Railway budget 2012-2013 highlight

Following are the prominent highlights of the railway budget for 2012-13 presented in the Lok Sabha by Railway Minister Dinesh Trivedi:

Prepared by: bhaveshkumar D. Suthar-8264085646

* No steep increase in passenger fares; 2 paise per km for second class on suburban trains and 3 paise per km on mail and express trains; 5 paise per km for sleeper class; 10 paise per km for a/c III tier and first class; 15 paise per km for a/c II tier; 30 paise per km for a/c I.

* Outlay of 60,100 crore during 2012-13, the highest ever.

* Targeting freight carriage of 1,025 million tonnes to bring in 89,339 crore; passenger earnings estimated at 36,073 crore; gross receipts estimated at 1.32 lakh crore.

* New passenger services: 820 new items; 75 new express trains; 21 new passenger trains; 75 new services in Mumbai suburban system.

* Standard of hygiene needs to be improved substantially; all out efforts will be made on this in the next six months; duty bound to provide high standard of services; special housekeeping body to be set up for stations and trains.

* Corrosion from night soil being discharged from toilets on tracks costs 350 crore annually; green toilets to be installed in 2,500 coaches in the next one year.

* Improvement of passenger amenities at a cost of 1,112 crore; regional cuisines to be introduced.

* Two thousand one hundred specially designed coaches manufactured to meet needs of the differently abled; aim to provide one such coach in each express train.

* Focus during next five years on five areas: tracks, bridges, signalling, rolling stock and stations.

* Signalling to be improved over 19,000 km.

* Investment of 1.70 lakh crore on rolling stock in next five years.

* Attempt to increase train speeds to 160 kmph; journey time from New Delhi to Kolkata can be brought down to 14 hours from 17 hours.

* Improvements to railway stations can provide employment to 50,000 people.

* Railways will require 14 lakh crore in the next 10 years for modernisation.

* Aim to bring down operating ratio from 90 percent to 84.9 percent in 2012-13 and to 72 percent by 2016-17.

* Time has come for formulating national policy for railways on the lines of that for defence and external affairs.

* Railways should grow at 10 percent annually for sustained GDP growth.

* Railways to invest 7.35 lakh crore during 12th Five Year Plan period (2012-17), a quantum jump from the 1.92 lakh crore invested in previous plan period.

* Railways must attract 10 percent of the 20 lakh crore government expects to spend on infrastructure during 12th Plan.

* Railways expect gross budgetary support of 2.5 lakh crore during 12th Plan.

* Collective challenge to formulate viable funding mechanism for modernisation.

* Railways should contribute 2 percent of GDP from the present 1 percent.

* Stress on strengthening safety. Has to be be benchmarked with the best in the world.

* Target of reducing accidents from 0.55 to 0.17 has been met.

* Special purpose vehicle to be set up on safety protocols.

* Independent railway safety authority to be set up as statutory safety body.

* Investment of 5.60 lakh crore required for modernisation.

* Independent tariff authority suggested; needs serious debate; experts panel established; decision after debate in parliament.

* Excess of 1,492 crore after meeting expenses/dividend payments not adequate for meeting costs of several projects.

* World Bank funding of 6,500 crore firmed up for dedicated freight corridors; land acquired for 3,300 km; first contracts to be handed out during 2012-13.

* Electrification to be undertaken over 6,500 km at an allocation of 8,000 crore during 12th Plan.

* Conversion from DC to AC power supply completed in Western Railway corridor of Mumbai suburban rail system; conversion of Central Railway corridor to be completed in 2012-13.

* Elevated corridor from Churchgate to Virar in Mumbai being firmed up.

* Government should consider dividend payback to railways.

* Thirty-one projects over 5,000 km being implemented with state govenments sharing costs.

* Capacity augmentation to get 4,410 crore during 2012-13.

* Eighty-five new line projects to be taken up during 2012-13.

* One hundred and fourteen new line surveys to be undertaken during 2012-13.

* New line projects to get 6,870 crore in 2012-13.

* Gauge conversion to be undertaken over 800 km with an allocation of 1,950 crore.

