Some logical thinking on Diesel Cars, however hopes vanish…

When I started writing, I was excited that finally there was a possibility that the Govt. was thinking logically and will try to bring in a way to ensure that the subsidy given for Diesel is not misused by the passenger car segment. However by the time I am finishing this post the honourable FM has issued statement that there is no proposal to either increase the excise duty for Diesel Cars or to price diesel differently for passenger cars.
It is surprising that passenger car segment is the 2nd largest consumer of subsidised Diesel and still Govt. is not taking any steps to set right this loot.
Govt. has been always talking about the financial drain resulting out of subsidising Diesel.

Question arises, why subsidise Diesel in the first place?
Primarily the transport sector and the agriculture sector use Diesel as fuel for their trucks & pump sets. Logic behind subsidy was to ensure that cost for these sector is to be kept low to ensure that the end costs of their service/product is affordable to public.
This logic has ensured that we continue to subside all Diesel sales even though today diesel has a much wider usage like in passenger cars, in gen-sets powering the posh houses, commercial complexes & offices. Today at least half of all diesel sales is towards these non-core usage. Given the rising economy and affordability levels, more people are buying gen-sets & diesel cars thus driving up the demand and with it the subsidy burden.

What’s wrong in subsiding diesel for  Cars?
Passenger Cars are personal modes of transport and are a luxury. Further no poor buys cars, most car owners have decent income.
It is wrong for the Govt. to subsidy private costs.

So what can be done?
1. Simplest wish would be to ban Diesel cars – it is easier said than done. some people will even argue about the mileage efficiency of diesel cars, job losses if car manufacturers are told to stop production of diesel cars.
2. Differential Pricing of Diesel for Cars – Good Idea, but given our Countrymen’s efficiency in corruption, we will end-up promoting a new corruption industry.
3. Increase the Excise Duty for Diesel cars – Very Good Idea. But what happens to existing Diesel Cars? Also the Excise Duty amount to cover the subsidy cost for a normal usage of the car over a period of 5years will increase the cost of the car by a substantial amount.
4. Increase the Road Tax for Diesel cars – I recommend this idea. Collect additional road tax in proportion to the Cubic Capacity of the Engine. Make people pay yearly or once every 2-3years.
My suggestion is Rs.10 for every CC of the engine.
During registration collect additional “diesel road tax” for 2year period and then require the car owner to pay every alternate year.
Yes, this will increase the administrative expenses in collecting the tax. but this will ensure that existing diesel car population is also covered and with the advancement in technology Govt. can provide online payment option which will ensure smooth & easy payment option for car owners.
In case of tourist vehicles, they are anyway required to visit RTO offices every year for a FC (fitness certificate), they can be made to pay at that time.

But why are the politicians not interested in doing this?
1. Most politicians own high-end cars that run on diesel. They are just trying to keep their running cost down.
2. This change will pinch the rich & powerful, so they don’t want it.
3. Car Manufacturers see that this will cause a fall in sales.
3. Who cares about poor and improving the public transport.

Probably only when we think as a nation and not individually will such laws be implemented in India.

I hope some State Government will take this initiative and not wait for Central Government to do it.

Or do we need Supreme Court to step in this issue as well…

Posted in Happenings in India, Uncategorized, ViewPoint | Tagged , , | Leave a comment

How US & Europe are robbing Libya

I simply couldn’t resist posting this article that I received as a forward mail. It just shows how towards world works.
Western World is on shaky ground and they are doing all they can to ensure they continue to rule the world.

