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Friday, June 30, 2017

Passport : Cheaper for seniors..!

Passport : Cheaper for seniors..!

Passport application fees have been reduced for applicants under the age of eight and over the age of 60, external affairs minister Ms. Sushma Swaraj announced last week.

The minister further said that from now, all new passports issued will be in Hindi and in English and not just in English like before.

These changes follow after minister's December 2016 easing of rules to apply for a passport.

CRISIL Research has launched two new indices

CRISIL  Research has launched two new indices

CRISIL  Research has launched two new indices the Crisil 10 Year SDL Index and the Crisil Ultra Short Term Debt Index.

The former will track state development loans, while the latter will serve as a benchmark for funds with residual maturity of 9 months to 1 year, which is shorter than that of short-term debt funds.

Reliance Mutual Fund Dual Advantage Fixed Tenure Fund XI Plan C..

Reliance Mutual Fund Dual Advantage Fixed Tenure Fund XI Plan C..

Reliance Mutual Fund (MF) is set to launch Reliance Dual Advantage Fixed Tenure Fund XI Plan C on 29 June, 2017.

 The scheme will invest in a portfolio of fixed income securities that are maturing on or before the maturity of the scheme. It will also invest in equity.

The minimum investment is Rs. 5,000 and the scheme closes on 13 July, 2017.

ICICI Prudential Life Insurance HeartCancer Protect.

ICICI Prudential Life Insurance  HeartCancer Protect.

ICICI Prudential Life Insurance has launched HeartCancer Protect.
You have the option of choosing either or both covers.

On being diagnosed with a heart or / cancer condition, all future premiums are waived off.

Thursday, June 29, 2017

RBI releases Handbook of Statistics on Indian States 2016-17

RBI releases 

Handbook of Statistics 

on Indian States 2016-17

The Reserve Bank of India released the second edition of its statistical publication titled “Handbook of Statistics on Indian States 2016-17”. Through this publication, the Reserve Bank has been disseminating wide-ranging data on the regional economy of India.

This publication follows the ‘one indicator-one table’ approach and in 129 tables it covers sub-national statistics on socio-demographics, state domestic product, agriculture, industry, infrastructure, banking and fiscal indicators across Indian States over a time period ranging from 1951 to 2016-17.

While the Handbook has been updated based on latest available data, its content has been improved by covering additional tables on infrastructure. Thus, in addition to the existing data series on State-wise availability of power, per capita availability of power, installed capacity of power, and power requirement, this edition has added data on State-wise length of national highways, railway routes, length of roads, and length of state highways, based on information sourced from the respective authorities namely, Ministry of Road Transport and Highways, and Ministry of Railways; Government of India.

The electronic form of the Handbook can also be accessed on

Insurance penetration in India - 3.42% far below global average

Insurance penetration in India at 3.42%, far below global average

India’s current insurance penetration rate stands at 3.42%, far below the global average of 6.2%, says an industry report.

“A 1% rise in insurance penetration translates into 13% reduction in uninsured losses-an increased investment equivalent of 2% of national GDP and a 22% reduction in taxpayers contribution,” stated the report ‘Transformative Agenda for The Indian Insurance Industry and its Policy Framework’, jointly authored by H Ansari, former member (non-life), IRDAI, and leading insurance expert Arun Agarwal. The report also said the existing regulatory framework of the insurance industry is insufficient to promote insurance penetration and density significantly despite the government’s objectives to have a country with full insurance and pension penetration.
The report, which is provided to the insurance regulator and finance ministry, focuses on key areas that need to be addressed from a policy, regulatory and market development perspective.

 “The regulatory framework and support tends to over-regulate, predictably the cost of compliance is high. Besides the regulatory policy is less development oriented,” said Mr. Arun Agarwal during the press conference.

With 17% of the worlds population, the Indian insurance market accounts for less than 1.5% of the worlds total insurance premium as India is both under-penetrated and inadequately penetrated. General insurance companies had seen gross direct premium at Rs. 1.27 lakh crore a growth of 32% in financial year 2016-17. Sharp growth in the non-life sector was largely due to the growth in health and motor insurance along with new crop insurance scheme, says market participants. While life insurance industry saw its new business premium at Rs. 1,75,021.89 crore as on March 2017 as compared to Rs. 1,387,60.47 crore in March 2016 a growth of 26.13%.

The report concluded by saying that, it is regulators who have to set up to the plate. It is the time to transform- in thoughts and actions. “This also means outcomes need building coalitions, creating specialized knowledge, less hierarchy, more collaboration and flatter professional structures,” said the report.

SEBI's Proposals on investment advisors Rules : Are it very practical?

SEBI's Proposals on investment advisors Rules :  Are it very practical? 

The Securities and Exchange Board of India's SEBI's latest proposals on selling of investment products has drawn mixed responses.