* GRP/RPF personnel deployed on 3,500 trains.

* Free travel by Rajdhani express for Arjuna awardees.

* Dedicated railway design wing at National Institute of Design with a contribution of 10 crore.

* Guru Parikrama trains to be run to Amritsar, Patna and Nanded.

Thank you,

Bhaveshkumar D. Suthar- bhaveshsuthar77@yahoo.in

DTC and its impacts.....

                                   

                      DTC AND ITS IMPACTS………………………..

Several changes will take place in regard to how to invest across various asset classes as Direct tax Code (DTC) will be affective from April 1, 2012. Therefore you need to revise your investments accordingly. The original draft of DTC differs from it s current form. But still you need to make your investments in DTC yield. The analysis below will help you.

Impact on Insurance:

Insurance will have a significant impact of DTC. A policy should offer life cover of at least 20 times the annual premium, to be eligible for tax deduction under DTC. You will not be able to receive any tax deductions on premium and even the income from policy will be taxable, if the condition mentioned is not met. At present the income received from insurance policies is free. So while hunting for tax deduction on insurance plan, make sure that you always go for a policy that offers bigger cover. But it is possible only if the duration for cover plan is of 20-25 years.

Not so good news is that tax deduction limit for life insurance will get reduced from present 1 lakh a year to 50,000 an year. This annual limit of 50,000 will comprise the amount paid for tuition fees of children as well as medical insurance for self and parents. So an insurance policy with a large premium, around 80,000 - 1 lakh will carry maximum tax deduction of only 50,000.The DTC will also push policyholders to acquire long term view on investments. You need to think twice before deciding upon a insurance policy as premature withdrawals from ULIPs will be taxed. The fact that surrender charges have been waived off and you can withdraw money after 5 years without paying anything will not be true anymore.

How Equities Investment will be Effected

The positive news here is the continuation of exemption on long term capital gains. So the investors here relieved as they don't have to revise their plans due to DTC and can continue with their investments as planned. On the other hand ELSS Mutual Fund scheme's tax exemption will exit and they will be treated at par with other schemes in market with no tax exemption. Investors who are in search for Mutual Funds for tax exemption should consider this factor while investing.

Definite Impact on Pension Funds:

Most of existing tax saving investment will not be eligible for deduction under the DTC. As an alternative, the focus has shifted to long term options with pension funds leading the way. An annuity is an investment that gives out a regular income to the investor. Pension plans require an investor to put at least 65 percent of corpus received on maturity in an annuity which then gives him monthly pension. Although more details are expected, DTC has planned to make annuity income exempt from taxation which makes them good tax saving instrument. The New Pension scheme is low cost pension fund which an investor can consider.

 DTC Impacton Real Estate:

The reimbursement of principal of your home loan will not be eligible for tax deduction under the DTC. The removal of tax on notational rent is good news. At present if you own more than one house you have to pay tax on notational rental income even if second house is lying vacant. The DTC will eliminate this anomaly and make investment in second home more tax efficient. An additional landlord friendly move is that advanced tax acknowledged from a tenant will be taxed in year it relates, not when it was received. DTC, more importantly has maintained tax benefit on the interest paid on home loan. The tax benefits decrease the effective cost of home loan thus making it reasonable for borrowers.

Prepared By: Bhaveshkumar Dasharathbhai Suthar- 8264085646

                    Bhaveshsuthar77@yahoo.in

10 reasons why railway budget matters......

          10 Reasons why Railway budget matters:

By: Bhavesh suthar

Indian Railways has 114,500 kilometres of total track over a route of 65,000 kilometres and 7,500 stations. It has the world's fourth largest railway network after those of the United States, Russia and China. It carries over 30 million passengers and 2.8 million tons of freight daily.

It is the world's second largest commercial or utility employer, by number of employees. It is India’s biggest central ministry in terms of size, employing nearly 1.4 million people. About 40% of the government staff belong to the Indian Railways. The number of people employed by the railways is even larger than the Indian Army, Navy and Air Force combined.

