India is a traditional society. Indian's are more conventional in nature. When it comes to technology we are far behind than rest of the world. Although we are having tradition for centuries we are enjoying freedom only for 62 years. Thanks to our white skin masters for imparting education upon us. Our culture is unique and we celebrate unity in diversity. We are forerunners among developing countries. India is a major player in the region economically we are more fit (thanks to the visionaries who had marched ahead). We are a thick populated society. India also holds a a unique stature in the world which is we are the youngest country in the world. Half of our population is in between the bracket 18-23. Which means we have huge potential in terms of everything.
Some online statistics
Online world is another world for everyone. As they showed us in matrix we will be confused which one is real. Internet offers so many facilities to it's users, we must congratulate bill gates and company for offering such a splendid facility to the mankind (or should we thank someone else). There may be difference of opinions but one thing is sure that once online world will become more prominent than the real world (will all of us become machines speaking only 1&0, I simply can't imagine. Only 2 years before the internet using population in the world crossed 1 billion mark (oh my god 100 crores). Which simply means one in every six of world's population is clicking and the number is going up drastically. In India, the traditional and conventional, 50 million people uses internet and it grows like anything. By 2012 the number will be 81.3 million. (of course even more). Indian union also taken steps to encourage students to be online, internet education is part of curriculum in almost all the states. At least all of our people even heard about internet which is a big plus in this regard.
Are you bull or bear
Now a days everyone (most probably) is aware about bull and bear, at least they can identify these terms as cliches related to stock market. More and more people in India, especially young people,are turning towards stock exchanges for investment. But statistics says that of it's massive population only less than 10 percent is involved in any kind of investment and who are investing in capital market the percentage is below 2. The capital market investment population in India is less than 2 crore. It seems more and more literacy is needed in this avenue of investment.
The stock market investment crowd is concentrated in the upper class and upper middle class pie of the society. (Oh I heard someone saying to include the middle class-OK agreed). The rest 113 crore of the people may or may not invest but they do not invest in stock markets as of now, but in the future we will be forced to redraw the picture.
Online share trading
During the early years of 90s National Stock Exchange of India started trading using v-sat connections. Those days which was a revolutionary change and was referred as online trading. (now also some misunderstands online trading with internet trading).In late 90 internet became popular in India and when 20 century became past internet use in India increased at it's maximum pace.
With the emergence of new generation jobs people looked for new venues for investing and stock markets came first in the list. In 2004 when UPA government came into power stock market in india gained more popularity and lot of confidence had been imposed on it. During all these days ans now also offline share trading is the house full show. The traditional way of trading by visiting the branch, calling a call centre executive etc is called offline trading in which you need a persons assistance. Online trading (internet trading now refers) removed the second person before the screen and you and the system became the characters. This is the easiness that have been provided to the customer. If your bank also provides online facility you will be more relieved man. You don't want to step into a brokers office for anything everthing you want to do you can do at your home/office in your PC with internet connection.
Within just three years online trading in NSE increased an unbelievable 13 percent. With in 3 years it is believed that the number of internet using facility will be double. On an average 34 percent of booking in railway is done through internet and 80 percent of airline booking have also gone online (online masthi isn't it). Reliance money, ICICI Direct, India Infoline, Geojit BNP Paribas, Sharekhan, Kotak Securities are the major brokers who are offering online trading facility to their clients. Some are offering online trading facility only otherwise customer have to call the call centre where as some otheres are offering both online and offline trading facilities.
High speed execution, greater flexibility and control are the main advantages of online trading. The brokerage charges are less in online compared to offline trading. Customer can place orders even after the trading hours is another advantage of online trading. Real time tracking of stock prices is another advantage (you can easily skip the time delay in online trading-time means money honey).
Any disadvantages
The band width menace is the main menace considering online trading (it is believed that which will be solved when we enter 3G).When some big happenings in the stock market the brokers server will be down and the beloved customer will be at sea, staring at the monitor. The customer needs specific browsers and web configurations to view all the facilities provided by the broker like charts etc. If the customer is net savy he can deal online trading smoothly otherwise there will be no first aids from the broker.
In this fast forward life online share trading is the need of the hour. The internet using community will increase day by day. Online share trading is aiming a long innings for sure (at least it is a cost effective method for the broker also-no need to pay an employee). When mobile and internet convergence take place things will drastically change. Mobile share trading will function full fledgly with in years. Convergence of technology only means advantage to the customer.
Thursday, August 27, 2009
GST: What all you know?
