General Affairs
Opposition Launches Sharp Attack On BJP Government Over Fake News Guidelines
-
Opposition parties on Tuesday attacked the central government over the now-withdrawn guidelines on fake news, with the Congress saying fascism has touched its peak and the AAP and the CPI(M) likening the prevailing situation to the Emergency.
The Information and Broadcasting Ministry Monday announced measures to contain fake news, saying the accreditation of a journalist could be permanently cancelled if the scribe is found generating or propagating fake news.
The guidelines were withdrawn after the prime minister's office intervened, following sharp criticism from the media fraternity and the opposition parties.
"Fascism reaches its nadir as a shaky Modi government, caught in its web of lies, seeks to muzzle all independent voices in media through fallacious rules! Congress communications in-charge Randeep Surjewala tweeted.
Senior Congress leader Ahmed Patel asked whether the move was an attempt to prevent reporters from reporting news uncomfortable to the establishment.
He also asked who would determine whether a news was fake and wondered if the rules were to be misused to harass reporters.
West Bengal Chief Minister and TMC chief Mamata Banerjee termed the attempt as a brazen and draconian move to curb press freedom and said it showed the government "has lost its way".
"What about fake news spread by a political party on a regular basis?" she asked on Twitter, without naming any party.
Recalling the fight for press freedom during the days of the Emergency in 1970s, CPI(M) leader Sitaram Yechury said his party condemned the duplicitous move.
He accused the government of attacking the media in the garb of fake news over news it finds uncomfortable .
"We stand for, and are committed to a free and independent Press, the Left leader tweeted.
"It is like an undeclared emergency. The Government wants to gag the Press. They want the Press to write what the Government wants," said CPI-leader Md Salim.
Former Delhi Chief Minister Sheila Dikshit said the issue could have been handled in a dignified manner through a law but the attempt undermined democracy .
The Information and Broadcasting Ministry Monday announced measures to contain fake news, saying the accreditation of a journalist could be permanently cancelled if the scribe is found generating or propagating fake news.
The guidelines were withdrawn after the prime minister's office intervened, following sharp criticism from the media fraternity and the opposition parties.
"Fascism reaches its nadir as a shaky Modi government, caught in its web of lies, seeks to muzzle all independent voices in media through fallacious rules! Congress communications in-charge Randeep Surjewala tweeted.
Senior Congress leader Ahmed Patel asked whether the move was an attempt to prevent reporters from reporting news uncomfortable to the establishment.
He also asked who would determine whether a news was fake and wondered if the rules were to be misused to harass reporters.
West Bengal Chief Minister and TMC chief Mamata Banerjee termed the attempt as a brazen and draconian move to curb press freedom and said it showed the government "has lost its way".
"What about fake news spread by a political party on a regular basis?" she asked on Twitter, without naming any party.
Recalling the fight for press freedom during the days of the Emergency in 1970s, CPI(M) leader Sitaram Yechury said his party condemned the duplicitous move.
He accused the government of attacking the media in the garb of fake news over news it finds uncomfortable .
"We stand for, and are committed to a free and independent Press, the Left leader tweeted.
"It is like an undeclared emergency. The Government wants to gag the Press. They want the Press to write what the Government wants," said CPI-leader Md Salim.
Former Delhi Chief Minister Sheila Dikshit said the issue could have been handled in a dignified manner through a law but the attempt undermined democracy .
Record 9,829 Kilometres Of National Highways Built In Financial Year 2018: Nitin Gadkari
-
Road Transport and Highways Minister Nitin Gadkari on Tuesday said that record 9,829 kilometres of national highways at a cost of Rs. 1,16,324 crore were constructed in the country during 2017-18, 20 per cent higher than the last year.
This translates to around 29 kms of highways built per day, short of the 40 kms per day target Mr Gadkari had set for himself. He said he would achieve this target next year.
In 2016-17, a total of 8,231 kilometres of national highways were constructed.
Mr Gadkari said that 17,055 kilometres road length was awarded in 2017-18, against 15,948 kilometres last year.
He told the media that the Eastern Peripheral Expressway would soon be opened for public as the work on the same was almost complete.
He said the project worth Rs. 4,420 crore will be completed in a record time of about 500 days, against the targeted 910 days.
"This will be the first expressway to be fully solar powered. Eight solar power plants of four megawatt capacity have been installed on the expressway.
"The expressway will reduce pollution and decongest the national capital, as non-Delhi bound commercial vehicles will not entre the city," he said.
The Minister also announced that the work on construction of 14-lane highway from Delhi to Dasna, under the ambitious Delhi-Meerut highway project, will be completed in record time of 15 months, against the targeted 30 months.
"Two new four-lane bridges on both sides of the existing major bridge on river Yamuna will convert it to a 16-lane bridge. This is the first bridge in the country to have vertical gardens with solar system and drip irrigation," he said.
The Minister also announced adoption of international system of counting of lane kilometres from the new financial year as against linear length which was counted so far.
This translates to around 29 kms of highways built per day, short of the 40 kms per day target Mr Gadkari had set for himself. He said he would achieve this target next year.
In 2016-17, a total of 8,231 kilometres of national highways were constructed.
Mr Gadkari said that 17,055 kilometres road length was awarded in 2017-18, against 15,948 kilometres last year.
He told the media that the Eastern Peripheral Expressway would soon be opened for public as the work on the same was almost complete.
He said the project worth Rs. 4,420 crore will be completed in a record time of about 500 days, against the targeted 910 days.
