IRDA proposes insurance awareness policy

Also, the insurance regulator has proposed to set up citizen’s charter and a grievance redressal cell. 
 

IRDA has proposed that insurance companies should formulate Insurance Awareness Policy (InAP) to create awareness about insurance among masses. However, the regulator has not clarified the manner in which such programs should be carried out.

In a draft circular, IRDA has instructed insurance companies to formulate an ‘InAP’ to educate customers about insurance products, benefits, rights and responsibilities of policyholders, etc.

Further, to improve the quality of services and communication between policyholders and insurers, the regulator has proposed to set up a citizen’s charter. IRDA defines Citizen’s Charter as, “Citizen’s charter of an insurer is a document, which represents the commitment of the insurer towards its clients in respects of standard of services, information, choice and consultation, non-discrimination and accessibility, grievance redress, courtesy and value for money. This also includes expectations of the insurer from the citizen for fulfilling the commitment of the insurer. It enshrines the trust between the insurance service provider and the end users with the primary objective of empowering clients in relation to insurance service delivery.”

Also, IRDA has directed insurance companies to enforce basic rights to consumers such as right to professional diligence, right to protection against unfair contract terms, right to protection against unfair market conduct, right to protection of personal information, right to requirement of fair disclosure etc. 

Meanwhile, IRDA has proposed to set up a grievance redressal cell to improve customer service. The regulator has asked insurance companies to appoint Chief Executive Officer or Chief Compliance Officer as Grievance Redressal Officer (GRO). 

IRDA has proposed that insurance companies have to appoint an official at every regional, divisional and branch office. Insurers will be required to put in place a system to receive, register and dispose of grievance in such offices or through voice calls and emails.

The insurers have been instructed to issue acknowledgement of the complaint in which they will have to mention the expected turnaround time. Any delay will be subject to penalty. 

To improve transparency, IRDA has said that insurance companies should publish their grievance redressal procedure on their respective websites. 

IRDA has sought feedback from stakeholders before January 19 in this regard.

MF Utility gets green signal from SEBI

The first phase, which is meant for distributors, is expected to be launched in May 2015. 
 

The much awaited industry initiative MF Utility has received SEBI permission. The system which is currently in the testing phase is expected to be launched in six months. 

MF Utility will be launched in two phases – first phase for distributors and the second for investors. 

So far, 25 AMCs and 2,400 distributors from close to 400 locations (including 280 corporate distributors) have signed up with MF Utility. 

Fund houses have contributed Rs. 5 lakh as capital in this company. Distributors can access this system free of cost. AMCs will pay on the basis of number of transactions. AMCs may have to cough up anywhere around Rs. 18-20 per transaction.  

“This is an order routing system which will reduce duplication of data entry at various points. It will minimize data entry errors. The system can handle 25,000 users concurrently,” said V Ramesh, Managing Director & Chief Executive Officer, MF Utilities India. 

Ramesh said that this system will not compete with any of the existing platforms. “It’s just an order routing platform. We’ll funnel all the transactions and submit them to R&Ts. It will be of great help to distributors where there are no R&T offices. It will save their time, effort and money. Distributors can just scan and send the documents to R&T which will help investors get the same day’s NAV. The physical documents can be sent later. Moreover, now all the R&Ts will be AMC neutral, which means that Karvy can accept HDFC applications even if HDFC MF’s R&T is not Karvy. Distributors can send documents through courier to any of the nearest R&T.” 

One of the most useful features of this system is that investors can invest through a single cheque if they wish to invest in multiple funds. Distributors can execute all kinds of transactions like SIP, STP, lump sum investment, redemption, etc. on this system. 

MF Utility will operate as a registrar to an issue (RTI) and will be regulated by SEBI. 

IRDA to have separate regulations for health insurance

IRDA has constituted an 11-member committee to examine the framework of health insurance. 
 

IRDA is planning to segregate regulations governing health insurance and general insurance sector. The insurance regulator has constituted a 11-member committee to examine the framework of health insurance. 

M Ramaprasad, Member, Non-Life, IRDA will head the committee as the chairman. 

In a circular, IRDA has said, “Recognizing the unique features of health insurance and realizing the need for a separate framework for the segment, IRDA brought out comprehensive framework for health insurance in the form of the health insurance regulation as well as guidelines of standardization in health insurance. This is the one segment where both life and non-life insurers, apart from stand-alone health insurers, participate. A need has been felt to visit/re-visit various areas in the framework applicable for health insurance to ensure level playing field for the industry as well as rationalize various provisions, wherever required given the nature of business.”

Here are some key responsibilities of the committee:

• Health insurance products and distribution structure
• Reinsurance in health insurance
• Protection of policyholders
• Place of health in rural and social sector obligation
• Mergers and acquisition
• Approaches to solvency and various actuarial matters
• Investment as well as financial matters

The committee will give its recommendations within 8 weeks.

Source: Team CafeMutual

Canara Robeco Emerging Equities Announces Change In Exit Load Structure

With effect from 01 January 2015 

Canara Robeco Mutual Fund has announced change in exit load under Canara Robeco Emerging Equities, with effect from 01 January 2015. 

Accordingly the revised exit load will be: 

If redeemed / switched out within 18 months from the date of allotment, the exit load will be 1%. 

If redeemed / switched out after 18 months from the date of allotment, the exit load will be Nil.

L&T MF Announces Change In Exit Load Structure Under Three Schemes

With effect from 01 January 2015

L&T Mutual Fund has announced change in exit load structure under L&T India Large Cap Fund, L&T India Value Fund and L&T Infrastructure Fund, with effect from 01 January 2015. 

Accordingly, the revised exit load structure will be: 

If redeemed within 1 year from the date of allotment or purchase applying first in First in First out basis: 2% of applicable NAV. 

If redeemed after 1 year but on or before 2 years from the date of allotment or purchase applying First in First out basis: 1% of applicable NAV. 

