Why you should buy gold now

They say that a crisis shows you the faces of your real friends. A financial crisis is no different - it shows you the basic nature of each product in your portfolio.

With the 30-plus per cent returns we got in the last few years, we assumed immunity to the inherent short-term risk that the product called equity carries. Now that the world battles the latest financial crisis and Indian stocks are off by almost a quarter, it is a great time to rebuild your portfolio in case you were using just equity (in the form of equity funds or direct stocks) and debt (in the form of your Employees Provident Fund, Public Provident Fund and fixed deposits) in it.

Now that the dizzying Sensex is not blinding us anymore, we can look at introducing a third investment vehicle that reduces risk and provides stability to our portfolio.

The stability comes from it being a great hedge against inflation -- it may not give returns like equity can, but will keep the money's head over the inflation trend line (see Market Record).

Market Record
Return* (%)
Gold is the perfect vehicle for inflation-
adjusted conservative returns
Sensex 23.05
Gold 12.69
FDs 9.35
Inflation 5.24
* Average return per year from 1995 to 2008




And to make the deal sweeter, this product is on steroids currently and is up 40 per cent from last year. Ladies and gentlemen, introducing the contents of the cloth bundle at the back of your Godrej safe, or of the box in the bank locker, on your fingers and around your neck: the not-so-humble rock star: Gold.

The 10 biggest falls of the Sensex

The Bombay Stock Exchange benchmark Sensex sank by 951 points on black Monday on panic selling by funds, triggered by weak global cues. Similarly, the wide-based National Stock Exchange's index Nifty dropped by 243 points to 4,503.
The government meanwhile said that Indian stock markets are taking cues from the United States and Asian markets, even though the sub-prime mortgage crisis has only moderately impacted the credit and financial flows into the country.
The 10 largest falls of the Sensex

1. Jan 21, 2008 --- - 1,408.35 points
2. Mar 17, 2008 --- - 951.03 points
3. Mar 3, 2008 ---- - 900.84 points
4. Jan 22, 2008 --- - 875.41 points
5. Feb 11, 2008 --- - 833.98 points
6. May 18, 2006 --- - 826.38 points
7. Mar 13, 2008 --- - 770.63 points
8. Dec 17, 2007 --- - 769.48 points
9. Oct 17, 2007 --- - 717.43 points
10. Jan 18, 2007 --- -687.82 points

