MUMBAI | BANGALORE: Mona Sandhu, a lecturer turned costume jewellery designer, set up a jewellery store in her home city of Karnal, Haryana, in 2006. The five-year-old store was doing well, selling about 70 pieces a week, but the limited pool of customers was stifling for the ambitious businesswoman.
On a whim, Sandhu set up a profile on Facebook at the end of last year with photographs of some of her products. To her surprise, she bagged an order the same day from a customer in California. Ten months on, Sandhu, whose social media page has been liked by 17000 visitors, is busy planning exhibitions in the US and UK.
As business on social media gains rapid acceptance, small-town entrepreneurs are securing customers from across the world. Sandhu gets over 100 orders a week mostly from customers in the US, Canada and the UK. On an average, individual customers order 5-10 pieces at a time, while a wholesale order starts at 40. "I have international recognition which has helped increase sales by 20 times since the launch of the page," says Sandhu for whom the Facebook page is the sole link with her customers.
For scores of entrepreneurs like Sandhu living in non-metros and towns with tight marketing budgets and no experience of running a commercial enterprise, Facebook has emerged as a significant marketing and sales tool. In fact, many of them are using their Facebook page as a substitute for a proprietary website. It costs nothing to set up a page, profile or group and it provides space for displaying photographs to boot.
Monday, August 15, 2011
No immediate threat to India's sovereign rating: S&P
NEW DELHI: Standard and Poor's has said there is no immediate threat to India's sovereign debt rating of BBB, though loose fiscal policy and the government's inability to carry forward economic reforms could have implications in the medium term.
"We do not see an immediate impact on India's sovereign rating (BBB-/Stable) resulting from the lowering of the US sovereign rating to AA+," Standard & Poor's sovereign analyst Takahira Ogawa said.
S&P recently lowered the sovereign rating of the US to AA+ from AAA. The ratings are opinions that reflect the ability and willingness of the rated entity to meet financial obligations.
The decision to lower the sovereign rating of the US had deleterious consequences for stock markets all over the world, including India.
Referring to problems with regard to high inflation and the fiscal deficit in India, Ogawa said, "Potential longer-term consequences may point to negative factors."
He further said that while tight policies could have a positive bearing on the country's rating, a deterioration in fiscal health and setbacks on the economic reforms front might result in a downgrade.
India has been struggling to deal with inflation, which is nearing the double-digit mark. Headline inflation stood at 9.44 per cent in June, while food inflation was 9.90 per cent for the week ended July 30.
On the fiscal side, rising prices of crude oil and high food and fertiliser subsidies, coupled with the inability of the government to raise Rs 40,000 crore from the divestment of equity in public sector companies during 2010-11, could create problems.
Inflation, Ogawa said, "remains India's biggest challenge in the near-term, as high inflation could push up credit costs and dampen the country's economic growth trajectory."
Although the pace of food price rise seems to have stabilised to "some extent", the prices of manufactured products are still increasing, he said.
Referring to public finances, Ogawa said, "Ballooning fiscal deficits also constrain the sovereign ratings on India. Continuing its fiscal consolidation policies into fiscal 2012 will be a key challenge for the government."
India's sovereign rating, S&P said, could be raised if "the government continues to reduce the public sector's deficits materially.
"For example, future government initiatives to significantly reduce subsidies for fertilisers, foods and fuels would be a positive factor in improving the expenditure structure of the budget and reducing the negative influence of potential external shocks on India's fiscal position," the agency said.
"We do not see an immediate impact on India's sovereign rating (BBB-/Stable) resulting from the lowering of the US sovereign rating to AA+," Standard & Poor's sovereign analyst Takahira Ogawa said.
S&P recently lowered the sovereign rating of the US to AA+ from AAA. The ratings are opinions that reflect the ability and willingness of the rated entity to meet financial obligations.
The decision to lower the sovereign rating of the US had deleterious consequences for stock markets all over the world, including India.
Referring to problems with regard to high inflation and the fiscal deficit in India, Ogawa said, "Potential longer-term consequences may point to negative factors."
He further said that while tight policies could have a positive bearing on the country's rating, a deterioration in fiscal health and setbacks on the economic reforms front might result in a downgrade.
India has been struggling to deal with inflation, which is nearing the double-digit mark. Headline inflation stood at 9.44 per cent in June, while food inflation was 9.90 per cent for the week ended July 30.
On the fiscal side, rising prices of crude oil and high food and fertiliser subsidies, coupled with the inability of the government to raise Rs 40,000 crore from the divestment of equity in public sector companies during 2010-11, could create problems.
Inflation, Ogawa said, "remains India's biggest challenge in the near-term, as high inflation could push up credit costs and dampen the country's economic growth trajectory."
Although the pace of food price rise seems to have stabilised to "some extent", the prices of manufactured products are still increasing, he said.
Referring to public finances, Ogawa said, "Ballooning fiscal deficits also constrain the sovereign ratings on India. Continuing its fiscal consolidation policies into fiscal 2012 will be a key challenge for the government."
India's sovereign rating, S&P said, could be raised if "the government continues to reduce the public sector's deficits materially.
"For example, future government initiatives to significantly reduce subsidies for fertilisers, foods and fuels would be a positive factor in improving the expenditure structure of the budget and reducing the negative influence of potential external shocks on India's fiscal position," the agency said.
What have widening income gaps got to do with globalisation & IT revolution?
London burns. The Arab Spring triggers popular rebellions against autocrats across the Arab world. The Israeli Summer brings 250,000 Israelis into the streets, protesting the lack of affordable housing and the way their country is now dominated by an oligopoly of crony capitalists.
From Athens to Barcelona, European town squares are being taken over by young people railing against unemployment and the injustice of yawning income gaps, while the angry Tea Party emerges from nowhere and sets American politics on its head. What's going on here?
There are multiple and different reasons for these explosions, but to the extent they might have a common denominator I think it can be found in one of the slogans of Israel's middle-class uprising: "We are fighting for an accessible future." Across the world, a lot of middle-and lower-middle-class people now feel that the "future" is out of their grasp, and they are letting their leaders know it.
