Fees Reimbursement in Andhra Pradesh

15 Feb

The Government of Andhra Pradesh dilly-dallying on the fees reimbursement got ample wrath from Supreme Court. The Respected Court rightly observed that the Government can’t go back on something that it promised for such a wide range of public.

I am personally against populist schemes that have potential to endlessly make holes to State exchequer. However, once such scheme starts implementing, the Government has no moral right to leave out the beneficiaries in the middle of nowhere. If the Government wants to take out the scheme, then it should at least continue the scheme for the current batches of students to complete their coursework and stop extending it to new batches of students.

Ideally, if the Government pays education fees for students, it should have a vision of how such expense should lead to direct or indirect revenues in the long run. Each students who gets a benefit of a lakh of rupees, say, definitely has the potential to bring in that much indirect revenue to the Government in the long run, if proper environment is created where these students can excel in their careers and bring in good economy (read pay taxes.) The Government should have a blueprint on how it can nurture such an economy and should have a plan on how it will withstand these expenses till such economy starts paying off.

In my last few months of interaction with students, majority of them from financially weaker sections, I am finding very good talent getting benefited from such schemes. If such a scheme is not there, their talent would definitely be left unpolished or would take a much more painful path to get polished. I hope Government finds a way to extend help to such rightful beneficiaries in future, yet controls huge outflows of money from treasury.

EPF Interest rate hike: good or bad?

17 Sep

EPF board increased the interest rate on provident funds from 8.5% to 9.5%. Is this good or bad for the economy?

While this may be a good news for salaried employees from a tax savings and retirement earnings stand point, it also creates a feeling that we as a country are going back to the high interest and low spending days. Not sure if that is a good guess or not, but I have a feeling that with interest rates going high in all areas, I may be paying heavily at some point for those small gains…

Cashless Mediclaim

13 Jul

Slowly, the cashless mediclaim facility seems to be heading for an exit from the market. Late last week, the insurers started backing out from cashless facility in major metros. Now, there is a further blow on insured -  a 10.3% service tax. This tax is going to have a chain effect. First, the newly introduced tax will make the insurers exit out of the cashless mediclaim sooner than later (or they may considerably increase the premiums for cashless claims). It will eventually reduce the patronage of corporate and high quality hospitals. Reason: even if one may get eventual reimbursement, the person might not have cash flow to pay upfront. Also, people will be burdened with the cash balance requirements even with predictable hospitalizations: say, child birth and elective surgery.

This whole change will be an additional burden on employees and senior citizens.

Markets Around The Globe

06 Feb

Markets in Europe are causing ripple effects around the globe. India’s BSE has gone below 16K for the first time in many weeks. Despite all this, Dow Jones in US did an interesting feat. It closed above 10K for 3 consecutive months (since Nov 05th 2009) and that is interesting.

I have a feeling that India’s finance ministry and RBI didn’t capitalize on a golden opportunity. There are feelers of interest hikes and also many of the tax benefits are shown the door. That would have a long term effect on the cash flow into the markets.

Sensex closer to annual high

01 Dec

Two days of continuous surge puts Sensex closer to the yearly max. But is there enough good news to sustain it there? The spoilers could be:

  • Potential interest rate hikes to negate over stimulation
  • Signs of industrial production slowing down in the last couple of months