For rolling stock, it owns over 240,000 (freight) wagons, 60,000 coaches and 9,000 locomotives.

The railways earn Rs 30,000 crore from passenger fares and a hike in this of even 10% could mean the ministry would receive an additional Rs 3,000 crore in a year.

The fastest trains of Indian Railways, Rajdhani Express and Shatabadi Express face competition from low-cost airlines since they run at a maximum speed of only 150 kilometres per hour (93 mph).At least six corridors are under consideration for the introduction of high speed trains to India with expert assistance from France and Japan.

A panel headed by former nuclear scientist Anil Kakodkar had recommended investments to the tune of Rs 1 lakh crore to ensure the Railways have the most modern safety features. And the requirement of the safety features is not in doubt any more.

Railway officials say that the majority of the losses on passenger fares, comes from the unreserved class in trains and about 8,000 crore came from the reserved classes in which sleeper classes account for Rs 6,000 crore.  And those costs can only rise with each year as operational and fuel costs rise

Railways on Tuesday withdrew 4% exemption on fertiliser and foodgrain loading rates besides making a 10-15 percent upward revision of other commodities ahead of Rail Budget.The move is expected to increase prices of an array of goods, ranging from coal to fertilizers.

For the Railways, which is expected to garner about Rs 70,000 crore from freight earnings in the current fiscal, this hike would mean a potential to increase annual earnings by up to Rs 18,000 crore.

In its Vision 2020 document, Indian Railways has estimated an investment of Rs 14,00,000 crore to provide customer focused and environment friendly sustainable integrated transport solutions. Various projects like adding new lines, dedicated freight corridor, modernization of stations, implementation of modern signaling systems, electrification of routes, use of efficient technologies etc. are expected to be implemented.

U shaped recovery

A type of economic recession and recovery that resembles a "U" shape in charting. Specifically, a U-shaped recovery represents the shape of the chart of certain economic measures, such as employment, GDP and industrial output. A U-shaped recovery involves a gradual decline in these metrics followed by a gradual rise back to its previous peak. Compared to a V-shaped recovery, the U-shaped recovery takes longer to reach levels seen prior to the start of the recession.

latest government job opening

Latest Government Job Openings in India. Click on the below links for more detail;

CLICK HERE to access Current Openings List

Bihar Kshetriya Gramin Bank - Officer Junior Management (Scale I) (Any Graduate)

AP Media & Broadcasting Company - Marketing Managers / Web Designers

IRCON - RRV/Tower Wagon Operator

Rubber Board - Analytical Trainee(BSc/Diploma)

PGIMS - Statistician (MSc/Diploma)

ARI Pune - Scholarship Scheme for Women Scientists

Tripura University - Traineeship/ Studentship(MSc)

NCCS - Research Associate / SRF

Physical Research Laboratory - Summer Internship Program(ME/M.Tech/MSc)

NIT Rourkela - JRF (ME/M.Tech/MSc)

Bihar Kshetriya Gramin Bank - Officer Middle Management Grade

SPIC - Software Engineer cum Programmer

CBSE - Executive Assistant

Central University of Jammu - Asst Professor(M Phil / Phd)

TNTET(Govt of Tamilnadu) - Teacher Eligibility Test

ISI Kolkata - Project Linked Person(MA/MSc)

University of Rajasthan - Asstt.Registrar(Any Post Graduate)

Anna University - JRF/ Administrative Helper

cyclical unemployement

A factor of overall unemployment that relates to the cyclical trends in growth and production that occur within the business cycle. When business cycles are at their peak, cyclical unemployment will be low because total economic output is being maximized. When economic output falls, as measured by the gross domestic product (GDP), the business cycle is low and cyclical unemployment will rise.

Economists describe cyclical unemployment as the result of businesses not having enough demand for labor to employ all those who are looking for work. The lack of employer demand comes from a lack of spending and consumption in the overall economy.

Balance of payment

 Definition:

The balance of payment is systematic accounting record of all economic transaction during the period between resident of countries and resident of foreign countries. When all components of the BOP accounts are included they must sum to zero with no overall surplus or deficit.