"This will be the first expressway to be fully solar powered. Eight solar power plants of four megawatt capacity have been installed on the expressway.
"The expressway will reduce pollution and decongest the national capital, as non-Delhi bound commercial vehicles will not entre the city," he said.
The Minister also announced that the work on construction of 14-lane highway from Delhi to Dasna, under the ambitious Delhi-Meerut highway project, will be completed in record time of 15 months, against the targeted 30 months.
"Two new four-lane bridges on both sides of the existing major bridge on river Yamuna will convert it to a 16-lane bridge. This is the first bridge in the country to have vertical gardens with solar system and drip irrigation," he said.
The Minister also announced adoption of international system of counting of lane kilometres from the new financial year as against linear length which was counted so far.
SSC Cheating Racket: Gang Of Four Arrested In Delhi In Crackdown
-
After four people were held for their alleged involvement in the SSC cheating racket last week, the Delhi Police crime branch have arrested four more people in a crackdown.
The accused - Anup Rao, Neeraj, Kushal Negi and Dured Ali allegedly used a remote access software tool called Team Viewer for the crime. Police said they provided internet connectivity, downloaded the window sharing application and shared the password with the candidates appearing for the exam.
The gang also arranged for two examinations centres in Patparganj and Badarpur, one of which is allegedly owned by the third accused - Dured Ali.
Last week, a joint team of Uttar Pradesh STF and Delhi Police busted the cheating racket in Timarpur leading four arrests. The case was then transferred to the crime branch from the north district police.
Three laptops, 10 mobile phones, an external hard disk, a white colour tender router, four pen drives, a wi-fi device, five blue tooth devices were seized from the spot, according to the police.
The accused - Anup Rao, Neeraj, Kushal Negi and Dured Ali allegedly used a remote access software tool called Team Viewer for the crime. Police said they provided internet connectivity, downloaded the window sharing application and shared the password with the candidates appearing for the exam.
The gang also arranged for two examinations centres in Patparganj and Badarpur, one of which is allegedly owned by the third accused - Dured Ali.
Last week, a joint team of Uttar Pradesh STF and Delhi Police busted the cheating racket in Timarpur leading four arrests. The case was then transferred to the crime branch from the north district police.
Three laptops, 10 mobile phones, an external hard disk, a white colour tender router, four pen drives, a wi-fi device, five blue tooth devices were seized from the spot, according to the police.
IISc Tops National University Rankings Third Time In A Row
-
The Indian Institute of Science (IISC) in Bengaluru was adjudged the overall best institution in the country by the HRD Ministry's national ranking framework.
Announcing the rankings at an event at the Vigyan Bhavan on Tuesday, HRD Minister Prakash Javadekar said the Indian Institute of Technology, Madras (IIT-M) has been adjudged the best engineering college and the Indian Institute of Management-Ahmedabad (IIM-A) the best management institution.
According to the National Institutional Ranking Framework (NIRF), Delhi University's Miranda House was the best college, premier healthcare institute AIIMS the best medical college and NLSIU-Bengaluru the best law school in the country.
In the university category, IISc stood first, followed by Jawaharlal Nehru University (JNU) and Banaras Hindu University (BHU).
The Indian Institute of Science was established in 1909 by a visionary partnership of industrialist Jamsetji Nusserwanji Tata, the Maharaja of Mysore and the government of India, according to its official website.
Since its inception, the institute has laid a balanced emphasis on the pursuit of basic knowledge in science and engineering, as well as on the application of its research findings for industrial and social benefit.
Announcing the rankings at an event at the Vigyan Bhavan on Tuesday, HRD Minister Prakash Javadekar said the Indian Institute of Technology, Madras (IIT-M) has been adjudged the best engineering college and the Indian Institute of Management-Ahmedabad (IIM-A) the best management institution.
According to the National Institutional Ranking Framework (NIRF), Delhi University's Miranda House was the best college, premier healthcare institute AIIMS the best medical college and NLSIU-Bengaluru the best law school in the country.
In the university category, IISc stood first, followed by Jawaharlal Nehru University (JNU) and Banaras Hindu University (BHU).
The Indian Institute of Science was established in 1909 by a visionary partnership of industrialist Jamsetji Nusserwanji Tata, the Maharaja of Mysore and the government of India, according to its official website.
Since its inception, the institute has laid a balanced emphasis on the pursuit of basic knowledge in science and engineering, as well as on the application of its research findings for industrial and social benefit.
"Take Part In Ranking Process Or Else...": Minister's Warning To Colleges
-
All public colleges and universities in the country must take part in the government's annual ranking of educational institutes, Union Education Minister Prakash Javadekar said today. "And, those public institutions which will not take part in it will face fund cut," said Mr Javadekar, whose ministry is facing heat over the recent leaks of the CBSE board exam question papers.
Delhi's Miranda has been ranked the best college in the country this, the results of which were announced in the capital on Tuesday. St. Stephens College in Delhi, Bishop's Heber College, Tiruchirapalli, Hindu College, New Delhi, Presidency College, Chennai.
Participation in the ranking framework, introduced three years ago, was earlier optional. 4,500 institutes participated in the National Institutional Ranking Framework (NIRF) rankings this year.
IIT-Madras was ranked the best engineering institute in the country. Bengaluru-based Indian Institute of Science (IISc) topped the overall category this year. Last year, IISc had emerged as the top institute in the overall category.
In the management ranking,the usual suspect, IIM-Ahmedabad topped the category.
The other two institutes which have managed to make their way to the list of top ten engineering institutes are Anna University and Institute of Chemical Technology, Mumbai. Jadavpur University, which had been placed at the ninth rank last year did not make it to the top ten ranks this year.
