of his money for charity to be managed by Bill and Melinda gates.
Buffett ,, struck up a friendship with Charles T Munger, a lawyer and investor and Charlie Munger eventually joined Warren at Berkshire Hathaway as his Vice-Chairman, alter ego, and friend. Warren Buffett is always the first to acknowledge the contribution that Charlie Munger has made to Berkshire Hathaway. Under Buffett and Munger, Berkshire Hathaway has become an investment giant that wholly owns a number of successful companies that include, Geico corporation, Nebraska Furniture Mart and See’s Candy Shop. Warren Buffet is known for his lavish praise on his colleague. He recently told that Ajit Jain, his colleague at Berkshire, is the greatest gift of India to him. Ajit Jain has most intelligent Business Mind much better than his own, he declared in a meeting in India.
.
Warren Buffet has become a legend and is generally ranked, along with his mentor, Benjamin Graham, first in a stellar cast of investors that includes Peter Lynch, John Neff, and Philip Fisher. Buffet, however, was different from his master for his exceptional philosophy of life. He also earned money, created vast wealth but used very little out of that and felt happy. He did not keep his enormous wealth for himself or for his family . he distributed it to the people wo need it most. He excelled his Master for his philosophy towards life. He earned his billions and, in his life time, donated most of it for charity. He donated his wealth to a Charitable Trust to be managed by Melinda Gates and Bill Gates , another richest person of the world. Warren Buffet is not going to invest in India immediately. He has come here to study the environment and to request his fellow Indian rich persons to spare at least fifty percent of their personal wealth for the cause of poverty. Buffet advised not to buy share of any enterprise unless investors understand the dynamics of that business. During great Dot Com boom he kept himself away from tech companies . Many of his share holders expressed reservation for his aloofness from the tech world. But later on when the boom was burst they heave the sigh of relief understanding his vision well. Perhaps Buffet would start investment in India in future after he understand business philosophy of Indian businessmen and Government’s attitude towards business enterprise. The greatest thing is Buffet is bullish in US economy followed by India and China. He wanted investors to make money not only for their personal gain but for the gain of the world economy and to eradicated poverty. His investing advice to people is to select value stock and value mutual fund and keep it for decade to get benefit.
---------------------------------------------------------
Buffet was born in 1930 in Omaha, Nebraska, the son of a stockbroker and Congressman. Nobody, including himself, thought in his early years that he would be the world’s most successful investor in future.. As a boy, irrespective of his family background, he delivered newspapers to make extra money and this probably sparked his interest in the media where he has made several successful investments including the Washington Post Company, a stock that has made him a lot of money and which he vows never to sell. Buffet is loved and respected not only because he is one of the richest persons of the world but for his humanitarian attitude towards life. His humility, sincerity of purpose and compassion has won respect throughout the world. Speaking to Business school students of India Buffet mentioned that to be a successful investor terrific IQ is not necessary. The most important requirement for an investor is sensible temperament and robust common sense. A successful investor must learn to value business. His preference for value stock is wellknown.
From his young age Buffet was a determined person. Imbued with a determination to make good and an entrepreneurial nature, Warren dabbled in several part time businesses but his destiny was chartered early in the piece when, after graduating from the University of Nebraska, he studied business at the Columbia Graduate Business School .His Guru was Benjamin, Graham who shaped up his foresight. About India, where his presence is comparatively minuscule and includes recent tie-up with Bajaj Allianz for distribution of motor insurance products, Buffet said that he was looking at investments in large countries like India., Buffet said that he was looking at investments in large countries like India. Saying away from Indian enterprise so long was a mistake , Warren Buffet said. But he also conceded that none from India also contacted him so long.. Sooner or later the mistake would be surely rectified but no time frame has been fixed yet, he added.
Like many legend his first attempt to get a job ended in failure. He tried to get a position with Graham’s firm and was at first unsuccessful. Finally he got the job and learned a lot about stock investment from the Master. Graham eventually retired and Buffet started a limited partnership in Omaha, using capital contributed by family and friends. The partnership was a great success and Buffet is said to have averaged an annual rate of return for the partnership in excess of 23 per cent, far in excess of the market. Buffet was born and raised during the time of great depression. By the time he grew up, USA was returning back to normalcy and was getting ready to jump to prosperity. Buffet availed the opportunity with meticulous discipline. He never overspent. His philosophy of life was money earned by him was not meant for him alone. It is to be shared with the society. To him society did not mean America but the world of have-not this attitude of his endeared him with mass and class.
