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Fiscal Deficit: Fiscal Deficit (FD) is the difference between total expenditure and total revenue of a government. Primary Deficit: Primary Deficit  is nothing but Fiscal deficit devoid of the interest paid. Primary Deficit= Fiscal deficit-Interest Paid Current Account Deficit (CAD): CAD is the difference (in monetary value) between  imports and exports of a country. Trade Deficit(TD):   TD is the CAD devoid of   Balance of Payment (BOP) of Investment and Foreign Aids  BOP. Simply put, TD is the BOP of goods and services only. 

HDFC SL Classic Assure is a limited premium paying plan which comes with survival benefits. Besides Maturity Benefit and Death Benefits this plan may give you non-guaranteed returns every year (better called as reversionary bonus or non guaranteed bonus) which once added to the policy is guaranteed either at maturity or on the death of the insured person, whichever is earlier. Reversionary bonus is nothing but a bonus amount added to the Sum-Assured, given out of the surplus profit of the insurance company annually. Sum Assured is the minimum amount payable to the insured person who survives till maturity or to his relatives in case of the death of the insured person. This plan comes with various premium paying options like yearly, half-yearly, quarterly or monthly. This policy shall fetch you tax benefits under sections 80 C and 10(10D). Let us review this plan for a 36 year old male for a policy term of 15 year. Premium is payable for 7 years. Policy Term Annual Premium To

Kelkar committee on Friday clearly emphasized the precariousness of the Indian economy aggrieved by the subsidy burden. If financial reforms are not pursued seriously then fiscal deficit could even touch 6.1% mark against the FY 13 budget target of 5.1%. Indian government has so far been providing subsidies on Food, Fertilizers and Fuel. Higher fiscal deficit makes the government to borrow more from the market leading to higher interest rates which consequently translates into higher inflation. Higher interest rates also affect the profitability of the Indian businesses and hamper the flow of foreign funds in the country which finally translates in weaker rupee. Weaker rupee further increases the fiscal deficit and might result in economy going into a spiralling downtrend. Kelkar committee has recommended the complete abolishing of the Diesel subsidy but in view of coming state (Gujarat) and general elections (2014) this seems impossible. In the financial year 2012 total petroleum pro

FY 13 Q2 Review: Rakesh Jhunjhunwala portfolio shares in FY 13 Q2                                     Rakesh Jhunjhunwala, a billionaire investor often called as Indian Warren Buffett who recently hit the headlines by for quashing the political parties opposing the introduction of FDI in retail, has recently increased his stake in Mumbai based Godrej group engineering solution provider firm Geometric Ltd. Rakesh Jhunjhunwala along with his wife Rekha now holds around 14.55 % stake. This stock soared 56% in Q2 . Another member of his portfolio Titan saw 13 % appreciation in price. Jewellery accounts for more than 70 % of the company's revenue and soaring gold prices put downward pressure on its revenue which capped its price rise. Opening of the retail sector for foreign equity caused even Pantaloon Retail to soar 13 % which was declining earlier.

Holding companies owns outstanding shares of other companies. Outstanding shares are nothing but issued shares devoid of the treasury stocks . Simply put, a holding company owns non-treasury shares of other companies. The most famous example of a holding company is-warren Buffett led Berkshire Hathaway. Some of listed Indian holding companies are as follows- Tata Investment Corporation, Bajaj Holdings and Investments, Rane Holdings Ltd, UBHL (United Breweries Holding Ltd.), SIL Investments and a few more. Holding companies are not involved in any production nor do they render services. Dividends and capital gains are the main sources of income for holding companies. Holding companies may own shares of listed as well as non-listed companies.Besides shares, holding companies may also own bonds, mutual funds and other similar financial instruments. Holding companies generally trade at 20-70% discount to their inherent values. Double taxation : If a holding company owns less than 51 % stak

RGESS was proposed by the former finance minister Mr. Pranav Mukharji -now president of the nation in budget. This scheme shall provide income tax benefits to investors having annual income below Rs. 10 lakh . RGESS is restricted to first time investors only. What is this scheme? First time investor with annual income not exceeding Rs. 10 lakh can invest up to Rs. 50,000 in equities, mutual funds and ETFs (Exchange Traded Funds) to avail a deduction of 50 %  of the investment from the taxable income for that year. If Mr. Verma who is a first time investor in equity with annual income of Rs. 6,00,000, invests a sum of Rs. 50,000 under this scheme  then he shall get a deduction of Rs. 25,000. So, taxable income for Mr. Verma shall be Rs. 5,75,000. This scheme is besides the 80-C investment scheme. Under RGESS, investment should be done in top-100 shares of BSE’s ‘BSE 100’ or NSE’s ‘CNX 100’ or public sector companies of Mahratna, Navratna or Miniratna stature . Besides this, investment i

