It has been a while since I updated about the National Pension Scheme. But believe me, you didn't lose anything. As usual, government and their policies takes time to move and reach out to public. The movement is very slow in putting all the things in place and setup for enduser investing. I see lot of blogs than lastyear with more details especially many compliants about the way it is being handled.

With all the initial hype and great interest from NRI's, we expected the NPS would be up and running efficiently by now with more marketing from POC's and banks. But thats not truth, things are moving in snail fast. Anyway, here are some information, links and forms which you can go through

One good news, many banks which are declared as Points of Presence (POP) are setting up centers to support this scheme and slowly jumping in the band wagon. Their current target is focused mainly on citizens of India living in India and not many banks have good information about how to NRI's.

One bank which I just came across being named among POP's for NPS is focusing on Gulf/Middle East NRI  community is South Indian Bank. The SIB claims to be the largest service provider for the scheme, having the highest number of authorised branches for offering services under the NPS. You can learn more about their service by visiting their website at SIB.  Other banks who are named as POP's are also offer NPS and accept contributions are listed below:

Allahabad Bank,
Axis Bank Ltd,
Bajaj Allianz General Insurance Co Ltd,
Central Bank of India (CBI),
Citibank,
Computer Age Management Services Private Ltd,
ICICI Bank Ltd, IDBI Bank Ltd,
IL&FS Securities Services Ltd,
Kotak Mahindra Bank Ltd,
Life Insurance Corporation of India,
Oriental Bank of Commerce,
Reliance Capital Ltd,
State Bank of Bikaner&Jaipur,
State Bank of Hyderabad,
State Bank of India,
State Bank of Indore,
State Bank of Mysore,
State Bank of Patiala,
State Bank of Travancore,
Union Bank of India and
UTI Asset Management Company Ltd

Click here to see the detail list of branches in various cities. Also here is the registration form to register with POP.

Here are few Articles I came across which might interest your on this topic.

Details about South India Bank and NPS at thepeninsulaqatar.com

Reasons why NPS is not growing as expected at Business-standard.com

Questions&Answer about NPS economytimes.com

NPS not Cheap by businesspandit.com

ICICI NPS FAQ at ICICI.com

To conclude, it will take more time to get much more clearance on the process and availability of the scheme for NRI's more easily. Please continue the research and you are welcome to share any good information here. I will also keep updating on this topic when I hear any thing new so keep checking.

Happy Newyear Everyone!!

Year 2009 has come and  gone. It surely made imprints with lot of headliners and became a part of the history book. Year 2010 just started ticking it's counter and adding a brand new decade in the 21st century. Another thing to notice about 2010 is, by doubling the last 2 digits either like "10" *2 or 1+1 0+0 makes the first 2 digits "20". I found that to be interesting because it doesn't happen often. Let's hope year 2010 doubles our happiness by doubling our wealth and keeping us healthy.

Newyear Resolution -A waste of time

"May your troubles last as long your Newyear Resolutions" - Author Unknown

I saw the above funny quote posted outside of an auto repair shop. Nowadays people are not at all really serious about newyear resolutions and studies literaly reflects the downtrend. In the recent resolution study, while 52% of participants were confident of success with their goals, only 12% actually achieved their goals despite all the best intenstions.

Whether you resolve your resolution are not, somebody is will make big buck out of you. It is most likely going to be,

1. Fitness centers and Trainers
2. Weight loss program and weight loss book sellers
3. Dieticians and Weight loss Food producers

Just be aware of it and don't get pulled by all the marketing gimmicks and TV ads. Most goal setting experts believe this is due to ignorance concerning how to set goals properly. Let me share my very own 3 Talk method which might help achieve things in all the areas of your life.

T1. Talk to yourself first

It might seem wierd but the truth is everything starts from you. You have the answers to know what will work  best for you! So, use this time make an appointment to yourself to think with an open mind, about past year’s mistakes and missed opportunities or goals. Ask yourself what type of life you would like to create for yourself in the coming year.

If you have the habit writing journal, it helps in this process. If you don't have one, I would recommend to start one today.  Try to take these steps during your own interview.

1.Check your past year goals and see how you resolved/performed. Pat your back if you scored well. Tweak them if it need to continue this year.

2. Make 3 new goals for this year whether short or long term. Just Three only, no more!

3. KISS method - Keep it simple stupid. Always set goals as simple as possible to start with.  Try to set SMART goals. These are goals that are Specific, Measurable, Achievable, Relevant, and Trackable. If you want to lose weight, start with losing 5lbs in 2 weeks and continue to maintain it for 2 more weeks.

4.  Write them down and start planning towards working on those goals. If you plan to reduce wait, look for a good and cheaper options to start instead of getting an expensive Treadmill at first. Try signing up for $10 fitness center which has mushroomed in many areas.

