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India – Attractive Place for Investment

Posted by banker on April 25, 2012

India remains an attractive place to invest, says Finance Minister

Our revered Finance Minister Mr. Pranab Mukherjee has stated that India as a whole remains an attractive area for investment, in spite of controversial schemes to make overseas firms retroactively accountable for taxes. Mr. Pranab Mukherjee sought to serene the issue over proposed judgment on investment to hunt overseas companies for duty on mergers concerning Indian resources by stating investment related decisions are not taken only on the foundation of “tax allowances”. Planning whether to make money investment into a nation is “based on what is the volume of the trading market, if the trading mechanisms are translucent and what is the purchasing power of the nation people,” Finance minister was quoted on Friday by the Indian media as stating. India in a whole with its growing affluent residents of 1.2 billion people remains a lucrative nation with a perspective of investment, he told listeners on the sidelines of meetings of the International Monetary Fund and the World Bank.

“From all these perspectives, India seems to be a nice investment nation,” Mr. Pranab Mukherjee said on Saturday in United States of America. India’s cash-strapped administration had been extensively projected to plug union tax issues in its financial plan last month. But the retrospective angel of its tax judgment has stimulated an international protest in an era when India immediately needs hefty overseas investments to promote its ramshackle infrastructure and incite recessionary economic growth with investment. Vodafone which is one of the India’s main overseas investor — confronts a dollar 2.2 billion tax invoice over its 2007 acquisition of the Indian leg of Hutchison Whampoa which is based out of Hong Kong. It threatened to drag India to international negotiation platform earlier next week. The changes will permit India to levy the auction of Indian resources, even if both buyer and seller are overseas and the investment is concluded in a foreign country, and has left companies facing projection of massive invoices they had not estimated.

Finance Minister stated that no tax related issues that are more than six years old will be reopened under the jurisdiction expected to be approved in the coming weeks and assured “transparent” deliberations with firms that object to the decision. A United States Treasury Secretary Tim Geithner informed his Indian counterpart later in the week that United States industries are concerned about alterations in India’s excise related rules and that they had diminished enthusiasm about India’s investment climate.” So these investments related issues have made India lucrative destination to put money.

Youth Awareness on Finance

Posted by banker on April 24, 2012

Youth in India are less concern and aware about financial aspects: A report from HDFC life

India is growing like anything and so the population of India. India is known for the innovative brain and has set many new trends in almost every field of the innovation. Indian youth are the winners and are responsible for giving new identity to the country in the global scenario, whether it’s a sports, games, passionate games like cricket, software technology, ecommerce, internet business and much more. Youths are simple the new identity to the Indian dominion. However in spite of having the awareness in all the factors of life and living aid along with the innovation to produce the new technology, youth in Indian scenario are not much aware of the financial aspect and which is quite a critical issue.

As per the report from the HDFC Life, the young Indians which lies in the age group of 20 to 30 years which are mainly working in the software and marketing domains are low in the financial awareness and planning. HDFC recently have conducted a market analysis and research with the firm called ValueNotes have found out the dramatic and drastic results which has proven the youth in India are not only less aware but they are also least interested and even concern about the financial aspects.

However this report does not point the complete absence of the financial planning, but it proves that even youth who wants to be associated to the financial planning are not aligned with the proper financial goal. This result is due to poor awareness about the financial events and which makes the youth direction less about their financial goals and merits.

On the scale of 0 to 100, only 25.8 youth are aware about some of the aspect and their financial goals and which seems extremely poor when you rate even the 25.8 percent in terms of financial knowledge and awareness about the financial products. Out of 100, 55.2 percent at least have idea about the financial and investment products, however they still are not confident and aware which event and external forces can provide benefit to the financial products and how these schemes works for their welfare.

Study also have proven that it is important for these youth to understand the importance and the role of financial aspect in life, as when responsibilities grows on the shoulder, burdens like health expenses, financial crises, home loans, conditions after retirement and many more thing breaks the leg and at that time only the proper planned investment can support you to sustain the life with dignity.

Investment in Property – The Right Time to Consider

Posted by banker on April 23, 2012

Wish to invest in property? At present is the right time

The Delhi residential home market observed utilizations of 4,182 homes in the initial quarter of the year 2012 against 3,370 homes in the ending quarter of the year 2011. An approximate 25 housing projects were started in the initial quarter of 2012 while ten residential schemes covering 1,459 homes across different areas were inhibited from current stock as they were fully sold out, as per the quarterly survey by Jones Lang LaSalle. Many factors have lately alleviated the adversities faced by homebuyers or people who want to invest in property earlier. Any interruption on the end of main-users in obtaining a home shall only be at a greater cost nowadays. But, times are changing for people who want to invest in property and there are many factors that would reduce the concerns faced previously while investing in a property.