If redeemed after 2 years from the date of allotment or purchase applying First in First out basis: Nil. 

Peerless Mutual Fund Announces Change In Exit Load Structure Under Two Schemes

With effect from 01 January 2015 

Peerless Mutual Fund has announced change in exit load under all plans / options of Peerless Short Term Fund and Peerless Flexible Income Fund on a prospective basis, with effect from 01 January 2015. 

Accordingly the revised exit load will be: 

Peerless Short Term Fund: 

If redeemed within 3 months from the date of allotment, the exit load will be 0.25%. 
 
Peerless Flexible Income Fund: 

If redeemed within 6 months from the date of allotment, the exit load will be 0.60%.

ICICI Prudential MF Announces Change In Exit Load Structure Under Its Schemes

With effect from 01 January 2015 

ICICI Prudential Mutual Fund has announced change in exit load structure under the following schemes, with effect from 01 January 2015. 

Accordingly, the revised exit load will be: 

ICICI Prudential Dynamic Bond Fund: Nil. 

ICICI Prudential Short Term Plan: 

If units purchased or switched in from another scheme of the fund are redeemed or switched out within 3 months from the date of allotment, the exit load will be 0.50% of the applicable NAV. 

If units purchased or switched in from another scheme of the fund are redeemed or switched out after 3 months from the date of allotment, the exit load will be Nil. 

ICICI Prudential Long Term Plan: 

If units purchased or switched in from another scheme of the fund are redeemed or switched out within 1 month from the date of allotment, the exit load will be 0.25% of the applicable NAV. 

If units purchased or switched in from another scheme of the fund are redeemed or switched out after 1 month from the date of allotment, the exit load will be Nil. 

ICICI Prudential Ultra Short Term Plan: Nil. 

Govt Signs Loan Agreement with ADB for $75 Million and $1.8 Million Grant for Karnataka Integrated Urban Water Management Investment Program

Government of India signed an agreement with Asian Development Bank (ADB) here today for a $75 million loan and a $1.8 million grant that will help improve water resource management in three (3) towns of Karnataka in the Upper Tungabhadra sub-basin. This loan from the ADB's Ordinary Capital Resources has a 25-year term including a grace period of five years. 

This first tranche of the loan under the Karnataka Integrated Urban Water Management Investment Program will help expand and upgrade urban water supply and sanitation infrastructure; improve water resource planning, monitoring and service delivery; and strengthen operational and administrative capacity in the three towns of Byadagi, Davanagere and Harihar. 

Shri Tarun Bajaj, Joint Secretary, Department of Economic Affairs at the Ministry of Finance, signed the agreement on behalf of Government of India, and Shri Rajeev Singh, Officer-in-Charge of ADB's India Resident Mission, signed the agreement on behalf of ADB. The project agreement was signed by Shri D. Chandrashekariah, Joint Director, Planning, Urban Development Department, Government of Karnataka on behalf of Government of Karnataka and Shri Darpan Jain, Managing Director, Karnataka Urban Infrastructure Development & Finance Corporation Limited (KUIDFC) on behalf of KUIDFC. 

Speaking on the occasion, Shri Bajaj said that he is happy to note that this project will help increase water treatment capacity by 15,000 cubic meters per day; help expand and upgrade more than 1,000 kilometers of water pipelines, and increase sewage treatment capacity by 48,000 cubic meters per day, thereby promoting water efficiency and environmental protection. 

Shri Rajeev Singh, Officer-in-Charge of ADB's India Resident Mission said that the project will pioneer the establishment of Urban Local Bodies Incentive Fund to assist towns in implementing reforms and mainstreaming the use of performance-based contracts in ensuring continuous water services. He said that the project will also test the application of output based approaches to support program for poor and vulnerable households. 

The investment program aims to improve water resource management in urban areas in a holistic and sustainable manner. Investment support will be provided to modernize and expand urban water supply and sanitation (UWSS) while strengthening relevant institutions to enhance efficiency, productivity and sustainability in water use. Innovative instruments, such as public-private partnership (PPP) or reform oriented incentive funds will also be pursued. The Program will seek to assist more fragile environments increasingly affected by water resource degradation, often located in North Karnataka. The Program will also promote climate-resilient development, capacity-development for conducive adaptation. 

Government Signs Loan Agreement with ADB for $60 Million for Jammu and Kashmir Urban Sector Development Investment Program

The Government of India signed an agreement with Asian Development Bank (ADB) here today for a $60 million loan that will help improve urban services, including water supply and urban transport infrastructure, in two key cities of Jammu and Kashmir. This loan from the ADB's Ordinary Capital Resources has a 25-year term including a grace period of five years. 

The third tranche loan under the Jammu and Kashmir Urban Sector Development Investment Program will supplement the urban infrastructure up-gradation program initiated under Project 1 and Project 2. About half-a-million people in Srinagar and Jammu will benefit from improved access to water supply, functional drainage systems, and better transport infrastructure 

Shri Tarun Bajaj, Joint Secretary, Department of Economic Affairs at the Ministry of Finance, signed the agreement on behalf of Government of India, and Shri Rajeev Singh, Officer-in-Charge of ADB's India Resident Mission, signed the agreement on behalf of ADB. The project agreement was signed by Shri Tahseen Mustafa, Chief Executive Officer, J&K ERA on behalf of Government of Jammu & Kashmir and Ms. Shagufta Qazi, Director Finance J&K Economic Reconstruction Agency on behalf of J&K ERA. 

Speaking on the occasion, Shri Bajaj said that the project will support the state in ensuing ¬increase average water supply, from 90 liter/day/capita to 135 liter/day/capita through rehabilitation and improvement of infrastructure. This would also help in substantial reduction of water logging in project areas. 

Shri Rajeev Singh, Officer-in-Charge of ADB's India Resident Mission said that the capacity development programs will be run for the concerned state government departments and representatives of urban local bodies to enable them to provide better urban services and bring efficiency and accountability in their functioning. 