The institutes were assessed under nine categories - Overall, Universities, Engineering, Colleges, Management, Pharmacy, Medical, Architecture, and Law. The first such rankings were announced in 2016.
Delhi's Miranda has been ranked the best college in the country this, the results of which were announced in the capital on Tuesday. St. Stephens College in Delhi, Bishop's Heber College, Tiruchirapalli, Hindu College, New Delhi, Presidency College, Chennai.
Participation in the ranking framework, introduced three years ago, was earlier optional. 4,500 institutes participated in the National Institutional Ranking Framework (NIRF) rankings this year.
IIT-Madras was ranked the best engineering institute in the country. Bengaluru-based Indian Institute of Science (IISc) topped the overall category this year. Last year, IISc had emerged as the top institute in the overall category.
In the management ranking,the usual suspect, IIM-Ahmedabad topped the category.
The other two institutes which have managed to make their way to the list of top ten engineering institutes are Anna University and Institute of Chemical Technology, Mumbai. Jadavpur University, which had been placed at the ninth rank last year did not make it to the top ten ranks this year.
The institutes were assessed under nine categories - Overall, Universities, Engineering, Colleges, Management, Pharmacy, Medical, Architecture, and Law. The first such rankings were announced in 2016.
Business Affairs
Several systemic loopholes led to PNB loan fraud, says ICAI panel
-
A high-power group, constituted by the Institute of Chartered Accountants of India (ICAI) to look into the PNB loan fraud case, has found systemic failure at many levels that led the fraud in the first place and then failed to detect it for a long time.
The group found that Nirav Modi's company was granted loan despite his company having only current account with the Brady House branch of the bank. "When there is only current account, no credit facility should be granted -- neither the letter of undertakings (LoUs) nor Letter of credit (LoCs)," says SB Zaware, member, Central Council, ICAI.
The group also observed that LoUs are only used by Indian banks to offer loans to companies. That is primary reason why LoUs in the Nirav Modi case were only issued to foreign branch of Indian banks. Any other foreign bank would not have accepted LoUs.
"LoUs unlike LoCs, are unconditional undertakings, which means if payment is not made on the due date and demand is made, the payment has to be made by PNB without asking for any documents," says Zaware, who was presenting the initial finding of the group to media persons in Delhi today.
The group also found that the concurrent audit of the books was done by the bank's internal employees who were not chartered accountants. The group said that while the bank used its own resources for concurrent audit, they failed to detect the frauds running into crores.
It, therefore, has recommended that banks should appoint external agencies for concurrent audit.
It also found that the there is lack of understanding about the Swift messaging system among the staff of the banks. The group also said that there is an urgent need to Swift messaging system should be linked to the core banking system (CBS) of the bank.
Zaware said that RBI in November 2016 had issued a confidential circular to banks probably warning them about the possible risks associated with LoUs and also asked the banks to link their Swift messaging system with their CBS by April 2018.
However, the group noted that since the circular was confidential and not in public domain, the warning against LoUs may not have reached to all stakeholders.
It also found that RBI did online inspection of the bank's systems but no physical verification was done. "Had they done a physical verification, the fraud could have been detected," observed the high power group of ICAI.
It also raised the issue of last minute appointment of central statutory auditor as well as branch auditors. Most of the appointments are done almost in the last week of March due to which auditors do not get enough time to audit the accounts properly.
The group recommended that appointment of central auditor should be done in the first quarter of the financial year and branch auditors by last quarter so that proper planning of the audit can be done.
The group found that Nirav Modi's company was granted loan despite his company having only current account with the Brady House branch of the bank. "When there is only current account, no credit facility should be granted -- neither the letter of undertakings (LoUs) nor Letter of credit (LoCs)," says SB Zaware, member, Central Council, ICAI.
The group also observed that LoUs are only used by Indian banks to offer loans to companies. That is primary reason why LoUs in the Nirav Modi case were only issued to foreign branch of Indian banks. Any other foreign bank would not have accepted LoUs.
"LoUs unlike LoCs, are unconditional undertakings, which means if payment is not made on the due date and demand is made, the payment has to be made by PNB without asking for any documents," says Zaware, who was presenting the initial finding of the group to media persons in Delhi today.
The group also found that the concurrent audit of the books was done by the bank's internal employees who were not chartered accountants. The group said that while the bank used its own resources for concurrent audit, they failed to detect the frauds running into crores.
It, therefore, has recommended that banks should appoint external agencies for concurrent audit.
It also found that the there is lack of understanding about the Swift messaging system among the staff of the banks. The group also said that there is an urgent need to Swift messaging system should be linked to the core banking system (CBS) of the bank.
Zaware said that RBI in November 2016 had issued a confidential circular to banks probably warning them about the possible risks associated with LoUs and also asked the banks to link their Swift messaging system with their CBS by April 2018.
However, the group noted that since the circular was confidential and not in public domain, the warning against LoUs may not have reached to all stakeholders.
It also found that RBI did online inspection of the bank's systems but no physical verification was done. "Had they done a physical verification, the fraud could have been detected," observed the high power group of ICAI.
It also raised the issue of last minute appointment of central statutory auditor as well as branch auditors. Most of the appointments are done almost in the last week of March due to which auditors do not get enough time to audit the accounts properly.
The group recommended that appointment of central auditor should be done in the first quarter of the financial year and branch auditors by last quarter so that proper planning of the audit can be done.