The country's new stock exchange MCX-SX would start functioning from Diwali and along with the new exchange, the investors and traders are in for a new index as well. The MCX-SX, which is expected to be a full-fledged stock exchange, is set to begin trading with about 1,000 - 1,200 stocks. MCX-SX will commence trading in cash market and derivative segments (futures and options). Not only the exchange, MCX-SX   is all set to take on the country's two most popularly traded equity indices, the Sensex-30 and the Nifty-50, with its own benchmark index  SX-40 . It will select top stocks from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) to create the SX-40. The new index, SX-40 is expected to consisting of BSE-30 stocks and the rest 10 would be of picked from stocks reflecting the growth story of India. Currently, the Sensex and Nifty are recognised globally, of which NSE comprising of  exchange-traded funds (ETFs), exchange-traded futures and options and ot

MCX Stock Exchange Limited (MCX-SX), branded as India’s new stock exchange, is set to launch equity segment   from Diwali, according to exchange sources.Earlier in 2008, MCX commenced operations in the Currency Derivatives (CD) and has been witnessing a steady and significant growth in average daily turnover and open interest ever since its inception. It has a separate clearing corporation, MCX-SX Clearing Corporation Ltd. (MCX-SX CCL), through which the clearing and settlement is conducted. The currency derivatives segment at MCX-SX is supported by a strong membership base and witnesses a nation-wide participation. At the end of July 2012, MCX-SX had 751 members and saw participation from 714 towns and cities across India. MCX-SX has received permissions to deal in Interest Rate Derivatives, Equity, Futures & Options on Equity and Wholesale Debt Segment. Following its success in Currency futures, MCX is all set to launch its equity operations from Diwali. What does this mean for

To bail out counties such as Spain and Italy and to save the Euro Zone, ECB (European Central Bank) went ahead with its much-awaited bond buying programme better known as money printing or 'liquidity insertion ' leading into rising global markets. Under this move ECB shall buy  short term bonds of one to three year maturity from crisis-hit countries to pump liquidity. A new economic term got originated – OMT (Outright Monetary Transactions), under which ECB shall continue its unlimited bond buying programme. The ECB President Mario Draghi has justified OMT by calling it a necessary programme to save the Euro zone. The beneficiaries of OMT shall necessarily have to implement austerity-measures to avail the same. Simply put, austerity measures are nothing but the lowering of the government spending. This is nothing but like an old wine in a new bottle.OMT was done fearing the threat of some members of the Euro zone deserting the common currency Euro. The biggest problem with the

In the era when coins of denominations 50 paise and below have been discontinued in India, there are a few shares on NSE which shall cost you 50 paise or less. Here follows a list of of penny stocks on the National Stock Exchange. But, thing to keep in mind is penny stocks may not be cheaper in valuations which is better measured by ratios like Price to Earnings ratio (P/E ratio), Price to Book value ratio (P/B ratio) and PEG (P/E to growth ) ratio. Too much equity dilution often results in diminishing stock value. Penny stocks are often prone to sudden and wild price swings and this is one of the reasons that makes them a cynosure of traders.

Market is rife with the news about rising gold prices every day. In one of my previous posts I had discussed reasons responsible for   rising gold . There is no foolproof methodology for determining whether this yellow metal is overbought or not as it is determined by demand & supply scenario. But gold holds an empirical relationship with crude.  Gold prices are expressed in dollars per troy ounce. (1 troy ounce = 31.1 grams) while crude prices are denoted in dollars per barrel. The ratio of gold price to crude price has been found to settle around 15. By this time spot gold is trading at 1691 $ per ounce while Nynex crude is hovering around 95 $ per barrel. This gives gold to crude ratio as 17.8. Gold prices are also juxtaposed against silver prices. Gold to silver price ratio have been found to hover in the 50-60 range. Presently silver is trading at 32 $ per ounce and this give the aforesaid ratio as 52.84. Gold is rising in the hope of stimulus package from the US Federal Reser

US national debt ultimately touched the dreading $ 16 trillion level turning its every citizen into a debtor to the tune of $50,000. Every taxpayer of the United States is burdened with a debt of $ 1,40,000. Interestingly US GDP is around $ 15.3 trillion-this means US owes more than its GDP (total value of goods and services produced by the economy in entire year).  US dollar being the reserve currency of the world, US did not find any difficulty in amassing this huge liability.  Years of deficit spending has resulted into such a gargantuan debt. China in order to keep its domestic currency competitive parked money into US treasury products and presently China is the largest foreign owner of the US debt.  China presently holds around 7.25 % of the US debt. However, China had reduced its exposure in US treasury products over the past year. By June 2012, China owned US debt worth $ 1.16 Trillion against the previous figure of $1.31 trillion a year ago. Japan follows the china with th