Delhi Building Bye-Laws made user friendly; simplified, rationalized and updated

Plots up to 100 sq.mt exempted from sanction process; Single Window clearance for plots above 20,000 sq.mt 

Seeking to put an end to the harrowing experiences of residents of Delhi in obtaining building plan approvals, the Delhi Building Bye Laws of 1983 have been simplified, rationalized and updated under the directions of the Ministry of Urban Development. The Delhi Urban Arts Commission (DUAC) in association with Delhi Development Authority (DDA) and municipal bodies have completed the simplification exercise and submitted Draft Simplified Bye Laws to the Ministry of Urban Development. The Urban Development Minister Shri M.Venkaiah Naidu today directed DDA to notify them at the earliest. 

The updated and simplified Bye Laws will serve as a comprehensive singe reference ready reckoner by integrating the Building Bye Laws notified in 1983 and several changes that have been subsequently notified over the last 31 years. This will enable the residents of Delhi and the professionals in obtaining sanctions for building plans in an easy and time bound manner. Some new provisions have also been made to address emerging challenges like green construction and water conservation and management. 

Some of the salient features of the simplified Bye Laws include: 

1.Small residential plots of size up to 100 sq.mt have been exempted from sanction procedures. The proponents will only have to furnish the requisite information in a simplified one page format to the concerned urban body and go ahead with the construction. The validity of this submission will be three years and if required, a fresh submission may be made thereafter; 

2. For plots of 100 sq.mt to 2,000 sq.mt, specific time schedules have been stipulated for according approvals by various concerned agencies; 

3. For plots of more than 2,000 sq.mt, Single Window Clearence mechanism has been proposed. Under this, applications received will be scrutinized by a High Powered Committee consisting of representatives of all concerned agencies for according sanctions; 

4. Competency norms of various professionals like Engineers, Architects, Town Planners etc., have been clearly stipulated addressing the vagueness in the existing provisions; 

5. Clarity has been imparted in respect of the agencies like Heritage Conservation Committee, Archeological Survey of India, National Monument Authority etc., to be approached in respect of constructions in the vicinity of heritage buildings/monuments etc ; 

6. Green construction norms plot size-wise have been clearly stipulated providing clarity; 

7. Setting up of Grievances Redressal Committees in Urban Local Bodies for time bound resolution of disputes has been made mandatory; 

8. Time frames have been stipulated for issuing development control regulations to applicants and professionals; 

9. Provision of washrooms in public buildings of more than 4,000 sq.mt size has been made mandatory 

10. Rain water harvesting and waste water recycling has to be provisioned; 

11. Differently abled persons have to be provided easy access besides meeting their specific needs; 

12. Needs of children and senior citizens have to be duly met by providing for easy access, fittings and fixtures in toilets and altering the height of the hand rails in the buildings; 

13. Provisions for disaster mitigation, structural and fire safety codes have been specified; and 

14. Art elements like paintings, frescos, statues etc., to be provided in public buildings for better aesthetic environment. 

Simplification, rationalization and updation of Building Bye Laws notified in 1983 under the Delhi Development Act, 1957 was undertaken after extensive stakeholder consultations. A workshop was held in October this year which was attended by over 100 engineers, architects, town planners, urban experts, consumer and builder organisations etc. In response to a public notice, over 1,000 suggestions were received. All these have been examined in detail jointly by DUAC, DDA and municipal bodies before coming out with user friendly Bye Laws. 

PM urges fast tracking of pro-farmer initiatives under Pradhan Mantri Krishi Sinchai Yojana

NREGA should be integrated with the overall plan of Pradhan Mantri Krishi Sinchai Yojana Says PM 

In yet another initiative aimed at benefiting farmers, the Prime Minister has asked concerned Departments and Ministries of the Union Government to fast-track the Pradhan Mantri Krishi Sinchai Yojana. Today's meeting follows yesterday's decision by the Union Cabinet, in which amendments to the Land Acquisition Act, 2013, were cleared. The amendments include the pro-farmer step of bringing 13 most frequently used Acts for Land Acquisition for the Central Government Projects into the purview of the Land Acquisition Act, thus benefiting a large number of farmers whose land is acquired for such projects. 

Chairing a high-level meeting involving the Ministries of Agriculture, Water Resources, Rural Development, the Prime Minister called for a multi-pronged approach to the ultimate goal of providing irrigation for every farm through the Pradhan Mantri Krishi Sinchai Yojana. 

The Prime Minister noted that NREGA had been used over the past few years for creation and augmentation of irrigation assets. He said that NREGA should be integrated with the overall plan of Pradhan Mantri Krishi Sinchai Yojana. He also called for precise monitoring of outcomes in this regard. 

At the macro-level, the Prime Minister asked the Ministry of Water Resources to identify river-interlinking projects that could be immediately taken up. 

The Prime Minister called for comprehensive mapping and identification of water bodies across the country. He said satellite imagery and 3D photography could be used to guide villages to best possible sources of irrigation. 

The Prime Minister has asked concerned departments to look into the possibility of identifying progressive farmers, who could take the lead in implementing water conservation and innovative irrigation techniques. 

The Prime Minister has also called for integrating water recycling projects of key towns and cities, to irrigation in nearby rural areas. He emphasized the importance of generating consciousness among people towards water conservation. 

The Union Minister for Water Resources, Uma Bharati, and the Union Minister for Agriculture, Radha Mohan Singh, were present on the occasion.

Ownership of Indian Railways to Remain with the Government: Suresh Prabhu

Railways Initiates Process of Delegating Powers to Field Functioneries 

The Minister of Railways Shri Suresh Prabhakar Prabhu said that there are several expectations from various stake holders of Indian Railways and called upon General Managers to live up to those expectations. The Minister pointed out that there is a need to benchmark our performance so that our full potential is utilized to deliver the best services to the people. The Minister stated this while addressing the conference of General Managers of all Zonal Railways and Production Units which was held here today. The Minister said that he is bringing out a white paper which will provide the vision and help formulate the road map to take Railways forward. 