Highlights of Union Budget 2008-09

Following are the highlights:
Changes in I-T slab. Threshold of exemption for all Income Tax assesses raised from from Rs 1,10,000 to Rs 1,50,000.
Every income tax assessees to get relief of minimum of Rs 4,000.
No change in rate of surcharge.
New tax slabs will be: 10 per cent for Rs 150,000 to Rs 300,000, 20 per cent for Rs 300,000 to Rs 500,000 and 30 per cent above Rs 500,000.
For women, the income tax limit goes up from Rs 1.45 lakh to Rs 1.80 lakh. In case of senior women citizens, it increases from Rs 1.95 lakh to Rs 2.25 lakh.
Fresh facilities, encouragement to sports and guest houses exempted from Fringe Benefit Tax.
Five year tax holiday for setting up hospitals in tier II and tier III regions for providing healthcare in rural areas from April 1, 2008.
Five year tax holiday for promoting cultural tourism.
Short-term capital gains increases to 15 per cent.
Commodities Transaction Tax to be introduced on the lines of Securities Transaction Tax.
Banking cash transaction tax withdrawn from April one, 2009.
Direct tax proposals to be revenue neutral. Indirect tax proposals to result in loss of Rs 5,000 crore.
Rs 500 crore for corpus fund to subsidise all women Self Help Groups for LIC cover for permanent disability.
Agricultural loans given by scheduled commercial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and due for December 31 that year will be covered under the waiver scheme to address the problem of indebtedness.
No change in corporate income tax.
To protect tigers, Rs 50 crore for National Tiger Conservation Programme. Bulk of it to be used to raise Tiger Protection Force.
Plan expenditure fixed at Rs 2,43,000 crore and non plan expenditure at 5,74,000 crore.
Fiscal deficit pegged at 3.1 per cent and revenue deficit at 1.4 per cent.
Tax to GDP ratio increased from 9.2 per cent in 2004-05 to 12.5 per cent 2007-08.
No change in peak rate of customs duty for non
Customs duty on specified life saving drugs reduced from ten per cent to five per cent.
Special Countervailing Duty on power imports.
Customs duty on specified sports goods machinery down from 7.5 per cent to five per cent.
Duty withdrawn on naptha for production of polymers.
Duty on crude and unrefined sulphur reduced from five to 2 per cent to help raise domestic fertiliser production.
General Centvat on all goods to be reduced from 16 per cent to 14 per cent. Excise duty reduced from 16 per cent to eight per cent on all pharmaceutical goods manufacture.
Excise duty on small cars reduced to 12 per cent from 16 per cent and hybrid cars to 14 per cent.
Excise duty reduced from 16 to 8 per cent on water purification items.
Duty on non filter cigarettes to be raised.
Asset management service under mutual funds, services by stock exchanges to be brought under Services Tax net.
Threshold for small service providers raised from Rs eight lakh to Rs 10 lakh.
Allocation for defence to be increased by 10 per cent from Rs 96,000 crore to Rs 1,05,600 crore.
75 lakh people to be covered by health insurance scheme.
Allocation for Textile Upgradation Fund to be more than doubled.
Micro, small and medium enterprises to continue to get special attention.
Risk Capital Fund to be set up in SIDBI.
PAN requirement to be extended to all transactions in capital market subject to a threshold.
Rs 750 crore for upgradation of 300 ITIs in 25 districts.
Rs 32,676 crore as subsidy to Public Distribution System.
PDS through smart cards in Haryana and Chandigarh on pilot basis.
Three schemes to be introduced for providing social security to unorganised sector workers.
Sixth central pay commission to submit report by March 31, 2008.
Rs 624 crore allocated for Commonwealth Games
Farmers' debt to be waived
Complete waiver of loans for marginal farmers owning land up to one hectare and small farmers owning land up to 1 and 2 hectares.
Agricultural loans given by scheduled commericial banks, regional rural banks and cooperative credit institutions up to March 31, 2007 and due for December 31 that year will be covered under the waiver scheme to address the problem of indebtedness.
One time settlement of loans for other farmers.
Agriculture loans restructured and rescheduled by banks from 2004-06 and other loans normally rescheduled under RBI guidelines will also be eligible under the waiver scheme.
Implementation of debt waiver and debt relief will be completed by June 30 this year.
Loan waiver scheme to involve loans liability of Rs 60,000 crore and to benefit four crore farmers.
By loan waiver scheme, the country is discharging a deep debt and sense of gratitude to farmers, says Chidambaram.
The corpus of rural infrastructure development fund to be raised to Rs 14,000 crore.
More reforms needed in coal and electricity sectors to ensure double digit growth in manufacturing sector.
Rs 800 crore for accelerated power reforms programme.
National Fund for Transmission and Distribution Reforms to be launched.