 For example, if a country is importing more than it exports, its trade balance will be in deficit, but the shortfall will have to be counter-balanced in other ways – such as by funds earned from its foreign investments, by running down central bank reserves or by receiving loans from other countries.

Accounting principle in balance of payment:

-          It is a double entry system in which each transaction have two entry debit and credit.

-         A transaction which increase demand of foreign exchange and decrease the supply of foreign exchange is record in debit side entry and each transaction which decrease demand of foreign exchange and increase supply of foreign exchange recorded in credit side entry.

Balance of payments crisis:

A BOP crisis, also called a currency crisis, occurs when a nation is unable to pay for essential imports and/or service its debt repayments. Typically, this is accompanied by a rapid decline in the value of the affected nation's currency. Crises are generally preceded by large capital inflows, which are associated at first with rapid economic growth. However a point is reached where overseas investors become concerned about the level of debt their inbound capital is generating, and decide to pull out their funds. The resulting outbound capital flows are associated with a rapid drop in the value of the affected nation's currency. This causes issues for firms of the affected nation who have received the inbound investments and loans, as the revenue of those firms is typically mostly derived domestically but their debts are often denominated in a reserve currency. Once the nation's government has exhausted its foreign reserves trying to support the value of the domestic currency, its policy options are very limited. It can raise its interest rates to try to prevent further declines in the value of its currency, but while this can help those with debts in denominated in foreign currencies, it generally further depresses the local economy

Valuation and timing:

-          Uniform timing of recording required.

-          Two side of transaction must recorded at same time period.

-          Export are recorded when cleared by custom and import when payment is made.

-           

Component of BOP:

A). Current account:

 Import and export of goods and services and unilateral transfer of goods and services.

B). The capital account:

Grouped transaction leading to change in forign assets and liability of country.

C). The reserve account:

 Same as capital account but only Reserved assets are included which used by monetary authority to settle deficit and surplus.

Meaning of deficit and surplus in BOP:

Both are just due to imbalance in export and import. In language of accountant we divide BOP in Above the line and Below the line.

If the balance is Positive above the line we called as Surplus and negative balance called deficit. There are various types of balance like Trade balance, current account balance, balance of goods and services, balance of current account and long term capital.

Recording of Typical Transactions:

The balance-of-payments accounts are commonly grouped into three major categories: (1) accounts dealing with goods, services, and income; (2) accounts recording gifts, or unilateral transfers; and (3) accounts dealing basically with financial claims (such as bank deposits and stocks and bonds).

Categories of transaction:

Commercial exports, payment for commercial exports, receipt of income frominvestment abroad, expenditure on travel abroad, gifts to foreign resident, loans to borrower abroad, purchase and sales of dollar balances by foreign central banks.

Why BOP statistics important?

BOP deficit or surplus directly affects forign exchange rate and financial decisions of business and country. In short BOP accounts are intimately connects with overall savings and investment in country national account. Continuing deficit or surplus may leads to monetary or fiscal actions design to correct the imbalance, which in turn affects exchange rate and interest rates in the country.

Causes of BOP imbalances:

There are conflicting views as to the primary cause of BOP imbalances, with much attention on the US which currently has by far the biggest deficit. The conventional view is that current account factors are the primary cause - these include the exchange rate, the government's fiscal deficit, business competitiveness, and private behaviour such as the willingness of consumers to go into debt to finance extra consumption.^] An alternative view, argued at length in a 2005 paper by Ben Bernank, is that the primary driver is the capital account, where a global saving glut  caused by savers in surplus countries, runs ahead of the available investment opportunities, and is pushed into the US resulting in excess consumption and asset price inflation.

Balancing mechanism :

Broadly speaking, there are three possible methods to correct BOP imbalances, though in practice a mixture including some degree of at least the first two methods tends to be used. These methods are adjustments of exchange rates; adjustment of nations internal prices along with its levels of demand; and rules based adjustment. Improving productivity and hence competitiveness can also help, as can increasing the desirability of exports through other means, though it is generally assumed a nation is always trying to develop and sell its products to the best of its abilities.