The RBI (Reserve Bank of India) has reduced the repo rate by 0.50 per cent letting invest in property option the method to make home loans discounted. To let people invest in property, banks and housing finance firms are expected to cut the lending rates soon. One bank has by now given to new-price to its present invest in property loan at a cheaper interest rate. Within this choice, mortgagors can switch to the current floating rate i.e. at a concession to the key lending rate. The mortgagor who wants to invest in property has to shell out a one-time ‘switchover fee’ of two percent of the unresolved loan. Some banks have lowered their offering costs by 0.75 to 1.75 per cent points. The cost cuts shall be applicable to fresh borrowers.

With the labor, input and land costs rising, home prices are creeping upwards through all micro-areas. As per the industry sources, in view of price upsurges of the main key construction parameters, cement, steel, labor and bricks, there is an eighteen percent net rise in building costs over the previous couple of years. Furthermore, new projects, enhanced connectivity levels and structure development shall only up the increasing land costs each year. And to invest in property the State government too reviewed policy values for registration, which would only pressure on to the accommodation costs. All this denotes that any suspension on the part of main-users to come into the market will only be at a greater cost later. Also, the surge in the overall service tax prices from 12.5 percent to 15.18 per cent would increase the prices of manufacture for developers who want to invest in property.

Gold Investment in India

Posted by banker on April 23, 2012

Building up the wealth and making you entire life secure, heading up the normal expenses and to manage your investment is a tough job. This is quite a common scenario in the Indian average and working class group, where everyone likes to have a house of own, some amount of investment and has a peaceful life a head. People want to have a lavish life and to build an empire of their children in order to secure their life in their presence and after them. In the Indian finance scenario, there are many financial and investment schemes which have flooded the market, many of them are quite lucrative and also offer the good return of investment, however they are many where you moves to big losses.

Typically many people look forward to the fixed deposits, recurring account, saving account, life insurance policy, SIP and other schemes as the best option to invest on, however there is another types of investment which can return you better than anything else. Gold investment is quite lucrative and common in the Indian scenario. India had been the land of gold and it is also termed as the bird of gold in the 19^th and 20^th century. Gold has been and it is still the most lucrative element to invest on and with the scenario where the price of gold tripled in last 10 years, investing on gold is a smart decision.

Gold has always been the precious element since years and centuries and people have them in many forms. Many people have the gold in the form of jewelries which is a very common form, they do have them in the form of coins and also in the form of bars. Well but it is not like that you can only invest on gold physical form or can have them in the form of ornaments. Then how can you invest on gold in India other than investing on the physical state.

• Especially in Indian Scenario, investment on the physical state of gold is quite easy and hence many people opt for it, however you can also invest on the gold EFT which is a safer option to invest on gold and you do not directly invest on gold rather you invest on the price of it.
• Gold fund is also another lucrative gold investment option in India, where you invest on companies which do trading in gold investment.
• Investing in the gold mines is also a good option where you invest on the profit of gold and not directly on the gold price or as a physical asset.

Right now, gold price is quite stable and it is the best time to invest on direct and indirect investment on gold, if you are looking forward for the long term profit.

Infraspending

Posted by banker on April 23, 2012

India needs to rise infra spending

World economy is quite unstable these days, and it goes up and down almost on the daily basis. Indian economy largely depends on the US economy, However Indian business scenario is not completely depends on the US business, but still large part of outsourcing business comes from the US and other big markets from Europe and other countries. India needs to raised the infrastructure spending to ten percent of the total GDP in order to achieve and also to have a sustainable market scenario and to take the economic growth to the target of 9 percent in coming years.

In order to gain the sustainable market scenario and also the achieve the sustainable growth targets, it is important to invest in the infrastructure and this should be increase further to over ten percent of the GDP by year 2017. According to the Director of IDFC project limited, Pradeep Singh this is a crucial time and India should invest of the infrastructure to make our financial pillars strong enough to sustain better in the world economy and make a stable market conditions in Indian market. He said this in the presentation at the annual meet of Asian development bank.

India’s infrastructure spending is right now just 8 percent of the GDP-gross domestic product which is 1 percent less as compared to China, who spends 9 percent for the development of infrastructure. The country’s GDP was close to $ 1.4 trillion which was recorded at the end of march in year 2011. India has a long way to go if we talk about in terms of meeting the infrastructure requirement as compared to the countries in the world. According to the 12^th five year plan which is to be implement for year 2012 to 2017, USD 1 trillion investment is needed for the infrastructure sector to make India shining.

Of the total investment, private sector is expected to invest the lumpsum amount of USD 500 billion. Domestic funding source would not be enough to fulfill the need and hence total USD 425 billion would be needed more for the next five years to continue the infrastructure development.