Why now? It starts with the fact that globalisation and the information technology revolution have gone to a whole new level. Thanks to cloud computing, robotics, 3G wireless connectivity, Skype, Facebook, Google, LinkedIn, Twitter, the iPad, and cheap Internet-enabled smartphones, the world has gone from connected to hyperconnected. This is the single most important trend in the world today. And it is a critical reason why, to get into the middle class now, you have to study harder, work smarter and adapt quicker than ever before.
All this technology and globalisation are eliminating more and more "routine" work - the sort of work that once sustained a lot of middle-class lifestyles. The merger of globalisation and IT is driving huge productivity gains, especially in recessionary times, where employers are finding it easier, cheaper and more necessary than ever to replace labor with machines, computers, robots and talented foreign workers. It used to be that only cheap foreign manual labour was easily available; now cheap foreign genius is easily available.
This explains why corporations are getting richer and middleskilled workers poorer. Good jobs do exist, but they require more education or technical skills. Unemployment today still remains relatively low for people with college degrees. But to get one of those degrees and to leverage it for a good job requires everyone to raise their game. It's hard.
From Athens to Barcelona, European town squares are being taken over by young people railing against unemployment and the injustice of yawning income gaps, while the angry Tea Party emerges from nowhere and sets American politics on its head. What's going on here?
There are multiple and different reasons for these explosions, but to the extent they might have a common denominator I think it can be found in one of the slogans of Israel's middle-class uprising: "We are fighting for an accessible future." Across the world, a lot of middle-and lower-middle-class people now feel that the "future" is out of their grasp, and they are letting their leaders know it.
Why now? It starts with the fact that globalisation and the information technology revolution have gone to a whole new level. Thanks to cloud computing, robotics, 3G wireless connectivity, Skype, Facebook, Google, LinkedIn, Twitter, the iPad, and cheap Internet-enabled smartphones, the world has gone from connected to hyperconnected. This is the single most important trend in the world today. And it is a critical reason why, to get into the middle class now, you have to study harder, work smarter and adapt quicker than ever before.
All this technology and globalisation are eliminating more and more "routine" work - the sort of work that once sustained a lot of middle-class lifestyles. The merger of globalisation and IT is driving huge productivity gains, especially in recessionary times, where employers are finding it easier, cheaper and more necessary than ever to replace labor with machines, computers, robots and talented foreign workers. It used to be that only cheap foreign manual labour was easily available; now cheap foreign genius is easily available.
This explains why corporations are getting richer and middleskilled workers poorer. Good jobs do exist, but they require more education or technical skills. Unemployment today still remains relatively low for people with college degrees. But to get one of those degrees and to leverage it for a good job requires everyone to raise their game. It's hard.
Monday, August 8, 2011
Recession 2011: Behind the bluster, China reprices US risk
BEIJING: Chinese editorials flaying Washington for fiscal recklessness over its debt dramatics and downgrade mask a growing unease in Beijing: a fear that China's own economic policies are shifting too slowly.
Interviews with a dozen high-ranking Chinese officials and government economists revealed frustration with China's self-imposed fetters to the US dollar and louder calls for a change, but no clear short-term plan to break free.
The obvious answer -- allowing the yuan to rise more rapidly -- carries economic and political costs that China is probably not yet prepared to pay.
One idea that appeared to be gaining some traction in Beijing is to loosen restrictions on Chinese businesses and citizens investing abroad. That would help to reduce the build-up of cash inside China.
But it would only marginally trim China's US exposure. An estimated two-thirds of China's $3.2 trillion in reserves is invested in US dollar-denominated assets such as Treasuries, and the pile of cash grows each month thanks to a heavy trade surplus.
Standard & Poor's stripped the United States of its prized AAA rating on Friday, citing the government's rising debt burden, drawing a blast of criticism from official China media.
Some officials who spoke to Reuters sounded resigned to their fate, acknowledging that there is no viable alternative to investing in US Treasury debt.
But others saw the US debt debacle in recent weeks as just the sort of shove Beijing needs to speed up domestic reforms.
"We need to diversify to the greatest extent possible," said one People's Bank of China official who spoke on condition of anonymity because he was not authorized to speak to the media.
"China's position has always been very clear," he said. "First, we'll demand strongly that the United States strengthen its self discipline -- they can't just keep issuing debt without limit. Secondly, we need to speed up the pace of our domestic economic transformation and reduce our accumulation of foreign exchange reserves."
PUBLIC SHAME China's public response to the US debt troubles, expressed in a series of scathing commentaries in the state-controlled media, has been to censure Washington for neglecting its responsibility as issuer of the world's primary reserve currency and trying to "borrow its way out of messes of its own making".
But in interviews with Reuters, some officials quietly acknowledged Beijing's own policies have put China in an uncomfortable position, and argued they would have to change.
China has already laid out a five-year plan that envisages promoting domestic consumption, something the United States has urged for years as a way to reduce a gaping trade imbalance and shrink the vast heap of dollars Beijing invests in Treasuries.
But 2015 is a long way off. One idea for quicker change came up in conversations with several sources -- easing restrictions on foreign investment.
"The government will quicken its pace to allow Chinese companies and individuals (to) invest abroad," said a government economist with the National Development and Reform Commission, China's economic planning agency.
Cheng Siwei, a former vice-chairman of China's parliament, made the same point in a Reuters Insider interview on Monday.
Interviews with a dozen high-ranking Chinese officials and government economists revealed frustration with China's self-imposed fetters to the US dollar and louder calls for a change, but no clear short-term plan to break free.
The obvious answer -- allowing the yuan to rise more rapidly -- carries economic and political costs that China is probably not yet prepared to pay.
One idea that appeared to be gaining some traction in Beijing is to loosen restrictions on Chinese businesses and citizens investing abroad. That would help to reduce the build-up of cash inside China.
But it would only marginally trim China's US exposure. An estimated two-thirds of China's $3.2 trillion in reserves is invested in US dollar-denominated assets such as Treasuries, and the pile of cash grows each month thanks to a heavy trade surplus.
Standard & Poor's stripped the United States of its prized AAA rating on Friday, citing the government's rising debt burden, drawing a blast of criticism from official China media.