Buffett, after several years, decided to wind up the partnership, returning the lucky investors their capital and their share of the profits, and bought an interest in Berkshire Hathaway, a textile company, giving his original investors the chance to invest. The smart ones joine3d him. This attitude reflected Buffet’s sincerity towards his friends and colleagues. Contrary to popular belief his early days at Berkshire Hathaway were not great. The company was in an industry facing real challenges from exports and high manufacturing costs. Warren Buffett had not, however, forgotten what he had learned under Graham, and arranged for the company to buy out two Nebraska insurance companies that changed his business fortune. The business of insurance is a hard one but under Buffett, the company has become, not only a successful share investor, but a leading provider of insurance. Buffet always look for shares of solid companies with tremendous future prospect, having capable and honest management with a difference. His favourites enterprises are mostly large value based companies with service orientation and mass based. He preferred Insurance, Media, infrastructure, cold drinks and finance companies. Despite his great regards for the business acumen of Bill gates Buffett never owns any stock of Microshoft. However he donated most of his money for charity to be managed by Bill and Melinda gates.
Buffett ,, struck up a friendship with Charles T Munger, a lawyer and investor and Charlie Munger eventually joined Warren at Berkshire Hathaway as his Vice-Chairman, alter ego, and friend. Warren Buffett is always the first to acknowledge the contribution that Charlie Munger has made to Berkshire Hathaway. Under Buffett and Munger, Berkshire Hathaway has become an investment giant that wholly owns a number of successful companies that include, Geico corporation, Nebraska Furniture Mart and See’s Candy Shop. Warren Buffet is known for his lavish praise on his colleague. He recently told that Ajit Jain, his colleague at Berkshire, is the greatest gift of India to him. Ajit Jain has most intelligent Business Mind much better than his own, he declared in a meeting in India.
.
Warren Buffet has become a legend and is generally ranked, along with his mentor, Benjamin Graham, first in a stellar cast of investors that includes Peter Lynch, John Neff, and Philip Fisher. Buffet, however, was different from his master for his exceptional philosophy of life. He also earned money, created vast wealth but used very little out of that and felt happy. He did not keep his enormous wealth for himself or for his family . he distributed it to the people wo need it most. He excelled his Master for his philosophy towards life. He earned his billions and, in his life time, donated most of it for charity. He donated his wealth to a Charitable Trust to be managed by Melinda Gates and Bill Gates , another richest person of the world. Warren Buffet is not going to invest in India immediately. He has come here to study the environment and to request his fellow Indian rich persons to spare at least fifty percent of their personal wealth for the cause of poverty. Buffet advised not to buy share of any enterprise unless investors understand the dynamics of that business. During great Dot Com boom he kept himself away from tech companies . Many of his share holders expressed reservation for his aloofness from the tech world. But later on when the boom was burst they heave the sigh of relief understanding his vision well. Perhaps Buffet would start investment in India in future after he understand business philosophy of Indian businessmen and Government’s attitude towards business enterprise. The greatest thing is Buffet is bullish in US economy followed by India and China. He wanted investors to make money not only for their personal gain but for the gain of the world economy and to eradicated poverty. His investing advice to people is to select value stock and value mutual fund and keep it for decade to get benefit.
---------------------------------------------------------
The New Ulip is not the Best insurance Product
The new ULIP scheme is an excellent product provided insured have a goal or objectives in front of him . The new ULIP could be a sought after product for Children’s education, marriage of daughter or to create wealth for initial down payment for home loan. It is neither a pure investment nor a pure insurance product worthy for middle class. Many readers of AT asked whether it would be prudent to buy new ULIP product for the sake of insurance or investment. My views are loud and clear. It is a good product with an objective or goal in mind for the wellbeing of the family. It is neither a cost effective life insurance product nor an efficient investment product, unless continued for long term. It has 80 c tax benefits for the insured. But it has yet to receive tax free status under section 10d of finance Act.
The Unit linked Insurance Plan(ULIP) is a type of life insurance product under IRDA having an investment overtone.. The cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder.
ULIP came into play in the 1960s and is popular in many countries in the world. Now in India once ULIP is taken cannot be surrender till fifth year of subscription is over. ULIP once subscribed must be maintained till full policy term in order to gain benefit.
.
In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment and insurance by the same instrument was challenged by the market regulator SEBI which took up the matter to the Supreme court of India .The Indian government brought down curtains on the two-month long tussle between the regulators by ruling that Unit-linked Insurance Products (Ulips) will be governed by the IRDA
If you use life insurance as an investment instrument, be prepared for slightly lower yields because of increased taxation. The ULIP product is not tax efficient despite it provides 80 C benefit. The service tax on ULIP is now 1.5 percent against 1% on Life insurance.