The Railway Minister again reiterated that Railways will not be privatized and the ownership of it will always remain with the Government. He said that we need funds to invest in various pending projects and future projects. Vigorous efforts are being made to mobilize investments in Railways Sector. Capacity augmentations is another important area which needs attention as we have to decongest highly dense traffic routes through double line, triple line or more lines, besides creating new railway connectivity. Shri Prabhu said that Railways will also have to modernize its rolling stocks, signaling system, safety operations etc. The Minister pointed out that he has already initiated the process of delegating powers to field functionaries like General Managers, Divisional Railways Managers and Station Managers but with that comes responsibilities also on the field functionaries to deliver. 

Referring to the cleanliness, the Minister said that an integrated approach is required to address this important aspect of passenger amenities. He said that mechanized laundries have improved quality of linen supplied in the trains and we have to set up more such laundries to cover the entire railway network. The Minister also pointed out that sustained efforts also need to be made to improve quality of food being served at railway stations and in trains and for this, base kitchen with quality monitoring should be set up. He also called upon General Managers to complete energy audit ordered by him earlier so that we can conserve and optimize energy consumptions in Railways. Similarly, we need to do water audit for its optimum utilization. Expressing his concern for the unfortunate and tragic accidents at unmanned level crossings, Shri Prabhu said that General Managers should think of new and innovative methods to reduce such accidents and make railway operations safer. In this connection the Railway Minister informed that ISRO is helping Indian Railways using Geospatial Technologies. 

Shri Prabhu also said that he has written letters to Members of Parliament requesting them to use MPLAD funds for railway works for the benefit of the passengers. He also called upon General Managers to pay due attention to the requests made by the elected representatives on behalf of public. There is a need to save precious railway land from unauthorized encroachment and at the same time take measures to recover encroached land. The Railway Minister said that he is newest member in this vast railway family and he is proud of railway personnel for their dedication, sincerity and ability to deliver. He called upon railway unions and railway administration to work together for the betterment of Indian railways and the nation. 

In his address, Minister of State Shri Manoj Sinha said that it is the duty of railway administration to fulfill the expectations of railway users and we have to constantly work to improve the image of Indian Railway. Shri Sinha also emphasized on being consistent for ensuring best result. He said that we have to work as a unified railway system ensuring best coordination among all railways zones and railway divisions. 

In the beginning Chairman, Railway Board, Shri Arunendra Kumar outlined the agenda of the Conference and presented action plan for the General Managers. The agenda of the meeting included; Vision for Indian Railways in the next five years with short term & long term targets, Improving productivity, Safety, Global benchmarking of Railway services for customers and Improvement in Rolling Stock. 

Civil Aviation Ministry discusses draft civil aviation policy with states

Civil Aviation, Tourism and Culture have to work together to realize the great potential 

Minister of Civil Aviation, P. Ashok Gajapathi Raju inaugurated the Meeting of Chief Ministers and State Civil Aviation Ministers in New Delhi today to discuss the Draft Civil Aviation Policy and other issues related to civil aviation sector. Speaking on the occasion, the Minister said the civil aviation sector in India has been growing steadily registering a growth of 13.8% during the last 10 years. He said, though the rate of growth came down during the last two years due to the overall economic slowdown, it is recovering fast, with the year 2013-14 showing a growth of 6%. 

P. Ashok Gajapathi Raju expressed concern that despite high growth rates, most of the airlines in the country are reported to have incurred losses and some airlines are struggling to stay afloat. He said, though there is a need for helicopter operations in India, helicopter population in the country has not improved in recent years. The number of small aircraft and seaplanes is stagnant. The Minister said that the aviation industry as such is seriously affected by high operational costs including cost of aviation turbine fuel, service tax and other charges, shortages of maintenance facilities, high foreign exchange rate, competition from foreign airlines etc. There is a high customs duty on import of private aircrafts and helicopters. 

P. Ashok Gajapathi Raju stated that aviation is now acknowledged as a growth engine, which has a force multiplier effect. He said that as per global estimates, for every $100 of input, there is $325 worth of output generated while for every 100 jobs created by aviation industry, there are 610 jobs created in other industries. Highlighting close linkages between tourism and civil aviation sectors, the Minister said more than 90% of the international tourists arrive by air. He said that according to a study conducted in 2009, the aviation sector has contributed 0.5% directly and 1.5% with catalytic effects to the Indian GDP and this, when coupled with the tourism sector's contribution of 5%, works out to be a significant 6.5% of the GDP. He said acknowledging the role of civil aviation in the overall growth of economy, Government has proposed a Draft Civil Aviation Policy. 

Civil Aviation Minister said that India's impressive growth in international and domestic trade over past few years has augured well for the air-cargo industry. However, he said, the current share of air-cargo compared to other modes of cargo-transportation is fairly low in India. The Minister added that the growth in the passenger and cargo traffic requires significant investments in terms of construction of new airports, expansion and modernization of existing airports, improvement in connecting infrastructure and better airspace management. 

P. Ashok Gajapathi Raju underlined that the real challenge is to manage phenomenal growth of air traffic with safety. He said, the increase in air traffic has not only increased demand of aircraft but also posed a challenge to meet the airport and air navigation infrastructure to ensure safe, orderly and efficient operations. 

Earlier speaking on the occasion, Minister of State for Civil Aviation, Tourism (Independent Charge) and Culture (Independent Charge) Dr. Mahesh Sharma said that the three Ministries, i.e. Civil Aviation, Tourism and Culture have to work together to realize the great potential that India has in the civil aviation sector. He emphasized on improving air connectivity to remote areas. Highlighting the role civil aviation plays in an economy like India, the Minister stated a multi-model approach is the need of the hour for the development of the sector.