Read On…

Human slavery never ends, it is reinvented in various guises by the capitalistic ecconomies of the world for self-sustenance!
The objective of the war against Libya is not just its oil reserves (now estimated at 60 billion barrels), which are the greatest in Africa and whose extraction costs are among the lowest in the world, nor the natural gas reserves of which are estimated at about 1,500 billion cubic meters. In the crosshairs of “willing” of the operation “Unified Protector” there are sovereign wealth funds, capital that the Libyan state has invested abroad.
The Libyan Investment Authority (LIA) manages sovereign wealth funds estimated at about $70 billion US, rising to more than $150 billion if you include foreign investments of the Central Bank and other bodies. But it might be more. Even if they are lower than those of Saudi Arabia or Kuwait, Libyan sovereign wealth funds have been characterized by their rapid growth. When LIA was established in 2006, it had $40 billion at its disposal. In just five years, LIA has invested over one hundred companies in North Africa, Asia, Europe, the US and South America: holding, banking, real estate, industries, oil companies and others.
In Italy, the main Libyan investments are those in UniCredit Bank (of which LIA and the Libyan Central Bank hold 7.5 percent), Finmeccanica (2 percent) and ENI (1 percent), these and other investments (including 7.5 percent of the Juventus Football Club) have a significance not as much economically (they amount to some $5.4 billion) as politically.
Libya, after Washington removed it from the blacklist of “rogue states,” has sought to carve out a space at the international level focusing on “diplomacy of sovereign wealth funds.” Once the US and the EU lifted the embargo in 2004 and the big oil companies returned to the country, Tripoli was able to maintain a trade surplus of about $30 billion per year which was used largely to make foreign investments. The management of sovereign funds has however created a new mechanism of power and corruption in the hands of ministers and senior officials, which probably in part escaped the control of Gadhafi himself: This is confirmed by the fact that, in 2009, he proposed that the 30 billion in oil revenues go “directly to the Libyan people.” This aggravated the fractures within the Libyan government.
US and European ruling circles focused on these funds, so that before carrying out a military attack on Libya to get their hands on its energy wealth, they took over the Libyan sovereign wealth funds. Facilitating this operation is the representative of the Libyan Investment Authority, Mohamed Layas himself: as revealed in a cable published by WikiLeaks. On January 20 Layas informed the US ambassador in Tripoli that LIA had deposited $32 billion in US banks. Five weeks later, on February 28, the US Treasury “froze” these accounts. According to official statements, this is “the largest sum ever blocked in the United States,” which Washington held “in trust for the future of Libya.” It will in fact serve as an injection of capital into the US economy, which is more and more in debt. A few days later, the EU “froze” around 45 billion Euros of Libyan funds.
The assault on the Libyan sovereign wealth funds will have a particularly strong impact in Africa. There, the Libyan Arab African Investment Company had invested in over 25 countries, 22 of them in sub-Saharan Africa, and was planning to increase the investments over the next five years, especially in mining, manufacturing, tourism and telecommunications. The Libyan investments have been crucial in the implementation of the first telecommunications satellite Rascom (Regional African Satellite Communications Organization), which entered into orbit in August 2010, allowing African countries to begin to become independent from the US and European satellite networks, with an annual savings of hundreds of millions of dollars.
Even more important were the Libyan investment in the implementation of three financial institutions launched by the African Union: the African Investment Bank, based in Tripoli, the African Monetary Fund, based in Yaoundé (Cameroon), the African Central Bank, with Based in Abuja (Nigeria). The development of these bodies would enable African countries to escape the control of the World Bank and International Monetary Fund, tools of neo-colonial domination, and would mark the end of the CFA franc, the currency that 14 former French colonies are forced to use. Freezing Libyan funds deals a strong blow to the entire project. The weapons used by “the willing” are not only those in the military action called “Unified Protector.”
Posted in ViewPoint | Tagged , , | Leave a comment

Interest Rates of Savings A/c

RBI has made 2 important announcements in the past 10days – the recent being increasing the interest rates on Savings Account from 3.5% to 4.0%. This is definitely a good news for the a/c holders, esp. people who maintain high balances. This increase comes after almost 2 decade.

The 1st announcement was release of a discussion paper on whether to free the saving a/c interest rate. Freeing of the interest rate payable on Saving a/c means each bank can decide what interest rate it wants to pay, typically like the FD interest rates which are decided by the individual banks (though they remain in the narrow band).

So what happens if the interest rate on Savings A/c is deregulated (freed)?
1st – PSU banks expect that this will lead to Pvt. banks increasing the rates to unsustainable levels resulting in migration of a/cs from PSU banks.
2nd – It will lead to increase in the cost of funds for the banks thereby putting pressure on the interest margins.
3rd – From Depositor’s perspective, it means higher interest rate, though it is still negative in real returns it is better than before

4th – It will also lead to banks pricing different products differently and being able to attract different category of customers. Like providing a pure internet based bank a/c (like ICICI’s B2 a/c) with higher interest rates, or providing a No frills a/c with no cheque book but higher interest rates. These will help in bring more customers.
Today the banks are not able to offer this kind of incentive to the customer and may be losing out in gaining customers and balance.

Possibly higher SB A/c interest rates will also result is some customers maintaining higher balances in SB A/c and not opening FD, which in turn will be good for the bank’s margins.

Read RBI’s discussion paper in this link and send your comments (either by commenting on this post or directly to RBI)

Posted in For the Future, Happenings in India | Tagged | 1 Comment

Commission Reports on attacks on Church in Bangalore

Every minority group and “eminent personality” have trashed the commission report on attacks on Churches in Bangalore where the commission has said Hindu Groups are not to be blamed.
Every group has said this report to be politically motivated to protect the Hindu Groups.

One fact I do not understand is – “why only reports that say Hindu Groups are not guilty are claimed to be false & biased?” When similar reports are given for so-called minority groups they say it upholds justice. Rubbish…

In our country, Hindus are the actual minorities. Muslims & Christians get to do whatever they want. they can construct mosques & churches wherever they want, they can convert as many people they want, they can buy property wherever they want,  they can speak out against Hindus & Indian Traditions, they can paint Hindu Gods as they like… but if any of these is done by Hindus – it is fault… Even protest by Hindus against unjust favourism towards Muslims & Christians is deemed as anti-minority…

It’s time, general people stand-up against such irrational policies.