Last week, the markets regulator suggested that selling' and 'advising' would be kept at arm's length, besides asking the banks & other financial institutions to separate their advisory and distribution divisions.

To address any conflict of interest, SEBI has suggested that an investment adviser should only perform those functions for which he / she is entitled to a fee and not sell any mutual fund (MF) product. Those in the segment say such a move could impact big MF distributors.

"No large distributor would like to be called an adviser, given the hardships associated with getting an investor to pay advisory fees," said a Mumbai-based independent expert of the MF sector.

SEBI also has proposed to scrap the practice of usage of 'independent financial advisers' by distributors. Instead, such entities will solely be called 'mutual fund distributors' (MFDs). They will have to make disclosures in a prescribed form to clients, which should include the disclaimer that the distributor may not be acting in the best interest of the investor'.

Sector players say such a disclaimer might hurt investor confidence.

Mr. Dhirendra Kumar, Chief Executive, Value Research, says the proposed rules are not very practical, as they try to micro-regulate. "One of the proposals is that distributors will be forbidden from offering advice. They can describe material facts about MFs but cannot give advice. Instead, Sebi should create well-defined topics on which distributors and investors cannot have a conversation," he recommends.

Those in the segment say big players such as banks can get away by simply creating separate divisions to sell and advise but smaller players might face issues.
On a positive note, some fund managers have hailed Sebi's proposal to continue with a model which will involve both distributors and advisors, instead of moving to an advice-only model.

"With this paper, SEBI appears to have sent a message that it wants existence of both advisers and distributors. Else, there was an impression that the regulatory was thrusting the advisory model and the sector would have to do away with distributors in due course, which could have been bad for it," said a chief executive officer for a fund house.

SEBI's move to relax the educational qualification for employees of registered investment advisers has also been welcomed by the industry, besides its other measure of slashing fees for large entities in the advisory business.

What the MF sector has welcomed?

1. To continue with MF distributors

2. Relaxation of educational qualifications for investment advisers

3. Reduction in fees and net worth for body corporates

What MF sector has opposed?

1. Distributors being barred from giving advice
2. Disclosure of commissions to investors
3. Disclaimer that distributors might not be acting in the best interest of investors

Src: Chandan Kishore Kant, Business Standard         

Godrej Industries to raise Rs. 400 cr via Agrovet IPO

Godrej Industries to raise Rs. 400 cr via Agrovet IPO

Godrej Industries plans to divest its stake in Godrej Agrovet through an initial public offering and raise Rs. 400 crore.

Godrej Agrovet is a diversified, research & development-backed agri-business company that caters to animal feed, oil palm plantations, crop protection, hybrid seeds, dairy and processed poultry.

Godrej Industries currently holds 60.8% stake in Godrej Agrovet.

In a filing to the BSE, Godrej Industries informed that its board “has decided to participate in the IPO of equity shares by Godrej Agrovet.” “Our company proposes to sell such number of equity shares in Godrej Agrovat up to ₹400 crore through the offer,” it added.

The board has authorised the management “to consider and finalise the terms and condition” for participation in the offer, it further added.

The public issue may also provide an opportunity to Temasek Holdings Pte Ltd, Singapore’s State-owned investor, to pare its holding in the company. Temasek had picked up 19.99% stake in Godrej Agrovet in 2012-13 for Rs. 572 crore. “The investment will be a combination of primary and secondary investment with the primary investment intended to support GAVL’s future expansion plans” Godrej had then said.

In 2015-16, Godrej Agrovet had made two acquisitions, Astec LifeScience — a listed niche agro-chemicals company, and Creamline Dairy Products — a prominent dairy company in South India.

SBI Mutual Fund to complete 30 years..!

SBI Mutual Fund to complete 30 years..!

 SBI Mutual Fund, the fifth largest (by AUM) asset management company, is completing three decades of operations tomorrow, making it the oldest entity in the country.

With an AUM of over Rs. 1,57,860 crore (excluding domestic fund of funds) as on March 2017, SBI MF was also the first bank-sponsored MF to have been registered with SEBI.

Speaking on the occasion, SBI MF Managing Director & Chief executive Anuradha Rao said the industry AUM has grown from Rs. 3.26 trillion as of March 2007 to Rs. 19.04 trillion (trillion  as of May 2017, a six-fold increase in a decade.
SBI Mutual Fund has a market share of 9.14% as of now.

Ms. Anuradha Rao attributed the success of her company to vast experience in asset management blended with strong parentage, rigorous investment templates, structured and disciplined processes to ensure effective execution of strategies, and the strong confidence reposed by over 30,000 IFAs.

Its ETF offering SBI ETF Nifty 50 recently became the largest equity fund with over Rs 20,000 crore AUM. It was also the only ETF manager chosen for EPFO's maiden allocation in equities.

