No, the government is not moving towards implementing CPI based inflation calculation, but from October onwards, instead of releasing weekly inflation figures, the full data on wholesale price index will be released only on a monthly basis.
As per the decision taken by the government, the weekly index figures will not be released for manufactured products, but will be limited to primary articles and fuels. Manufactured products have a weightage of 63.74851%, while primary articles and fuel have weightages 22.02525% and 14.22624% respectively in inflation calculation.
The government says that the practice of releasing weekly inflation rates is scrapped to curb "volatility" in the markets. But, is it a gradual shift towards adopting CPI, where CPI figures are generally released on a monthly basis?
Related Articles
- Inflation rates of India (2009)
- Inflation rates of India (2008)
- How is WPI inflation rate calculated in India?
- Commodities and their weight-ages in WPI calculation of India
- Base year and number of commodities used for inflation calculation in India
- The magic of Inflation
Thursday, 17 December 2009
Tuesday, 15 December 2009
India moving closer to adopt GST
The 13th Finance Commission (TFC) has endorsed its proposal for single goods and services tax (GST) and recommended a “revenue-neutral” rate of 12% – Livemint.
Of the 12%, 5% will go to the center and 7% to the states. From the state’s share, 2% will go to third tier of governments made up of panchayats and local bodies.
Currently different states charge different tax rates for the same goods and services and there’s an incentive for an individual to purchase goods from a state where tax rates are lower. The difference in tax rates sometimes lead to the smuggling of goods as well.
Once adopted, GST will enable uniform tax rates for similar goods and services across the country. It would economically unify the country, reduce the incidence of tax and ensure greater revenue through better compliance. Most of developed countries of the world use GST.
The union government had promised to adopt GST by 1st April 2010, but has been unable to get the states to agree to the schedule. Some states fear that they would lose their existing tax revenues if they adopt GST.
To take care of this apprehension, the commission recommends creating a ‘safety net’ (a compensation fund with a corpus of Rs. 30,000 crore) in five years by the center. Any state which suffers a revenue loss from implementing GST shall be compensated using the safety net.
Related Articles
- New Income Tax Slabs
- How does Short Term Capital Gain/Loss work?
- No proof required for LTA & Conveyance allowance claims
- How to file Income Tax returns online
- How to check whether your employer/financial institution have deposited your TDS?
Of the 12%, 5% will go to the center and 7% to the states. From the state’s share, 2% will go to third tier of governments made up of panchayats and local bodies.
Currently different states charge different tax rates for the same goods and services and there’s an incentive for an individual to purchase goods from a state where tax rates are lower. The difference in tax rates sometimes lead to the smuggling of goods as well.
Once adopted, GST will enable uniform tax rates for similar goods and services across the country. It would economically unify the country, reduce the incidence of tax and ensure greater revenue through better compliance. Most of developed countries of the world use GST.
The union government had promised to adopt GST by 1st April 2010, but has been unable to get the states to agree to the schedule. Some states fear that they would lose their existing tax revenues if they adopt GST.
To take care of this apprehension, the commission recommends creating a ‘safety net’ (a compensation fund with a corpus of Rs. 30,000 crore) in five years by the center. Any state which suffers a revenue loss from implementing GST shall be compensated using the safety net.
Related Articles
- New Income Tax Slabs
- How does Short Term Capital Gain/Loss work?
- No proof required for LTA & Conveyance allowance claims
- How to file Income Tax returns online
- How to check whether your employer/financial institution have deposited your TDS?
Monday, 14 December 2009
Online car insurance rates
It is unavoidable to have insurance for our car when we own one. Car insurance not only covers the money required to do rework on a car after an accident, but it also covers the life of the passengers inside. Hence, driving without car insurance is a huge risk that a person is taking. And most of the times a car insurance is mandated by the laws of a nation. Then it becomes all the more important to have insurance for our car.
There are umpteen insurance companies that offer car insurance to the public. They offer various schemes with varying options. So much so that sometimes we have to do a thorough research before finalizing on a particular insurance company. That’s where websites that provide auto insurance reviews come to our rescue. They provide all the information one would need when he is going for car insurance.
