Fresh News

While India's overall software exports have slowed down on account of the global slowdown, those from Kerala grew 43.41 percent.

 

The Supreme Court today upheld Kerala government's decision to allot 28000 acres of forest land to tribals for cultivation.

 

Actress Asin plans to unwind and re-energize herself during a week-long break in the hills of Kerala.

 

Indian Institute of Architects has recommended that the State increase the floor area ratio, as in Singapore and New York.

 

Security strengthened at 3 international airports in Kerala after information regarding a possible LTTE terrorist attack.

 

Kerala is targeting Russian and Swedish tourists to beat the downturn feared this year, the government said.

How to Start Business in India for NRIs/PIOs

Many NRI's will tell you that it is in fact a nightmare for NRI's to do business in India. Many NRI's have burnt their fingers in their ventures in India. Doing Business in India is tough for an NRI or a PIO who is used to smooth ride in developed world, where it is relatively easy to do business. The problem becomes compounded when an NRI does not find seek proper legal help before venturing into a business in India.

 

However, if an NRI ventures in a planned and methodical manner, under proper legal guidance, he or she can succeed.  The following are some of the points an NRI should keep in mind before starting any business in India:

 

First, get a PIO or Person of Indian Origin Card (if you are a PIO, NRI do not require a PIO card) that puts you on a par with an Indian as far as business and tax matters are concerned. Among other benefits, a PIO has visa-free entry for 15 years and allows you to engage in business and own property, like any Indian.

 

Second, get a PAN or Permanent Account Number card issued by the income-tax department. Any person - NRI or Indian - making an investment of over Rs.50,000 is required to quote his/her PAN number. This also applies to purchases of over Rs.50,000. Since you plan to go into business in India, you will eventually file your income-tax returns annually. So you need a PAN card that is also a very useful identification document because it has your photo on it and you can show it in many places where you wish to be identified as an Indian - and not overcharged as an NRI!

 

Third, Choose a Business Partner in India. Obviously, it is impossible for you to go into business on your own unless you want to move to India. If not, you need partners for your proposed venture. You will identify and select your partners on the basis of their track record, integrity and other personal attributes. Be careful of the single and most common pitfall of going into business with your relatives and close friends on the basis of your family relations or friendship. A great majority of NRI business ventures have come to grief because of this 'emotional' alliance. When the business collapses, you have lost not only your money but also a precious relationship.

 

Four, Choose a Proper Business Entity. A simple partnership is a viable takeoff for your venture although it has some pitfalls. All it takes is a lawyer to draw up the agreement between you and your partner(s) and register on a legal, stamp paper of Rs.100 and it takes just a few days to complete this simple formality. When your turnover exceeds four million rupees, you need the services of a qualified accountant to audit your accounts and file your tax returns. Limited liability companies take a lot of time to get off the ground. You need a lawyer to register the name of your company called a 'private limited company'. This involves paying a small fee and suggesting at least three proposed names. It takes about a week for the Registrar of Companies to inform you which of the three proposed names is available. On deciding its name, the lawyer prepares its memorandum and articles of association and files them with the appropriate fees depending on value of the share capital. It takes at least one month to carry out all these registration of company formalities. These 'private limited companies' are regulated under a host of 'company laws' that cover most organizational and accounting matters from writing the minutes of every board meeting to filing of its annual returns to the working of company directors to the format of their balance sheets. There are rules and regulations all the way during the operations of this company and if you want to close down this limited liability company, you must again go to the lawyer/accountant and it can take up to eight or ten years to obtain the permission of the High Court for winding up the company. In addition to the court fees, there are lawyers' fees to be borne by the directors. No wonder NRIs shy away from getting into business in India, especially in private limited liability companies.

 

Five, once you take all these steps, you are - at last! - ready to launch into business. Of course, you have decided the area in which you are going to engage in business. So your company should become a member of the different business organizations looking after this sector in addition to the local chamber of commerce.

 

Many NRIs have ventured into exports from India as they help in marketing through their contacts. All export/impost business must be registered with the Director General of Foreign Trade. The application form requires a bank account number and a letter from the bank plus various details of partners/directors. The registration takes about two to three weeks.