Despite the most aggressive growth fact in last 5 years, India’s basic infrastructure stood 86^th in the global competition, according to the report from world economic forum in 2010. Well it is the time that government and private bodies should take some serious steps towards the development of better infrastructure to take the growth momentum faster as compared to other countries in the world.

Global economic indicators

Posted by banker on April 23, 2012

Global economic indicators clearly evidences that the world is under the economic crisis, where India is no exception.

India, the developing country has been affected awfully due to the weakened global economy. Global economic indicators put forth the terrible fact about the economic crawl at global level, with no exceptions. Even the United States of America, the largest and strongest economy of the world is facing a lot of struggles and hurdles. The United Kingdom has very recently experienced and announced the recession at the euro zone. China, the highly populated country with very strict political influence on the people is also experiencing the battle from the workers to increase their wages. Eventually, the country is under great pressure to enhance the appreciation of their currency, facing the issues associated with the congestion. In addition, several approvals and sanctions on the Middle East countries make the other countries shiver about the further hike in the oil prices, which surely spikes more pressure in the economy.

Global economic indicators clearly evidences the said mentioned, a few, global crisis likely to ruin the entire world, including India. Any global crisis and economic downfall, has an indirect impact on the borrowings. The availability of funds become stringent, which squeezes the investment. Moreover, even for any crucial project, borrowings are restricted, irrespective of the fact, whether the project is proposed by government or private sector.

In addition, the government is unable to proceed with the needed reformation due to political pressure from its alliances. Bringing the FDI, Foreign Direct Investment in India, Aviation industry, etc proposed by the parliament has frozen because of the gold feet developed by the ruling party and its alliances. However, not even the citizens of India appreciate the FDI in retail. The hands are tied not to take any fruitful step to move the economy forward to reap the fruits of reducing the inflation, enhanced cost of life and improving the standard of life. However, it is just not possible to rely on the ruling party, as the reforms proposed by them may further decline the economy and put the people under great struggle.

Owing to these global economic indicators, the next aspect affecting the Indian economy and causing inflation is obviously the foreign exchange. It is only for the past few days that Indian rupee started getting recovery from the accidental and injurious decline in the value of rupee against the US dollars. It was a very tough period, which adversely and abruptly affected all over the country with no single exception. Very fortunately, rupee started gaining from the accidental fall in its value. However, foreign exchange is always a major culprit causing damage to the Indian economy and the prices are always fluctuating.

Fiscal Deficit

Posted by banker on April 23, 2012

Lately, a rating agency has downgraded the India’s current and future economy and economic growth from bad position to worst. However, the rating and report was not a big surprise as the macro and micro economic indicators were not functioning well in the past couple of years, putting the country into great trouble. Following are the two major aspects that are more likely to ruin the economy of the country leaving an unexpected level of damages.

India, being a country with developing economy has not always been fiscally practical and cautious to cut down the costs of excessive needs. Rather, it never cared to incur some hefty expenses for the excess needs. Paying hefty price has almost become a common practice, which is still being followed now, with absolutely no botheration about the fiscal deficit.

The target for the current year’s fiscal deficit is 4.6 percent on the GDP, mainly because of the association with the global economic conditions and revelations. In spite of the fact that oil prices have been hiked by 13 percent across the globe, the ruling government and its coalition in India is unable to pass the hike to the people because of the result of the state elections held before a couple of month. Due to the disastrous results of the state elections, no reformatory ardour was curbed. The government, keen on the 2014 elections is hesitant to hike the oil price. Moreover, the association with the coalition is quite shaky and the Government is likely to play in the safe hands until the completion of the 2014 general elections, because the coalitions confessed their dislike towards the oil price hike. This complex situation undoubtedly aggravates the fiscal deficit and fiscal credibility of India, by dramatically increasing the borrowing costs and other related expenses.

While the government is hesitant about the fiscal credibility and deficit at the current economic condition, it would be very horrible to pass the oil price hike again on the heads of the people. In the past couple of years, oil and other petroleum products price were hiked at least by 8 – 10 times in very short intervals. Eventually, when compared with price of oil before two years, there was dramatic increase in total cost, account at an approximate of 40 percent increase. Already, common people are suffering a lot with the hike the oil prices and inflation. It would be a very bad idea to implement and pass the hike to the people. Even though government is cautious about maintaining their political state of affairs and need a cordial relationship with coalitions, it has benefitted the common people. However, as every coin has two sides, it is weakening the weakened fiscal deficit.