The site allows us to compare car insurances offered by several companies so that we can make an informed decision before we purchase one. It also helps the users to evaluate insurance coverage and rates of various insurance policies and has good articles that can educate an interested person. Thus finding car insurance that is appropriate for one’s personal needs would be quite easy while using the site.
There are umpteen insurance companies that offer car insurance to the public. They offer various schemes with varying options. So much so that sometimes we have to do a thorough research before finalizing on a particular insurance company. That’s where websites that provide auto insurance reviews come to our rescue. They provide all the information one would need when he is going for car insurance.
The site allows us to compare car insurances offered by several companies so that we can make an informed decision before we purchase one. It also helps the users to evaluate insurance coverage and rates of various insurance policies and has good articles that can educate an interested person. Thus finding car insurance that is appropriate for one’s personal needs would be quite easy while using the site.
Wednesday, 16 September 2009
SEBI makes IPOs more transparent
The Securities and Exchange Board of India, SEBI, issued a new investor protection guideline that prevents companies doing IPO from sharing information, which is not available for the outside world, with their IPO arrangers.
Previously, a company going for an IPO shared key financial information with the investment bank arranging the IPO; information which is available only to the bank and not to others. The investment bank would then prepare research reports which are based on this extra information. The reports are shared with institutional investors prior to the filing of the prospectus and are not available to retail or ordinary investors.
So, one could easily make out that the additional information would make IPO estimations by the investment bank dealing with the IPO more accurate and give institutional investors an unfair advantage against other investors. Given this situation, the tweak from SEBI which says,
Related Articles
- Now Interest Rate Futures can be traded in National Stock Exchange
- SEBI mandates Rs. per share dividend declaration
- How does Short Term Capital Gain/Loss work?
- Application Supported by Blocked Amount for IPOs
- Money no longer gets locked in IPOs
Previously, a company going for an IPO shared key financial information with the investment bank arranging the IPO; information which is available only to the bank and not to others. The investment bank would then prepare research reports which are based on this extra information. The reports are shared with institutional investors prior to the filing of the prospectus and are not available to retail or ordinary investors.
So, one could easily make out that the additional information would make IPO estimations by the investment bank dealing with the IPO more accurate and give institutional investors an unfair advantage against other investors. Given this situation, the tweak from SEBI which says,
“no selective or additional information or information extraneous to the offer document shall be made available by the issuer or any member of the issue management team/syndicate to any particular section of the investors or to any research analyst in any manner whatsoever including at road shows, presentations, in research or sales reports or at bidding centers”shall provide a level playing ground for investors alike and would bridge problems associated with information asymmetry.
Related Articles
- Now Interest Rate Futures can be traded in National Stock Exchange
- SEBI mandates Rs. per share dividend declaration
- How does Short Term Capital Gain/Loss work?
- Application Supported by Blocked Amount for IPOs
- Money no longer gets locked in IPOs
Tuesday, 15 September 2009
Now Interest Rate Futures can be traded in National Stock Exchange
After a gap of six years, the National Stock Exchange (NSE) of India re-launched trading in Interest Rate Futures. This will give the investor an opportunity to speculate and trade with these advanced financial instruments.
Interest Rate Futures allow institutions to hedge risk associated with interest rate fluctuations. They can reduce the risk associated with cash flows resulting from underlying assets such as home loans, long term fixed deposits etc.
However, in India, the underlying asset on which the interest rate future is based on is a 10 year notional coupon bearing government security. Have a look at this small series that came in ET, which talks about few things one has to consider before trading in interest rate futures.
Interest Rate Futures allow institutions to hedge risk associated with interest rate fluctuations. They can reduce the risk associated with cash flows resulting from underlying assets such as home loans, long term fixed deposits etc.
However, in India, the underlying asset on which the interest rate future is based on is a 10 year notional coupon bearing government security. Have a look at this small series that came in ET, which talks about few things one has to consider before trading in interest rate futures.
Saturday, 8 August 2009
Inflation rates of India (2009)
This post tracks inflation rates of India for the year 2009, like Inflation rates of India (2008) did for 2008. Before that, a few facts about inflation rate calculation in India.