5.  Take action by start working out twice a week and gradually move to thrice a week. Adjust your diet accordingly and you will surely see a change in your health. Be resilient.  Don't throw towel in just a week. Try atleast 3 weeks. Ask for help is a old techique. I would say advertise your goals which will motive yourself to achieve them when your friends ask about it.  Eva

2T. Talk to your Doctor

Next an important one. Make an appointment with your family doctor to do the physical checkup during the month of January. Almost all the insurance companies cover the physical check once a year upto $300. Most physical checks including labs won't take more than $300. I try do it by end of Jan so I can see my levels on  LDL, HDL, total cholestrol, Sugar and compare from the last years. 

By doing at the beginning of the year helps to manage those levels  or work to improve on them in the coming months. Prevention is better than cure. By doing physical checkup atleast once a year, it surely helps to find any problems before ahead and gives more time take action to treat the problem in the starting stage itself.

3T. Talk to your Financial Planner/CPA

Finally, your wealth check up. You better meet with your CFP/CPA to check your current financial status. If you are your own financial Planner, try to set up a time to go over your financial condition. Check your financial goals and objectives, see it is performed last year. Make any changes to your short or long term financial goals for this year.

Also take time to check some important documents like WILL, Trust, Durable Power of Attorney and Living Wills. If there is any change in your family staus like new kid, new house, you surely need to make proper adjustments to the Will or Trust to reflect your current status to avoid any future problems.

By doing just these simple things at the beginning of the year, you are setting your life boat in proper condition to sail this new year in the right direction to reach your destination.

Happy Goal setting!!

If you are into picking up stocks for your portofolio whether it is in Newyork exchange or Mumbai Exchange, analysis used to select the right one is more or less the same. You either go with technical indicators or fundmental signs to choose the right one for your portofolio accordingly. But when it comes to picking mutual funds it is not the same. They are totally different.

We end up looking at the underlying stocks to judge the mutual funds performance instead of just looking at mutual fund itself. That is not the right way as per many analyst. Because the very reason we want mutual funds is you don't want to pick the stocks and end up in trouble. It is done by professional managers and they are responsible to make sure the funds perform right. So you should pick the fund as whole not by looking at by picking stocks in the fund.

Check out an article which explains why someone should choose the fund not it's portfolio.  Share your thoughts in this matter.


Pick a fund, not a portfolio
Dhirendra Kumar
www.financialexpress.com
Posted online: Oct 26, 2009 at 2355 hrs

It goes without saying that choosing a mutual fund is the most critical aspect of fund investing. How well your investments perform is directly dependant on how you pick them. It is safe to say that picking the right fund is almost as good as ensuring good returns on your investments. But, despite the fact that choosing funds is such an important factor, most people often seem to falter at this very step.

There are a lot of different approaches used to choose a mutual fund. When it comes to equity funds, the approach that is most ineffective is the one based on the fund’s portfolio. Under this approach, an investor – and quite often even an analyst or expert – looks at the fund’s recent portfolio statement and decides for or against the fund on the basis of the stocks it holds. I can’t stress enough on why this method is a futile way of choosing a fund to invest in.

Firstly, this approach is wrong because it takes away the basic advantage of investing in a fund. You invest in a fund because you don’t have either the time or the knowledge, or sometimes both, required to dabble in stocks. So you let the fund manager do it for you. But when you start decoding a fund’s portfolio, you are doing nothing but dabbling in stocks and worse, also assuming that you are a better judge of stocks than the fund manager. In general, stock investors who feel the need to venture into funds as well use this approach. Apart from them, this method is used by broking firms who have started selling funds. In such firms, the stock analyst analyses the funds as well. And hence, he looks at the fund’s portfolio. If he doesn’t like the stocks in it, he renders the fund unfit for investment.

This approach has been appearing in the media a lot too. Recently, a financial publication published a misdirected article that picked individual stocks in isolation from funds, followed the fund managers’ actions on those stocks through a couple of years and then declared those actions to be illogical. What amazed, and amused, me was that they didn’t realise that the funds that they had picked out were funds that had mostly outperformed their benchmarks and peers over the last few years.

This is just another example which shows why a fund shouldn’t be analysed on the basis of its portfolio. A fund buys or sells a stock for myriad reasons, many times for reasons that have nothing to do with the stock’s performance. At times, another stock from the industry could be more attractive. At times, there could be an internal limit on an industry, or to the company. And likewise.

Hence, a fund shouldn’t be analysed on the basis of its portfolio. For most funds, a look at its past returns-based performance is more than enough. A comparison of a fund’s returns, vis-à-vis its benchmark’s or peers’ returns, will give you a fair idea of whether the fund is worth investing in or not. The fund’s portfolio should be looked at after it has answered other basic questions. The portfolio should only be seen to know if the fund is concentrated, is it churned a lot, does it have exposure to emerging sectors, etc. The portfolio should be used to decide between two otherwise similar funds, not as a primary deciding factor..