ASSOCHAM moots FinMin for amending IT Act for overseas Sr. Indian citizen

The Associated Chamber of Commerce and Industry of India (ASSOCHAM) has proposed the government to make announcement before the Pravasi Bhartiya Divas (PBD) amendment in the Income Tax Act that those senior citizens who come back and bring their wealth from overseas will be taxed only on the income earned in India and not on their global income. 

The change would encourage these senior citizens to bring their overseas wealth back to India and this would also help in solving the issue of ‘Black money' and create a more conducive investment atmosphere. 

In a communication to the Finance Minister, ASSOCHAM has stated that the post-independence era has shown that a sizeable population of Indian who have become Overseas Citizen of India (OCI) / Persons of Indian Origin (PIO) has contributed significantly to the overall development of the country. Recent estimates from the Ministry of Overseas Indian Affairs indicate the Indian Diaspora to be the second largest in the world, with 25 million people with a cumulative purchasing power of approximately $300 Billion. 

These persons are often Indian origin entrepreneurs, who have spread their business empire worldwide or professionals who have taken important international assignments. Even if they desire to come back to settle permanently in India as Senior Citizens due to love for the mother land and near and dear ones due to the prevalent tax regime of the country. 

Under Income Tax Act, 1961 if an individual stays in India for more than 182 days in a particular financial year or 60 days in the relevant tax year and 365 days or more in the preceding four financial years, the individual becomes resident of India. 

The individual is considered to be not ordinarily resident (NOR) where his or stay in India during the past 7 financial years is 729 days or less or individual has been non-resident in nine out of ten financial years.( NOR conditions). However, where both these conditions are not fulfilled, individual is considered to be ordinarily resident (ROR) and taxed in India on his global income and also required to disclose his global assets. 

NOR are taxed on their India sourced income like non residents and therefore, practically this window is available to the returning individual for the 2 to 3 years depending on the timing of their return. Thereafter they become ROR as they are not able to fulfill NOR conditions mentioned above. This has become a major contributor in the creation of ‘Black money', which is a menace to economic development. 

Keeping in view the contribution of OCIs / PIOs in the development of the country mentioned hereinabove, ASSOCHAM has suggested that the provisions of Taxation Law should be amended so as to encourage the OCIs / PIOs to return and re¬settle in India by taxing them only on their Indian income and giving them exemption from payment of tax on income earned outside India 

This is a practice in certain developed countries in Europe- where residents are taxed only in respect to the income earned in that country or on the income brought in the country. The income earned outside and not brought into the country remains outside the tax net. The rationale of such a policy is to tax on territorial jurisdiction of the country only and to bring a balance between domestic and international taxation. If an individual resident of the country intends to consume the income earned outside the territorial jurisdiction, he/she is free to do so after paying due tax thereon to the exchequer. 

Radha Mohan Singh emphasises on Enhancing Agriculture Production and Productivity

Union Agriculture Minister Radha Mohan Singh emphasised on Government's priority on Enhancing Agriculture Production and Productivity, while addressing the journalist in a Press Conference organised in National Academy of Agriculture Science, Pusa. He further mentioned that the new Government has a very clear perception about holistic and sustainable growth of agriculture. 

Addressing on this occasion, Radha Mohan Singh mentioned the various initiatives and achievements of the Government during last seven months, to make the farmer-oriented policy aimed at lessening the distance between lab-to-land and infuse a new confidence among farmers: 

· Government have taken an initiative to ensure Integrated Soil Management. During 2007-08 to April 2014, an amount of Rs.112 crore was released for Soil Testing Laboratories whereas Rs.86 crore have been released after May 2014. The Government have sanctioned Rs.568.54 crore for the next three years to provide Soil Health Card to 14.5 crore farmers. Earlier, there was no separate scheme for Soil Health Card under Mission mode. 

· The Government has started National e-governance Scheme in agriculture sector with an allocation of Rs.886 crore. 

· At block level, the number of agriculture extension workers has been increased by 8000. Now, their number has increased to 26,000 from 18,000. 

· Technical support to farmers in agriculture sector has been a problem area. To tackle this problem, we have set up 913 Farm Machinery Banks. Farmers will be able to take equipments on hire basis from these banks. 

· In addition, we have distributed 72627 farm machinery equipments during last six months. An amount of Rs.1345 crore has been sanctioned to states for machinery banks and equipments/instruments whereas during 2013-14 figure for farm mechanization was Rs.1213 crore only. 

· An allocation of 50% under National Food Security Mission (NFSM) had been made for growth of pulses so as to encourage cultivation of pulses. Also, a decision has been taken to start the cultivation of pulses in the states of Jammu & Kashmir, Himachal Pradesh, Uttarakhand and the North-Eastern States including Sikkim. 

· The Government have increased the subsidy amount to Rs.300/ha from Rs.100/ha to promote bio-fertilizers. 

· The Government have established a special fund of Rs.500 crore as an important initiative. With the setting up of this Price Stabilization Fund, farmers will be able to get fair price of their products. We have called upon the State Governments to amend the APMC Act so that farmers may sell their fruits and vegetables direct to consumers. So far, 12 States have agreed to our suggestion. States have been requested to set up Kisan Mandis and a kisan mandi is being established in Delhi. The entire country being connected through e-marketing under Agri Tech Infrastructure Fund. 

· The Government have given in-principle approval to a scheme of traditional agricultural development. The Prime Minister's Krishi Sichai Yojana is under finalization. We also have a plan to make comprehensive amendments in the Cooperative Act and make available a 24-Hour exclusive TV Channel for farmers. We have also targeted to cover at least one family out of three families under Kisan Call Centre. 

· The Government have made several initiatives for development of Animal Husbandry, Dairy and Fisheries sector under the National Gokul Mission. An allocation of Rs.500 crore has been made to protect and promote the breed of Desi Cows. So far, projects of Rs.378 crore have been sanctioned and Rs.123 crore have been released during the current financial year. 

· Under National Dairy Plan Phase-I from June to November 2014, 87 SP Projects has been sanctioned as compared to 41 SP Projects during the same period last year. 