- Inflation in India is based on Wholesale Price Index
- A set of 435 commodities are used for the WPI based inflation calculation
- The base year for WPI calculation is 1993-94
- WPI is available at the end of every week (generally Saturday), for a period of 1 year ended that day
- It has a time lag of 2 weeks (WPI for the year ended two weeks back will be available this week)
Latest Inflation Rate
- 2009 Nov - 4.78% (via)
(for 12 months ended on the given month)
Previous Inflation Rates (for 12 months ended on given date/month)
- 2009 Oct - 1.34% (via)
- 2009 Oct 17 - 1.51% (via)
- 2009 Oct 10 - 1.21% (via)
- 2009 Oct 03 - 0.92% (via)
- 2009 Sep 26 - 0.70% (via)
- 2009 Sep 19 - 0.83% (via)
- 2009 Sep 12 - 0.37% (via)
- 2009 Sep 05 - 0.12% (via)
- 2009 Aug 29 - (-0.12)% (via)
- 2009 Aug 22 - (-0.21)% (via)
- 2009 Aug 15 - (-0.95)% (via)
- 2009 Aug 08 - (-1.53)% (via)
- 2009 Aug 01 - (-1.74)% (via)
- 2009 Jul 25 - (-1.58)% (via)
- 2009 Jul 18 - (-1.54)% (via)
- 2009 Jul 11 - (-1.17)% (via)
- 2009 Jul 04 - (-1.21)% (via)
- 2009 Jun 27 - (-1.55)% (via)
- 2009 Jun 20 - (-1.30)% (via)
- 2009 Jun 13 - (-1.14)% (via)
- 2009 Jun 06 - (-1.61)% (via)
- 2009 May 30 - 0.13% (via)
- 2009 May 23 - 0.48% (via)
- 2009 May 16 - 0.61% (via)
- 2009 May 09 - 0.61% (via)
- 2009 May 02 - 0.48% (via)
- 2009 Apr 25 - 0.75% (via)
- 2009 Apr 18 - 0.57% (via)
- 2009 Apr 11 - 0.26% (via)
- 2009 Apr 04 - 0.18% (via)
- 2009 Mar 28 - 0.26% (via)
- 2009 Mar 21 - 0.31% (via)
- 2009 Mar 14 - 0.27% (via)
- 2009 Mar 07 - 0.44% (via)
- 2009 Feb 28 - 2.43% (via)
- 2009 Feb 21 - 3.03% (via)
- 2009 Feb 14 - 3.36% (via)
- 2009 Feb 7 - 3.92% (via)
- 2009 Jan 31 - 4.39% (via)
- 2009 Jan 24 - 5.07% (via)
- 2009 Jan 17 - 5.64% (via)
- 2009 Jan 10 - 5.60% (via)
- 2009 Jan 3 - 5.24% (via)
Related Articles
- Inflation rates of India (2008)
- How is WPI inflation rate calculated in India?