 

Seven, getting roper legal guidance is very important. In starting a business once should not be 'penny wise and pound fool.'

India tops remittances in 2008, fall predicted in 2009: World Bank

With migrant workers facing job losses, anti-migrant sentiment and even violence in the deepening global financial crisis, World Bank researchers predict remittances will fall to $290 billion in 2009, from last year's high of $305 billion.

 

Remittances flowing to developing countries from Russia, South Africa, Malaysia and India are "especially vulnerable to the rolling economic crisis", says the Bank's revised Migration and Development Brief.

 

With a total of $45 billion, India was the top recipient of remittances in 2008. China came next with $34 billion followed by Mexico ($26 billion), Philippines ($18 billion) and Poland ($11 billion).

 

But even with a drop of between five and eight percent, remittances will still outstrip private capital flows, expected to fall by half in 2009, and official development aid, typically around $100 billion, the bank said.

 

Remittance flows will stay "resilient" because many countries have a well-established "stock" of migrants who are unlikely to leave their adopted countries.

 

They will continue to send money home, even if they have to reduce the amount they send, says economist Dilip Ratha, who leads the World Bank's Migration and Remittances team.

 

Although newspapers are reporting a large number of migrants returning home, migrant workers are still moving to destination countries, although at a slower pace. They, too, will add to the flow of remittances, says Ratha.

 

Ratha's team predicts remittances will amount to about 1.8 percent of GDP for developing countries in 2009, a slight drop from 1.9 percent of GDP in 2008.

 

However, considering that officially recorded remittances registered double-digit annual growth in the past few years, the expected fall will cause hardships in many poor countries, says the Bank's Brief.

 

Ratha says employment of foreign-born workers in the US is holding steady in wholesale and retail and going up in the restaurant and hotel sector, though their employment in construction has fallen faster than that of native born workers, based on new US Bureau of Labour Statistics data.

 

"Migrant workers are more flexible. They are cheaper. They work harder and they don't insist on all the right employment conditions. They don't ask for too much. And I think there is an additional reason - a lot of workers that have dropped out of the payroll officially continue working off the books."

Fresh News

Kerala, known for its marine products, is setting up the country's first Aqua Technology Park (ATP) at Aluva this year.

 

Alappuzha will soon get a "floating market" that will sell provisions to people living on the banks of the Vembanad lake.

 

The State Government has set a vision to free the state from the menace of rabies by 2015.

 

More than 25 lakh women descended on the Kerala capital for the annual 'pongala' ritual at Attukala Devi Temple.

 

Kerala is aiming to double its power generation capacity.

 

A hi-tech astronomical gallery will soon come up at the Regional Science Centre and Planetarium Calicut, the first of its kind in the country. 

 

Around 2000 housewives in Kerala have come together to demand from the government a fixed salary and old-age pension for domestic chores.

 

World Bank predicts the global economy and global trade would both shrink this year for the first time since World War II.

 

America will need over 50,000 nurses to meet the shortage. Kerala worried after Obama says no to foreign nurses.

 

Kerala's annual elephant race which was held in Guruvayur drew in huge crowds again.

Fresh News

Government in Kerala would set up a welfare fund for people settled here from other states, making it the first such state.

 

Kerala Government has decided to seek national pilgrim centre status for the famous Attukal Bhagavathi temple Trivandrum.

 

The coconut productivity in Kerala is expected to go up substantially with the Centre sanctioning an amount of Rs 2275 crore for three years for cutting diseased and senile coconut palms and for replanting new palms.

 

Malappuram district has the highest number of emigrants from Kerala followed by Trivandrum - Centre for Development Studies.

 

Kerala will showcase its IT infrastructure, primarily its IT parks, at the CeBIT 2009 event in Germany from March 3.

 

Kerala govt. will gift mobile phones to 40000 police officers in the state.

 

Kerala is set to have a single phase Lok Sabha polls on April 16 two days after Vishu.