Global warming, green technology, saving the world are few of some magical words making trips all around the globe. But is these words getting any attention at all in India is the bigger question? My answer would be, "Not enough". There is not enough being doing by the government pushing for any bill or law to enact energy conserving strategies except emission prevention. I came across this nice, interesting article which talks more on that lines. Keep reading...


heed the Global warming
Kamal Meattle
Posted online: Oct 04, 2009 at 2336 hrs

Global warming is a larger threat than terrorism and will affect each one of us, in our lives and our future generations. In India, the Ganga will dry up by 2030, according to a statement made by Executive Secretary of UN IPCC, Yvo de Boer, at the Delhi Sustainable Summit in February 2008. Over 400 million people living in the Indo-Gangetic Plain will be affected. It will affect the country’s food production and self-reliance in the area, as a result of no water availability for irrigation, as well as shortage of drinking water.

This problem clubbed with CO2 emissions affects all of us across borders. Creating awareness amongst the citizens about global warming clearly suggest what each one can do for their own personal good. Any prudent administration should take steps to inform people, so that they aware of this threat. It is in India’s interest to join hands with the world, without accepting quantitative cap on emissions of CO2, and support these initiatives financially and economically. The western world must provide financial support besides technology for Cleantech in India. This problem clearly has a positive side. It opens doors to innovation and come up with new and green clean technologies to tackle the menace of Global warming. Technology flow is vital for reducing CO2 emissions. Clean energy technologies are essential and should be available to India.

We need efficiency and energy conservation in all uses including vehicles, pumps, electric motors, automobiles, lighting, air-conditioning, production of cement, steel etc. We need carbon storage, alternative energy— nuclear, wind, PV, fuel-cells, bio-fuels, besides increase of forest cover. Water could pose a larger threat than energy. Solutions lie in better management of existing water and other resources. India must move to a path for sustainable development. This should become our core policy to include — efficient water distribution and reduction of water wastage in transmission. Cost of water needs to be increased to reduce wastage. We should license tube wells in agriculture, rural and urban India and only allow selling of energy efficient pumps, promote drip and spray irrigation. Similarly we have to make water-harvesting compulsory for all public parks, green areas and buildings.

Promote energy efficiency using regulatory measures to reduce energy use in buildings, agriculture etc. by 1/3rd with a time lines, make ECBC code mandatory for buildings of more than 500 m2 and have all such buildings to be certified Green by IGBC or TERI Griha. Outlaw GLS lamps and set up a central CFL recycling unit to extract mercury. Allow only 4-5 star air conditioners, refrigerators, electric motors and transformers to be sold, levy a high excise duty on energy inefficient products and zero for energy efficient ones. Make solar heating mandatory for all buildings as far as possible, get CSIR labs to concentrate on solar energy research and development to improve efficiency and reduce cost.

We need to promote use of energy from waste. Set up gobar gas plants in each village and use the methane gas for cooking and the residual material as fertiliser. Some of the gas can also be stored to run a fuel cell electric generator for producing electricity at night for powering mobile telephone towers, and LED and CFL based electric lighting. Make tougher recycling laws, as in Germany. Promote vermi-culture in cities, towns and villages, to recycle food waste locally. Plant more trees and look after them in an accountable manner, which is transparent and involves local people/communities.

There should be an execution and implementation plan, with timelines, announced immediately and CDM credits should be applied for, as trees absorb CO2. There are certain species of trees that absorb more CO2 than others — example Bamboo, Banana, Teak etc. We need research to determine the best plants that absorb CO2 most, for different soil and weather conditions. This could be carried out by IARI and CSIR. We have 33 million hectares of wasteland that can be used for growing Jatropha for bio-fuels. We give about $25billion each year to subsidise kerosene. Why not invest this in PV and alternative energy instead? Poor nations need technology that allows them to reduce emission in sectors such as buildings, steel and cement. Buildings take up 40% of world’s energy and construction of these buildings uses up about 40% of world’s resources. It is possible to reduce this by 75% as demonstrated by the GreenSpaces Project. The question is cost and not technology. Relevant technology is available and being refined every day to make it more cost effective. This becomes very important for India where currently 22% of the population lives in urban areas and the rest in villages.

There is a migration of rural people to cities and unlike in China, there is no restriction on free movement of people in the country. The density of population in cities is already very high. For example in Delhi it is over 12,000 per km2 and increasing. Abu Dhabi has broken ground on its US$ 22 billion Masdar City project, a zero carbon zero-waste, car free development driven by Abu Dhabi Future Energy Company ADFEC. In conclusion, I would like to say that Cleantech offers a great solution in several areas to make our planet Earth, a cleaner and greener place, for the future generations. As prudent, responsible and intelligent people we should take insurance and do what we need to do it now!