Some officials who spoke to Reuters sounded resigned to their fate, acknowledging that there is no viable alternative to investing in US Treasury debt.
But others saw the US debt debacle in recent weeks as just the sort of shove Beijing needs to speed up domestic reforms.
"We need to diversify to the greatest extent possible," said one People's Bank of China official who spoke on condition of anonymity because he was not authorized to speak to the media.
"China's position has always been very clear," he said. "First, we'll demand strongly that the United States strengthen its self discipline -- they can't just keep issuing debt without limit. Secondly, we need to speed up the pace of our domestic economic transformation and reduce our accumulation of foreign exchange reserves."
PUBLIC SHAME China's public response to the US debt troubles, expressed in a series of scathing commentaries in the state-controlled media, has been to censure Washington for neglecting its responsibility as issuer of the world's primary reserve currency and trying to "borrow its way out of messes of its own making".
But in interviews with Reuters, some officials quietly acknowledged Beijing's own policies have put China in an uncomfortable position, and argued they would have to change.
China has already laid out a five-year plan that envisages promoting domestic consumption, something the United States has urged for years as a way to reduce a gaping trade imbalance and shrink the vast heap of dollars Beijing invests in Treasuries.
But 2015 is a long way off. One idea for quicker change came up in conversations with several sources -- easing restrictions on foreign investment.
"The government will quicken its pace to allow Chinese companies and individuals (to) invest abroad," said a government economist with the National Development and Reform Commission, China's economic planning agency.
Cheng Siwei, a former vice-chairman of China's parliament, made the same point in a Reuters Insider interview on Monday.
Recession 2011: Euro zone investors gloomiest for nearly 2 years, says Sentix
BERLIN: Euro zone investor sentiment plummeted going into August, hitting its lowest level since September 2009 amid concerns global policymakers lack the tools to respond effectively to a deepening economic crisis, a survey showed.
Market research group Sentix said on Monday its headline index fell at its fastest pace on record to -13.5 in August from 5.3 in July, missing even the lowest forecast in a Reuters survey of economists for a drop to -1.0 by a long way.
Economists had on average forecast a fall to 1.9. "The mix of EU debt problems, the powerlessness of policymakers regarding this and the quarrels in the US regarding lifting the deficit ceiling have strongly unsettled investors," Sentix said in a statement.
The group said this mix of problems, as well as an historic downgrade of the US credit rating and turbulence on the financial markets, were reinforcing the impression that the outlook for the global economy was darkening.
A sub-index of current conditions fell to 3.50 from 19.25, while expectations dropped to -29.00 from -7.75. "Ever more investors see a spillover of the financial markets' problems into the real economy as a probable scenario," Sentix said.
Twin debt crises in Europe and the United States are stoking fears of the rich world sliding back into recession, and finance chiefs from the world's industrial powers pledged on Sunday to take whatever actions were needed to steady markets in an attempt to calm frazzled investors' nerves.
The market reaction was mixed on Monday. Asian bourses were still coloured red, but European shares rose and debt spreads eased, reassured by signs the European Central Bank had stepped up its support measures by buying Italian and Spanish debt.
"Countries' fragile financial framework is causing many investors to question how states and central banks can even tackle a possible recession," Sentix said, adding: "A global recession is giving notice that it is on its way".
Sentix based its data on a survey of 822 European private and institutional investors conducted between August 4 and August 6.
Market research group Sentix said on Monday its headline index fell at its fastest pace on record to -13.5 in August from 5.3 in July, missing even the lowest forecast in a Reuters survey of economists for a drop to -1.0 by a long way.
Economists had on average forecast a fall to 1.9. "The mix of EU debt problems, the powerlessness of policymakers regarding this and the quarrels in the US regarding lifting the deficit ceiling have strongly unsettled investors," Sentix said in a statement.
The group said this mix of problems, as well as an historic downgrade of the US credit rating and turbulence on the financial markets, were reinforcing the impression that the outlook for the global economy was darkening.
A sub-index of current conditions fell to 3.50 from 19.25, while expectations dropped to -29.00 from -7.75. "Ever more investors see a spillover of the financial markets' problems into the real economy as a probable scenario," Sentix said.
Twin debt crises in Europe and the United States are stoking fears of the rich world sliding back into recession, and finance chiefs from the world's industrial powers pledged on Sunday to take whatever actions were needed to steady markets in an attempt to calm frazzled investors' nerves.
The market reaction was mixed on Monday. Asian bourses were still coloured red, but European shares rose and debt spreads eased, reassured by signs the European Central Bank had stepped up its support measures by buying Italian and Spanish debt.
"Countries' fragile financial framework is causing many investors to question how states and central banks can even tackle a possible recession," Sentix said, adding: "A global recession is giving notice that it is on its way".
Sentix based its data on a survey of 822 European private and institutional investors conducted between August 4 and August 6.
Recession 2011: What happened to Barack Obama?
ATLANTA: It was a blustery day in Washington on Jan. 20, 2009, as it often seems to be on the day of a presidential inauguration. As I stood with my 8-year-old daughter, watching the president deliver his inaugural address, I had a feeling of unease. It wasn't just that the man who could be so eloquent had seemingly chosen not to be on this auspicious occasion, although that turned out to be a troubling harbinger of things to come. It was that there was a story the American people were waiting to hear - and needed to hear - but he didn't tell it. And in the ensuing months he continued not to tell it, no matter how outrageous the slings and arrows his opponents threw at him.
The stories our leaders tell us matter, probably almost as much as the stories our parents tell us as children, because they orient us to what is, what could be, and what should be; to the worldviews they hold and to the values they hold sacred. Our brains evolved to "expect" stories with a particular structure, with protagonists and villains, a hill to be climbed or a battle to be fought. Our species existed for more than 100,000 years before the earliest signs of literacy, and another 5,000 years would pass before the majority of humans would know how to read and write.
Stories were the primary way our ancestors transmitted knowledge and values. Today we seek movies, novels and "news stories" that put the events of the day in a form that our brains evolved to find compelling and memorable. Children crave bedtime stories; the holy books of the three great monotheistic religions are written in parables; and as research in cognitive science has shown, lawyers whose closing arguments tell a story win jury trials against their legal adversaries who just lay out "the facts of the case."