For example, if you paid an annual premium of Rs 10,000, the service tax (of 10 per cent) was charged on Rs 100. Now, the tax will be charged on Rs 150. “These will be adjusted in the premiums and accordingly the yield will fall,” said a senior official of a life insurance company.
Similarly, the finance minister has also brought all unit-linked insurance plan (Ulip) charges under the gamut of service tax. Until now, only mortality and fund management charges were subjected to service tax. This means, policy administration charge and policy allocation charge, too, would come under the service tax net. According to Nageswara Rao, CEO and managing director, IDBI Federal Life Insurance Company, guaranteed Ulips would attract higher charges, too, after the Budget modification in the service tax.
However, the insurers were waiting for the finance minister to clarify on the continuation of the exempt-exempt-exempt (EEE) tax regime on life insurance products once the Direct Tax Code is implemented from April 1, 2012. “EEE is an important incentive to invest in long-term savings instruments such as life insurance and hence should be retained. However, the speech did not give any clear indication on it,” , commented by an insurance expert.
In the new guidelines, which took effect from September 1, Irda increased the lock-in period for Ulips from the existing three years to five years. And, all Ulips other than pension and annuity products were to provide a minimum mortality cover or health cover. This has resulted in a sharp drop in sales of Ulips, which once had constituted more than 90 per cent of the sales of life insurance companies.
“All products under the new guidelines have been performing very well and this shows if a proper product can be developed, sales will not be an issue,” said an LIC official.Private life insurance companies, on the other hand, have seen sluggish growth in the financial year so far. In the first 10 months, they collected Rs27,865 crore by selling new policies, a modest 5.8 per cent increase as against Rs26,328 crore collected a year before.
Why ULIP plans are avoided now a day by most people? This is due to the fact that in earlier regime most ULIP plans were improperly sold. The insurance officials did hide the fact that it is a long term product and would not yield any profit for at least for seven years, though product could be exited after three years. Many insurance agents sold the product on the basis one time payment . Agents also never clearly mentioned that if policy is exited before seven years a penalty would be charged as the surrender value. If the insurance companies would have trained their agents properly this kind of miss information would not have occurred. Instead of imparting proper training to their agents, insurance companies pressurised their agents to achieve higher target every months. This was done for ULIPS were the bread and butter for insurance companies then. Difference between two regulators forced the government to recast the ULIP. The product is of great value now provided it is understood properly. The ULIP could be bought by young parents while they are in their late Thirties. This would provide them with great satisfaction while sending their children for higher education and during marriage.
----------------------------
The Unit linked Insurance Plan(ULIP) is a type of life insurance product under IRDA having an investment overtone.. The cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder.
ULIP came into play in the 1960s and is popular in many countries in the world. Now in India once ULIP is taken cannot be surrender till fifth year of subscription is over. ULIP once subscribed must be maintained till full policy term in order to gain benefit.
.
In India investments in ULIP are covered under Section 80C of IT Act. However, the concept of having an investment and insurance by the same instrument was challenged by the market regulator SEBI which took up the matter to the Supreme court of India .The Indian government brought down curtains on the two-month long tussle between the regulators by ruling that Unit-linked Insurance Products (Ulips) will be governed by the IRDA
If you use life insurance as an investment instrument, be prepared for slightly lower yields because of increased taxation. The ULIP product is not tax efficient despite it provides 80 C benefit. The service tax on ULIP is now 1.5 percent against 1% on Life insurance.
For example, if you paid an annual premium of Rs 10,000, the service tax (of 10 per cent) was charged on Rs 100. Now, the tax will be charged on Rs 150. “These will be adjusted in the premiums and accordingly the yield will fall,” said a senior official of a life insurance company.
Similarly, the finance minister has also brought all unit-linked insurance plan (Ulip) charges under the gamut of service tax. Until now, only mortality and fund management charges were subjected to service tax. This means, policy administration charge and policy allocation charge, too, would come under the service tax net. According to Nageswara Rao, CEO and managing director, IDBI Federal Life Insurance Company, guaranteed Ulips would attract higher charges, too, after the Budget modification in the service tax.
However, the insurers were waiting for the finance minister to clarify on the continuation of the exempt-exempt-exempt (EEE) tax regime on life insurance products once the Direct Tax Code is implemented from April 1, 2012. “EEE is an important incentive to invest in long-term savings instruments such as life insurance and hence should be retained. However, the speech did not give any clear indication on it,” , commented by an insurance expert.
