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| May 22, 2015 |
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| Weekly Facts | | | Close | Change | %Change | | S&P BSE Sensex* | 27,957.50 | 633.50 | 2.32% | | Re/US $ | 63.60 | 0.05 | 0.08% | | Gold Rs/10g | 27,480.00 | 75.00 | 0.27% | | Crude ($/barrel) | 63.66 | -2.17 | -3.30% | | F.D. Rates (1-Yr) | 7.00% - 8.50% | Weekly changes as on May 21, 2015
*BSE Sensex as on May 22, 2015 |
Impact 
Indians seem to be the most confident nationals across the globe. As per the findings of Nielsen Global Survey of Consumer Confidence and Spending Intentions, India's consumer confidence index was the highest among that of 60 countries surveyed, in the first quarter of 2015. With this, India left behind other developing countries such as Indonesia and Philippines.
As reported by the Economic Times dated May 21, 2015; given below are the key findings of Nielsen survey...
- About 83% of the respondents were optimistic about job prospects
- Nearly 65% of the polled respondents believed that it has been a good time to buy new things they need and want
- Around 79% of surveyed people felt that they need to change their spending habits to save on expenses
- Most of the urban respondents suggested that their finances were sound
- While Job security (22%) and striking the balance between work and personal life (11%) was a challenge for many people surveyed
PersonalFN believes high confidence of Indian consumers may be an optimistic reaction to the reform agenda of the 1-Year old NDA Government. PersonalFN is of the view that, while it is a good thing to be optimistic, you need to take a prudent and cautious approach to your finances. Before you spend, you must think about saving money. If you earn a lot but spend a lot too; your savings may suffer and satisfying financial goals may become difficult for you.
PersonalFN believes you should chalk out a personalised financial plan to meet your financial goals that may arise in future. A personalised financial plan touches almost all aspects of personal finance such as income, expenses, investments and insurance among others. It considers your preferences, current financial circumstances and your risk appetite, giving you a complete roadmap to achieving financial goals.
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Impact
Continuing with its thrust on legislative reforms, the Government now wants to amend the Consumer Protection Act 1986. Last year, the Government had expressed its wish to put in place a new legal framework for protecting consumers from unjust trade practices. Recently, Finance Minister and Consumer Affairs Minister discussed the proposed amendments. It is expected that, necessary actions may be taken soon to amend the said act.
How consumers may benefit?
- If Consumer Protection Act gets amended indeed, it may become possible to initiate inquiries without a complaint against fraudsters, deceivers who fool a number of people, under class action suits
- Filing complaints online may become possible for consumers
- Consumer may be represented by non-lawyers as well
- Central Consumer Protection Authority would be established which would be headed by a commissioner having a rank of secretary in the Government of India
- The aforesaid authority would be empowered to order, 'recall', 'refund' or 'return' of products or services in dispute
- E-commerce and Online transactions would also be brought under the purview of Consumer Protection Act
- Giving justice to victims of false advertisements may also become easy
The proposed amendments are expected to lessen the workload of consumer courts. Settling and resolving disputes may become easy as well. PersonalFN is of the view that, the proposed amendments may provide more powers to the consumer. Besides, formation of Central Consumer Protection Authority may make it possible to deliver justice faster. Consumer satisfaction and protection is important for long term development of businesses in India.
Do you think the proposed amendments would deter sellers from cheating consumers? Share your views here.
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Impact
If you have gold lying idle in your vaults or in bank lockers, you may be keen to monetise it. After all, idle gold doesn't earn anything. While its value may increase over time if gold prices rise, you also bear a holding cost in the form of locker rent. Thus as a measure to put the idle gold to effective use, the Government introduced Gold Monetisation Scheme (GMS) vide its proposal in the union budget 2015-16.
How will the Scheme work?
Recently, the Government released the draft outline for Gold Monetisation Scheme (GMS).
As per the draft, anybody with minimum holdings of 30 grams of gold may participate in the Scheme. To make the Scheme attractive, it has been proposed that the depositor may receive tax exemption on interest earns on the gold deposit account and the capital gains thereon.
GMS would be primarily run by Banks and would have a 3-stage process to mobilise idle gold.
To read more about this news and PersonalFN's views over it, please click here.
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Impact
Asset quality of banks affects the entire domestic economy as higher proportion of bad assets may have undesired spill over effects. As you may be aware, banks in India have been facing a trouble in recovering loans, especially from corporate entities. In a press conference held after the Central Board meeting of Reserve Bank of India (RBI) concluded lately, the RBI Governor cautioned banks that the worst on the Non-Performing Asset (NPA) front may not be over yet. Gross NPAs went up to 4.45% in March 2015 as against 4.1% recorded in March 2014. Nevertheless, banks are expected to get leverage soon; here's why...
The Benami Transactions (Prohibition) Amendment Bill, which is pending for parliamentary approvals, if gets enacted, would provide banks some legal course against wilful defaulters. It has been observed that some corporate as well as other borrowers divert borrowed funds to creating benami properties.
A benami property is defined as, "where a property is transferred to, or is held by, a person for a consideration provided, or paid by, another person." Moreover, property refers to 'any' property which is the subject matter of a benami transaction.
To read more about this news and PersonalFN's views over it, please click here.
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- You will have to spend more on eat outs, telephone calls, air travels and hotel stays from June 01, 2015. And that's not all; many more services are going to cost you more. Reason? Central Board of Direct Taxes (CBDT) has notified that the rate of service tax will be revised upwards to 14% from the current 12.36%. The announcement was made in Budget 2015-16.
It is said that, hike in service tax may help in smooth rollout of Goods and Services Tax (GST). With this, Government may garner Rs 2.09 lakh crore in 2015-16. It is estimated that, the Government has managed to collect Rs 1.68 lakh crore in 2014-15. In other words, the Government is eying hefty 25% jump in the service tax revenue.
PersonalFN is of the view that, hike in service tax may result in higher inflation. However, if Government manages to collect higher revenue and cut down on subsidy payment, fiscal deficit may come lower.
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Consumer Sentiment: "A statistical measurement and economic indicator of the overall health of the economy as determined by consumer opinion. Consumer sentiment takes into account an individual's feelings toward his or her own current financial health, the health of the economy in the short term and the prospects for longer term economic growth. "
(Source: Investopedia)
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Quote : "As many advisors have told us, your investment portfolio is like a bar of soap. The more you handle it, the smaller it gets " - William Smead
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