ICF sets manufacturing target of 3,000 train coaches this fiscal; sets new record in 2017-18
-
Integral Coach Factory, one of the earliest production units of independent India, is now gunning for a hat-trick. For the second straight fiscal the rail coach manufacturer has managed to surpass its annual production target, hitting a new milestone along the way this year.
"ICF has crossed another milestone in the production history by surpassing the target of 2,464 coaches fixed by the Railway Board and made a record outturn of 2503 coaches," it said in a statement over the weekend. A whopping 73 per cent of them were stainless steel coaches. In 2016-17, it had similarly produced a then-record 2,277 coaches, exceeding the production target by 5 per cent.
According to media reports, the 2,500th coach - made with technology from Linke-Hoffman Busch, Germany - was flagged off in the presence of S. Mani, ICF general manager, last Saturday. But the Chennai-based plant has grander plans for the future. According to a senior official, the ICF is targeting 3000 coaches next year, and has many new products in the pipeline. "We are looking to supply 80 world-class coaches to Sri Lanka, for which the prototype will be ready tentatively in July," he said. Then there are plans to reportedly acquire technology from Germany to manufacture world-class coaches with an aluminium body, codenamed Train 20, by 2020.
In the meantime, the development of Train 18 - another next-gen product - is reportedly already underway. According to The Financial Express, the new self-propelled semi-high speed train set will be rolled out in June 2018 and will boast 16 fully air-conditioned coaches with features like modular toilets, plush interiors, diffused lighting, automatic plug doors, and more. Better yet, the train will run at a speed of 160 kmph.
A report by the Standing Committee on Railways on safety and security in December 2016 had observed that the modern Linke-Hoffman Busch (LHB) coaches do not witness higher casualties in case of derailment as the coaches do not pile on each other, and recommended that the Indian Railways completely switches to LHB coaches. According to the report, Railway Minister Piyush Goyal recently said that ICF has almost tripled the production of such coaches. The number of LHB coaches had crossed 1,100 in 2017-18, up from 400 in 2016-17. In fact, the railway ministry has reportedly decided to exclusively manufacture LHB coaches, thus doing away with the conventional coaches, this year on.
"ICF has crossed another milestone in the production history by surpassing the target of 2,464 coaches fixed by the Railway Board and made a record outturn of 2503 coaches," it said in a statement over the weekend. A whopping 73 per cent of them were stainless steel coaches. In 2016-17, it had similarly produced a then-record 2,277 coaches, exceeding the production target by 5 per cent.
According to media reports, the 2,500th coach - made with technology from Linke-Hoffman Busch, Germany - was flagged off in the presence of S. Mani, ICF general manager, last Saturday. But the Chennai-based plant has grander plans for the future. According to a senior official, the ICF is targeting 3000 coaches next year, and has many new products in the pipeline. "We are looking to supply 80 world-class coaches to Sri Lanka, for which the prototype will be ready tentatively in July," he said. Then there are plans to reportedly acquire technology from Germany to manufacture world-class coaches with an aluminium body, codenamed Train 20, by 2020.
In the meantime, the development of Train 18 - another next-gen product - is reportedly already underway. According to The Financial Express, the new self-propelled semi-high speed train set will be rolled out in June 2018 and will boast 16 fully air-conditioned coaches with features like modular toilets, plush interiors, diffused lighting, automatic plug doors, and more. Better yet, the train will run at a speed of 160 kmph.
A report by the Standing Committee on Railways on safety and security in December 2016 had observed that the modern Linke-Hoffman Busch (LHB) coaches do not witness higher casualties in case of derailment as the coaches do not pile on each other, and recommended that the Indian Railways completely switches to LHB coaches. According to the report, Railway Minister Piyush Goyal recently said that ICF has almost tripled the production of such coaches. The number of LHB coaches had crossed 1,100 in 2017-18, up from 400 in 2016-17. In fact, the railway ministry has reportedly decided to exclusively manufacture LHB coaches, thus doing away with the conventional coaches, this year on.
10% LTCG tax comes into effect: Will ULIPs deliver higher returns than mutual funds now
-
With 10% percent LTCG tax coming into effect from April 1, have your mutual funds investments lost their sheen? Are ULIPs with their tax-free status now the better investment options?
First, let's look at what are mutual funds and ULIPs.
ULIP is a life insurance product, which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.
A mutual fund is a professionally managed investment scheme, usually run by an asset management company that brings together a group of people and invests their money in stocks, bonds and other securities.
Now, we find out how they are stacked against each other before comparing their returns.
Costs
ULIPs are costlier with a host of charges levied during their tenure.
Some of them have 2-6% surrender charges before lock-in period of five years, policy administration charges between Rs 700 to Rs 1000 per annum and switching charges in case you want to shift between Equity, Balanced and Debt funds within the same ULIP.
Fund management charges also from the core of ULIP charges. The maximum allowed is 1.35 percent per annum of the fund value and is charged daily. There are some other charges too which are not built into the net assets value (NAV) but levied by cancellation of the units alloted to the investor.
Flexibility
You can't transfer your ULIP to another fund house. If you want to withdraw, charges are huge. In case of mutual funds, you have multiple options to withdraw after you have infused money for a minimum of one year in a particular MF. If you want to pull back earlier than a year, 1 percent exit load is applicable.
The only respite in case of ULIPs is they are tax free at the time of maturity under section 10(10)d of Income Tax Act. In case of MFs, 10 percent LTCG tax without allowing the benefits of indexation will have to be paid on long term capital gains exceeding Rs 1 lakh on sale of equity shares/units of equity oriented fund from April 1.