In the new guidelines, which took effect from September 1, Irda increased the lock-in period for Ulips from the existing three years to five years. And, all Ulips other than pension and annuity products were to provide a minimum mortality cover or health cover. This has resulted in a sharp drop in sales of Ulips, which once had constituted more than 90 per cent of the sales of life insurance companies.
“All products under the new guidelines have been performing very well and this shows if a proper product can be developed, sales will not be an issue,” said an LIC official.Private life insurance companies, on the other hand, have seen sluggish growth in the financial year so far. In the first 10 months, they collected Rs27,865 crore by selling new policies, a modest 5.8 per cent increase as against Rs26,328 crore collected a year before.
Why ULIP plans are avoided now a day by most people? This is due to the fact that in earlier regime most ULIP plans were improperly sold. The insurance officials did hide the fact that it is a long term product and would not yield any profit for at least for seven years, though product could be exited after three years. Many insurance agents sold the product on the basis one time payment . Agents also never clearly mentioned that if policy is exited before seven years a penalty would be charged as the surrender value. If the insurance companies would have trained their agents properly this kind of miss information would not have occurred. Instead of imparting proper training to their agents, insurance companies pressurised their agents to achieve higher target every months. This was done for ULIPS were the bread and butter for insurance companies then. Difference between two regulators forced the government to recast the ULIP. The product is of great value now provided it is understood properly. The ULIP could be bought by young parents while they are in their late Thirties. This would provide them with great satisfaction while sending their children for higher education and during marriage.
----------------------------
Thursday, March 17, 2011
ARE WE PREPARED FOR AN EARTHQUAKE IN NORTHEAST ?
It is a fact that Northeast is a land of earthquake. Our population hav to learn to live with it like Japanese and Californian have learnt. We have experienced earthquake every year .
The most of those earth quake are smaller magnitude . Yet Northeast has experienced two great earthquakes in the year 1897 and in the year 1950. These two earthquakes were amongst the most violent earthquakes in the world. The intensity earth quake of 1897 was 8.7 . the earthquake of 1950 had the intensity of 8.6. It could be noticed that the occurrence of both the earth quakes were during summer months. The first one was in the month of June and the second one was in the month of August. According to a few geophysicists Northeast may experience great earth movement within fifty to sixty years. Now the question is are we ready for it?
The last great earthquake occurred on August 15, 1950, and had a magnitude of 8.6. The epicenter was actually located near Rima, in Tibet . However, the earthquake as destructive in both Assam and Tibet, and 1,526 people were killed.
In an attempt to further uncover the seismic history of Northeast India, field studies were conducted by scientists with the NGRI, Bhubaneswar discovered signs of soil liquefaction including sills and sand volcanoes inside of at least twelve trenches in alluvial fans and on the Buri Dihing River Valley that were formed by past seismic activity. Radiocarbon dating identified the deposits at roughly 500 years old, which would correspond with a recorded earthquake in 1548 .
An article in Science, published in response to the 2001 Bhuj earthquake, calculated that 70 percent of the Himalayas could experience an extremely powerful earthquake. The prediction came from research of the historical records from the area as well as the presumption that since the 1950 earthquake enough slippage has taken place for a large earthquake to occur. The 1898 earth quake was still bigger though loss of human life was minimal the damage to the property was enormous as pr records. 1898 devastated lower Assam including kamrup and Goalpara the earth quake of 1950 devastated upper Assam.
This time we have to be prepared for both the areas to experience earthquake .Though according to experts Meghalaya and Lower Assam could be worst victim this time. Keeping aside the technicalities of earth movements to geologists let us concentrate what are the precaution human need to adhere to. In earlier earth quake though loss of human life was not very high any earth quake now may result in huge loss of life due to increase in population. As per the calculation Assam may experience again a great earth quake sooner or later this summer or next. We need to be prepared for that.
We need to learn from the experience of Japan. In Assam whenever earthquake comes every boy runs out of house to open to save themselves. In Japan such behaviors has been a taboo. From the childhood every child is taught to behave in a discipline manner. They are taught not to rush out of house. In India every year lots of people die for every body tries to rush out whenever pandemonium breaks out. the most death occurs due to suffocation and trampling by others feet.. Since earth quake is imminent all the schools from primary level to College level should now teach the student how to behave when earthquake strikes.
The most of the Assam type house has fewer hazards to fall apart compared to concrete houses. The concrete houses are also safe provided that have been built to withstand earth quake shocks. It is imperative to get the construction of the house checked up soon. People need to take insurance cover for earthquake. During earth quake cooking of food should be suspended. It is also told that people should keep away from overhand fans and false ceiling etc. In the house much more unsecured places are open car garages which are not fortified by walls.
