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| July 28, 2017 |
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Impact 
July 28th is celebrated as ‘World Nature Conservation Day’. The question is, why do we need to observe conversing our planet on days we’ve designated as ‘special’?
The answer is simple, yet scary. While we are busy earning an income and achieving our materialistic dreams, knowingly or unknowingly, we often encroach and abuse the Earth’s resources.
Global warming is a real threat.
And, we aren’t addressing this threat the way we should.
So, ‘World Nature Conservation Day’ is observed to create awareness about this cause. It is meant to remind us of the importance to adopt an eco-conscious, green lifestyle.
This year, some of India’s drought-prone regions are facing floods. So far, the Kutch and Saurashtra regions in Gujarat have received nearly 60% excess rain this season. Western Rajasthan has received over 100% excess rain. While some districts in the East Rajasthan region have recorded the highest rainfall ever. Such torrential rainfall is as bad as a drought and surely, it’s a side-effect of global warming.
Never mind.
Imagine discussing the impact of global warming seated in air conditioned offices, restaurants, and our favourite cafes offering us free Wi-Fi facility (but have us pay for water).
But let that not concern you, right?
Let’s discuss the impact of heavy rains on our pockets and monthly budgets (while some are busy pocketing more profits taking undue advantage of the situation).
Vegetable prices have shot up due to excess rains, and they are perhaps making a dent on our wallets.
Let’s blame nature’s system and our fate, too, for the rise in living expenses.
When Mother Nature showers blessings on us and we harvest a bumper crop, it is disrespectfully dumped because it won’t make us a profit. But, when the crop has suffered in some regions, we are happy to conveniently churn a windfall.
Political systems will ensure that farm loan waivers have a bright future.
Doubts and concerns of intellectual desk-jockeys can be easily addressed by throwing plausible reasons on their face. ‘Demand-supply mismatch’, ‘toll of natural calamity’, and so on…
Isn’t that the price we pay for being reluctant and probably discourteous to Mother Nature?
But, why discuss Nature? Let’s stick to the subject of economics.
Excess rains have made potatoes, onions, and tomatoes expensive. Currently, the prices of most vegetables are about 25% to 30% higher than what they cost a year ago. Vegetables have a weightage of about 6.0% in the Consumer Price Index (CPI)—a barometer of retail inflation.
A few experts believe, this temporary phenomenon won’t impact retail inflation, others predict the current hike in the prices will.
Mr DK Joshi, Chief Economist at Crisil, is of the view that, “vegetable prices tend to spike a number of times during the year. But, we expect retail inflation in July to be weak and not to cross 2 per cent.”
While, Mr Naresh Takkar, MD and Group CEO, ICRA expressed, “The prices of a number of food items such as pulses, vegetables, barring tomatoes and oils, remain weak on a seasonally adjusted basis so far in July. A reversal of the favourable base effect could lead to a sharp rise in food and headline inflation, and exceed 4 per cent during the second half of the fiscal.”
So far, the monsoon has been above normal and is expected to end the season in line with expectations. Kharif sowing has been 19% higher than last year. The sowing has improved this season across all important categories such as pulses, rice, and coarse grains among others. Critical water reservoirs have 100% storage capacity of the average storage in the last ten years. Besides vegetables, prices of other agro commodities are under control. This is a good sign for the Rabi crop.
Considering all these factors, it appears that, food inflation may remain under control and may not pose any threat to the growth prospects of the economy.
However, it remains to be seen how the RBI perceives all these developments.
Whether or not it lowers policy rates in the foreseeable future would largely depend on how the Monetary Policy Committee interprets the present growth-inflation situation.
RBI may strike a perfect balance in policymaking, but how about striking the ideal economic-environmental balance?
That’s the real cause of food inflation, isn’t it?
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Impact 
India’s social security system is one of the weakest in the world. This makes many elderly people in India dependable on the younger members of their family. Often, older individuals are left with no option but to work at an age at which they ideally shouldn’t work to make a living. Addressing this pressing issue is important. The good thing is the Government seems to have identified this problem.
However, the sad part is the solution it has offered is too basic and doesn’t serve the purpose.
Recently, the Finance Minister launched Pradhan Mantri Vaya Vandana Yojana (PMVVY). The scheme is being promoted as a ‘pension plan for elderly’, and is available for purchase through Life Insurance Corporation (LIC). You can buy the scheme online as well as offline. If you read the fine print, you would realise, this ‘Yojana’ is nothing more than a 10-year fixed deposit scheme.