The loan waiver scheme will benefit three crore small and medium farmers and cover loans totalling Rs 50,000 crore.
One crore other farmers will benefit to the tune of Rs 10,000 crore in the waiver.
Foreign investment of 3.5 to 8 billion dollars expected for exploration and development of new oil blocks.
Rs 7,200 crore to be allocated to the Ministry of Women and Child Development, marking an increase of 24 per cent.
Rs 500 crore for corpus fund to subsidise all women Self Helf Groups for LIC cover for permanent disability.
A target of Rs 2.80 lakh crore for agriculture credit set for the coming year.
Rs 20,000 crore for irrigation projects under AIPB, showing an increase of Rs 9,000 crore over last year.
National Horticulture Mission to be given Rs 1,100 crore in 2008-09 with special focus on coconut cultivation.
Rs 75 crore to be given to Agriculture Ministry for providing mobile soil testing laboratories in 250 districts.
Rs 644 crore for National Agriculture Insurance Scheme, which will be continued pending evolving an alternative crop insurance scheme.
National Plant Protection Training Institute at Hyderabad to be made autonomous body and Rs.29 crore will be allocated to it.
A scheme of debt waiver and relief for small and marginal farmers announced.
NREGA scheme to be rolled out in all the 596 rural districts in the country in 2008-09.
Jawaharlal Nehru Urban Renewal Mission to get Rs 6,865 crore this year against Rs 5,482 crore past year.
Allocation for Rajiv Gandhi Drinking Water Mission to be increased to Rs 7,300 crore. Rs 200 crore for potable water in schools.
Rs 300 crore to be set aside for desalination plant in Chennai for drinking water.
Rs 500 crore for identifying urgent needs of development programmes of border areas like Arunachal Pradesh.
SC, ST and minority students to continue to get special attention.
Allocation for several schemes in North East raised from Rs 14,365 crore to Rs 16,400 crore.
Rs 75 crore sanctioned for Rajiv Gandhi National Fellowship Programme for SC/ST students pursuing M.Phil.
Rs 230 crore will be extended as additional equity to developmental organisations looking after the welfare of SC,
ST, socially and economically backward classes and minorities.
Allocation for Minority Affairs Ministry to be doubled from Rs 500 crore to Rs 1,000 crore.
Rs 540 crore for multi-sectoral development plan for minority concentration districts.
288 public sector bank branches to be opened in districts having minority community concentration.
Sarva Shiksha Abhiyan will be provided Rs 13,100 crore, Mid Day Meal scheme Rs 8,000 crore, Secondary education Scheme Rs 4,554 crore.
410 additional Kasturba Gandhi Vidyalaya to be set up in backward blocks.
Navodaya Vidyalayas to be opened in 20 districts with special focus on regions having SC/ST concentration.
Allocation of Rs 130 crore for this purpose. Rs.750 crore more to be given for merit scholarship to students up to 10th and 12th class.
Mid day Meal scheme extended to upper primary level in 3479 schools. 16 central universities to be opened in 2008-09.
Three IITs to be set up in Andhra Pradesh, Bihar and Rajasthan.
Schools of architecture and planning in Bhopal and Vijaywada. More institutes of higher education to be opened.
Rs 100 crore to be given to Information Technology Ministry to set up national knowledge centres.
Allocation for NRHM increased to Rs 12,050 crore
Rs 992 crore for national AIDS programme.
A national programme for the elderly to be started at a cost of Rs. 400 crore.
Rashtra Swasthya Beema Yojana to start from April one in Delhi and Haryana. Rs 30,000 for each family belonging to unorganised sector.
Allocation for ICDS increased to Rs 6300 crore.
Rs 85 crore sanctioned for scholarships to students pursuing science education.
Indian Institutes of Science Education and Research to be set up at Bhopal and Thiruvananthapuram.
Agriculture credit doubled in the first two years of the government to reach Rs.2.40 lakh crore by March 2008.
Eleventh Plan started on a robust growth.
Gross budgetary support to be raised to Rs 2,43,386 crore, an increase of more than Rs 38,000 crore from the current level.
Allocation for Bharat Nirman to be raised to Rs 31,280 crore.
Twenty per cent hike in education budget this year from Rs 28,674 crore to Rs 34,400 crore.
GDP growth slows down to 8.4 per cent during quarter ended December 31, 2007 as compared to 9.1 per cent a year ago.
Economy grew over eight per cent over 12 successive quarters since 2005, says Finance Minister P Chidambaram.
Growth rate of agricultre extimated at 2.6 per cent during the current year.
Services and manufacturing sectors expected to grow by 10.7 per cent and 9.4 per cent, says Chidambaram.
Keeping inflation under check is one of the cornerstones of the Government's policy.
Rice production estimiated at 94.08 million tonnes, maize 16.78 mt, soyabean 9.45 mt and cotton 23.38 million bales.