I planned to write a post talking about recent economic developments in India. When I came across this interesting article, I decided to post since it's very descriptive shedding light, touching different aspects of India's growth. The article author talks about, what is current happening in India after recession, how we were able to get back so quickly and what force drives Indian economy. Check it out and share your feedback.


India finds itself awash in foreign investment
14 Oct 2009, 1713 hrs IST, New York Times

Six months ago, it looked as if India was in for a bumpy recession. Factories were laying off workers and construction sites were grinding to a halt as foreign investment slowed to a trickle.

But in the last few months India has hit a gusher, as investors around the world have turned away from the dollar, the global refuge during the crisis, and rediscovered their optimism in the world economy and India’s place in it.

There is palpable optimism here. Major stock indexes have roughly doubled from their March lows. Companies are advertising initial public offerings on television. And articles about bonuses and corporate expansion plans have started replacing news about layoffs and deferred projects on the front pages of newspapers.

Nearly $7 billion more foreign direct investment flowed into India than left the country in the second quarter, from April through June, nearly twice as much as in the previous six months combined.

Including cash invested in the stock and bond markets, India received about $15 billion in foreign investment, the most it has received in any quarter except the last three months of 2007, according to Macquarie Securities.

If the current surge continues – and skeptics doubt that it can – the Indian economy could start growing at 8 to 9 percent a year as early as 2010, far sooner than forecasts by the International Monetary Fund and many independent analysts.

"Clearly after the big shock of last year, things are back on track," said Surjit S. Bhalla, who runs Oxus Research and Investments, based in New Delhi. "People are seeing the recovery to be lot more robust than what many of the naysayers are saying."

While many say the good times are here to stay, some analysts worry that the renewed ebullience will be fleeting if global financial markets take another turn down.

Confidence in India’s potential could also falter if the government does not address some long-standing problems, namely, improved infrastructure, investment in education and economic reforms, as it has promised to do to lift hundreds of millions out of poverty.

Another big concern is that the foreign money might re-inflate bubbles in stock and real estate markets. Indian stocks are less than 20 percent shy of their 2008 peak, even though corporate profits and the economy as a whole are growing more slowly now.

"Because we are a fairly large attractor of capital, the possibilities of bubbles building up in sectors like real estate are very real," said Abheek Barua, chief economist at HDFC Bank, who is nonetheless upbeat about the economy. "It has clearly happened in China and there is some of that sort of problem here, as well."

For a country that quarantined its economy from the rest of the world for much of the last 60 years, India has increasingly relied on foreign investment in recent years. It has helped bridge the gap between domestic savings and the growing capital needs of the private sector and the government, which is borrowing money to pay for welfare programs and subsidies.

In India’s fiscal year, which ended in March, growth slowed to 6.7 percent, from 9 percent a year earlier, in part because of lower foreign cash flows. Most analysts estimate the economy will grow more than 6 percent this year, but some like Bhalla say growth will be as high as 8 percent.

Rising foreign investment should help offset some of the economic impact of erratic monsoon rains. The agricultural sector makes up about 17 percent of India’s economy but sustains more than half its population.

India’s economy lacks some of the handicaps present in other countries. For instance, domestic demand never collapsed to the extent it did in the United States, and yet consumer spending is picking up now. Car sales were up 13 percent in the five months that ended in August, compared with the same period last year. Builders say sales of affordable apartments – priced from $10,000 to $30,000 – are up, too. Even retailers, who were forced to close hundreds of stores last year after overexpanding, are talking about opening new outlets.

Some Western companies are eager to get a piece of this market. Last month, Ford Motor said it would build and sell a new hatchback here. McDonald’s announced that it would open 120 more restaurants. And Baltimore-based T. Rowe Price, according to local news reports, is in talks to buy a stake in an Indian mutual fund firm. T. Rowe Price declined to comment.

At the same time, thanks to strong overseas demand for Indian stocks and bonds, companies here are raising billions of dollars. In a recent initial public offering for Oil India, a government-owned company, demand outstripped available shares by 31 times.

"There is a large amount of liquidity in the world," said A. Murugappan, executive director at Icici Securities. The money is flowing here, because "people see that India and China are the two growth areas."

Still, the rising flow of foreign funds poses challenges.

India’s currency has appreciated 11 percent since early March, to 46.13 rupees to the dollar, because of rising demand for rupees and the broad decline in the dollar. That will make Indian garment and jewelry exports less competitive on the world market at a time when those industries are still recovering.

"That is a cause of worry," Vasant Mehta, chairman of India’s Gem and Jewelry Export Promotion Council, said about the appreciating rupee. "Profit margins are being squeezed, and in such a period we cannot expect to raise prices."