Indian rupee has breached the 52 mark

The Indian rupee has breached the 52 mark versus the dollar. Today, the rupee had opened at 51.9 per dollar. It is now currently trading at 52.16 per dollar.

The rupee did make an initial recovery to hit an intraday high of 51.53 against dollar showing signs of strength. However, the rally was short-lived and it surpassed the 52 mark versus dollar for the first time ever. The recovery in the early trade was in conjuction with Asian peers. However, a steep fall in equity markets in the late trade brought dollar buyers back in the market. Also, Non Deliverable Forward market turned into buying mode. The dealers say there are no dollar sellers in the market and the market is looking forward to RBI.

Pradeep Khanna, Director & Head – FX Trading, HSBC India feels that he is little surprised by the timing of the move on the rupee. He adds that emerging economies especially India where growth stories don’t look to be extremely exciting in the near future will face pressure on its domestic currency & one can see 53-54 levels going ahead.

Sharmila Whelan, Senior Economist, CLSA says that the downside risk for rupee has increased since all the bad fiscal news has come out. A huge rally in dollar across the board is seen as investor’s eye safety into the dollar. She expects rupee to touch 54 this month.

INDIAN RUPEE SEEN AT 51.25 PER DOLLAR BY END-JUNE

INDIAN RUPEE SEEN AT 51.25 PER DOLLAR BY END-JUNE,  FIRMING TO 50 BY END-SEPT (FROM 51.72 NOW) - REUTERS POLL POLL-Indian rupee seen slowly recovering from record lows

    * Indian rupee seen firming to 51.25/dlr end June; 50 by Sept

    * Eight of 10 analysts see rupee off record lows by Sept

    * Narrowing trade and current account deficits to help rupee

     MUMBAI, March 3 (Reuters) - The Indian rupee may fall to fresh record lows beyond 52 per dollar in coming months, but is expected to steady by mid-2009 and recover to 50 by the end of September, a Reuters poll showed.

    The partially convertible rupee has slumped to life lows as buyers desert it due to a falling stock market, foreign fund outflows and a deteriorating economic outlook as Asian exports collapse and domestic demand weakens.

    The currency hit a record low of 52 on Monday, taking its losses so far in 2009 to more than 6 percent after falling 19.1 percent in 2008. By 0830 GMT on Tuesday, it was trading at

51.72/73 per dollar.

    The median forecast was for it to be at 51.25 per dollar by mid-2009, firming back to 50 by end-September.

    Only three of the 10 economists polled by Reuters see the rupee falling to new lows by the end of June, and only two see it weaker than 52 by end-September.

    "We expect the rupee to recover from current levels due to a lower trade deficit and improving capital flows, especially from foreign direct investments and non-resident Indian remittances,"

said Shubhada Rao, chief economist at Yes Bank.

    India's exports fell in annual terms for a fourth straight month in January as the global slowdown slashed demand for Asian goods, although the value of imports have also fallen sharply as commodity and energy prices drop.

    January's trade deficit narrowed to $6.1 billion from $7.6 billion in December as imports dropped 18.2 percent.

    For a graphic of India's and the rupee, please see https://customers.reuters.com/d/graphics/IN_RUP0209.jpg

    Foreign flows have been a key driver of the rupee in recent years. Foreign funds sold a net $1.7 billon worth of shares in the first two months of 2009 as the global economic outlooked soured, after selling more than $13 billion in 2008.

    In 2007, when the rupee rallied more than 12 percent, inflows were a record net $17.4 billion.

    Analysts expecting further losses for the rupee said the extent of the economic slowdown will be key to currency moves.

    The government estimates growth will slow to a six-year low of 7.1 percent in its 2008/09 fiscal year ending this month, and cool further in 2009/10, after three years of growth at or above

9 percent.

    But many economists believe those forecasts are too optimistic, especially if global economic conditions continue to deteriorate.

    "Our growth forecast is much lower than what the market is expecting. Our GDP forecast for next year is 4 percent, and so that has a profound impact on the capital flows into the stock market," said Sailesh Jha, Singapore-based senior regional economist at Barclays Capital.