Different credits offered by banks

OverdraftThis is offered to help your business meet its working capital requirements. Your Relationship Manager will determine your borrowing limit together with you. The facility is renewable annually. It entails simple documentation and could be made available in a range of currencies depending on your business requirements.
Bills DiscountingThis offers your business cash against post dated cheques issued by your customers. The Bank discounts these cheques and the amount is credited in your account upfront helping you to manage cash flows better. The discounting of cheques is undertaken on certain pre-approved customers. It is ideal in managing the business in today’s competitive environment without having to wait for cheques to be realized on due date.
Invoice DiscountingThis gives your company an ideal opportunity to transform credit sales into working capital. The invoice is discounted by the Bank once it is accepted by your customer. This gives you immediate cash injection in the business upto an agreed percentage of the value of the unpaid invoices. Your Relationship Manager will help you decide whether invoice discounting finance will work for your company.
Loans including asset backed financingTerm Loans ranging between 1 to 5 years are offered to part fund your ongoing business expansions and other capital expenditure programmes. Asset backed financing is also undertaken where the Bank uses collateral such as land, buildings, equipment or inventory as security against the loan. The repayments are tailor-made to suit the cash flows associated with the business.
Import & Export financingA loan is granted to the importer to provide liquidity for buying against sight payment. Each loan is related to a specific import transaction and the terms of financing can vary depending on the type of product and the requirement of the importer. This provides importers who have orders from customers backed by a letter of credit with the necessary financial backing to meet larger orders than they would on their own financial strength.
When you export, you significantly reduce the risk of non-payment by asking your buyer to pay you under a letter of credit. The Bank helps you get paid quickly by discounting such letter of credit after its acceptance by the issuing bank.
Contract financingTaking into account your contractual requirements with your clients and based on the cash flows, we structure a full array of banking products specifically to suit your requirements thereby enabling you to comfortably execute your projects.
Structured dealsWith their extensive banking experience, our Relationship Managers are able to help you understand and structure deals most beneficial for your business requirements. This involves a customized package from a lender to a borrower.
Letters of CreditLetters of Credit are a time-tested mechanism for settlement of international trade transactions. They are an undertaking given by us, at your request, to effect payment against presentation of credit complying documents. This is an effective way to get paid for goods and services that you have provided or an effective means of ensuring delivery of goods and services that you have paid for.
GuaranteesThe Bank stands as a guarantor to your client to meet your trade/contractual agreements for a fee.
Documentary CollectionsThis provides an excellent solution to help lower costs and expedite processing while still maintaining control over the transfer of goods and funds. When this facility is used, you as the seller forward the shipping documents and a sight/time draft drawn on the buyer’s account to the Bank. The draft and the documents are sent with instructions to the buyer’s bank. The buyer’s bank delivers the draft to the buyer, but retains the documents until the buyer pays or accepts the draft. This lets you maintain control of your shipments until payment is secured. The buyer also benefits by not having to release the payment until the goods have been shipped. We can supply you with an efficient routing system for your trade documents so that you can be sure of their delivery to you, your trading partners and their banks.