The governor of the Reserve Bank of India recently said that to control inflation, his central bank might have to raise interest rates before developed countries, where rates are at historic lows. But he said that doing so could encourage overseas investors to move even more money into India, driving the rupee even higher.

With great recessions or depression comes great opportunity to invest and expand for both individuals and businesses. You are already witnessing lot of mergers, take overs and many old companies entirely vanishing from the earth. 

Thats true all over the world and especially many Indian companies taking this opporunity to expand their reach in bigger markets. The trend has gone little more far. Days of American companies coming to India for outsourcing are gone. Now many Indian companies are setting stones in US and UK to service their foreign clients.

TATA's who acquired Jaquar and Land Roover from FORD is one good example. It is planning to launch NANO cars using their dealership network in US. That is change of business model.  Don't wait for business to come to you, go where the business is. In IT servicing industry, this new approach is catching fire and taking many dimensions by Indian IT providers like HCL, Infosys and Wipro. 


I read an article published in PC world 2 months ago and like to share some essence of the article. Indian outsourcers are increasingly looking to put data and software development centers closer to customers, including opening ones in the U.S. Some outsourcers also believe that hiring local staff reduces criticism in the U.S. that Indian outsourcers are causing job losses in the U.S.

Indian outsourcer HCL Technologies has acquired its first data center in the U.S. from one of its customers, the company said on Monday.

HCL also took over the data center's staff and other operations, said R. Srikrishna, senior vice president for sales for the North America business of HCL's Infrastructure Services Division. The data center, located in New Jersey, fits into HCL's strategy to offer some services from locations close to its customers, Srikrishna said. The data center will in part be used to serve the unnamed customer HCL purchased it from, as well as offer services to other HCL clients.

HCL has already invested US$15 million to upgrade the 35,000-square-foot center to support eco-friendly technologies, virtualization, cloud computing, business continuity and mainframe management services. Customers want data center services delivered from locations close to them, he said. A customer in California, for example, would prefer to have services delivered from a data center in the state rather than from New Jersey, he added.

Although customers can save money by outsourcing IT services to India, this may not be the case with data centers, according to Srikrishna.

Setting up and running a data center in the U.S. is far cheaper because of India's high electricity costs, Srikrishna said. Real estate -- the other major cost for a data center -- is on par and in some cases cheaper in the U.S. than in India, he added.

HCL already has close to 5,000 staff in the U.S., and this is likely to grow, Srikrishna said. About 1,500 of the staff became part of the company after its acquisition last year of Axon Group, a SAP consulting company firm in the U.K.  A large number of outsourcing contracts, particularly infrastructure services contracts, have required HCL to absorb some of the clients' IT staff.

This change is also happening in banking sector. SBI India has opened branches in DC, Newyork and Chicago to act as US bank with Indian foot hold to attract NRI's investment. It is a good change and welcome one.

What do you think about this change? Share your comments and thoughts.

Two days ago, US Treasury Secretary  Timothy Geithner said the global economy is "back from the abyss" thanks to efforts by the U.S. and other nations to fight the economic crisis. Geithner insisted his G20 counterparts to continue the efforts until there are clearer signs of recovery.

Economy recovery

In another report issued by Government of India, Indian economy has grown from 5.3 last December to 6.1 in June 2009. The Deputy Chairman of the Planning Commission, Montek Singh, commenting the latest figures said: “The worst may be over and we expect to see improved performance in subsequent quarters”.

The government’s stimulus measures for the economy have helped to create demand. The share of consumer spending in the economy shrunk to 55.6% in April-June from 58% a year ago, while the government’s share rose to 9.9% from 9.6% on the back of stimulus spending. Whilst in 2008 the growth index was at 7.8 it fell at 5.3 in the worst month of the crisis and now is slowly moving up to 6.1. With the recovery shown in the last two quarters from 5.3 to 6.1, India remains the second-fasted growing major economy after China, which has an almost 8% growth rate.

The doubt on the stability of this growth rate is cast by the poor ongoing monsoon, which could severely affect agriculture and mostly the energetic field. The worst-hit sector were trade, hotels, transport and communication. Together these sectors posted 8.1% growth in the first quarter of this fiscal compared to 13% a year ago.

Giving his opinion on the matter the prime minister, Manmohan Singh, while addressing the plan panel on Tuesday said: “We have been through a difficult year because of the global economic downturn, which is only now coming to an end with a slow return to normalcy in the months that lie ahead. The country has also seen a poor monsoon”. He cautioned that despite a slight rise in growth, the road to recovery was a long haul.

The recovery has been possible, in part, because the Indian economy is much less dependent on exports, and is largely sustained by domestic demand. Stimulus packages by the Central Bank amounting to more $100 billion also helped businesses to rebound.