When Barack Obama rose to the lectern on Inauguration Day, the nation was in tatters. Americans were scared and angry. The economy was spinning in reverse. Three-quarters of a million people lost their jobs that month. Many had lost their homes, and with them the only nest eggs they had. Even the usually impervious upper middle class had seen a decade of stagnant or declining investment, with the stock market dropping in value with no end in sight. Hope was as scarce as credit.
In that context, Americans needed their president to tell them a story that made sense of what they had just been through, what caused it, and how it was going to end. They needed to hear that he understood what they were feeling, that he would track down those responsible for their pain and suffering, and that he would restore order and safety. What they were waiting for, in broad strokes, was a story something like this:
"I know you're scared and angry. Many of you have lost your jobs, your homes, your hopes. This was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated with your lives and futures. It was made by conservative extremists who told us that if we just eliminated regulations and rewarded greed and recklessness, it would all work out. But it didn't work out.
The stories our leaders tell us matter, probably almost as much as the stories our parents tell us as children, because they orient us to what is, what could be, and what should be; to the worldviews they hold and to the values they hold sacred. Our brains evolved to "expect" stories with a particular structure, with protagonists and villains, a hill to be climbed or a battle to be fought. Our species existed for more than 100,000 years before the earliest signs of literacy, and another 5,000 years would pass before the majority of humans would know how to read and write.
Stories were the primary way our ancestors transmitted knowledge and values. Today we seek movies, novels and "news stories" that put the events of the day in a form that our brains evolved to find compelling and memorable. Children crave bedtime stories; the holy books of the three great monotheistic religions are written in parables; and as research in cognitive science has shown, lawyers whose closing arguments tell a story win jury trials against their legal adversaries who just lay out "the facts of the case."
When Barack Obama rose to the lectern on Inauguration Day, the nation was in tatters. Americans were scared and angry. The economy was spinning in reverse. Three-quarters of a million people lost their jobs that month. Many had lost their homes, and with them the only nest eggs they had. Even the usually impervious upper middle class had seen a decade of stagnant or declining investment, with the stock market dropping in value with no end in sight. Hope was as scarce as credit.
In that context, Americans needed their president to tell them a story that made sense of what they had just been through, what caused it, and how it was going to end. They needed to hear that he understood what they were feeling, that he would track down those responsible for their pain and suffering, and that he would restore order and safety. What they were waiting for, in broad strokes, was a story something like this:
"I know you're scared and angry. Many of you have lost your jobs, your homes, your hopes. This was a disaster, but it was not a natural disaster. It was made by Wall Street gamblers who speculated with your lives and futures. It was made by conservative extremists who told us that if we just eliminated regulations and rewarded greed and recklessness, it would all work out. But it didn't work out.
US crisis may hit export & capital flows: C Rangarajan
NEW DELHI: Prime Minister's Economic Advisory Council Chairman C Rangarajan today said the downgrade of the US sovereign rating will negatively impact exports and moderate capital flows into the country.
"More than the downgrade, what will be the impact for the rest of the world will be the slow pace of recovery in the US," he said in a statement.
"In the first half of the current calender year, the growth rate in the USA was 1.5 per cent. Perhaps for the year as a whole, other growth rates may not be much higher than that. That's a very, very slow pace of recovery and that has implications for the world in terms of capital flows, in terms of trade flow," he said.
Even Finance Minister Pranab Mukherjee said the downgrade of the US sovereign rating will have some implications on India, but added there was no need to press the panic button as the fundamentals of the economy remain strong.
"The recent developments in the US and the eurozone have injected certain uncertainty in global markets. These developments could have some impact on India. But as India's growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge," Mukherjee told reporters outside Parliament House.
Mukherjee said there could be "some impact" on capital and trade flows, "but as India's growth story is strong, we could see FIIs viewing India as an attractive investment destination even if there is any temporary outflow".
Ratings agency Standard and Poor's on Friday lowered the sovereign credit rating of the US to AA+ from AAA, a development which raises concerns that investors will lose confidence in the American economy.
Justifying its rating, S&P said that predictability about US policymaking and political institutions has weakened at a time of fiscal challenge. A US Treasury official, however, said the decision of S&P was flawed.
"More than the downgrade, what will be the impact for the rest of the world will be the slow pace of recovery in the US," he said in a statement.
"In the first half of the current calender year, the growth rate in the USA was 1.5 per cent. Perhaps for the year as a whole, other growth rates may not be much higher than that. That's a very, very slow pace of recovery and that has implications for the world in terms of capital flows, in terms of trade flow," he said.
Even Finance Minister Pranab Mukherjee said the downgrade of the US sovereign rating will have some implications on India, but added there was no need to press the panic button as the fundamentals of the economy remain strong.
"The recent developments in the US and the eurozone have injected certain uncertainty in global markets. These developments could have some impact on India. But as India's growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge," Mukherjee told reporters outside Parliament House.
Mukherjee said there could be "some impact" on capital and trade flows, "but as India's growth story is strong, we could see FIIs viewing India as an attractive investment destination even if there is any temporary outflow".
Ratings agency Standard and Poor's on Friday lowered the sovereign credit rating of the US to AA+ from AAA, a development which raises concerns that investors will lose confidence in the American economy.
Justifying its rating, S&P said that predictability about US policymaking and political institutions has weakened at a time of fiscal challenge. A US Treasury official, however, said the decision of S&P was flawed.
New RBI rules about ATMusage
Over the past couple of years, there has been a vast change in the way you conduct your banking transactions, be it online payments, swiping cards at shopping outlets or withdrawing cash from ATMs. The RBI regulations aimed at strengthening the safety infrastructure and banks encouraging the use of alternative channels like ATMs has meant that the routine transactions have become more userfriendly and secure.
Banks too are keen that ATMs are seen as more than just cash dispensing machines, resulting in their increased usage. "After the changes in the regulation on ATM usage, we have seen a four-fold increase in non-Standard Chartered customers accessing our ATMs," says Rajashree Nambiar, general manager, distribution, Standard Chartered Bank. Concurs Shalini Mehta, executive vicepresident, Kotak Mahindra Bank: "ATM usage has certainly gone up. The total transactions have increased by 106% since April 2009. Customers have adapted to ATMs as one of the most preferred channels for basic banking transactions."