 

    Following are the forecasts for the dollar/rupee by end June and end September.

 ----------------------------------------------------------------

 RESPONDENTS                     END-JUNE            END-SEPT

 ----------------------------------------------------------------

 BARCLAYS CAPITAL                 56.00               56.00

 BANK OF BARODA                  53.00               50.00

 UBS                                         52.50               50.00

 HSBC                                      52.00               53.00

 ABN AMRO BANK                   51.50               51.00

 DBS                                         51.00               50.00

 YES BANK                                49.50               48.00

 NOMURA                                49.00               48.00

 STANDARD CHARTERED         48.25               47.00

 AXIS BANK                               48.00               47.00

 ----------------------------------------------------------------

 MEDIAN                           51.25               50.00

 AVERAGE                          51.08               50.00

 ----------------------------------------------------------------

Investment Option - Gold

•          Historically gold is one of the most popular investment options.

•          People normally do not invest in gold for returns as it does not provide interest, dividend etc. People generally buy gold as a hedge/protection against crisis & uncertainties.

•          Crisis/uncertainty mainly includes economic ones like stock market crash, inflation, bank failures, low interest rates etc. Crisis can also be political/social - like war, social unrest.

•          Apart from these - gold prices are also decided by demand & supply, sale/purchase of gold reserves by various governments, strength of US Dollar

•          Since 1968 the price of gold on the open market has ranged widely, from a high of $850/oz in 1980, to a low of $253/oz in 1999. Present price is around $975/oz while some analysts predicting $1030 level.

•          Gold prices can move in both direction and it is not generally bought to gain from value appreciation. For example gold fell from 850 Dollars to 253 Dollars from the year 1980 to 1999. It again crossed 850 $ in the year 2008 only. That means those who invested in Gold (in Dollars) in the year 1980 could recover their principal only in 2008.

•          Investment in Gold can be made in physical form or in paper format. Gold Exchange Traded Fund (ETF) is now a days more popular among investors. Gold can also be purchased from select branches of SBI.

•          During the times of economic stability price of gold will be about one half of that of platinum and during recession/crisis/uncertainties gold prices go above platinum prices. Recently we have seen the later situation.

•          Acute power shortage in South Africa (major producer of Gold) is causing supply shortage and Governments are reluctant to sell their gold reserves.

•          Current global recession, bank failures and uncertainty on economic outlook caused a new bull run in gold prices. Further movement of Gold will depend on success or failure of various government stimulus/bailout packages. Demand of gold from consumers is declining due to high prices and many consumers are selling gold to benefit from high prices.

Top News

•          SBI is offering Home Loan at 8% for the first year of loan and then normal rates (8.5 to 9.25%) for remaining years of loan – SBI Happy Home offer.

•          Citigroup, one of the largest banks in the world, with assets worth $1.95 trillion now values less than the State Bank of India (SBI), India's largest Bank.

•          Britain will implement new immigration restrictions so existing vacancies can first be offered to local workers.

•          NRI investments in India-based properties dropped by over 50% this season - Jones Lang LaSalle Meghraj (JLLM), a global real-estate consultancy firm.

•          Canada will admit more foreign students and fewer foreign workers this year.

•          95 percent of Gulf NRIs do not save money and return to India empty handed -one survey by the Pravasi Bandhu Welfare Trust Dubai

•          US will restrict firms receiving government bailouts from hiring foreign workers including Indians, if they are replacing American workers.

•          A PAN centre was inaugurated in Oman that will enable NRIs in Gulf to procure a Permanent Account Number as well as tax-related services.

•          Many banks in Switzerland may be forced to reveal their traditional secret accounts.

•          The number of failed American banks is climbing, with eight banks going belly up in February alone, pushing the total bank failures in this year (2009) to 14.

•          Kerala Government announces package for NRKs who lost jobs - loans at lower interest rates and Rs 100-crore for starting business ventures.

•          Dubai Smartcity Company has informed that their Kochi project is on track.