· During June-November, 2014, Rs.133.56 crore subsidy has been released under Dairy Entrepreneurship Development Scheme. National Livestock Mission has been made effective in the entire country. 

· The Fisheries Guidelines have been simplified further. Fishing boats of 15 mtr. Size or more can enter Exclusive Economic Zone to catch fish. In case of death of fishermen, insurance amount has been increased from Rs.1.00 lakh to Rs.2.00 lakhs. Sanction for housing for 830 fishermen under Fishermen Welfare Scheme has been issued. Government will adopt latest technologies to promote Blue Revolution in the country. 

· Under Mission Blue Revolution and RKVY, Government plans to establish new breeding centres cages, manufacturing of marine cages and cold water fishing with a provision of Rs.157 crore. 

· We aim to increase milk production to 150 million tonnes by 2016-17 and also organized dairy market will be extended. 

During the conference, Sh. Radha Mohan Singh mentioned that there will be definite results of all these initiatives taken by the Government in the time to come and there will be growth in agricultural sector and welfare of farmers will be promoted. He hoped that agriculture's contribution in GDP will touch newer heights with these initiatives. 

FPIs in selling mode

Net outlow of Rs 218.16 crore on 29 December 2014 

Foreign portfolio investors (FPIs) sold shares worth a net Rs 218.16 crore on Monday, 29 December 2014, compared with inflow of Rs 419.15 crore on Friday, 26 December 2014. 

The net outflow of Rs 218.16 crore on 29 December 2014 was a result of gross purchases of Rs 1419.07 crore and gross sales of Rs 1637.23 crore. There was a net outflow of Rs 162.74 crore from the secondary equity market on 29 December 2014, which was a result of gross purchases of Rs 1419 crore and gross sales of Rs 1581.74 crore. The S&P BSE Sensex had advanced 153.95 points or 0.57% to settle at 27,395.73 on that day, its highest closing level since 23 December 2014. 

There was a net outflow of Rs 55.42 crore from the category 'primary market & others' on 29 December 2014, which was a result of gross purchases of Rs 0.07 crore and gross sales of Rs 55.49 crore. 

FPIs have bought shares worth a net Rs 754.54 crore in this month so far (till 29 December 2014). They have sold shares worth a net Rs 1987.79 crore from the secondary markets in this month so far (till 29 December 2014). FPIs bought shares worth a net Rs 13753.29 crore last month. They had bought shares worth a net Rs 12677.10 crore from the secondary markets last month. 

FPIs have bought shares worth a net Rs 96774.10 crore in this calendar year so far (till 29 December 2014). They have bought shares worth a net Rs 84160.20 crore from the secondary equity market in this year so far (till 29 December 2014). 

Dull day for precious metals

Gold futures end lower tracking rising equity markets with the dollar trending higher 

Bullion prices ended lower at Comex on Monday, 29 December 2014 at Comex. Gold prices pulled back on Monday after some wide swings during Christmas week. Gold prices ended last Friday on a big uptick but still finished down a bit for the holiday-shortened week due to heavy losses in the prior sessions. 

Gold for February delivery fell $13.40, or 1.1%, to settle at $1,181.90 an ounce on the New York Mercantile Exchange. 

Silver for March delivery also fell, slipping nearly 37 cents, or 2.3%, to settle at $15.78 an ounce. 

Gold futures ended lower on Monday, tracking rising equity markets with the dollar trending higher against a select band of currencies. There was little or no significant economic releases for cues, with investors upbeat over an improving US economy. Nevertheless, trading volumes are expected to remain thin during the week, ahead of the New Year. 

After some strong data recently, including a report showing US gross domestic product to have grown much more than expected in the third quarter, the prospects of a rate hike next year seem to get more definite with the greenback continuing to gain consistently against most major currencies. A higher interest rate supports the dollar and is a drag on gold. 

Among data due this week are the consumer confidence index for December from the Conference Board, the weekly jobless claims, the National Association of Realtors' pending home sales index for November and the results of the Institute for Supply Management's national and MNI Indicators' regional manufacturing surveys. 

The S&P Case-Shiller house price index for October, Markit's final US manufacturing index for December and the Commerce Department's construction spending data for November will also be out during the course of the week. 

Crude settles at lowest levels in five and half years

Crude-oil futures have now plunged 50% from their 2014 high 

Crude prices ended lower at Nymex on Monday, 29 December 2014 at Nymex. Crude-oil futures have now plunged 50% from their 2014 high, as prices swung lower again on Monday. Prices slipped once again on Monday following a higher dollar. The pace of the slide, to the lowest settlement in nearly six years, is the fastest in about 8 years. 

On the New York Mercantile Exchange, light, sweet crude futures for delivery in February fell $1.12, or 2%, to settle at $53.61 a barrel, after an early rally on reports of a fire affecting oil-storage terminals in Libya collapsed. That's the lowest settlement since May, 2009. 

Earlier, the February contract traded as high as $55.74, or 1.8% higher than Friday's settlement. Nymex crude lost 4.2% last week, marking a fifth consecutive week of declines. 

Overall, oil prices have now plunged 50% from their 2014 settlement high, set on June 20.
There was little or no significant economic releases for cues, with investors upbeat over an improving US economy. Nevertheless, trading volumes are expected to remain thin during the week, ahead of the New Year. 

After some strong data recently, including a report showing US gross domestic product to have grown much more than expected in the third quarter, the prospects of a rate hike next year seem to get more definite with the greenback continuing to gain consistently against most major currencies. A higher interest rate supports the dollar and is a drag on gold. 

Among data due this week are the consumer confidence index for December from the Conference Board, the weekly jobless claims, the National Association of Realtors' pending home sales index for November and the results of the Institute for Supply Management's national and MNI Indicators' regional manufacturing surveys. 

The S&P Case-Shiller house price index for October, Markit's final US manufacturing index for December and the Commerce Department's construction spending data for November will also be out during the course of the week. 