To make the most of this conducive environment, you need to be wellacquainted with the regulations governing ATM transactions that have been introduced in the past few months. Here are some you should know about.
Limited free transactions The most recent stricture from the banking regulator concerns third-party ATM transactions. Beginning 1 July, the five free transactions allowed at third-party ATMs include non-financial transactions as well. So, while earlier there was no limit on nonfinancial transactions like balance enquiry and taking a mini-statement, now these will be charged.
Banks too are keen that ATMs are seen as more than just cash dispensing machines, resulting in their increased usage. "After the changes in the regulation on ATM usage, we have seen a four-fold increase in non-Standard Chartered customers accessing our ATMs," says Rajashree Nambiar, general manager, distribution, Standard Chartered Bank. Concurs Shalini Mehta, executive vicepresident, Kotak Mahindra Bank: "ATM usage has certainly gone up. The total transactions have increased by 106% since April 2009. Customers have adapted to ATMs as one of the most preferred channels for basic banking transactions."
To make the most of this conducive environment, you need to be wellacquainted with the regulations governing ATM transactions that have been introduced in the past few months. Here are some you should know about.
Limited free transactions The most recent stricture from the banking regulator concerns third-party ATM transactions. Beginning 1 July, the five free transactions allowed at third-party ATMs include non-financial transactions as well. So, while earlier there was no limit on nonfinancial transactions like balance enquiry and taking a mini-statement, now these will be charged.
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The HDFC Bank, for instance, charges Rs 20 per transaction for cash withdrawal and Rs 8.50 for non-financial transactions from account holders who exceed the free usage limit at third-party ATMs. Says Sumant Kathpalia, head, consumer banking, IndusInd Bank: "For savings account holders who maintain an average balance of Rs 10,000 or more, all third-party ATM transactions are free. For others, we charge Rs 20 per incremental cash withdrawal and Rs10 for non-financial transactions after they have used their five free services per month. But for certain types of accounts, such as the premium account, the charges are waived." Not all banks have a differential charge structure and could levy the same charges for all kinds of transactions.
Alerts for all transactions Another customer-friendly measure that has been introduced from 1 July is one that could minimise the damage caused by misuse of lost or stolen cards. Banks have been asked to send SMS alerts to their customers for all card transactions, be it online, at merchant establishments or ATMs. Prior to this, banks sent alerts only if the value of transactions exceeded a certain limit, usually Rs 5,000. With this facility being extended to all transactions, you will be in a better position to take immediate remedial measures, such as blocking the lost or stolen card in case a fraudulent transaction is conducted without your knowledge or consent. Compensation structure
There have been several complaints, wherein an ATM fails to dispense cash but the amount is debited from the card holder's account. Besides, banks have been known to drag their feet over rectifying such errors. The RBI has now directed the banks to resolve such issues within seven working days of a complaint being made, failing which the banks will have to pay a compensation of Rs 100 for each day of delay. Before 1 July, the banks were given 12 days to rectify the errors involving faulty debits by ATMs. However, to be eligible for the compensation, you need to have made the complaint within 30 days of the failed transactio
Government may lower disinvestment target for current fiscal
MUMBAI: The government on Monday indicated it may lower the Rs 40,000 crore disinvestment target for the current fiscal in view of the recent bloodbath in the stock markets on account of global uncertainty.
"It is difficult to say, if the the current target will remain intact or revised," Disinvestment Secretary Mohammed Haleem Khan told reporters here when asked if the government is contemplating to lower the disinvestment target for the current fiscal.
As against the ambitious target of raising Rs 40,000 crore from sale of shares of the state-owned enterprises, the Government has so far raised a little over Rs 1,144 crore by offloading stake in the Power Finance Corporation.
Following the downgrade of sovereign credit rating of the US to AA+ from AAA by Standard and Poor's, the BSE Sensex plunged to below 17,000 mark during the intra-day trade before reducing losses.
"There are a few companies in the pipeline for disinvestment, but it is difficult to say when. We have a set of professional advisors to advise us on disinvestment," Khan said, adding the government is monitoring the situation.
A senior official in the Disinvestment Department had earlier said that the government hopes to raise a little over Rs 15,000 crore through share sale of PFC, SAIL, ONGC and HCL. PFC follow-on offer hit the market in May.
RINL, MMTC and NBCC was also on the government's radar for disinvestment but the current financial turmoil may prompt the government to postpone equity sale.
Last fiscal, the government had raised Rs 22,763 crore from sale of equity in public sector enterprises against a target of Rs 40,000 crore. It offloaded equity in SJVN, Engineers India, Coal India, PowerGrid, and Shipping Corporation of India.
The Indian stock market never made a prolonged bull run so far in the current fiscal in the wake of debt crisis in Europe, stubborn inflation within the country and a series of rate hikes by the Reserve Bank.
"It is difficult to say, if the the current target will remain intact or revised," Disinvestment Secretary Mohammed Haleem Khan told reporters here when asked if the government is contemplating to lower the disinvestment target for the current fiscal.
As against the ambitious target of raising Rs 40,000 crore from sale of shares of the state-owned enterprises, the Government has so far raised a little over Rs 1,144 crore by offloading stake in the Power Finance Corporation.
Following the downgrade of sovereign credit rating of the US to AA+ from AAA by Standard and Poor's, the BSE Sensex plunged to below 17,000 mark during the intra-day trade before reducing losses.
"There are a few companies in the pipeline for disinvestment, but it is difficult to say when. We have a set of professional advisors to advise us on disinvestment," Khan said, adding the government is monitoring the situation.
A senior official in the Disinvestment Department had earlier said that the government hopes to raise a little over Rs 15,000 crore through share sale of PFC, SAIL, ONGC and HCL. PFC follow-on offer hit the market in May.
RINL, MMTC and NBCC was also on the government's radar for disinvestment but the current financial turmoil may prompt the government to postpone equity sale.