PMVVY is available only to those who have attained the age of 60. The scheme has an option of paying either monthly, quarterly, half-yearly, or an annual pension. Depending on the option you choose, it will pay you the interest (termed as ‘pension’ in this case) at a rate ranging from 8.0% p.a. to 8.3% p.a. There’s a pension ceiling of Rs 60,000 per annum, per family. Effectively it means the maximum investment amount is capped at Rs 7.5 lakh. The minimum investment is set as Rs 1,44,578. To know more about PMVVY, please click here. However, it would be prudent to avoid investing in this scheme.
To know more about the product and Personal FN’s views, click here.
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Impact
With the effects of demonetisation continuing to unveil and bring crucial aspects of monetary management to light, many had questioned the Government's rationale to introduce Rs 2,000 notes.
And, rightly so.
After all, the whole purpose of discontinuing the high-value notes was to curb the circulation of black money and wealth being hoarded in private vaults. The Rs 2,000 note made it easier to perform high-value transactions.
Nearly 8 months on, it seems the introduction of Rs 2,000 notes was a stopgap arrangement. Indeed, it seems authorities are putting their trump card on the table slowly.
If you go to any ATM or a bank branch, there's definitely a shortage of pink notes. According to latest media reports, the RBI ceased to print Rs 2,000 notes about 5 months ago. At present, it has been supplying Rs 500 as high-value notes and Rs 2,000 notes are sourced only through recirculation within the system.
To read more about this story and Personal FN's views over it, please click here.
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Impact
Anil, a small-time retailer, was taken up with the recent stock market craze. Curious about all the hype, he too wanted to try his hand at investing.
He knew the risks involved and considered investing in less-volatile balanced funds. Recently, he had read that balanced funds were a good option to start with. However, there were so many balanced funds available for investment.
Which one should he choose?
Of course, he knew the importance of analysing performance over multiple periods, check risk ratios and all. But, Anil wanted an easy way out and decided to consult with his elder brother, Mukesh, who was a shrewd businessman and had a better knowledge of investments.
He directed Anil to check the mutual fund star ratings and to invest in 5-star rated funds. Anil, however, was expecting a recommendation. Abruptly, Mukesh suggested Reliance Regular Savings Fund - Balanced Option.
Happy with this information, Anil decided to check the star rating of this balanced fund. He was surprised to see that one mutual fund rating agency rated the scheme's regular plan 3-star, while the direct plan was rated 4-star. Another rating firm gave both the plans of the balanced fund a 4-star rating. On further research, a well-known credit rating firm gave the fund a 3-star.
To read more about this story and Personal FN's views over it, please click here.
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Impact
As you know, Aadhaar is set to become your new identity in this digital world. So right from using mobile phone services to filing your income tax returns, you need to quote your Aadhaar number and confirm your identity.
But carrying around an Aadhaar card is a tedious task, and it’s a bit risky too. Unique Identification Authority Of India (UIDAI) has come up with a smart solution...
It recently launched a mobile app ‘mAadhaar’ that will enable you to carry Aadhaar in your cellphone. Besides this, ‘mAadhaar’ will save you from the hassle of producing your demographic information in the manual form when needed. A mobile app will do that job for you now. The app will also provide you with a facility to lock and unlock your biometric details. This is an added security measure.
To know how the app wil work, click here. |
7 Ways To Verify Your Income Tax Returns
Why You Should Begin Tax Planning Early
How Working Women Should Manage Their Personal Finances
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The Securities and Exchange Board of India (SEBI) recently questioned the practice of allowing instant redemptions from the liquid funds. A few mutual funds were allowing instant withdrawals of upto Rs 2 lakh a day per investor through IMPS (Immediate Payment Service). SEBI has advised mutual funds to check the preparedness of the systems and liquidity management processes before making it a practice.
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Velocity Of Money: The velocity of money is the rate at which money is exchanged from one transaction to another and how much a unit of currency is used in a given period of time. Velocity of money is usually measured as a ratio of GNP to a country's total supply of money.
(Source: Investopedia)
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Quote :“All intelligent investing is value investing -- acquiring more that you are paying for. You must value the business in order to value the stock.” - Charlie Munger
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