Lock-in period
Lock in period is the most critical point to watch out when you opt for one of these. In case of ULIPs, lock-in period of five years can lead to wealth creation in the long term but high charges act as deterrent.
According to analysts, mostly ULIPs start delivering higher returns than mutual funds after 10 years of investment. During the first five years, ULIP charges eat into returns from your investment. So if your investment horizon is of more than 10 years, and you don't want to brainstorm about which fund you should pick, ULIPs are better investment options.
Expert quotes
Vaibhav Agrawal, head of research and ARQ at Angel Broking said, "Though ULIP has better tax advantage as compared to mutual funds, there are other factors, which also need to be considered. The most important factor to be considered is the returns, where mutual funds have consistently delivered better returns than ULIP. This is primarily due to high premium allocation/admin charges in initial years in ULIPs, which takes away substantial part of returns over long term.
Further ULIPs have lock-in period and levy surrender charges for pre-mature withdrawal whereas mutual funds doesn't have lock in period (except ELSS) and exit load charge is applicable only if amount is withdrawn within 1 year (in most of the cases). Thus mutual funds still stand far ahead of ULIPs inspite of LTCG introduced on withdrawal."
Vijayananda Prabhu, investment analyst at Geojit Financial said:
1." Earlier, ULIP policies were mis sold as mutual funds. Now the good thing is that ULIPs will be sold as ULIPs (at least).
2. I never recommend to mix up investments with insurance. Insurance should do its job. Term plan is the only product worth shopping for.
3. ULIP policies are very expensive compared to mutual funds over long term. The 10% LTCG would still be smaller compared to charges associated with ULIPs. During the earlier years, say 5 to 7 years, the yearly charges in ULIP ranges from 4% up to 8% per annum. Later though the charges diminish, the average cost remains high.
4. In a volatile market, one cannot expect ULIPs to afford mortality costs.
5. If an investor takes a holistic look at his entire portfolio, then he will find no reason to substantiate the inclusion of a ULIP in the kitty. With high life cover supplied by an online term plan and a well managed debt and equity portfolio in the investment front, a set of well diversified direct equity portfolio or a mutual fund portfolio can yield better and cost effective results over long term.
Verdict
Data from Morningstar show that ULIPs deliver 100-300 basis points lower returns compared to mutual funds. During the past one year, an average large-cap ULIP fund grew 15.51% compared to an average large-cap mutual fund which saw a growth of 18.83%. (One basis point is one hundredth of a percentage point).
Hence, mutual funds are better options even after imposition of 10% LTCG tax since they have been offering higher returns in the past. Also they don't have a long lock-in period, which makes them easy to use in case of emergencies. They also suit those investors who do not have a shorter investment horizon than 10 years.
First, let's look at what are mutual funds and ULIPs.
ULIP is a life insurance product, which provides risk cover for the policy holder along with investment options to invest in any number of qualified investments such as stocks, bonds or mutual funds.
A mutual fund is a professionally managed investment scheme, usually run by an asset management company that brings together a group of people and invests their money in stocks, bonds and other securities.
Now, we find out how they are stacked against each other before comparing their returns.
Costs
ULIPs are costlier with a host of charges levied during their tenure.
Some of them have 2-6% surrender charges before lock-in period of five years, policy administration charges between Rs 700 to Rs 1000 per annum and switching charges in case you want to shift between Equity, Balanced and Debt funds within the same ULIP.
Fund management charges also from the core of ULIP charges. The maximum allowed is 1.35 percent per annum of the fund value and is charged daily. There are some other charges too which are not built into the net assets value (NAV) but levied by cancellation of the units alloted to the investor.
Flexibility
You can't transfer your ULIP to another fund house. If you want to withdraw, charges are huge. In case of mutual funds, you have multiple options to withdraw after you have infused money for a minimum of one year in a particular MF. If you want to pull back earlier than a year, 1 percent exit load is applicable.
The only respite in case of ULIPs is they are tax free at the time of maturity under section 10(10)d of Income Tax Act. In case of MFs, 10 percent LTCG tax without allowing the benefits of indexation will have to be paid on long term capital gains exceeding Rs 1 lakh on sale of equity shares/units of equity oriented fund from April 1.
Lock-in period
Lock in period is the most critical point to watch out when you opt for one of these. In case of ULIPs, lock-in period of five years can lead to wealth creation in the long term but high charges act as deterrent.
According to analysts, mostly ULIPs start delivering higher returns than mutual funds after 10 years of investment. During the first five years, ULIP charges eat into returns from your investment. So if your investment horizon is of more than 10 years, and you don't want to brainstorm about which fund you should pick, ULIPs are better investment options.
Expert quotes
Vaibhav Agrawal, head of research and ARQ at Angel Broking said, "Though ULIP has better tax advantage as compared to mutual funds, there are other factors, which also need to be considered. The most important factor to be considered is the returns, where mutual funds have consistently delivered better returns than ULIP. This is primarily due to high premium allocation/admin charges in initial years in ULIPs, which takes away substantial part of returns over long term.
Further ULIPs have lock-in period and levy surrender charges for pre-mature withdrawal whereas mutual funds doesn't have lock in period (except ELSS) and exit load charge is applicable only if amount is withdrawn within 1 year (in most of the cases). Thus mutual funds still stand far ahead of ULIPs inspite of LTCG introduced on withdrawal."
Vijayananda Prabhu, investment analyst at Geojit Financial said:
1." Earlier, ULIP policies were mis sold as mutual funds. Now the good thing is that ULIPs will be sold as ULIPs (at least).