Last fiscal, the government had raised Rs 22,763 crore from sale of equity in public sector enterprises against a target of Rs 40,000 crore. It offloaded equity in SJVN, Engineers India, Coal India, PowerGrid, and Shipping Corporation of India.
The Indian stock market never made a prolonged bull run so far in the current fiscal in the wake of debt crisis in Europe, stubborn inflation within the country and a series of rate hikes by the Reserve Bank.
Indian economy can handle current financial crisis: Pranab Mukherjee
NEW DELHI: Amid a fall in the stock markets in the wake of economic problems in the US, Finance Minister Pranab Mukherjee on Monday said India's fundamentals are strong and the government is ready to address any concern that may arise, while admitting there could be some impact.
"We would focus on encouraging greater domestic consumption and give impetus to the drivers of domestic growth", Mukherjee said while talking to reporters outside Parliament.
The government, he further said, will fast track the implementation of the pending reforms while keeping an close watch on international developments.
India, Mukherjee said, is in a better position than other nations to meet the challenge posed by the developments in the US and the Eurozone.
The Finance Minister expressed confidence that India could see faster and greater FII inflows unlike after 2008 meltdown, in view of the higher returns that global investors could get here.
"The recent developments in the US and the Eurozone have injected certain uncertainty in global markets. These developments could have some impact on India. But as India's growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge," he said.
Mukherjee said there could be "some impact" on capital and trade flows "but as India's growth story is strong we could see FIIs viewing India as an attractive investment destination even if there is any temporary outflow".
Mukherjee asserted that India's institutions are strong and "we are prepared to address any concern that may arise on account of the present situation". His statement came as the stock markets plunged by over 500 points before witnessing some recovery.
The finance minister said softening of global commodity prices, especially oil, will help check inflationary pressures.
"We would focus on encouraging greater domestic consumption and give impetus to the drivers of domestic growth", Mukherjee said while talking to reporters outside Parliament.
The government, he further said, will fast track the implementation of the pending reforms while keeping an close watch on international developments.
India, Mukherjee said, is in a better position than other nations to meet the challenge posed by the developments in the US and the Eurozone.
The Finance Minister expressed confidence that India could see faster and greater FII inflows unlike after 2008 meltdown, in view of the higher returns that global investors could get here.
"The recent developments in the US and the Eurozone have injected certain uncertainty in global markets. These developments could have some impact on India. But as India's growth story is intact and its fundamentals strong, we are in a better position than many other nations to manage the challenge," he said.
Mukherjee said there could be "some impact" on capital and trade flows "but as India's growth story is strong we could see FIIs viewing India as an attractive investment destination even if there is any temporary outflow".
Mukherjee asserted that India's institutions are strong and "we are prepared to address any concern that may arise on account of the present situation". His statement came as the stock markets plunged by over 500 points before witnessing some recovery.
The finance minister said softening of global commodity prices, especially oil, will help check inflationary pressures.
India's subsidies should not be grabbed by the rich: Jeffrey Sachs
NEW DELHI: India needs subsidies to help its teeming millions reeling under poverty but its welfare policies need to be revamped so that doles are not grabbed by the rich and flow to the deprived, says renowned economist Jeffrey Sachs.
"India has poor people. They need help. So the fundamental point with subsidies is that you need to target them as 'smart' subsidies," Sachs, also called a green evangelist and director of the Earth Institute at Columbia University, told IANS in an interview.
"Across-the-board subsidies mainly grabbed by the higher income groups is the heavy cost India has borne by poorly-designed systems. But subsidies are needed. In a country with continuing extreme poverty you need a lifeline for water, for power, for food," he said.
"You have 17 percent of the world's population but just two-and-a-half percent of land area and water supply. That's the fundamental challenge and that is where India has to crack the puzzle. It cannot simple continue to go on like this."
India has budgeted a total subsidy bill of a whopping Rs.1.43 lakh crore (nearly $32 billion) for this fiscal, mainly toward fuel and food. This is a 100-percent jump over the total subsidy of Rs.70.92 crore given out in 2007-08.
The government has accordingly promised a major re-haul in subsidies by March 2012.
"What to do is clear. Better metering, smart cards, unique identification numbers and how to apply that to subsidies which will make them a lot cheaper and a more efficient and the get the economy to work better," said the Harvard-educated professor.
Some of the proposals suggested by Sachs, who has worked on the Millennium Development Goals as advisor to the UN, are already being implemented in India, like the allocation of unique identification numbers and direct transfer of fuel and food subsidies.
Finance Minister Pranab Mukherjee also spoke of this last week and said there was a case for a differential subsidy regime for diesel, since 15 percent of this was being used as transport fuel in India for powering costly vehicles used by the rich.
"India has poor people. They need help. So the fundamental point with subsidies is that you need to target them as 'smart' subsidies," Sachs, also called a green evangelist and director of the Earth Institute at Columbia University, told IANS in an interview.
"Across-the-board subsidies mainly grabbed by the higher income groups is the heavy cost India has borne by poorly-designed systems. But subsidies are needed. In a country with continuing extreme poverty you need a lifeline for water, for power, for food," he said.
"You have 17 percent of the world's population but just two-and-a-half percent of land area and water supply. That's the fundamental challenge and that is where India has to crack the puzzle. It cannot simple continue to go on like this."
India has budgeted a total subsidy bill of a whopping Rs.1.43 lakh crore (nearly $32 billion) for this fiscal, mainly toward fuel and food. This is a 100-percent jump over the total subsidy of Rs.70.92 crore given out in 2007-08.
The government has accordingly promised a major re-haul in subsidies by March 2012.
"What to do is clear. Better metering, smart cards, unique identification numbers and how to apply that to subsidies which will make them a lot cheaper and a more efficient and the get the economy to work better," said the Harvard-educated professor.
Some of the proposals suggested by Sachs, who has worked on the Millennium Development Goals as advisor to the UN, are already being implemented in India, like the allocation of unique identification numbers and direct transfer of fuel and food subsidies.
Finance Minister Pranab Mukherjee also spoke of this last week and said there was a case for a differential subsidy regime for diesel, since 15 percent of this was being used as transport fuel in India for powering costly vehicles used by the rich.