Above news from Mr.Geithner, Government and PM of India increases great deal of confidence among investors around the world, especially foreign direct investors(FDI's) who take good amount of risk investing in developing nation like India.  Many of you who closely track the stock market (US or India) can easily visualize the change from Sept 2008 to Mar 2009 to now Sep 2009.

With this backdrop, let us see how the rupee is doing against dollar and how it set out to do in future.

Rupee moving sideways

Rupee dropped so badly to reach the lowest against dollar on Mar 3rd, 2009 when the stock markets crashed all over the world. The economy was in recessions and the tone was set long back for this to happen. It was good times for NRI's who cashed in dollars for great rupee return. But it was short lived until May. After the Indian election in May when congress took the majority and won by big margin, Indian stock market rallied cheering the people decision. 

Rupee also rallied on and recorded the highest gain of 152 paise in more than decade. It moved higher to 47.47 against the US dollar, on anticipation of heavy foreign capital inflows as stock market may continue their rally. It is also because the dollar fell in the market as the crude oil price went up.

After 6 month of downtrend and 2 month of downtrend, rupee against dollar starts to move sideways trending between 47 - 49 INR and currently in 48 INR range. It strengthened after 3 days of free fall (during Aug end and Sept start)  against the US currency. Weak dollar against some other currencies and hopes of fresh capital inflows by foreign funds into equity markets, which may open higher also supported the Indian rupee.

Here is the rupee average for past 9 months. You can clearly see it is wavering and moving sideways from May till today with an average of 48 INR.

May   48.5497 INR (21 days average)
June  47.7459 INR (22 days average)
July   48.4358 INR (23 days average)
August   48.3314 INR (21 days average)


According to an article published in financial express on May 25, Rupee is likely to appreciate to 46 a dollar in the backdrop of a stable government at the centre and relatively resilient domestic demand, says a report by global financial services giant Goldman Sachs.

"We expect the INR to appreciate further from current levels as the stable government and relatively resilient domestic demand become key catalysts for foreign inflows," the report said, adding that the Indian currency "may touch Rs 46 to a dollar within 12 months".

Noting that there are significant pressures for rupee appreciation, the report said that the Indian currency gained about 5 per cent against dollar since the victory for the Congress-led UPA in the general elections. With the rupee strengthening, it said the sectors dependent on imports will gain, the exports will be hit.

Goldmann Sachs analyst very knowledgeable and might have done proper anlaysis to release a report predicting rupee appreciation. With the economy all over the world in reviving mode, commodity prices are going up and US dollar is losing strength in expectation to inflation, there is good chance for Rupee to reach 46 mark or atleast stabilize at 47 mark at the end of the year.

Currently the rate 48 INR is a good one and 46 INR is also reasonable price for both NRI's and indian exporters comparing a year ago when it was at just 38 INR. Just cherish the days and make full use of it.

Growing cost of education all over the world has evoked interest among many to look out for cost efficient, affordable with internationally credited education. Whether its US, UK or any other country, many Indian universities are stretching their wings to create existence in these foreign lands. It just start out as a support mechanism for Indian students taking correspondence courses, now they are opening up full fledge institutions equipped in all sorts of facilities and accredited faculties to attract both foreign students and Indian origin.

When I was looking to do my MBA in USA, the expenses are tagged to be around $30 grand compared to just $7-$10K thru Indian branched universities in USA. It was interesting to come across an article researching about growing trend on Indian universities going overseas.  It brings lot of light about many reputed Indian universities going abroad. Read on...

Source: financialexpress.com
Indian universities overseas: a growing trend
Malvika Chandan, Prachi Raturi Misra
Posted online: Aug 17, 2009 at 2332 hrs

The five million Indian population in the Gulf, of which over one million is in the UAE, was the reason Birla Institute of Technology and Science (BITS) in the year 2000 opened its engineering campus in Dubai. “Lots of Indians working in Dubai wanted to send their children to an Indian institute,” says LK Maheshwari, vice-chancellor&director, BITS Pilani. “KK Birla was the chancellor of BITS Pilani when the decision on the Dubai campus was taken and he took this decision to ‘help a friendly country’ and not from the commercial aspect,” adds Maheshwari. The arrangement was such that Eskom was the local partner that bore the ‘financial burden entailed in setting up and running the institute in Dubai’ while ‘academic aspects such as faculty recruitment, curriculum and degree award were in control of BITS’. What started with an enrolment of 60 students in 2000 has had 600 students enrolled in 2009 with over 45% from India. BITS was obviously pleased with the response to the Dubai campus that made them consider a proposal in 2003 from the government of Mauritius to set up a campus there, but because of a change in government the plans got stalled.