Mandatory to link AADHAAR with PAN from July 1, 2017 : CBDT

Mandatory to link AADHAAR with PAN from July 1, 2017 : CBDT

The central government has made it mandatory for income taxpayers to link their AADHAAR numbers with Permanent Account Numbers (PAN) from July 1, 2017.

“Every person who has been allotted PAN as on July 1, 2017, and who, in accordance with the provisions of sub-section (2) of Section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the Principal Director-General of Income-Tax (Systems) or Director-General of Income-tax (Systems) or the person authorised by the said authorities,” said a notification by the Central Board of Direct Taxes (CBDT).

It has also made it mandatory to quote the 12 digit biometric enrolment number at the time of applying for a PAN.

The CBDT has made the Principal DGIT (systems) or DGIT (systems) responsible for specifying the format and standard along with the procedure for verifying documents that are filed with PAN applications or intimation of Aadhaar.

The move comes after Finance Minister Arun Jaitley amended the Finance Bill 2017-18 and made it mandatory to quote Aadhaar for filing income-tax returns and to seed it with the PAN to check tax evasion through use of multiple PAN cards.

The Supreme Court had earlier this month upheld the validity of the provision to make Aadhaar mandatory for allotment of PAN cards and filing of returns. It had, however, granted a partial stay on its rollout until a Constitution Bench had ruled on the issue of the right to privacy.

In the new notification, the CBDT said the rules will become effective from July 1, 2017.

Real estate investments funds in India – Opportunity Awaits

REITs in India – Opportunity Awaits

By Mr. Ramesh Nair - CEO & Country Head, JLL India

Considering the capital-intensive nature of the commercial real estate sector as an investment avenue and also the limited investment opportunities with regards to high-grade office assets, REITs (Real estate investments funds) will be a big boon for the Indian real estate industry. In simple terms, a REIT is an investment tool that owns and operates real estate assets and even allows individual investors to invest in and earn income through partial/equity level ownership of commercial real estate without actually having to buy those assets.

REITs are modelled after mutual funds, and provide their investors with all types of income streams - as well as the benefits of long-term capital appreciation. A REIT also trades on major stock exchanges and provides investors with a highly liquid stake in real assets typically offering high yields.

Over the last decade, globally, REITs have developed into a mature market force, providing easy access to high-quality assets along with stable return on investments. To illustrate – as of 2016, there were over 500 REITs operating across various countries, with total market capitalization of more than USD 900 billion.

Taking a closer look at REITs globally..!

  • USA: The US Congress created the Real Estate Investment Trust (US-REIT) in 1960 to make large-scale, income-producing real estate investments accessible to smaller investors. Since then, US-REIT has dominated the market, and has a market capitalization which grew from USD 1.4943 billion in 1971 to USD 1 trillion by 2016.
  • Singapore: Since the launch of the first Singapore REIT in 2002, the REIT sector has become one of the biggest success stories of the Singapore Stock Exchange (SGX). Singapore REITs have since grown into a USD 53 billion market. Currently, the total ‘REITable’ stock available in Singapore’s CBD is 2.687million sq m.

  • Australia: The first REIT in Australia was the General Property Trust – a listed property trust started in 1971. A-REITs are the largest REIT market in Asia with a total market capitalization of almost €72 billion, accounting for 9.36% of the global REIT market capitalization. The Sydney CBD market has 3.060 million sq. m. of REITable stock.
Mr. Ramesh Nair - CEO &
Country Head, JLL India
Given the currently sluggish demand for residential real estate in India, the office sector provides some relief for real estate developers, given the declining vacancy levels and improving rents. With declining vacancies, superior quality buildings in CBDs, SBDs and PBDs are likely to see maximum REITable assets.

Close to 283 million sq ft of office space in India is REITable. Currently, there are 901 REIT-worthy properties in India:

There is no doubt that REITs will provide access to highly lucrative assets, such as large-scale commercial properties and high-quality retail assets, that may be otherwise out of reach for individual investors. 

Once the first REIT listings go live in India, we will definitely see significantly increased institutional and retail investor participation in this market.

About the author 

Mr. Ramesh Nair - CEO & Country Head, JLL India

For media contact
Arun Chitnis
Head - Corporate Communications & Media Relations
JLL India
Pune 411001.
Tel: (020) 40196100 Fax: (020) 40196101
Mob: 91 9657129999

200 CroreUse Facebook Now..!

200 CroreUse Facebook Now..!
Facebook says it has 200 crore (two billion) monthly active users now - meaning more than a quarter of the world's population is on the giant social network.

Founded in 2004, the social media behemoth hit the billionuser mark 5 years ago..

Wednesday, June 28, 2017

The Impact of GST on Indian Residential Real Estate..!

The Impact of GST on Indian Residential Real Estate..!