USA Credit Rating Downgrade
Standard & Poor's had maintained an AAA rating on the US since 1941. But on Friday the US lost its top-tier AAA credit rating. This move is certainly going to affect country's borrowing costs and investor opinion of US assets. Here is what you need to know on US S&P credit rating downgrade..
127 mills employing 41,118 people shutdown in past 3 yrs: Govt
NEW DELHI: Over 125 textile mills providing employment to 41,118 people have been shut down in the past three years on account of restrictions on cotton yarn exports and piling up of huge inventories, Parliament was informed today.
"As on May 31, 2011, 127 cotton/man-made fibre textiles mills (non-small scale units) were closed during the last three years," Minister of State for Textiles Panabaaka Lakshmi said in a written reply to the Lok Sabha.
She said the government has received representations from the industry with regard to a supply and demand mismatch, huge inventories of finished goods piling up, restrictions on the export of cotton yarn and rising input prices.
Lakshmi said out of 127 mills closed, 38 mills were registered with the Board for Industrial and Financial Reconstruction (BIFR) as of March 31, 2010. The BIFR decides on reliefs or concessions to be given to sick units.
To rehabilitate the workers rendered jobless due to closure of these mills, the government has formulated the Textile Workers' Rehabilitation Fund Scheme.
In April last year, the government had restricted cotton yarn exports to 720 million kg, which led to huge inventories accumulating with the mills.
However, the restrictions were removed from April 1 this year after the manufacturers found themselves saddled with massive inventories due to the curbs on exports.
In July, 2011, the government restored the Duty Entitlement Pass Book (DEPB) scheme providing for tax refunds on cotton yarn exports with retrospective effect from April, 2011.
The incentive was withdrawn in April, 2010, due to a surge in prices of the natural fibre.
"As on May 31, 2011, 127 cotton/man-made fibre textiles mills (non-small scale units) were closed during the last three years," Minister of State for Textiles Panabaaka Lakshmi said in a written reply to the Lok Sabha.
She said the government has received representations from the industry with regard to a supply and demand mismatch, huge inventories of finished goods piling up, restrictions on the export of cotton yarn and rising input prices.
Lakshmi said out of 127 mills closed, 38 mills were registered with the Board for Industrial and Financial Reconstruction (BIFR) as of March 31, 2010. The BIFR decides on reliefs or concessions to be given to sick units.
To rehabilitate the workers rendered jobless due to closure of these mills, the government has formulated the Textile Workers' Rehabilitation Fund Scheme.
In April last year, the government had restricted cotton yarn exports to 720 million kg, which led to huge inventories accumulating with the mills.
However, the restrictions were removed from April 1 this year after the manufacturers found themselves saddled with massive inventories due to the curbs on exports.
In July, 2011, the government restored the Duty Entitlement Pass Book (DEPB) scheme providing for tax refunds on cotton yarn exports with retrospective effect from April, 2011.
The incentive was withdrawn in April, 2010, due to a surge in prices of the natural fibre.
S&P: India, Japan & Malaysia may face credit rating downgrade
EW DELHI: Ratings agency Standard & Poor's today cautioned that it could lower the sovereign ratings of countries like India, Japan and Malaysia, which are still to come out of the economic meltdown of 2008.
"The implications for sovereign creditworthiness in the Asia-Pacific would likely be more negative than previously experienced and a larger number of negative rating actions would follow," S&P said in its report on Asia-Pacific Sovereigns.
"Fiscal capacities of Japan, India, Malaysia, Taiwan and New Zealand have shrunk relative to pre-2008 level," it said, adding that these countries continue to bear the scars of the downturn.
The governments, it said, would be required to use their own revenue streams to support their economies and financial sector once again.
It further said that if a renewed slowdown comes, it would create a deeper and more prolonged impact.
At the time of the global financial crisis in 2008, several countries, including India, had rolled out stimulus packages facilitating monetary expansion and lower taxes to mitigate the impact of the slowdown.
(Also check: Sensex may dive to 15k, fears market, says ET poll | US not on the road to recovery: Paul Krugman | 'US still the safest place to invest' | S&P warns US of further downgrade in credit ratings )
At that time, India had provided three fiscal stimulus packages totalling Rs 1.86 lakh crore, which helped the economy clock a growth of 8 per cent in 2009-10, as against 6.8 per cent in 2008-09. Prior to the crisis, the Indian economy had been expanding at a growth rate of over 9 per cent over a three-year period.
Late on Friday, global ratings agency S&P downgraded its US sovereign rating to AA+ from AAA, with a negative outlook.
"The implications for sovereign creditworthiness in the Asia-Pacific would likely be more negative than previously experienced and a larger number of negative rating actions would follow," S&P said in its report on Asia-Pacific Sovereigns.
"Fiscal capacities of Japan, India, Malaysia, Taiwan and New Zealand have shrunk relative to pre-2008 level," it said, adding that these countries continue to bear the scars of the downturn.
The governments, it said, would be required to use their own revenue streams to support their economies and financial sector once again.
It further said that if a renewed slowdown comes, it would create a deeper and more prolonged impact.
At the time of the global financial crisis in 2008, several countries, including India, had rolled out stimulus packages facilitating monetary expansion and lower taxes to mitigate the impact of the slowdown.
(Also check: Sensex may dive to 15k, fears market, says ET poll | US not on the road to recovery: Paul Krugman | 'US still the safest place to invest' | S&P warns US of further downgrade in credit ratings )
At that time, India had provided three fiscal stimulus packages totalling Rs 1.86 lakh crore, which helped the economy clock a growth of 8 per cent in 2009-10, as against 6.8 per cent in 2008-09. Prior to the crisis, the Indian economy had been expanding at a growth rate of over 9 per cent over a three-year period.
Late on Friday, global ratings agency S&P downgraded its US sovereign rating to AA+ from AAA, with a negative outlook.
Share market: Big IT stocks such as Infosys, TCS offer value buys, say analysts
NEW DELHI: Shares of big IT companies fell sharply in trade today after the US credit rating was downgraded by S&P on Friday.
All the three top IT companies, TCS, Wipro and Infosys, witnessed a huge fall in their share prices on the BSE as these companies earn a major chunk of ther revenue from US and Europe.