All these people who shout that minority rights are not protected in India must visit other countries – the Gulf Nations & the Christian Nations of the west and see how they treat minority religions. Nowhere in the world, other religions are pampered like in India.

Posted in Happenings in India, ViewPoint | Tagged , , | Leave a comment

More Trains in India?

Indian Railways now runs around 10000 Passenger Trains every day. Plans to increase the number of trains has resulted in an unexpected change in Indian Railways.

Currently the Passenger Train Numbers are 4-digit numbers and this does not allow Railways to introduce new trains. So from 20th December 2010, the Train Numbers have been converted to 5-digit numbers.

The transition has been made smooth by a simple logic – All existing scheduled & regular running express, mail, superfast trains will have the new train number by prefixing ONE (1) to their existing number.

Special trains will have the new number by prefixing ZERO (0) to their existing number.

Furthur, passenger trains & sub-urban trains will also be renumbered to adhere to the new 5-digit system.

Press release on Southern Railway can be read here.

Posted in For Info/ General, For the Future | Tagged , | Leave a comment

Government, Compensate because I will not.

We regularly hear politicians & activists demanding government give “adequate” compensation to people for a calamity or accident or mishap.  But if we ask these people how much they have helped the improvished/affected person, we will not receive any reply. Reason – they would have never helped the affected person either financially or even through support.

Most people talk loundly on stages, press meets, TV shows about the pathetic conditions of the affected people and demand Government action, but they would have hardly moved their fingers to help the affected people. All this drama would be to gain publicity rather than with the good intention of helping the affected.

How many politicians have contributed from their personal wealth or even party’s coffers when any calamity stikes?

I am not saying that they should not ask Government to initiate action and help the affected and compensate the losses. But the people must first contribute themselves before asking the government to initiate action. Government is not an endless supply of funds & resources. Government is more like a facilitator & enabler for the people to get what they need.

Hope we realise this before we just sit in AC rooms and harp about Government not doing anything.

It is surprising that people fall for such acts. Just think – in AP due to rain people’s crops have been destroyed and villagers are starving, what are politicians doing – going on 3 day hunger strike. A person who has filed multi-crore advance tax can do more esp. when he claims to be in public service and live only for the people. He should have shown the way to others & people in power by being the 1st to help. That would have shown that he is geniunely interested in people’s welfare.

Disgrace. But do politicians & media care about it…

Posted in Happenings in India, ViewPoint | Tagged , , , | Leave a comment

Instant Money Transfer using Mobile

A new service was introduced by National Payments Corporation of India (NPCI) last week – IMPS (Interbank Mobile Payment Service). IMPS enables instant fund transfer from one bank account to another across the country almost instantly.
Currently this service is provided by 7 banks – SBI, ICICI Bank, HDFC Bank, Yes Bank, Bank of India, Axis Bank & Union Bank of India.

So how do I use this service?
STEP 1: Register for the service with your bank. (you will need to have downloaded the mobile banking application of the bank in your mobile). Union Bank allows this service through SMS also.
Bank will give a MMID (a 7 digit number) for your mobile-account combination.  This is your unique ID for you to send/receive money.
STEP 2: Get the mobile no & MMID of the beneficiary
STEP 3: Use the your bank’s mobile banking application to send the IMPS – specify the mobile number & MMID of the beneficiary and the amount to be transferred.

Funds are transferred instantaneously. I received funds from my friend in 15 mins – from ICICI Bank to Axis Bank.

Presently the service is provided free of cost, probably to increase the awareness, later banks may choose to charge for the service. Currently only the cost of connecting to the bank from your mobile is the only charge.

How to get MMID – different banks have different process of obtaining MMID. Axis Bank in fact sent MMID to the registered mobile number for the account holders. A good move to help account holders who want to use this service to receive funds.

It would be better when more banks join this service and also when banks allow this service through SMS since it will make this service universal even to people with lower end mobile phones.

Transfer Limits
Currently a per day limit of Rs.50,000/- is set for encrypted transaction and Rs.1,000/- for unencrypted transaction.
Need to confirm whether this is only sending limit or receiving limit also.

I see an opportunity in integrating this payment mode with online payment gateway wherein a person can make payment through this service for online shopping. So who will be providing this feature first…

Posted in Happenings in India | Tagged , , , | Leave a comment

2G Scam JPC Probe

2G Scam is the biggest scam to hit Indians.  CAG has already submitted it’s report wherein it has pointed irregularities by A.Raja as the Minister and the DoT in spectrum allocation to companies in 2007/08.