 By Mr. Anuj Puri, Chairman – ANAROCK Property Consultants Pvt. Ltd.

The switchover to the GST regime is undoubtedly one of the biggest tax reforms in post-independence India.  

From July 1 2017, GST effectively cuts through a confounding Gordian knot of taxation complexity in the country. In other words, it replaces the multiple taxes levied by the central and state governments and will become subsumed of all the indirect taxes, including central excise duty, commercial tax, octroi tax/charges, Value-Added Tax (VAT) and service tax.

GST has been predominantly conceptualized around a ‘One Nation, One Tax’ philosophy and will:

·         Help eliminate the previous cascading tax structure

·         Ease compliances

·         Create uniform tax rates and structure, and

·         Help in reducing additional tax burdens on consumers.

However, the biggest game changer in GST is the introduction of Input Tax Credit, whereby credits of input taxes paid at each stage of production or service delivery can be availed in the succeeding stages of value addition. This makes GST fundamentally a tax only on value addition at each stage.

This means that the end consumer will thus only bear the GST charged by the last dealer in the supply chain, with set-off benefits at all the earlier stages. 

To ensure that manufacturers, developers and service providers pass on the benefit to the final customer, the Government has included an anti-profiteering clause in the GST bill under section 171 of GST law. 

This clause clearly states that it is mandatory to pass on the benefit tax reduction due to input tax credit to the final customer.

Impact on Residential Real Estate:

To say the least, the Indian real estate sector has been going through significant transform in the recent times. 

The recently implemented Real Estate and Regulation Act (RERA) has already started addressing the issue of non-transparency and affixes a level of accountability on real estate builders and brokers which is unprecedented in the history of the Indian property sector.

For the residential real estate sector, the implementation of GST will definitely be a positive sentiment booster among property buyers. 

GST may not be instrumental in bringing down the prices of residential real estate over the short term. 

However, it will benefit all the stakeholders of the residential real estate sector, as the perception of the sector will improve on the back of a simplified tax structure and accountability being fixed at every stage.
Anuj Puri, 
Chairman , 
ANAROCK Property Consultants Pvt. Ltd.

Benefit to Property Buyers:

A simple and transparent tax applied on the purchase price is the biggest take- away for property buyers. 

Under the GST regime, all under-construction properties will be charged at 12% (excluding stamp duty and registration charges). 

It will not apply to completed and ready-to-move-in projects, as there are no indirect taxes applicable in the sale of such properties.

VAT (with rates differing from one state to another) and Service Tax together accounted for 7% to 9% of the ticket price for a residential property, which is 3-4% lower than the GST rate. 

However, due to information asymmetry, consumers were largely unaware of how VAT and service tax are calculated – definitely, the entire tax calculation was too complex for laypeople to understand.

Any real estate product comprises of 3 expense components, namely 

1. Land

2. Material and 
3. Labour or service costs. 

VAT is calculated on material cost, and service tax is calculated on labour and service cost. 

It is very difficult for buyers to ascertain what components were included for calculation of VAT and service tax.

The implementation of GST makes the calculation much simpler, since the buyer has to pay only a single Goods and Services Tax. Also, the builder must pass on the benefit of the price reduction he enjoys due to input tax credit to the buyer.

Impact on Affordable Housing:

The affordable housing sector, which is a major thrust area of the incumbent Government & is the cornerstone of its ‘Housing for all by 2022’ vision, will not be impacted by GST. 

This has been clarified by the announcement from the Finance Ministry, which indicates that there will be no tax under GST for housing projects which comes under the affordable housing scheme.

Benefit to Developers:

In the previous tax regime, real estate developers also grappled with the challenge of multiple taxation. 

On various construction materials they purchased, builder paid customs duty, central sales tax, excise duty, entry tax, etc., thus creating various instances of multiple taxation. The cumulative burden eventually got passed on to the buyer.

GST will eliminate all the other taxes, and the benefit of being able to claim input tax credit can also improve developers’ profit margins.

Major construction materials have not seen a major change in tax rate.

·         Cement will be taxed at the rate of 28% under GST, which is higher the current average rate of tax around 20% to 24%

·         Iron rods and pillars will be charged at the rate of 18%, which is similar to the average rate of 20% under the old taxation regime

·         Paint, wall fittings, plaster, wallpaper and ceramic tiles will be taxed at 28%, which is also similar to the previous average rate of 20-25%

·         Sand lime bricks and fly ash bricks will be taxed at 5%, which is lower than the previous rate of 6%.

However, the marginal change in the percentage of these variables will make a huge difference as transportation and logistics costs reduce in the single taxation system.

To conclude:

While there might be marginal impact on the real estate sector in the near term, we are definitely looking at a significant improvement in buyer sentiment and perception of this sector. 

Developers too will find the GST regime much simpler to work with, with the benefit of input tax credit being an added advantage.

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