“When one looks at overseas educational alliances, there are clearly two categories. One category of institutes pursues ‘internationalisation’ with a bigger dimension to uplift all countries involved, to create goodwill through the educational process and in this case money is incidental. If you take the example of BITS Pilani itself, when we opened in 1964 we were helped by the MIT in the US not for money, but to make successful an initiative of a private group in the field of higher technical education. On the other hand, there are the ‘trade-in education services’ such as cross-border supply, setting up institutes, which are the fly-by-night initiatives, not long-term and primarily driven by commercial motivations,” adds Maheshwari.

Others such as SP Jain Centre of Management and Manipal University also have campuses in Dubai focusing on management studies. While time will tell what the motivators of the overseas initiatives of higher educational institutes are, these universities seem to be acting with speed to find their place in the sun. Ask Atul Chauhan, president, Amity education group, which has recently opened its campus in London and Singapore. The two campuses, he says, have been opened after a great deal of research. “So far we’ve got a phenomenal response. The London school, for example, has already got 1,500 applications from students all over the world while the Singapore campus has got about 1,000.”

Singapore’s institutes’ do have a feather in their cap which would serve as a good example for Indian institutes wherein the former’s policies regarding admission, course content, faculty selection and ranking are all transparently declared on the Web site. In India, all claim to be a “top ranking institute” with no official verification provided.

While BITS Pilani was granted a “deemed to be university” status by an act of Parliament back in 1964, private, self-financing institutes such as Institute of Management Technology, Ghaziabad, opened campus in Dubai in 2006. It is already thinking of a new campus in Singapore. IMT chose Dubai because it’s a global business hub and MBAs are much in demand. Another reason is its access to India which would let Dubai campus leverage faculty resources of its India campus. “If you have international tie ups and campuses, you attract more students in India since Indian institutes abroad give students a chance to have a global exposure at a reasonable rate,” acknowledges AM Sherry, chairman, admission&student affairs IMT, Ghaziabad.

However, a counter point to consider is that in India, where students hold Western higher education in high esteem, would prospective students choose an Indian academic institute in England where there is an Oxford or a Cambridge to choose from? Chauhan of Amity education group describes his differing target students and objectives, “There are some unparalleled leaders and we are not competing with them. But everybody doesn’t get into them. We offer an MBA at competitive rates and provide best facilities. Our positioning is not of an Indian academic institute transported abroad. It has been set up like any British B-school with global accreditation, director and faculty members. The same is the case for Singapore. We expect only 20% of students to be Indian.”

Savita Mahajan, chief executive, Indian School of Business, Mohali campus, offers a different perspective. She says, “Indian schools opening abroad are targeting Indian students who can’t get admission in other foreign schools. If it’s about giving a global perspective, we are doing it here in India.”

The Indian government is in favour of formulating guidelines to allow universities and government-run institutions to set up branches abroad to fund higher education for the poor back home and expand the educational infrastructure here. So far, private educational institutions have explored education opportunities abroad. Pune University became the first government-run institution to open its campus in UAE in 2009. While the process was tedious and long-drawn, Pune University was finally able to get approval.

However, bureaucratic hurdles have not dampened the intent of Indian institutes to open branches overseas. Corporate India has put the Indian flag abroad, it’s time Indian education did the same,” quips Chauhan

We all very well know Indian aviation industry is going thru transformation. New airliners like spiceJet, IndiGo, KingFisher jumped on board and saw lot of traffic and obviously made money when the economy was booming by offering cheaper air fares. But recently, they all took an "U" turn as many airliners increased their fares to coup with their losses during this bad time.  They also complain increasing airport taxes is another contributing factor for their loss and increase in airfares. I found an interesting article and sharing with you under the new series of "What's happening in India?"

Way out of aviation crisis: lower taxes, cheaper tickets
By - Sanat Kaul
Posted online: Aug 04, 2009 at www.financialexpress.com

The Federation of Indian Airlines threatened to go on strike for one day on August 18; it made headlines and upset many, including the government. The strike is off, and, yes, airlines are at fault, including for an attempt at cartel-like behaviour. But the government is at fault too.

India’s aviation industry, flying around 40 million domestic passengers a year, is still an infant industry when compared to railways which transports about 14 million passengers a day and bus transport which carries 90% of passengers, mainly over short distances. As the economy grows and incomes increase, the propensity to travel by air also grows. Air transport, no doubt, is a more efficient form of long distance transport. For efficient economic growth, aviation infrastructure including air connectivity at reasonable costs becomes as much a necessity as railways or road transportation. This realisation came in the early nineties when liberalisation of domestic airlines was carried out, followed by liberalisation of bilateral air service agreements, to allow more domestic and foreign airlines into the country. But air travel is still considered a luxury.