Among other energy products, gasoline futures swung to a loss. Nymex reformulated gasoline blendstock for January fell 5.5 cents, or 3.7%, to settle at $1.45 a gallon. 

Rupee bounces back

At 63.38/39 per dollar 

Rupee edged back higher to close at 63.38/39 per dollar on Tuesday (30 December 2014), versus its previous close of 63.6725/6850 per dollar.

Ministry for Development of North East Region Released About Rs.472 Crore Under Nlcpr

Steps Taken to put Development of North East Region on Fast Track 

The Ministry for Development of North East Region has taken various measures to put the cart of Development on track and accelerate the speed of development process. The steps include special emphasis on monitoring of the infrastructure projects for time-bound completion, priority funding for the identified projects tied up and fast tracking of environmental and forest clearance. 

The Non-Lapsable Central Pool of Resources (NLCPR) Schemes both State and Central were reviewed with each state separately in the last week of July and August 2014. 

To make the NLCPR schemes more responsive and transparent, guidelines are in the process of modifications to incorporate suggestions given by the states in the conference. 

In order to overcome the delay in completion of projects and early release of funds, selection, sanction and approval of the new projects are being streamlined in such a way that working season of the states from October – April is fully utilised for implementation.

An amount of Rs 400 crore has been released in NLCPR State and Rs 71.97 crore released under NLCPR Central in the last six months. 

Process has been initiated to appoint a Construction Supervision consultant and regular monitoring by staff. 

Action has been initiated for online preparation, submission of DPRs, along with e-mail alerts at various stages of implementation. 

The Minister DoNER convened a meeting of all the Members Parliament from North East seeking inputs and support for development of NER. 

Asia Pacific Market - Mixed trade globally today

As on today, during the day, key benchmark indices reversed initial gains triggered by the Prime Minister Narendra Modi-led Cabinet's approval yesterday, 29 December 2014 to Land Acquisition Act through the ordinance route for amendments.

In the meanwhile, Indian key benchmark indices eked out tiny gains in a volatile trading session. Indices swung between in positive and negative zone throughout the day. The S&P BSE Sensex and the CNX Nifty, both, hit their highest closing levels in a week. The S&P BSE Sensex rose 7.81 points or 0.03% to settle at 27,403.54. The market breadth indicating the overall health of the market was positive. Oil exploration stocks declined as lower crude oil prices would result in lower realizations from crude sales for oil exploration firms. Index heavyweight Reliance Industries declined in volatile trade. Sesa Sterlite declined on profit booking after recent rally. Capital goods stocks edged higher on renewed buying.

The foreign portfolio investors (FPIs) sold shares worth a net Rs 204.22 crore yesterday, 29 December 2014, as per provisional data.

European stocks declined today, after the release of disappointing inflation data from Spain and amid growing concerns over political tensions in Greece. Asian stocks edged lower today, as a sharp selloff in commodities and political uncertainty in Greece made investors less willing to take risks in the final trading days of 2014.

Key benchmark indices in China, Hong Kong, Taiwan, Singapore, Japan, and South Korea fell by 0.05% to 1.57%. Indonesia's Jakarta Composite index rose 0.94%.

The HSBC Holdings Plc/Markit Economics China manufacturing purchasing managers' index for the month of December 2014 will be declared tomorrow, 31 December 2014, followed by the official factory PMI on Thursday, 1 January 2015.

Japanese markets will be shut from tomorrow, 31 December 2014 to Friday, 2 January 2015 and will reopen on Monday, 5 January 2015.

SEBI may allow MFs to invest unclaimed money in liquid funds

Currently most fund houses deploy unclaimed money in bank fixed deposits. 

SEBI may allow fund houses to deploy the unclaimed mutual fund dividend and redemption proceeds lying in bank fixed deposits to be invested in liquid funds.  

It is learnt that some fund houses had requested SEBI that they should be allowed to launch liquid funds exclusive meant for managing unclaimed proceeds. This matter was discussed in SEBI MF Advisory Committee meeting held in Mumbai recently. 

Where is the money being currently invested? 

Fund houses are supposed to deploy unclaimed proceeds three months after it remains unclaimed in money market securities. Sometimes, AMCs do not find it feasible to park money in money market due to operational difficulties. So, a majority of fund houses currently deploy this money in bank fixed deposits. 

Claiming dividend/redemption proceeds 

If an AMC receives claims from investors, the AMC redeems the proportionate amount of securities and pays it to investors. If investors claim the money within three years then payment is based on prevailing NAV after adding the income earned on unclaimed money. If investors claim money after three years, the payment is based on the NAV at the end of 3 years.

Fee 

AMCs are allowed to charge a maximum 0.50 % per annum as investment management and advisory fees, though it is up to the AMC to decide if they wish to charge this fee. Some fund houses do not charge any fee for deploying these unclaimed proceeds. 

Investor protection fund 

If investors fail to claim their money even after seven years, then the accumulated fund gets transferred to Investors Education and Protection Fund (IEPF) which is utilized for spreading financial education. Once the amount gets transferred to IEPF it can’t be redeemed.

AMCs are expected to remind their investors to claim their proceeds. The unclaimed amount is mentioned in the annual report of AMCs. 

Instances where the dividend or redemption cheques return to the fund house because investors have not updated their address with the fund house were quite common earlier. 

Today, most investors opt to receive their dividend or redemption proceeds directly in their bank accounts through electronic clearing service (ECS). 

Source: Team CafeMutual

IRDA proposes to tighten norms for selling insurance policies

IRDA has proposed a host of measures relating to disclosure and selling practices among others to protect policyholder’s interests. 

IRDA has proposed to tighten norms for selling of insurance policies in order to check mis-selling.  

In a draft circular, IRDA has asked insurance companies and insurance intermediaries to strictly adhere to the IRDA advertisement regulation in which it had restricted use of any misleading information to sell policies. 