If we shoot this question to a lay man what will be his reaction. I can say with damn confidence that he will simply glare at you. India is a developing country. I has got somany people living under the line of poverty. Poverty means lack of education also (by product of indian development). Being in a democratic system the majority of the people in India are suffering the disease called ill development. Some are developing not all, some are enjoying the fruits of development in fashion but some are simply watching it.
Our former primer minister once said-when we spend Re 1 for the poor only 20 paise will reach to them. He was blaming the inefficiency of the system. When we talk about all government schemes the same is happening everywhere. Take the case of prestigious projects by governments that they announce on a regular basis, always a minority knows all about it. Being unknown simply means the are not getting benefited from it. As also the policies by government- there is a vast majority of people who are unknown about it. The danger resides there, because all the policies are intended towards aam admi when they are unaware of it the virtue of the policies are lost.
Now take the case of the introduction of GST. Last central budget announced that goods and services tax will be in effect from April 1st, 2010. Former finance minister P. Chidambaram set the target time for the introduction of GST in 2006-07. After a gap of only three years government is going to introduce the new tax system. Government plans to collect the tax from it's people, but the very people don't know what is happening. How pity? Isn't it. When the European union introduced a common currency called euro they even published the details about the currency in comic books for children under the head-euro is simple. The west is more concerned about knowledge passing. Be it policy change or some big developments in the country they are eager to distribute it to all irrespective of their age and gender. But in India this is not the practice. One day government will announce a policy change, ofcourse media will carry it. Is it reaching every individual of this big country, the answer will be a big zero.
I only mean to say government should do it's public relations duty in a more fruitful way. It should be transparent and user friendly. When it comes to knowledge distribution it should depend popular media also. GST is actually a leap forward in the taxation in this country. As analysts say they need consessus of various states for the proper implementation of the new tax system. If they educate people properly through the media, they will line up behind the government and through this public opinion they can smoothly Implement the new system of taxation. After all people is considered as kings in a democratic system. By doing this government is only giving due respect to people rights.
Our former primer minister once said-when we spend Re 1 for the poor only 20 paise will reach to them. He was blaming the inefficiency of the system. When we talk about all government schemes the same is happening everywhere. Take the case of prestigious projects by governments that they announce on a regular basis, always a minority knows all about it. Being unknown simply means the are not getting benefited from it. As also the policies by government- there is a vast majority of people who are unknown about it. The danger resides there, because all the policies are intended towards aam admi when they are unaware of it the virtue of the policies are lost.
Now take the case of the introduction of GST. Last central budget announced that goods and services tax will be in effect from April 1st, 2010. Former finance minister P. Chidambaram set the target time for the introduction of GST in 2006-07. After a gap of only three years government is going to introduce the new tax system. Government plans to collect the tax from it's people, but the very people don't know what is happening. How pity? Isn't it. When the European union introduced a common currency called euro they even published the details about the currency in comic books for children under the head-euro is simple. The west is more concerned about knowledge passing. Be it policy change or some big developments in the country they are eager to distribute it to all irrespective of their age and gender. But in India this is not the practice. One day government will announce a policy change, ofcourse media will carry it. Is it reaching every individual of this big country, the answer will be a big zero.
I only mean to say government should do it's public relations duty in a more fruitful way. It should be transparent and user friendly. When it comes to knowledge distribution it should depend popular media also. GST is actually a leap forward in the taxation in this country. As analysts say they need consessus of various states for the proper implementation of the new tax system. If they educate people properly through the media, they will line up behind the government and through this public opinion they can smoothly Implement the new system of taxation. After all people is considered as kings in a democratic system. By doing this government is only giving due respect to people rights.
India and New tax code
The UPA second is on it's way to economic reforms. Earlier we expected it in the maiden budget. But that didn't happened. India incorporated was very much worried on this issue. The silence of the government on disinvestment, insurance and aviation sector reforms created much ado, but it were all waste since government itself go ahead with the expected reforms. (public sector disinvestment has already started with the IPO of NHPC, as many more IPOs are there in the pipeline). ASEAN agreement the trade agreement with the south east asian nation is another development in the overall development. The proposed food security act will only be possible if this agreement came in tto effect. China is very keen in utilizing all the available measures to tap the market in Asia. If India want to survive in this world of open market then we should think beyond china. UPA is still also silent in insurance and aviation reforms. But sooner or later they will consider it seriously.