2. I never recommend to mix up investments with insurance. Insurance should do its job. Term plan is the only product worth shopping for.
3. ULIP policies are very expensive compared to mutual funds over long term. The 10% LTCG would still be smaller compared to charges associated with ULIPs. During the earlier years, say 5 to 7 years, the yearly charges in ULIP ranges from 4% up to 8% per annum. Later though the charges diminish, the average cost remains high.
4. In a volatile market, one cannot expect ULIPs to afford mortality costs.
5. If an investor takes a holistic look at his entire portfolio, then he will find no reason to substantiate the inclusion of a ULIP in the kitty. With high life cover supplied by an online term plan and a well managed debt and equity portfolio in the investment front, a set of well diversified direct equity portfolio or a mutual fund portfolio can yield better and cost effective results over long term.
Verdict
Data from Morningstar show that ULIPs deliver 100-300 basis points lower returns compared to mutual funds. During the past one year, an average large-cap ULIP fund grew 15.51% compared to an average large-cap mutual fund which saw a growth of 18.83%. (One basis point is one hundredth of a percentage point).
Hence, mutual funds are better options even after imposition of 10% LTCG tax since they have been offering higher returns in the past. Also they don't have a long lock-in period, which makes them easy to use in case of emergencies. They also suit those investors who do not have a shorter investment horizon than 10 years.
Banking stocks rise after RBI allows banks to spread bond losses in 4 quarters
-
Banking stocks rose in early trade on Tuesday on RBI's move which allowed the lenders to spread provisions for bond losses in the third and fourth quarters of FY18 over the next four quarters. The BSE bankex was the top gainer rising 178 points or 0.57% to 27,278. Bank Of Baroda (4.12%) and SBI (2.35%) were the top gainers on BSE bankex.
Bank Nifty too rose 0.40% or 90 points at 24,417 points.
Listen to April 2 market podcast
The move comes as a big relief for banks who are typically the biggest buyers of govt bonds and are likely to see a fall in treasury income in March quarter with a spillover effect in FY19 due to rising bond yields.
The central bank said the provisioning for each of these quarters may be spread equally over up to four quarters, commencing with the quarter in which the loss was incurred.
"With a view to addressing the systemic impact of sharp increase in the yields on government securities, it has been decided to grant banks the option to spread provisioning for mark-to-market (MTM) losses on investments held in the available-for-sale (AFS) and in the held-for-trading (HFT) for the quarters ended December 2017 and March 2018," RBI said in a notification on Monday.
The move comes as a big breather for banks which have been fighting record bad loans on top of the massive spike in bond yields since the past two quarters. After falling into under 6.4 per cent, the benchmark bonds have been trading around 7.5 per cent since last November.
The bad loans in the system have crossed more than 10.5 per cent or over Rs 11 trillion and rating agencies have warned that it will cross 11.5 per cent this year mid-way before improving to settle at 10.5 per cent.
Rating agencies had pegged investment losses at over Rs 15,000 crore in the December quarter alone while the whole year is yet to be ascertained. In FY17, banks had made huge gains to the tune of over Rs 1 trillion.
The central bank notification said the bank which is utilise the option, will have to make disclosures in their quarterly results.
"Banks have to provide details of provisions for depreciation of the investment portfolio for the third and fourth quarters made during the quarter/year and the balance required to be made in the remaining quarters," the apex bank notification said.
Banks are required to MTM the individual scrips in available for sale at quarterly or more frequent intervals and HFT at monthly or more frequent intervals and provide for net depreciation.
The apex bank also advised banks to create an investment fluctuation reserves (IFR) from the current year to build up adequate reserves to protect against any increase in yields in future.
For creating IFR, banks will have to transfer an amount not less than the net profit on sale of investments during the year or net profit for the year less mandatory appropriations, whichever is lower.
"Banks will have to transfer the amount until the amount of IFR is at least 2 per cent of the HFT and the AFS portfolio, on a continuing basis. Where feasible, this should be achieved within three years," the notification said.
A bank may, at its discretion, draw down the balance available in the IFR in excess of 2 per cent of its HFT and AFS portfolios, for credit to the balance of profit/loss as disclosed in the profit and loss account at the end of any accounting year.
If the amount in IFR is less than 2 per cent of the HFT and AFS investment portfolios,a drawdown will be permitted if the amount is used only for meeting the minimum CET1/tier 1 capital requirements and the drawdown is not more than the extent of the MTM provisions made during the aforesaid year and does not exceed the net profit on sale of investments during that year.
Bank Nifty too rose 0.40% or 90 points at 24,417 points.
Listen to April 2 market podcast
The move comes as a big relief for banks who are typically the biggest buyers of govt bonds and are likely to see a fall in treasury income in March quarter with a spillover effect in FY19 due to rising bond yields.
The central bank said the provisioning for each of these quarters may be spread equally over up to four quarters, commencing with the quarter in which the loss was incurred.
"With a view to addressing the systemic impact of sharp increase in the yields on government securities, it has been decided to grant banks the option to spread provisioning for mark-to-market (MTM) losses on investments held in the available-for-sale (AFS) and in the held-for-trading (HFT) for the quarters ended December 2017 and March 2018," RBI said in a notification on Monday.
The move comes as a big breather for banks which have been fighting record bad loans on top of the massive spike in bond yields since the past two quarters. After falling into under 6.4 per cent, the benchmark bonds have been trading around 7.5 per cent since last November.