You have more money to invest wisely

In his Budget speech, when Finance Minister P Chidambaram doled out a bonanza to four crore (40 million) farmers by announcing a loan waiver of Rs 60,000 crore (Rs 600 billion), a lot of urban Indians would have felt the jitters. Where would he get the money from? Would it mean more taxes or another surcharge?
However, he had the urban middle-class in mind as well. Thus came a slew of measures like the hike in basic exemption limits, duty cuts for breakfast cereals, water purifiers and milk, clarification on incomes from reverse mortgage for senior citizens and even a higher deduction on insurance premiums paid for parents under section 80D. All in all, these are satisfying sops from the FM for the individual.
The direct measures for one have enthused many. By hiking the basic exemption by Rs 40,000, Rs 35,000 and Rs 30,000 for male, female and senior citizens respectively, Chidambaram has saved them a lot of money.
Says financial planner Sajag Sanghvi, "The income taxpayer, with a salary of up to Rs 5 lakh, can save as much as Rs 45,000 a year."
That basically means another month's salary comes into the hand of the individual. And for the salaried, with incomes above Rs 5 lakh, the savings is an additional Rs 5,000 a year.
Also, now you have a wider choice of investment avenues under section 80C. The introduction of two instruments, Senior Citizen Saving Scheme 2004 and the Post Office Time Deposit Account, gives more options to risk-averse investors.
However, remember that there is a lock-in period of five years for both these instruments. Importantly, if you were to withdraw any amount from such deposits before five years, the amount withdrawn will be included in the income, and be taxed according to the income bracket.
For senior citizens, there is more. With a move of treating cash received from a reverse mortgage on your home as a loan and not as income, he has also pleased many who were worried that there would be more income tax to pay, if they mortgaged their house with a bank.
Also, under section 80D, now an individual can claim another Rs 15,000 of tax relief on the premium paid for purchasing medical insurance for his/her parents.
In other words, now the individual taxpayer has a benefit of Rs 30,000 under this section, which is a straight deduction on total taxable income.
Also, senior citizens, at present, get deductions up to Rs 20,000 on medical insurance. Therefore, an additional amount would be great for them with the rising cost of medical treatment and hospitalisation.
Housewives also can be happier now. Though fuel prices continue to be a concern, the fact that duties on some essential items like milk, water and refined edible oil are down should bring some smiles. Besides, the across the board cut in Cenvat from 16 per cent to 14 per cent will mean that most household goods would become cheaper.
Also, investment experts have felt that the hike in the short-term capital gains tax from 10 to 15 per cent will dissuade a lot aggressive investors and traders from active stock market trading.
But many financial planners like this move a lot. "By increasing the short-term capital gains tax, the FM has given a disincentive to traders who want to play the market. It is something we always advise our clients," says Kartik Jhaveri, director, Transcend India.
Of course, like in every Budget, there are some negatives as well. The introduction of service tax on unit-linked insurance plans (Ulips) is one that many are looking as a negative. Ulips, which are already considered very expensive because of the high costs that are paid to the insurance agent in the initial years and other fund management costs, will now become more expensive.
Many financial planners are quite happy with this as they believe that this will make investors think twice before mixing their investment and insurance needs.
Says Ranjeet Mudholkar, CEO, Financial Planning Board of India (FPSB), "The introduction of service tax on the asset management services, provided under Ulips will surely have a long-term impact on the personal finances of a large number of investors."
Yes, this was the last year for the UPA government before elections. Many people even believed that this would be the Budget where he would give sops to all and sundry. That has happened now.
While there will be critiques about how the FM will raise money to do all that he has plans to, for the urban middle-class, this is almost the best-case scenario.
To give Jhaveri the last word, "From a personal finance point of view, this is a pretty good budget." Absolutely true. As personal finance advice goes, you will be better off considering this bounty as a windfall and invest it wisely.

Here are 10 tips to choosing the right features of accounting software to match your needs:

1] Understand the nature of your organization and what style of accounting best suits its operations so you can choose the right features.
2] The price point is important, but the costs or benefits of the right accounting software can be significant over time.
3] Choose a software package that matches your managerial style, whether you like to work on the smaller details of if you prefer to get just an overview.
4] In a larger organization, get feedback from the other departments on their needs so that you can all use the accounting software most effectively.
5] To make your management more seamless, find an accounting suite that can integrate your important accounting tasks, like inventory tracking, purchase orders, payroll and check writing.
6] Utilize an accounting software package that is robust and flexible so that it can help you adapt as the business climate changes or your organization grows.
7] Free software may be good for some basic uses, but there may not be very much support available. Make sure that there is good technical support in case you need help.
8] Today's business accounting software is very sophisticated and 'smart'. Choose software that can anticipate your needs and can make the important factors plain to see.
9] If you don't understand some of the important accounting principles for you business, visit with another experienced manager or an expert accountant for advice on the best accounting software to use.
10] Look online for reviews and community forums that discuss accounting software.

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