"One should buy TCS or Infosys because I do not think business will be impacted so much in the short run, while the long tern story remains intact", says Raamdeo Agrawal, Director and Co-Founder, Motilal Oswal Financial Services in an interview with ET Now.
The US and Europe are the two biggest markets for Indian IT firms. TCS, Infosys and Wipro rely on the US and European markets for about 60 per cent of their revenue. Any slowdown there could straight away affect domestic IT companies having their presence globally.
While most IT companies have expressed caution in the past few months post their quarterly results in the wake of ongoing European debt crisis and high unemployment in the US. However they remain confident of being able to maintain their growth momentum
"On evaluation of IT companies and some of the frontline majors, their business prospects, business model and the possibility of getting new business remain robust and I find that fundamentally things have not changed as much", says Deven Choksey, MD, KR Choksey Securities in an interview with ET Now.
"The valuation of these companies have stayed around 20 plus price earning ratio which has started to come down more because the funds which invested into these particular companies are the trading funds or the index funds and they started pulling out money because of the want of money back home", said Deven.
"However, in comparison to other markets and stocks where the valuations has become far too attractive, shares in IT companies are still reasonably priced", says Deven. "Fundamentally things are not looking as negative as it is being feared about with the fall in the prices of IT companies", Deven further added.
Leading players like TCS and HCL Technologies have posted stellar growth numbers in the past few quarters on the back of steady demand for outsourcing services.
At 12.19 PM., the IT index of the BSE was down more than 4 per cent, underperforming the benchmark index, which was down 1.6 per cent. Shares of Infosys Technologies , Tata Consultancy Services and Wipro were down 5-4 per cent.
Weakness was also seen in the stocks of other IT companies such as Patni Computer systems Ltd, Tech Mahindra Ltd and HCL Technologies Ltd losing up to 2-4 per cent. Meanwhile, the BSE benchmark index Sensex was trading 325 points lower at 16,981.
All the three top IT companies, TCS, Wipro and Infosys, witnessed a huge fall in their share prices on the BSE as these companies earn a major chunk of ther revenue from US and Europe.
"One should buy TCS or Infosys because I do not think business will be impacted so much in the short run, while the long tern story remains intact", says Raamdeo Agrawal, Director and Co-Founder, Motilal Oswal Financial Services in an interview with ET Now.
The US and Europe are the two biggest markets for Indian IT firms. TCS, Infosys and Wipro rely on the US and European markets for about 60 per cent of their revenue. Any slowdown there could straight away affect domestic IT companies having their presence globally.
While most IT companies have expressed caution in the past few months post their quarterly results in the wake of ongoing European debt crisis and high unemployment in the US. However they remain confident of being able to maintain their growth momentum
"On evaluation of IT companies and some of the frontline majors, their business prospects, business model and the possibility of getting new business remain robust and I find that fundamentally things have not changed as much", says Deven Choksey, MD, KR Choksey Securities in an interview with ET Now.
"The valuation of these companies have stayed around 20 plus price earning ratio which has started to come down more because the funds which invested into these particular companies are the trading funds or the index funds and they started pulling out money because of the want of money back home", said Deven.
"However, in comparison to other markets and stocks where the valuations has become far too attractive, shares in IT companies are still reasonably priced", says Deven. "Fundamentally things are not looking as negative as it is being feared about with the fall in the prices of IT companies", Deven further added.
Leading players like TCS and HCL Technologies have posted stellar growth numbers in the past few quarters on the back of steady demand for outsourcing services.
At 12.19 PM., the IT index of the BSE was down more than 4 per cent, underperforming the benchmark index, which was down 1.6 per cent. Shares of Infosys Technologies , Tata Consultancy Services and Wipro were down 5-4 per cent.
Weakness was also seen in the stocks of other IT companies such as Patni Computer systems Ltd, Tech Mahindra Ltd and HCL Technologies Ltd losing up to 2-4 per cent. Meanwhile, the BSE benchmark index Sensex was trading 325 points lower at 16,981.
BSE Sensex recover over 300 points on European cues
NEW DELHI: The BSE Sensex has pared morning losses considerably on the back of positive cues from the European markets, and selective buying in index heavyweights. The BSE Sensex recovered over 300 points from the day's low and is now down 210 points at 17,091.
At 02:40 IST, the 50-share Nifty index too pared morning losses and is now trading 62 points lower at 5,148.
Most European shares had begun the day in negative territory with London and Frankfurt both down 1 per cent in opening trade.
However, the FTSE 100 climbed 18.02, or 0.3 per cent, to 5,265.01 at 8.32am, the first gains in seven days while German stocks also rose, with the benchmark DAX Index climbing 0.5 per cent to 6,266.33. The Dublin market was up by1.3 per cent to 2,537.69. The benchmark Stoxx Europe 600 Index rallied 0.5 per cent to 240.04 at 8:25 am, recouping losses of as much as 1.4 per cent.
"Indian equities provide a reasonable valuation vis-a-vis the alternatives which are available in the precious metals and real estate", says Nilesh Shah, President-Corporate Banking, Axis Bank in an interview with ET Now. "So net based on the experience, probably we will not see a panic bottom but just a neutral bottom getting formed over next couple of months", adds Nilesh.
At 02:40 IST, the 50-share Nifty index too pared morning losses and is now trading 62 points lower at 5,148.
Most European shares had begun the day in negative territory with London and Frankfurt both down 1 per cent in opening trade.
However, the FTSE 100 climbed 18.02, or 0.3 per cent, to 5,265.01 at 8.32am, the first gains in seven days while German stocks also rose, with the benchmark DAX Index climbing 0.5 per cent to 6,266.33. The Dublin market was up by1.3 per cent to 2,537.69. The benchmark Stoxx Europe 600 Index rallied 0.5 per cent to 240.04 at 8:25 am, recouping losses of as much as 1.4 per cent.
"Indian equities provide a reasonable valuation vis-a-vis the alternatives which are available in the precious metals and real estate", says Nilesh Shah, President-Corporate Banking, Axis Bank in an interview with ET Now. "So net based on the experience, probably we will not see a panic bottom but just a neutral bottom getting formed over next couple of months", adds Nilesh.
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