Central and state governments have found an easy way to enrich their coffers by putting very high taxes on petroleum products via both sales tax and aviation related charges. About two decades back, air travel was done mainly by government officers or corporate executives who were not price sensitive as their office paid for the bills. With economic growth, ordinary businessmen and people from all walks of life needed to travel by air also but were price sensitive. The sale price of aviation turbine fuel (ATF), sales tax on ATF, navigation and airport charges kept air travel expensive. With the coming of low cost carriers (LCC), full service carriers started to lose dominance. From about 30% of the market in 2007, they have reached 55% of air passenger traffic in Q1 of 2009, showing how price sensitive this sector has become.

The global financial meltdown impacted the sector globally and Mumbai 26/11 impacted India’s inbound tourism in a big way.

Airlines the world over suffered, including domestic ones. They can recover only with increasing air traffic and cost cuttings by use of better technologies like e-ticketing and improved procedures. Airline seats are perishable like electricity. Unfortunately, some domestic airlines felt that by cartelisation and increasing prices, they would be able to increase their bottomline. This didn’t work We need to relook at the government’s fiscal policy on the aviation sector. Boxes on the right list sales tax on ATF across different states, varying from 4% in Andhra Pradesh to 30% in Maharashtra. They also list comparative airport charges between Singapore and Delhi. Further, they provide a comparison of ATF charges at Singapore and Mumbai stations.

With the kind of price sensitivity we have experienced in the case of LCC vs full service carriers, it appears that if taxes and charges are reduced and this is reflected in reduced ticket prices, the loss to government revenue will perhaps be more than compensated by increased traffic. Andhra Pradesh has already taken a step forward towards reducing sales tax on ATF to 4%. If other states also join in, especially the states with metro cities, this will have a major impact on passenger traffic. Further, if we compare the tax on a railway ticket or bus ticket with the tax on an air ticket, then the comparison becomes completely skewed.

—The writer is chairman, International Foundation for Aviation and Development(India chapter) and India’s former representative to ICAO

Source: http://www.financialexpress.com/news/Way-out-of-aviation-crisis-lower-taxes-cheaper-tickets/497496/#

There have been some developments in the Indian investment scenario in the past couple of weeks that can be tagged good, bad and ugly from the investors’ perspective. Take a look.

The Good: Investing in Indian Mutual Funds (MF) just got cheaper. SEBI (Securities and Exchange Board of India) has scrapped the entry loads the MF were charging the investors towards remuneration of the intermediaries selling the scheme. The load was charged at a fixed percentage of the invested amount by the MF and was passed on fully or partially to the intermediary. This had commoditized the MF distribution activity with everyone receiving the same remuneration irrespective of the advice and service rendered.

Now the investor has the option to decide on the remuneration that he feels fit based on the intermediary’s service and advice quality. This has kicked up quite a storm among the distributor community which is understandable since they now have to negotiate and collect their remuneration directly from the investor. Though this is a welcome move which gives the final say to the investor, this move may well push the distributors to sell other competing financial products like Unit Linked Insurance Plan (ULIP) which offer similar investment avenues but a higher remuneration of even up to 50%. Small investors may be left in the cold as distributors concentrate on the HNI. It remains to be seen if the Indian investor community is mature enough to pay for advice as they are used to receiving it free so far, though the quality left a lot to be desired.

Indian regulations have recently been favorably benchmarked to world standards, but this move might just be ahead of time as the MF penetration is less than 10% among the Indian households. The MF concept has to be sold to the rural and semi-urban population which has a high comfort level with bank deposits, gold and property. The distributor community may not take the pain of educating the investors and this could affect the MF penetration outside the major cities.

But on the other side, this will shake up the so called advisors and consultants who were merely pushing products.  The really client-centric advisors and financial planners having a higher level of knowledge and skill to guide the investor with need-based approach should have nothing much to worry except adapting to the new business model. Lets hope this move achieves the intended purpose without any adverse side effects.

The bad: A lot was expected from the budget that the Indian government presented on the 6th July, but eventually turned out to be damp squib for the investors. The government had received a very favorable mandate not seen in the last two decades and did not depend on the left parties for its survival. The investors expected big bang reforms from the government and the stock market had run up on these expectations. But not much of the expectations fructified thus puncturing the optimism. To rub slat on the wound, the fiscal deficit projected by the government could head up to 12% of the GDP fuelling worries of rise in interest rates and crowding out private investors in the credit market. There is also the downgrading of the sovereign rating looming large. Let’s hope the Indian government pulls up its socks in due course and does justice to the huge expectations.

The ugly: The huge interest that the NPS (New Pension Scheme) generated could well evaporate as the government has not given the favorable tax treatment on par with other retirement products like PPF, EPF etc. This means that the investment returns will be taxed on maturity thus lowering the attractiveness of this excellent product. The response so far has not been anything to write home about with few hundred accounts having been opened and a few lakhs of rupees as contributions. The absence of any paid distribution channel would mean the entire onus of promoting the product and creating awareness would lie on the regulator, PFRDA.  We can just hope that the Indian government doesn’t throw the baby out with the bath water.