The insurance regulator has recommended that the products should be suitable to the policyholders income, personal and family circumstances, life stage, financial goals and risk appetite. IRDA said, “When buying an insurance policy, a prospect or proposer has a right to receive insurance advice consistent with his/her financial needs, inve­stment objectives, age, and other relevant information, and the insurance, insurance agent and insurance intermediary shall provide such insurance advice dispassionately.” Furthermore, IRDA has proposed insurance intermediaries to clearly illustrate the maturity amount and charges incurred in the policy like mortality charges and surrender value. 

On online distribution, the regulator has proposed that the insurance intermediaries can approach online leads only after taking prior consent of the prospect. Also, the canvassing to be made in such policies should be precisely on the lines of standard script approved with IRDA.

In order to improve post sales services, the insurance regulator has proposed insurers to put name, address and contact details of agents and insurance intermediaries in the policy documents, notices, premium receipts and any other communication. 

Also, the regulator has said that insurance intermediaries should make their clients understand the importance of KYC. “It is the need to comply with the minimal KYC requirements such as photograph, proposal form, proof of identity and proof of address. It is mandatory to furnish contact details such as email, phone number including mobile number and bank details so as to enable the policyholder to get intimation of benefits under the policy receive the amounts due expeditiously,” says the draft circular.

Meanwhile, in order to improve transparency and reduce ambiguity, the insurance regulator has proposed that insurance companies should clearly mention all the details of policy such as bonus, riders, premium payable, grace period, switch, surrender value, mortality charges, revival of lapse policies and terms and conditions on their websites.  

Like Key Information Document (KID) in mutual funds, IRDA has proposed insurers to issue Key Feature Document (KFD) along with the policy documents. The KFD will carry key features of policy in a simple language (jargon-free) and easy to read fonts. 

In addition, IRDA has proposed that insurers need to clearly disclose the returns on investment and manner in which it is calculated. Typically, traditional policies deliver CAGR of 4% to 6%. However, insurance companies usually calculate returns on sum assured which reflects higher returns on investments. 

IRDA has sought feedback from stakeholders before January 19 in this regard. 

Source: Team CafeMutual

IRDA penalizes Max Life, Canara HSBC OBC

The regulator has imposed a fine of Rs. 55 lakh on Max Life Insurance and Rs. 31 lakh on Canara HSBC Oriental Bank of Commerce for violation of various norms.

IRDA has imposed a fine of Rs.55 lakh on Max Life Insurance for outsourcing the work to collect renewal premium without taking prior approval and paying flat fees to such agencies (irrespective of premium amount) in the form of service charges. 

The insurance regulator found that the insurance company has outsourced the work to collect renewal premium from small cities and town. Further, the insurer was found to have paid flat fee of Rs.600 for collection of renewal premium and Rs.1,700 for proposal form in the form of processing fees, irrespective of premium amount. The insurer had not taken IRDA’s approval to carry out such activities. 

In its order, IRDA said, “On an examination of the fee paid vis-à-vis the services outsourced, it is considered that service fee agreed and paid to the service provider is disproportionate to the nature of services and the life insurer did not carry out any cost-benefit analysis as envisaged in the guideline, thereby violating the provisions.”

In another such move, IRDA has imposed a fine of Rs. 31 lakh on Canara HSBC OBC Life Insurance for violation of various norms such as luring employees of corporate agents with gifts/reward  and discrepancies in claim settlement. 

The insurance regulator found that the company had lured unauthorized sales persons of their corporate agents with gifts and rewards. The payout was over and above the commission. Also, the insurer was found to have spent close to Rs.14 crore on training programs for unauthorized sales persons and staff of the corporate agents. 

In a circular, the regulator said, “Rewarding of specified persons, other employees and senior management with gifts/foreign tour, the qualifying criteria being achievement of campaign targets, cannot be construed as training imparted. The life insurer is further directed to discontinue the practice of gifts/rewards and recognition programs in the name of training the staff of corporate agent and ensure strict compliance with the regulation.”

Meanwhile, IRDA found that the company had settled the claims in favour of master policyholder under group insurance policy as against the beneficiary of such policies.

SEBI to form digitalization committee for MFs

The committee will advise SEBI on how the mutual fund industry can leverage technology to reach out to investors. 

Market regulator SEBI is learnt to be in the process of forming a ‘digitalization committee’ which will advise SEBI on penetrating mutual funds through new age technology. 

The ‘digitalization committee’ will consist of senior MF industry executives including SEBI officials, sources said. The idea was mooted by SEBI at a recent SEBI MF Advisory meeting held in Mumbai. 

The committee will advise SEBI on how the MF industry can leverage technology like internet, mobile phone, stock exchange platform, etc. to reach out to investors. 

While fund houses allow investors to transact through their websites, the inflows from this route is not significant.  Some fund houses have started facilitating transactions through mobile phone apps. 

In its long term mutual fund policy for mutual funds, SEBI has urged AMCs to enhance their online investment facility and tap internet savvy users. “Mutual funds need to tap the burgeoning mobile-only internet users for direct distribution of mutual fund products,” states SEBI’s long term policy for MFs. 

So far, mutual funds have traditionally been sold through the brick and mortar branches of national distributors, banks and feet on the street IFAs, who continue to bring majority of inflows. 

Going by the people’s increasing acceptance of e-commerce, financial advisors believe that mutual funds will also be bought the same way in future. “The younger generation is more comfortable with the online medium. People are buying tickets, shopping and selling their stuff online. Technology can be a great tool to reach out to more investors,” says Hemant Rustagi of Wiseinvest Advisors. 

 

However, he says that the industry needs to first ease the operational difficulties faced while investing in mutual funds. “Bank KYC should suffice for investing in mutual funds. The first transaction requires investors to submit physical documents which becomes a hindrance. So, technology can have its limitations. The process has to be completely paperless for the technology to gain acceptability. Also, distributors are required to perform in-person verification (IPV) of clients which poses a hindrance in acquiring outstation clients,” Hemant points out.  

Source: Team CafeMutual