Short Review of Railway Budget 2015-16

Review of Railway Budget 2015-16

This railway budget seems to focus on improve passenger’s commuting experience and at the same time gives a signal for investments thrust. It proposes an annual plan of Rs 1 lakh crore with support from central government of budget allocation, market borrowing, internal resources and institutional investments. The highlights of railway budget are given below:

(A) There is no hike in passenger’s fares this time. The railway minister’s statements range from additional wagons to accommodate more passengers to improving security with equal importance of cleanliness indicates the government’s intention to improve the commuting experience. Only time will tell whether these promises fulfilled or get blocked due to lack of funds investment.

(B) The revised operating ratio for this year was 91.8%. Railway Minister Suresh Prabhu has set an ambitious operating ratio of 88.5% for the financial year 2015-16. The operating ratio is the amount that the railway has to spend to earn Rs 100. A lower operating ratio helps to improve passenger amenities and creating long term assets. The proposed operating ratio will be the best in the last nine years. Lower diesel prices will certainly help to keep lower the operational ratio.

(C) The government has proposed to hike the freight rate with effect of 1st April 2015. It will increase freight earnings by 13.6% in FY 2015-16.

(D) The focus on expansion of railway’s capacity over the next five years by increasing in daily passenger carrying capacity from 21mn to30mn, increase in track length by 20% from 1,14,000 Km to 1,38,000 Km and also the rise in freight-carrying capacity 1bn to 1.5bn ton.

(E)  There are much attention to modernization of infrastructure at railway stations, signaling and electrification works, coaches and wagons. A great attention has given to dedicated freight corridor projects which can benefit many railway equipment suppliers.

(F)   ABB, BHEL, KEC International, L&T, BEML, SIEMENS, Kalindee Rail Nirman, Texmaco and Titagarh Wagons may get benefited from this year budget proposals.

Overall, the railway budget for 2015-16 showed its thrust towards investments.

 If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Expectation from UNION BUDGET 2015-16

Expectation from Coming Union Budget for 2015-16

Everyone in India is waiting for 28 February. Last year in May 2015, modi government came in full majority with great expectation of citizen. People wanted change and that is the main reason behind that spectacular electoral victory. In July 2015 this government had passed the budget but that budget was not reflecting the government’s intention truly. Now after completing 9 months the government is ready with its full budget. Not only the people of India are waiting for this event but also foreign media also looking it very carefully.

Prime minister is very well known for hard working and fully focused man towards goal. Overall feeling across the country since the formation of the government has been that the government is working for only big industries and the expectation of poor and middle class have been ignored by this government. Recently the Delhi election result is showing the emotions of nation. This budget of Modi government is an opportunity for showing the path of “ACHHE DIN” means inclusive growth of overall.

Everyone have some expectation from the budget. I am not an exception and I have also some expectation. Agriculture and rural development should get proper attention. The fact is that our agriculture production has declined and there are need to take some steps for farmers and rural families.

The funding for social sector schemes like public health, education, senior citizens, handicapped people should not be cut. Potable drinking water for all should also get special attention in this budget. Rain water harvesting should be encouraged. With highly pitched ‘Make in India’ program there are need to develop a self-sustaining economy that can fulfill the job thrust of our country. Within high targeted GDP figure there are need to develop SMEs and skill development program. Corruption has been the root cause of all backwardness in this country and there should be scheme implementation should be in more transparent manner. There should be no scope of corruption. It means zero tolerance of corruption cases across the country without any partiality.

Inclusive growth means SABKA VIKAS. 70% rural and village BHARAT should not be ignored in the name of technology, FDI and industrial growth. Without growing agriculture one cannot think about strong India. There are many other sector like police modernization, defense sector, e-governance and to ensure the delivery of public service need proper budgetary allocation. There should be increase in tax-exemptions limit with simple tax structure.

Overall I expect this budget will have good provision for the development of agriculture, job creation, health reform, education, security and infra sector. The budget should be come with intention of inclusive growth as they promised in election SABKA SAATH, SABKA VIKAS.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Have you done your tax planning?

I am sure most of you have done your investment to save the taxes but still some people will wait for the last moment and will make fatal decision in hurry as the result of last rush. Many insurance advisors are very active in these days to trap the investors in the name of insurance with the false promise of sky rocketing return. Poor investors also do not care of investment as they want only trust not return. I wonder sometime when I meet such investors who are very happy to invest in endowment, money back or ULIP and still don’t know about their insurance cover and expected return.

They easily ignore the biggest threat of their investment. Do you know what is the biggest threat return your investment? It is Inflation. Due to this inflation most of time your real return become negative also. Please before any investment be very clear about the inflation concept. You should ask some question to yourself. How inflation and taxes eats your return? What will be real rate of return after adjust inflation and taxes?

Section 80C is very popular section among investors and for the financial year 2014-15 the investment limit has also increased till 1.5 lakh under section 80C. First calculate your other investment under section 80C like PF, PPF, home loan repayment, insurance premium etc. After consider all other available provision under this section determine your shortfall to complete 1.5 lakh limit.

During January to March there are many companies come with attractive and catchy advertisement. They show the high possible numerical figure in the name of save tax. In most of cases, these companies assume that investor is in 30% tax bracket and will investment full available amount 1.5 lakh available under section 80C. Due to this confusing advertisement people who are in 10% or 20% or nil tax bracket get misguided and make the wrong decision.

According to me if your investment horizon more than 8 year then ELSS is the best option to create wealth and beat the inflation. If you do not have time to plan your finances then you should contact certified financial planner.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Insurance Sector Update

Sector Update: Insurance

Ø       Most of the travel insurance do not cover adventure sports. Adventure sports like river rafting, long distance biking, para-gliding etc are becoming popular in India. These activities are part of the exclusions in most of the travel insurer. Bajaj Allianz General Insurance offers cover for any injury that occurs during adventure sports under a professional trainer / assistance. ICICI Lombard General Insurance do not cover it in travel insurance but the company offers it as add on cover. They insist that tour operators should be recognized and should follow all safety precautions.

Ø  Life insurance has emerged as the most preferred investment option for Indians with an income up to Rs 25 lakh, according to a survey. 75% of affluent population of the country, who hold investments other than cash, have put their money in life insurance while only 33% invest in equity mutual fund.

Ø   The IRDA is likely to revamp the Indian Market Terrorism Insurance Pool due to changing circumstances. It was formed in April 2002, after terrorism cover was withdrawn by international reinsurers after 11 September, 2001 attack on the US.

Ø    The IRDA has raised the concerns over the high attrition rate of of agent. In 2013-14, the total no. of agents appointed by life insurers was 7.25 lakh but those terminated was as high as 6.59 lakh. To tackle this issue, the IRDA had earlier reduced the pass percentage from 50% to 35%.

Ø   Crop insurance schemes are available now for farmers in Kerala. The weather based crop insurance scheme (WBCIS) and the modified national agriculture insurance scheme (MNAIS) are being extended to farmers in the state for the ongoing crop season. Paddy, plantain, cashew, sugarcane, mango and tapioca are covered under the schemes.

Ø   Union government of India’s move to increase the foreign investment cap in insurance sector will boost the finances and improve the innovation in products.

If you have doubt about any investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for seminar in your city just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com