New tax code
In the union budget there was some hike in the personal income tax limit. This proposal came at a time when global recession showed withdrawal syndrome. It is a simple logic that when the people in a country spends then only the economy of the country booms, we can't always look overseas for development. Which was evident during the time of global recession. China practiced the logic much before. In the global scenario also India is a major market with 1.15 billion people living here. All major global players in the market are now keen in opening branches in this country. As it is a truth all over the world india is a major service hub too (this proves that the salary given in india is cheap that's why all jobs are imported to india). Since the salary in India is very low considering global standards the income tax limit should also be in a rational way. The new tax code serves very well in this regard.
Draft direct tax code had been made public. Now it is left for debate and is proposed to implement in 2011. That means it will get almost 2 years to debate the new tax code. The highlight of the new tax code is the widening of tax limit. According to last general budget upto 1.6lakhs income will attract nil tax, for women the limit is 1.90lakhs and for senior citizens the limit is 2.40 lakhs. As it is a fact higher limit means higher spending by individuals. This in net effect will make positive impact in the economy. In the proposed new tax code income in the range 1.6-10 lakhs will only attract 10% tax only. The next slab is 10-25 lakhs which will attract a tax of 20% and above 25 lakhs the percentage is 30%. If these proposals are implemented there will be a large amount of money flow in the system.
Apart from these innovative steps savings limits will be increased form existing 1lakh to 3 lakhs. MAT (minimum alternate tax-tax payable to companies which are out of tax bracket) will be final tax and no carry over complication. STT, securities transaction tax-to eliminate from April 1, 2011. GST (goods and services tax) will be implemented from next financial year.It is believed that GST is a modern tax system which addresses all modern day tax issues.
Is it good
The new tax code is good to some extent. It will enable individuals to flow money to the market. The draft also proposes a reduction of 5% in corporate tax. The government is very sure that there will not be any loss in the revenue. Moreover it will bring transparency and simplicity to the system. The existing income tax law, 1961 will be replaced by the new law and India will reach in the 21st century taxation with the implementation of the same. Government plans to implement the tax tax law at the golden jubilee year of the existing tax law.
More aggressive debate is needed in this regard. If more simplicity is needed it should be done. Awareness in this regard should be done in a proper manner. Grass root level awareness is also required. If it is found out that the new system will cut governments revenue it should not impose new taxes on the people it should consider alternate measures to address the problem.
New tax code
In the union budget there was some hike in the personal income tax limit. This proposal came at a time when global recession showed withdrawal syndrome. It is a simple logic that when the people in a country spends then only the economy of the country booms, we can't always look overseas for development. Which was evident during the time of global recession. China practiced the logic much before. In the global scenario also India is a major market with 1.15 billion people living here. All major global players in the market are now keen in opening branches in this country. As it is a truth all over the world india is a major service hub too (this proves that the salary given in india is cheap that's why all jobs are imported to india). Since the salary in India is very low considering global standards the income tax limit should also be in a rational way. The new tax code serves very well in this regard.
Draft direct tax code had been made public. Now it is left for debate and is proposed to implement in 2011. That means it will get almost 2 years to debate the new tax code. The highlight of the new tax code is the widening of tax limit. According to last general budget upto 1.6lakhs income will attract nil tax, for women the limit is 1.90lakhs and for senior citizens the limit is 2.40 lakhs. As it is a fact higher limit means higher spending by individuals. This in net effect will make positive impact in the economy. In the proposed new tax code income in the range 1.6-10 lakhs will only attract 10% tax only. The next slab is 10-25 lakhs which will attract a tax of 20% and above 25 lakhs the percentage is 30%. If these proposals are implemented there will be a large amount of money flow in the system.
Apart from these innovative steps savings limits will be increased form existing 1lakh to 3 lakhs. MAT (minimum alternate tax-tax payable to companies which are out of tax bracket) will be final tax and no carry over complication. STT, securities transaction tax-to eliminate from April 1, 2011. GST (goods and services tax) will be implemented from next financial year.It is believed that GST is a modern tax system which addresses all modern day tax issues.
Is it good
The new tax code is good to some extent. It will enable individuals to flow money to the market. The draft also proposes a reduction of 5% in corporate tax. The government is very sure that there will not be any loss in the revenue. Moreover it will bring transparency and simplicity to the system. The existing income tax law, 1961 will be replaced by the new law and India will reach in the 21st century taxation with the implementation of the same. Government plans to implement the tax tax law at the golden jubilee year of the existing tax law.
More aggressive debate is needed in this regard. If more simplicity is needed it should be done. Awareness in this regard should be done in a proper manner. Grass root level awareness is also required. If it is found out that the new system will cut governments revenue it should not impose new taxes on the people it should consider alternate measures to address the problem.
Subscribe to:
Posts (Atom)