The bad loans in the system have crossed more than 10.5 per cent or over Rs 11 trillion and rating agencies have warned that it will cross 11.5 per cent this year mid-way before improving to settle at 10.5 per cent.
Rating agencies had pegged investment losses at over Rs 15,000 crore in the December quarter alone while the whole year is yet to be ascertained. In FY17, banks had made huge gains to the tune of over Rs 1 trillion.
The central bank notification said the bank which is utilise the option, will have to make disclosures in their quarterly results.
"Banks have to provide details of provisions for depreciation of the investment portfolio for the third and fourth quarters made during the quarter/year and the balance required to be made in the remaining quarters," the apex bank notification said.
Banks are required to MTM the individual scrips in available for sale at quarterly or more frequent intervals and HFT at monthly or more frequent intervals and provide for net depreciation.
The apex bank also advised banks to create an investment fluctuation reserves (IFR) from the current year to build up adequate reserves to protect against any increase in yields in future.
For creating IFR, banks will have to transfer an amount not less than the net profit on sale of investments during the year or net profit for the year less mandatory appropriations, whichever is lower.
"Banks will have to transfer the amount until the amount of IFR is at least 2 per cent of the HFT and the AFS portfolio, on a continuing basis. Where feasible, this should be achieved within three years," the notification said.
A bank may, at its discretion, draw down the balance available in the IFR in excess of 2 per cent of its HFT and AFS portfolios, for credit to the balance of profit/loss as disclosed in the profit and loss account at the end of any accounting year.
If the amount in IFR is less than 2 per cent of the HFT and AFS investment portfolios,a drawdown will be permitted if the amount is used only for meeting the minimum CET1/tier 1 capital requirements and the drawdown is not more than the extent of the MTM provisions made during the aforesaid year and does not exceed the net profit on sale of investments during that year.
Videocon loan case: I-T Dept issues notice to Deepak Kochhar; to be called for questioning soon
-
Troubles seem to be brewing for a power couple in the Indian corporate industry. Deepak Kochhar, CEO and co-founder of NuPower Renewables and the husband of ICICI bank Managing Director Chanda Kochhar, has been issued a notice by the Income Tax Department over the alleged tax evasion. To probe his financial transactions in the Videocon bank loan case, the department has asked him to furnish all the details regarding personal finances, Income Tax Returns for the past many years, and business transactions with NuPower Renewables.
Earlier in the day, Chanda Kochhar reportedly pulled out of the annual session of FICCI Ladies Organisation - to be held this week - where she was to be felicitated by President Ram Nath Kovind. Not only that, the role of Rajiv Kochhar, financial services company Avista Advisory founder and Chanda Kochhar's brother-in-law (her husband's brother), is also under the scanner. Avista's website also mentions two loan restructuring deals involving the Videocon Group.
The Income Tax Department notice to Deepak Kochhar has been issued under section 131 (power regarding discovery, production of evidence) of the I-T Act. Few more notices have been sent to the people associated with the firm and based on their replies, further action will be taken, they said. In a related development, the CBI officials said that Deepak Kochhar, who has been named in a preliminary enquiry, will be called for questioning soon.
The CBI had questioned a few ICICI bank officials as part of a preliminary enquiry to find if any quid pro quo was involved in the bank issuing a Rs 3,250 crore loan to the Videocon Group in 2012. The deal recently made news after reports questioned the loan and linked it to a possible quid pro quo that Videocon group promoter Venugopal Dhoot allegedly had with NuPower Renewables, a company founded by Deepak Kochchar.
The CBI enquiry had named Dhoot, Deepak Kochhar and unidentified others, officials said. A preliminary inquiry is a precursor before the agency lodges an FIR to probe criminal charges on the basis of evidence collected during the former exercise. Last week, the ICICI Bank board came out in support of Chanda Kochhar, saying it has full faith and confidence in her and described reports against her over the credit disbursement to Videocon group as "malicious and unfounded rumours".
The board had also reviewed the banks internal processes for credit approval and found them robust, the private sector lender had said in a statement. With regard to loans to the Videocon group, the board had said the banks current exposure is part of a syndicated consortium arrangement. "ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3,250 crore which was less than 10 per cent of the total consortium facility in April 2012," it added. The bank had clarified that none of the investors of NuPower Renewables are borrowers of ICICI Bank.
Earlier in the day, Chanda Kochhar reportedly pulled out of the annual session of FICCI Ladies Organisation - to be held this week - where she was to be felicitated by President Ram Nath Kovind. Not only that, the role of Rajiv Kochhar, financial services company Avista Advisory founder and Chanda Kochhar's brother-in-law (her husband's brother), is also under the scanner. Avista's website also mentions two loan restructuring deals involving the Videocon Group.
The Income Tax Department notice to Deepak Kochhar has been issued under section 131 (power regarding discovery, production of evidence) of the I-T Act. Few more notices have been sent to the people associated with the firm and based on their replies, further action will be taken, they said. In a related development, the CBI officials said that Deepak Kochhar, who has been named in a preliminary enquiry, will be called for questioning soon.
The CBI had questioned a few ICICI bank officials as part of a preliminary enquiry to find if any quid pro quo was involved in the bank issuing a Rs 3,250 crore loan to the Videocon Group in 2012. The deal recently made news after reports questioned the loan and linked it to a possible quid pro quo that Videocon group promoter Venugopal Dhoot allegedly had with NuPower Renewables, a company founded by Deepak Kochchar.
