Archive for Uncategorized

admin | January 6, 2018
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SHOULD YOU BE AN EMPLOYER ?

The recent news that even CAs, engineers, MBAs applied for a job of a peon.
This news set my mind on a thinking mode.

Why should one not be satisfied with a Small Time job and take up minimum responsibilities? Why should one always aspire to be an employer and not an employee?

Set your standards of living and earn enough to meet them. If your Ego and Needs are reasonable, finding a suitable employment is perhaps better than taking up the headache of running a 24*7 outfit, full of responsibilities and unsure success

I am sure this thought goes through the minds of many, particularly if the person is a Start Up or an MSME entrepreneur.

To understand the issue, one need to understand the basic assumptions that one makes .Many of them may not hold true and one MUST re affirm them.

1. All entrepreneurs do not Make Awful lot of profit .It is not necessary that you will always be successful as an entrepreneur in making the two ends meet.

2. If you default in meeting your obligations under any of the applicable laws ( it is a task to even finally know what all laws are applicable to you and your business ) , the law enforcing authorities are certainly not over sympathetic or generous towards any defaulters, not even towards start ups or MSME . Corrupt practices to overcome default are certainly not advisable nor are they economical and sustainable in the long run.

So please take up a good risk assessment and use the financefundas.com smartly before plunging.

I am sorry if someone finds this thought demotivating but one cannot and should not overlook realities.

Knowing this well, those who still plunge into “going on their own”, certainly should be sure of a good success in taming the known and unknown risk in satisfying their need of achievement, desired standard of living and fulfillment of their dreams .

I do compliment them and wish them luck.

Category: Finances, General, Political, Taxation, Uncategorized | Tags: ,
admin | January 12, 2017
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BLACK MONEY … ” CATCH ME IF YOU CAN “

At the onset of the recent Demonetization of Rs 500 and Rs 1.000 currency notes ( called SCNs ), it was expected that the entire lot of SCNs in the circulation will not be banked . The fake notes will be identified and naturally will not be able to enter the banking channel. Similarly , the SCNs held by black marketeers will also not be banked due to fear of being taxed and penalized. It was estimated that nearly Rs.4 Lakh crore worth of SCNs will not be deposited, which will represent the balck monies held backin the system. Now at the end of the deadline of 30th December 2016, it is estimated that only Rs.50,000 odd crore remain “un deposited “.
This is , by any imagination is a ridiculously low figure of Black Money that was in the system before demonetization. Even the GOI estimation was that nearly Rs 4 to Rs 5 Lakh Crores are held back in the system , representing Black Money.

In reality,as it is well known, the Black Money has actually been deposited in the bank accounts by adapting various dubious methods including opening dummy accounts,depositing benami SCNs etc methods so skillfully adapted!. It is therefore for the Income Tax Department now,to identify such deposits and catch the errant persons . This is a huge and painful task . The benami account holder ( a poor Jandhan account holders, in many cases ) and the Beneficial depositor, both will come under scrutiny . The number of such cases will be huge and it will be near impossibility for the IT department to reach out for all .

Similarly, many black money holders have re written their cash books, generated higher cash balances and deposited SCNs which were held illegally till than. Such cases are as large and wide spread . This by itself will be a memoth exercise to cover all such cases for the IT Department .

But the reality will be that the IT department is also not going to give up the chase so easily . I can quite see that there will be a huge increase in IT notices and almost all of them will result into lengthy litigation.

Again, it is equally important for the RBI to exactly reconcile the Monies ( SCNs ) deposited with the Banks , with the monies (SCNs) which were in circulation as per their records. RBI will have to be sure that Fake currencies have not been pushed into the banking system and will have to tally the genuine physical notes collected by the banks with the book figures that are being provided by the bankers . These reconciliations , reaching upto branch level is another herculean task , particularly when it is equally well known that several banks and bank officials have not been so praiseworthy. It will not be a huge surprise if initially it is noticed that more SCNs are deposited in the Books of Banks and RBI than the Actual numbers of SCNs in circulation . The Fake notes pushed in the system will have to be segregated and wrong book keeping will have to be corrected before closing this exercise .

I feel the stage is perfectly set for a Catch Me If You Can type of chase . It is shameful and painful , but unfortunately true .

Category: Finances, General, Political, Taxation, Uncategorized | Tags: , ,
admin | November 10, 2016
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“Demonetisation” . No need to panic for a common man .

Let me at the On Set compliment the Hon PM for taking this bold and bitter step of ” Demonetising ” the Rs 500 and Rs 1000 Currency notesparticularly for keeping it a very well guarded secret right till the end , though it certainly is a step well thought out right from the beginning of Jan Dhan and Voluntary disclosure schemes.
But it is unfortunate that the scheme has spread a panic button in the minds of many honest and common citizens .

I see the following are the main sources of this wrong signal

1… People are finding it hard to understand that the Notes are NOT FULLY DEMONETIZED till 31/03/2017 . Their circulation is restricted up to a point of time, after which only the same notes will be completely demonetized.