- Commodities and their weight-ages in WPI calculation of India
- Base year and number of commodities used for inflation calculation in India
- The magic of Inflation
- Inflation in India is based on Wholesale Price Index
- A set of 435 commodities are used for the WPI based inflation calculation
- The base year for WPI calculation is 1993-94
- WPI is available at the end of every week (generally Saturday), for a period of 1 year ended that day
- It has a time lag of 2 weeks (WPI for the year ended two weeks back will be available this week)
Latest Inflation Rate
- 2009 Nov - 4.78% (via)
(for 12 months ended on the given month)
Previous Inflation Rates (for 12 months ended on given date/month)
- 2009 Oct - 1.34% (via)
- 2009 Oct 17 - 1.51% (via)
- 2009 Oct 10 - 1.21% (via)
- 2009 Oct 03 - 0.92% (via)
- 2009 Sep 26 - 0.70% (via)
- 2009 Sep 19 - 0.83% (via)
- 2009 Sep 12 - 0.37% (via)
- 2009 Sep 05 - 0.12% (via)
- 2009 Aug 29 - (-0.12)% (via)
- 2009 Aug 22 - (-0.21)% (via)
- 2009 Aug 15 - (-0.95)% (via)
- 2009 Aug 08 - (-1.53)% (via)
- 2009 Aug 01 - (-1.74)% (via)
- 2009 Jul 25 - (-1.58)% (via)
- 2009 Jul 18 - (-1.54)% (via)
- 2009 Jul 11 - (-1.17)% (via)
- 2009 Jul 04 - (-1.21)% (via)
- 2009 Jun 27 - (-1.55)% (via)
- 2009 Jun 20 - (-1.30)% (via)
- 2009 Jun 13 - (-1.14)% (via)
- 2009 Jun 06 - (-1.61)% (via)
- 2009 May 30 - 0.13% (via)
- 2009 May 23 - 0.48% (via)
- 2009 May 16 - 0.61% (via)
- 2009 May 09 - 0.61% (via)
- 2009 May 02 - 0.48% (via)
- 2009 Apr 25 - 0.75% (via)
- 2009 Apr 18 - 0.57% (via)
- 2009 Apr 11 - 0.26% (via)
- 2009 Apr 04 - 0.18% (via)
- 2009 Mar 28 - 0.26% (via)
- 2009 Mar 21 - 0.31% (via)
- 2009 Mar 14 - 0.27% (via)
- 2009 Mar 07 - 0.44% (via)
- 2009 Feb 28 - 2.43% (via)
- 2009 Feb 21 - 3.03% (via)
- 2009 Feb 14 - 3.36% (via)
- 2009 Feb 7 - 3.92% (via)
- 2009 Jan 31 - 4.39% (via)
- 2009 Jan 24 - 5.07% (via)
- 2009 Jan 17 - 5.64% (via)
- 2009 Jan 10 - 5.60% (via)
- 2009 Jan 3 - 5.24% (via)
Related Articles
- Inflation rates of India (2008)
- How is WPI inflation rate calculated in India?
- Commodities and their weight-ages in WPI calculation of India
- Base year and number of commodities used for inflation calculation in India
- The magic of Inflation
Monday, 6 July 2009
New Income Tax Slabs
In the union budget for financial year 2009-10, the Finance Minister has announced new tax slabs.
General
Till 1,60,000 – 0%
1,60,001 – 3,00,000 – 10%
3,00,001 – 5,00,000 – 20%
Above 5,00,000 – 30%
Women
Till 1,90,000 – 0%
1,90,000 – 3,00,000 – 10%
Remaining tax rates are same as general
Senior Citizen
Till 2,40,000 – 0%
2,40,001 – 3,00,000 – 10%
Remaining tax rates are same as general
As you can see, compared to the last change, there is a 10,000 rupees increase in the first slab across all categories, while the remaining slabs remain unchanged. This would lead to a maximum savings of 1000 rupees for a tax payer whose income falls above Rs. 1,60,000. This may not be a significant saving for many.
However the interesting thing to note is that there is no 10% surcharge for incomes above 10 lakhs. This is a welcome move because I feel progressive taxation is counter productive to an aspiring population. Eventhough these tax sops would make holes in government's revenues, I guess the government is looking to increase the expendable surplus of the populace so as to boost up the economic downturn.
General
Till 1,60,000 – 0%
1,60,001 – 3,00,000 – 10%
3,00,001 – 5,00,000 – 20%
Above 5,00,000 – 30%
Women
Till 1,90,000 – 0%
1,90,000 – 3,00,000 – 10%
Remaining tax rates are same as general
Senior Citizen
Till 2,40,000 – 0%
2,40,001 – 3,00,000 – 10%
Remaining tax rates are same as general
As you can see, compared to the last change, there is a 10,000 rupees increase in the first slab across all categories, while the remaining slabs remain unchanged. This would lead to a maximum savings of 1000 rupees for a tax payer whose income falls above Rs. 1,60,000. This may not be a significant saving for many.
However the interesting thing to note is that there is no 10% surcharge for incomes above 10 lakhs. This is a welcome move because I feel progressive taxation is counter productive to an aspiring population. Eventhough these tax sops would make holes in government's revenues, I guess the government is looking to increase the expendable surplus of the populace so as to boost up the economic downturn.
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