The CBI enquiry had named Dhoot, Deepak Kochhar and unidentified others, officials said. A preliminary inquiry is a precursor before the agency lodges an FIR to probe criminal charges on the basis of evidence collected during the former exercise. Last week, the ICICI Bank board came out in support of Chanda Kochhar, saying it has full faith and confidence in her and described reports against her over the credit disbursement to Videocon group as "malicious and unfounded rumours".
The board had also reviewed the banks internal processes for credit approval and found them robust, the private sector lender had said in a statement. With regard to loans to the Videocon group, the board had said the banks current exposure is part of a syndicated consortium arrangement. "ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3,250 crore which was less than 10 per cent of the total consortium facility in April 2012," it added. The bank had clarified that none of the investors of NuPower Renewables are borrowers of ICICI Bank.
General Awareness
Indian culture will cover the salient aspects of Art Forms, Literature and Architecture from ancient to modern times.
Adopt a Heritage Project
-
Context: Infrastructure conglomerate GMR and tobacco company ITC Ltd are currently bidding to adopt the Taj Mahal under the ‘Adopt a Heritage’ project. The iconic tomb in Agra was not initially on the list of monuments to be adopted under the Adopt a Heritage scheme, because of its importance. However, it was added to the list in February and a seven-member Oversight and Vision Committee will now decide whom to hand over the bid to.
Adopt a Heritage Project:
What is it? The ‘Adopt a Heritage Scheme’ of Ministry of Tourism was launched on World Tourism Day i.e. 27th September, 2017. This project is a key initiative of Ministry of Tourism in close collaboration with Ministry of Culture and Archeological Survey of India (ASI), to develop the heritage sites / monuments and making them tourist-friendly to enhance the tourism potential and their cultural importance in a planned and phased manner.
How it works? The project plans to entrust heritage sites/monuments and other tourist sites to private sector companies, public sector companies and individuals for the development of tourist amenities. The project aims to develop synergy among all partners.
Monument Mitras: Successful bidders selected for adopting heritage sites / monuments by the Oversight and Vision Committee shall be called as Monument Mitras. The basic and advanced amenities of the tourist destinations would be provided by them. They would also look after the operations and the maintenance of the amenities. The ‘Monument Mitras’ would associate pride with their CSR activities.
Facts for Prelims:
In 2007, the government of Maharashtra had announced its own adopt-a-monument scheme, inviting private and public sector companies to adopt heritage sites for a period of five years. This was extended to 10 years in 2014 because of the poor response from companies. So far, the only site to be adopted by a private company under this scheme is Osmanabad district’s Naldurg fort, where tourism amenities are now being managed by Unity Multicons.
Context: Infrastructure conglomerate GMR and tobacco company ITC Ltd are currently bidding to adopt the Taj Mahal under the ‘Adopt a Heritage’ project. The iconic tomb in Agra was not initially on the list of monuments to be adopted under the Adopt a Heritage scheme, because of its importance. However, it was added to the list in February and a seven-member Oversight and Vision Committee will now decide whom to hand over the bid to.
Adopt a Heritage Project:
What is it? The ‘Adopt a Heritage Scheme’ of Ministry of Tourism was launched on World Tourism Day i.e. 27th September, 2017. This project is a key initiative of Ministry of Tourism in close collaboration with Ministry of Culture and Archeological Survey of India (ASI), to develop the heritage sites / monuments and making them tourist-friendly to enhance the tourism potential and their cultural importance in a planned and phased manner.
How it works? The project plans to entrust heritage sites/monuments and other tourist sites to private sector companies, public sector companies and individuals for the development of tourist amenities. The project aims to develop synergy among all partners.
Monument Mitras: Successful bidders selected for adopting heritage sites / monuments by the Oversight and Vision Committee shall be called as Monument Mitras. The basic and advanced amenities of the tourist destinations would be provided by them. They would also look after the operations and the maintenance of the amenities. The ‘Monument Mitras’ would associate pride with their CSR activities.
Facts for Prelims:
In 2007, the government of Maharashtra had announced its own adopt-a-monument scheme, inviting private and public sector companies to adopt heritage sites for a period of five years. This was extended to 10 years in 2014 because of the poor response from companies. So far, the only site to be adopted by a private company under this scheme is Osmanabad district’s Naldurg fort, where tourism amenities are now being managed by Unity Multicons.
Adopt a Heritage Project:
What is it? The ‘Adopt a Heritage Scheme’ of Ministry of Tourism was launched on World Tourism Day i.e. 27th September, 2017. This project is a key initiative of Ministry of Tourism in close collaboration with Ministry of Culture and Archeological Survey of India (ASI), to develop the heritage sites / monuments and making them tourist-friendly to enhance the tourism potential and their cultural importance in a planned and phased manner.
How it works? The project plans to entrust heritage sites/monuments and other tourist sites to private sector companies, public sector companies and individuals for the development of tourist amenities. The project aims to develop synergy among all partners.
Monument Mitras: Successful bidders selected for adopting heritage sites / monuments by the Oversight and Vision Committee shall be called as Monument Mitras. The basic and advanced amenities of the tourist destinations would be provided by them. They would also look after the operations and the maintenance of the amenities. The ‘Monument Mitras’ would associate pride with their CSR activities.
Facts for Prelims:
In 2007, the government of Maharashtra had announced its own adopt-a-monument scheme, inviting private and public sector companies to adopt heritage sites for a period of five years. This was extended to 10 years in 2014 because of the poor response from companies. So far, the only site to be adopted by a private company under this scheme is Osmanabad district’s Naldurg fort, where tourism amenities are now being managed by Unity Multicons.
No comments:
Post a Comment