Perhaps our architects have studied the problems of earthquake. In many countries where earth quakes are frequently felt most houses avoid brick and mortar interior walls. Whether similar construction would help in Assam or not could be studied. Earth quake anfd its cause should be compulsorily taught from primary level to higher secondary level. In all engineering colleges earthquake engineering should be compulsory in the first two years. There is almost no awareness among people of Northeast as to how to behave when earthquake struck. The mock earthquake drill should be introduced in al educational institute now.
If we take seriously prediction of Geologist and Geophysicists that North east would be visited by a powerful earth quake every fifty to sixty years this is the time for a major earthquake. We need to seriously think how to survive such catastrophe. It is not only government but also NGOS and educational institute need to play a proactive role in educating mass to safeguard them from earth quake menace.
--------------------------------------
The most of those earth quake are smaller magnitude . Yet Northeast has experienced two great earthquakes in the year 1897 and in the year 1950. These two earthquakes were amongst the most violent earthquakes in the world. The intensity earth quake of 1897 was 8.7 . the earthquake of 1950 had the intensity of 8.6. It could be noticed that the occurrence of both the earth quakes were during summer months. The first one was in the month of June and the second one was in the month of August. According to a few geophysicists Northeast may experience great earth movement within fifty to sixty years. Now the question is are we ready for it?
The last great earthquake occurred on August 15, 1950, and had a magnitude of 8.6. The epicenter was actually located near Rima, in Tibet . However, the earthquake as destructive in both Assam and Tibet, and 1,526 people were killed.
In an attempt to further uncover the seismic history of Northeast India, field studies were conducted by scientists with the NGRI, Bhubaneswar discovered signs of soil liquefaction including sills and sand volcanoes inside of at least twelve trenches in alluvial fans and on the Buri Dihing River Valley that were formed by past seismic activity. Radiocarbon dating identified the deposits at roughly 500 years old, which would correspond with a recorded earthquake in 1548 .
An article in Science, published in response to the 2001 Bhuj earthquake, calculated that 70 percent of the Himalayas could experience an extremely powerful earthquake. The prediction came from research of the historical records from the area as well as the presumption that since the 1950 earthquake enough slippage has taken place for a large earthquake to occur. The 1898 earth quake was still bigger though loss of human life was minimal the damage to the property was enormous as pr records. 1898 devastated lower Assam including kamrup and Goalpara the earth quake of 1950 devastated upper Assam.
This time we have to be prepared for both the areas to experience earthquake .Though according to experts Meghalaya and Lower Assam could be worst victim this time. Keeping aside the technicalities of earth movements to geologists let us concentrate what are the precaution human need to adhere to. In earlier earth quake though loss of human life was not very high any earth quake now may result in huge loss of life due to increase in population. As per the calculation Assam may experience again a great earth quake sooner or later this summer or next. We need to be prepared for that.
We need to learn from the experience of Japan. In Assam whenever earthquake comes every boy runs out of house to open to save themselves. In Japan such behaviors has been a taboo. From the childhood every child is taught to behave in a discipline manner. They are taught not to rush out of house. In India every year lots of people die for every body tries to rush out whenever pandemonium breaks out. the most death occurs due to suffocation and trampling by others feet.. Since earth quake is imminent all the schools from primary level to College level should now teach the student how to behave when earthquake strikes.
The most of the Assam type house has fewer hazards to fall apart compared to concrete houses. The concrete houses are also safe provided that have been built to withstand earth quake shocks. It is imperative to get the construction of the house checked up soon. People need to take insurance cover for earthquake. During earth quake cooking of food should be suspended. It is also told that people should keep away from overhand fans and false ceiling etc. In the house much more unsecured places are open car garages which are not fortified by walls.
Perhaps our architects have studied the problems of earthquake. In many countries where earth quakes are frequently felt most houses avoid brick and mortar interior walls. Whether similar construction would help in Assam or not could be studied. Earth quake anfd its cause should be compulsorily taught from primary level to higher secondary level. In all engineering colleges earthquake engineering should be compulsory in the first two years. There is almost no awareness among people of Northeast as to how to behave when earthquake struck. The mock earthquake drill should be introduced in al educational institute now.
If we take seriously prediction of Geologist and Geophysicists that North east would be visited by a powerful earth quake every fifty to sixty years this is the time for a major earthquake. We need to seriously think how to survive such catastrophe. It is not only government but also NGOS and educational institute need to play a proactive role in educating mass to safeguard them from earth quake menace.
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