Up to 30/12/2016, one can Deposit the old notes in their Bank Accounts and the Banks WILL ACCEPT the same . Routine collections of business e.g. by the grocery store keeper, salaries and wages , Cash Balances of one’s business, sundry balances at your home etc can be deposited easily . Only change is that the banks will give you the new notes or lesser denomination notes in exchange . Even after 30/12/2016 , upto 31/03/2017, one will be able to deposit these notes with RBI, though with proper explanations about the delay and the source of these notes. A clarity on these aspects is necessary . I was pained to see a chowkidar, refusing to accept his well earned salary since he was offered the same in Rs 500 denomination even when he had a bank account . The Milk man, the vegetable sellers etc all common traders are refusing to accept the OLD NOTES, since they believe that the same are fully demonetized.

2… A lot is being circulated on WHATSUP and TWITTER about the harsh steps that can be taken by the Income Tax authorities. But it needs to be equally understood that such cases of harsh steps would follow only if one is not in a position to justify his/ her sources of depositing the Old Notes. An Honest and genuine tax payer or citizen has no need to panic . This aspect also needs to be WHATSUPPED and TWITTED by the concerned Authorities

I am specifically highlighting this case for Non Panic, since I notice that the panic is spreading fast and may even give rise to tension among even honest common citizens

Category: Uncategorized |
admin | June 27, 2016
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Rexit and Brexit

These two words are taking rounds in the financial markets these days , and all are enjoying its thrill .

Frankly it is Rexit that is more relevant for us in India. Raghuram Rajan has done a very good job, as almost all of us will agree.The unnecessary controversy that surrounded his decision is rather shameful . This is no way we can attract good talents from outside the political and Bureaucratic circles . I am sure wiser counsel will prevail in finding his replacement and the decision will be guided by the economic ideology rather than political ideology of the incumbent.

The important issue here is regarding the crusade that Rajan has so well started against the NPAs . The momentum, lets hope is not lost .

As far as Brexit is concerned, I do not think there is any serious reason for India to worry , though a handful of sectors will have to experience a transitory set back . In fact, India and the Indian Rupee will gain grounds over a period of time. The Financial HQ ( London) will have to face a highly turbulent time due to uncertainties and painful process of Exit . I will not be surprised if Britain has a relook at the Poll Results and eventually continues in EURO Zone. But even if that happens, its credibility will be seriously doubted. For India, it is to be seen how smartly we are able to take an advantage of the turbulence that is created. I trust our private sector to perform aptly .

Category: Uncategorized | Tags: , ,
admin | March 17, 2016
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Start Up India.. Whats So New About It ? What More is Needed ?

What I feel is that there does exist a good bit of confusion about who exactly is a Start Up.

Simply put, any newly started business is a start up. As far as way of doing business, and the complexities of business is concerned, a start up is on the same grounds as that is there for any other new ventures.

But in order to encourage budding entrepreneurs the Government and certain organisations are offering certain free bees , training ,incentives, concessions and even financial support . For receiving entitlements for such advantages one needs to see that his or her new business venture falls within the definition of a Start UP.

Looking to the past history of incentives, one sees that giving concessional finance, providing infrastructural support at a concessional rates , giving subsidies etc have always been there. For instance, in Gujarat, GIDC, GSFC, GIIC, GSIC etc Government Organisations have played this role quite effectively in the past.

So what new is happening now ?

It is the participation of government and even the private sector by opening up their purses for providing business incubation and hand holding support that is note worthy. Earlier this role was being played by relatives and friends, which kept many budding , but not so well connected entrepreneurs at a clear disadvantage.

Secondly, over time, investors have realized that there are many brilliant ideas which , if nurtured to a business reality, has unbelievable possibilities of growth. Google, flip cart, etc speak for themselves. For investors there is a huge possibility of making good money if they take an equity exposure at the right time in right venture.
This business arena is fast catching up and there are real hectic activities growing between newer entrepreneurs with good ideas and opportunity seeking investors.

It is this Eco system that being nurtured and developed under the name and style of Start UP .

At the same time, we should look at the hard realities of actually doing business in India. The Administrative lethargy, the small time corruption, the end less delays and the evasive attitude in the real time world puts off many new entrants. These factors have resulted into numerous closures of potentially viable units. We need to also develop an Eco system that enables the picking up of potentially viable units and separating them from truly nonviable units. The BIFR experiment has failed to live up to its expectations. I see it as a great opportunity for the private sector to evolve a business model for reviving such units and share the fruits .Encouraging and setting up of merger mechanism and mechanism for taking over of the management of identified units is an area worth looking at .

There are units which go Sick and are not viable. Sometimes the promoters lack honesty and integrity.
For such units, the Bankruptcy laws and speedy legal actions will go a long way in unlocking the precious assets that get entangled with such ventures through revival.

Such holistic approach towards the entire field of industrial and service sector development will go a long way in giving a further boost to the economy .

Category: Finances, General, Uncategorized | Tags: , , ,
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