Opposition has been demanding a JPC probe on 2G Scam and has held Parliament to randsom by not allowing it to function for the 12th straight day.  It is surprising that the opposition is pressing for a JPC probe given that past JPC probe findings/recommendations have not been implemented or been implemented as a watered down version.
Given this background, Government & Congress must not ‘fear’ a JPC probe, but something is stopping them from allowing it.

There are many questions in the public’s mind:
1) What is the impact of a JPC probe? Can it indict any person and recommend punishment?
2) Can the recommendations of a JPC probe be disputed in Court of Law?
3) is JPC probe ranked higher than a Supreme Court monitored probe and suit?

Questions for which public do not have an answer. a good reference /backgrounder to JPC is this article in MSN.

This article in BUSINESS LINE describes a good way forward in the probe.

I think most Indians will want to see what happens in the end – will the guilty be ever punished? Will Government take the bold decision to take back the spectrum of the fraudulent companies?

If Government is serious on delivering Justice it should work speedily on this case and punish the guilty.

Opposition would do better if he ensures that this scam remains in the constant public view and also the progress is regularly reported by the investigating agencies, authorities.

When an agency like CAG has probed and found that policies, rules have been tampered with to benefit a few, then I think it is high time the guilty are punished. If nothing happens then probably we should punish CAG for the wrong-findings…

Probably too many people have been benefited from the scam that they are not interested in bringing the guilty to justice

Posted in Happenings in India | Tagged , , , | Leave a comment

You cannot invest in MF for your wife

From 15th November 2010, MF invests can be made by self-issued cheque only. You cannot invest using your friend’s, relative’s or spouse’s issued cheque. All investments with third-party cheques will be rejected.

Exceptions to this:
1. Investor for Minors – Up to Rs.50,000/- by the Parent/ Grand Parent/ Related Person
2. Employer on behalf of Employees for SIP investments through Payroll deductions
3. Payments by Custodians on behalf of FIIs or clients.

Such applications will require PAN & KYC for the person/entity making the payment & also declaration for the relationship with the 1st holder.

In case of Payment by Demand Drafts, a certificate from banker about the a/c holder’s name & a/c no. debited for issue of the DD is to be submitted. This will virtually ensure that DDs are not used for investing in MF considering it is a pain to get the certificate from the bank (may also incur additional charges). DDs taken using cash payment will not be accepted since the banker’s certificate cannot be submitted for this case.

New rules now provide an option to register multiple bank a/cs to a folio so that cheque can be issued from any a/c.

Further, in case the cheque from other a/c is accepted if it has the investor’s name printed on it or if a copy of the statement attested by bank manager is a also submitted. Very cumbersome process in the 2nd case (for most investors with a/cs in Nationalised Banks).

Few questions: (UPDATE: 29/NOV – I got replies to my queries to CAMS)
1. There are 3 investors in the application. Can any one issue the cheque or only the 1st applicant/holder’s cheque is allowed?
REPLY BY CAMS: 1st applicant cheque is allowed. Cheque/Bank Statement/Bank Passbook should contain the name of the First Holder in MF Application.
2. If I have a joint a/c (Either or surviror)  with my wife and my wife issues the cheque from the same a/c for investment in my name, is that allowed?
REPLY BY CAMS: Cheque/Bank Statement/Bank Passbook should contain the name of the First Holder in MF Application.
3. Why cannot a member of the family issue cheque for other members of the family? Like Husband issuing cheque for wife or children?
REPLY BY CAMS: AMFI circular says the cheque should be issued from the First Account Holder only.
4.  I issue a cheque wherein my name is not printed on the cheque leaf. However I sign the cheque (same signature as in the application form). Why do I need Banker’s attestation? If the cheque is passed by the bank, it proves that the cheque leaf belongs to my a/c.
REPLY BY CAMS: Before depositing the cheque itself, we need to ensure that the cheque pertains to the First Holder only. Latest Bank Statement/Passbook with A/c Holder’s Name and Bak Account Number from where cheque is issued can be submitted as a proof.

Posted in For Info/ General | Tagged , | Leave a comment

KYC Mandatory for all investors in Mutual Fund

With effect from 1st January 2011, KYC will be mandatory for all investors irrespective of amount of investment.

In case of investment for a minor, Guardian/Parent who is investing on behalf of the minor must be KYC complaint.

Impact of this move:
1. Even small investors have to now register for KYC.
2. Address updates have to be made in KYC for update in the Folios. However, contact details (phone & email) have to be separately updated with each AMC/for each folio.

UPDATE:

Q> KYC for investments after 1st Jan 2011 – what happens to existing SIPs? Do they also require KYCs to continue investment?
Reply> KYC will be mandatory irrespective of investment amount for Individuals and Minors for only those SIPs registered on or after 01-Jan-2011. It is already mandatory for all other investors irrespective of invetsment amount.
Posted in For Info/ General | Tagged , | Leave a comment