New Delhi Airport

Posted by banker on April 22, 2012

New Delhi Airport – To be the world’s most expensive airport

New Delhi Airport is more likely to get the position of the world’s most expensive airports. Since its operator, the GMR infrastructure ltd allowed to increase the charges, the airport charges are more likely to get hiked by the mid of May, 2012. Just before a week, New Delhi Airport, the Indira Gandhi International Airport was just rewarded the world’s most improved airport in the year 2012. The airport in the capital city is rated the best airport in India, followed by Bangalore and Hyderabad at the nest two places.

The proposal for the same made by the GMR was approved by the authoritative regulatory body, to hike the airport charges. The major reason behind the increase in the charge is insufficiency of funds to cover the maintenance cost.

Cost of air ticket for international flights departed / operated from the New Delhi airport is expected to get hiked by an approximate for Rs.500/- per ticket and the domestic air ticket is like to get hiked by around Rs.290 per ticket. Since New Delhi Airport is the major hub for many local and international flights operating to almost all cities in India and across the globe, the hike in the airport charges would surely increase the overall revenue get increased at least by 20 percent to 30 percent.

The revised charges of the New Delhi Airport services also have its impact in the landing fee and parking fee of the aircraft. In addition, the airport is also planned to raise the development fee. This move made by the GMR looks unlikely and may discourage and daunts the foreign aircrafts operating to and from the Capital city of India.

The impact of the hike in the airport charges not only will affect the travellers, airline service providers, but also the economy of the country. It can weaken and adversely affect the ruined and destabilized economy of India, because the aviation industry in India is already injured. The new and raised charges to be levied by the Capital city of India are like to hurt it more and move it from intensive care to critical care.

In addition, on cost perception, this move on the New Delhi Airport affects the cost conscious people, struggling to maintain their lifestyle with elevated cost of list, battling all over to defeat the inflation, etc. Eventually, people who are regular flyers, who could not afford for the hike in the airport charges should look for the option of cheap mode of transport, the only possibility is trains.

Solar Hot Water for Green environment

Posted by banker on April 4, 2012

In these days, a lot of homeowners are environment conscious and also they look forward for some ways to save money to protect their environment. One possible way that helps in reducing their expense towards maintaining green environments is using natural and renewable resources through using solar hot water.

Electric heaters are highly expensive to operate. Similarly, a large variety of photovoltaic panels are required to heat up the drinking liquid using photovoltaic electrical power. The source of energy from the sun is a good alternate that functions by accumulation of heat directly from the sun. It is highly productive and cheaper way of heating than the other.

The panels of the heating system utilize the direct heat emitted by sun as a source of energy. The heater panels are similar to classic astral panels and they are installed in direct natural light, particularly on roofs.

There are two types of heating systems such as active and passive systems. These two types are categorised into sub divisions of heating systems serving different purposes. Two types of active systems include direct circulation and indirect circulation system and two types of passive systems include integral collection storage system and thermosyphon systems.

The direct circulation heaters works through pumps that distributes the liquid right through the home and into all required rooms. The indirect circulation heater functions alternatively that uses the heat energy and the heat exchanger for heating the fluids before they are distributed.

Indirect heaters are built with additional components that facilitate to operate even in cold climate and freezing temperature. However, direct systems are designed to use with climate where we can stay comfortably all through the year.

The passive astral heater is relatively cheaper than the active heaters and it is highly durable. However, it is no so effective over the other. Integral collection storage passive heaters perform with great efficiency in places where normal climatic conditions prevail for a long term. They are ideal for homes that require significant amount of heated fluids throughout day and night.

Thermosyphon passive systems are designed to facilitate the fluids to flow as rise of warm liquids and fall of cold fluids. However, it is limited to certain type of homes based on the roof designs and unfortunately; it is so effectively for everyone who has installed the system.

Solar hot water systems are beneficial in terms of maintaining green environment and cost effective method.

History of Gold Price

Posted by banker on April 2, 2012

Gold, the precious yellow metal, has made the people go crazy behind it. Gold made a revolution in the investment industry, where people fall for investing money in various forms of gold, than investing in the safest and traditional investment forms like bank deposits, post office saving scheme, bonds and certificates. The demand for gold soared because the outlook on purchasing gold is changed across the country. Gold is no more considered a metal to beautify or boast the status. More or less it is considered a best choice of investment. Unexpectedly, gold price has elevated to a great extent, reaching the unimaginable increase in the price. Specifically, the price of gold is elevated and increased almost thrice the price in the past 5 – 6 years. Here is the chart that depicts the increase in the gold price.

The list depicts the price of 10 grams of gold of the past 96 years.

Click on the image to get the larger view.

Until 2005, the increase in the price of gold is very mediocre and it starts elevating from the year 2006. The price of gold increased by 60% in the year 2011, when compared with the cost of gold in the year 2010. Current price of gold is around INR 28,000/-

Economy of India other blog of Financial Red India.