•          The Kerala government plans to invest Rs.10000 crore in the IT sector in the near future. Kerala to have 10 IT parks by 2011

•          Shri O.P. Bhatt, Chairman, State Bank of India, has been conferred the “Best Executive 2008” award by financial magazine Asiamoney.

•          SBI launches biometric ATM machines & Mobile Banking in domestic mobile phones. Mobile banking offers money transfer, bill payments etc.

•          Kerala will face a severe drought this summer due to drop in rainfall.

•          SBI now has 4 branches and 7 ATMs in Singapore and they offer full retail banking facilities to customers.

Investments

Stock Market

Stock market is again showing declining trend after 2 months of relative stability.  Global situation especially in USA is turning from bad to worse. Risk aversion is on increase again as FIIs are selling on net basis continuously for last 10 days. Domestic insurance companies get lot of funds during these ‘tax saving’ months (Feb/March) and they are net buyers for last many days but it is not enough to arrest the fall in stock prices.

General elections will be held in April/May and the next trigger will be the new government formation. Until then stock market direction will depend on US market which is expected to be subdued.

 

Real Estate

Real estate market is expected to correct slowly over next few years and is certainly not suited for short term speculators and persons with high debt levels. Real estate is a highly illiquid market and correction in prices will be a very slow process unlike share market where prices gets adjusted to the reality very quickly.

 

Dollar

The Indian rupee is at a record low of almost Rs 51.90 per dollar on the back of dollar buying by oil companies & FII selling in stock market. Many experts are now predicting further fall in coming days as FII selling is continuing unabated. UAE Dirham also touched important Rs 14 mark. NRIs who were waiting for better dollar rates can start sending money.

Insurance/Mutual Fund

March is the time when investors normally buy tax saving mutual fund and life insurance schemes. Here investors can opt for SBI Mutual Fund’s SBI Taxgain scheme as tax saving cum investment option. This scheme has a decent track record and is good even for those persons who need not save any tax.

 

Bank Deposits

SBI has increase NRI Deposit rates while NRO deposit rates will be reduced from 9th of this month by almost half percentage. NRIs are again advised to opt for fixed deposits as quickly as possible as interest rates are expected to go down from here.

MONEY QUOTES

·         We live by the Golden Rule. Those who have the gold make the rules. ~Buzzie Bavasi

·         Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair. ~Sam Ewing

·         The waste of money cures itself, for soon there is no more to waste. ~M.W. Harrison

·         There's no money in poetry, but then there's no poetry in money, either. ~Robert Graves

·         The safe way to double your money is to fold it over once and put it in your pocket. ~Frank Hubbard

·         A bank is a place that will lend you money if you can prove that you don't need it. ~Bob Hope

·         The economy depends about as much on economists as the weather does on weather forecasters. ~Jean-Paul Kauffmann

·         Money often costs too much. ~Ralph Waldo Emerson

·         A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way. ~Mark Twain

·         A rich man is nothing but a poor man with money. ~W.C. Fields

·         Inflation is taxation without legislation. ~Milton Friedman

·         Business is the art of extracting money from another man's pocket without resorting to violence. ~Max Amsterdam

·         “Treasury Secretary has resigned. He didn't want to resign, but there wasn't any money left in the treasury so he's got nothing to do." -Jay Leno

·         "The FBI has issued a warning that terrorists may be planning a spectacular attack intended to damage our economy. Well I have news for them; they are a little too late " -Jay Leno

Indian Rupee is at Record Lows

The Indian rupee is at a record low of Rs 51.80 per dollar on the back of dollar buying by oil companies. Most other Asian currencies fell too on global risk aversion.

Citi has said the rupee may touch touch Rs 54 per dollar levels in the next two to four weeks. “Customers are still on the short side,” it said. “The rupee will move along with other Asian currencies as risk aversion is still there. Any RBI intervention will smooth the movement but cannot stop the rupee slide.”

Standard Chartered said it expects rate cuts to happen soon.

“There is little fresh supply coming from the market and with global equity markets weakening outflows, it is likely to put pressure on the rupee,” said HDFC.