Transfer & Posting of CCO-Finance dt 29/05/2009

Prithviraj Chavan takes over as Minister for Science & Technology and Earth Sciences

Shri Prithviraj Chavan today took over as Minister of Science & Technology and Minister of Earth Sciences. Interacting with the key officials of the two Ministries after assuming charge as MoS ( Independenrt Charge), he said that the people of the country are looking forward to scientific achievements to deliver solutions for problems faced by them.

A graduate with honors in Mechanical Engineering from Birla Institute of Technology (BITS), Pilani, the new Science Minister also holds a Masters degree in Engineering from the University of California at Berkeley. He described the new assignment as exciting. Also a member of the Atomic Energy Commission and the Space Commission, the highest policy making bodies in the respective fields, the Minister said he was looking forward to all scientific departments working together.

On his first day at his office in the CSIR, Shri Prithviraj Chavan held a meeting with the heads of departments and other key officials of the two Ministries following a warm welcome by the scientists, researchers and officials. The team of scientists headed by Secretary DST, Dr. T Ramasami and DG CSIR, Prof. Samir Brahmachari, apprised the Minister with the ongoing projects in the various S&T areas.
Courtesy : PIB

Modus operendi of Common cadre restructuring

1. A structured questionnaire would be developed and circulated amongst all the cadre officers to elicit their opinion on various aspects relating to the administration and management of common cadre; The questionnaire would be accompanied by a brief write up giving the management perspective , a synopsis of the recommendations made by Mrs Valsala Kutty , consultant and the guidelines for reference while completing the responses to the questionnaire.
2. on the basis of analysis of the responses to the questionnaire, several rounds of discussions will be organized to the brainstorm and deliberate on various options, decisions and so on is small groups and large groups, with individual cadres as also as collective groups
3. following discussions, a draft paper would be compiled and circulated again to all concerned for their comments. Based on the responses received, there would be a round of discussions before finalizing the policy framework for management of the common cadre .

न नौ मन तेल होगा न राधा जी नाचेंगी

Revision of emoluments of senior RA at CSIR w.e.f 1/9/2008

GOI clarification on effect of 6th CPC over the 1/3 commuted portion of pension of government servents who get absorbed in PSU/CAO

GOI Clarification regarding extension of 6th CPC benefit in the scale of 6500-10500 in autonous bodies

Authorization of the Central Government to file an application u/s 3 of the Criminal Law (Amendment) Ordinance, 1944 for attachment

Authorization of the Central Government to file an application u/s 3 of the Criminal Law (Amendment) Ordinance, 1944 for attachment of the money or property procured by means of the scheduled offence.

Grant of Non-functional scale to SO -clarification regarding fixation of pension , GOI OM Dated 14/5/2009

we are still waiting for extension of scheme from 1/1/96.

Information Technology and Banking – A Continuing Agenda

(Keynote Address delivered by Dr. D. Subbarao, Governor, Reserve Bank of India on May 18, 2009 at the Banking Technology Awards 2008 of the Institute for Development & Research in Banking Technology, Hyderabad.)

I am delighted to be here today to celebrate outstanding Information Technology achievements in the Indian banking sector. We are all well aware of the significant contributions that Indian IT professionals have made in the world arena. In fact, when the phrase “Indian talent” is used, it is often meant as a synonym for IT excellence.

IT in the Indian Financial Sector – the Beginnings

2. The use of technology in expanding banking has been a key focus area of the Reserve Bank. Technological innovation not only enables a broader reach for consumer banking and financial services, but also enhances its capacity for continued and inclusive growth.

3. There are several factors attributed to India’s high growth in the recent period - improved productivity, growing entrepreneurial spirit, and higher savings, to name the most important. But one factor usually goes unacknowledged – that is financial intermediation. I believe improvement in the quantum and quality of financial intermediation ranks along with other factors that I mentioned above as a key growth driver. And one of the factors that drove the improvement in the quantum and quality of financial intermediation is more wide spread and more efficient use of IT.

4. Implementing IT in an Indian banking system dominated by government-owned banks has not been easy. In his book ‘Imagining India – Ideas for the New Century’, Nandan Nilekani makes interesting references to this issue. He writes about his travels around the country in the early 1990s, speaking about the role of, what was then called in typical Indian English as ‘electronification’ in Indian banking. After one such presentation, Nandan writes, the chairman of a bank advised him to stop preaching, warning him that (quote), ‘The unions will gherao you in your house!’ (unquote) Nandan goes on to describe another presentation before an incredibly hostile audience, who dismissed out of hand all his ideas and suggestions. But at the end of the presentation, the union leader told him privately that both his sons were working for Microsoft on software solutions. I am told that during the initial days of IT implementation at the Reserve Bank, systems had to be smuggled into the office when ‘the world was sleeping’. Happily for us, IT implementation no longer faces opposition from any quarter. Indeed, everyone welcomes it. Even the trade unions have become extensive users of technology.

5. On this occasion, as we honor achievement in technology implementation, I want to share a few thoughts on the role of IT in the Indian financial sector.

IT in the Indian Financial Sector – Status Today

6. First, let me briefly review the current status of IT in the financial sector. More than most other industries, banks and financial institutions rely on gathering, processing, analyzing and providing information in order to meet the needs of customers. Given the importance of information in banking, it is not surprising that banks were among the earliest adopters of automated information processing technology. The visible benefits of IT in day-to-day banking in India are quite well known. There’s ‘Anywhere Banking’ through Core Banking Systems, ‘Anytime Banking’ through new, 24/7/365 delivery channels such as Automated Teller Machines (ATMs), and Net and Mobile Banking. In addition, IT has enabled the efficient, accurate and timely management of the increased transaction volume that comes with a larger customer base. It has also facilitated the movement from class banking to mass banking.

7. The past few years saw us marking some major milestones in the Indian payment and settlement systems. The introduction of the Real Time Gross Settlement (RTGS) System has resulted in compliance with the Basle Core Principles for Systemically Important Payment Systems of the Bank for International Settlements. It also has paved the way for risk-free, credit push-based fund transfers settled on a real-time basis and in central bank money. The facility for inter-bank funds settlement through RTGS is today available across more than 55,000 bank branches, in more than 2500 regional centers across the country – a coverage span perhaps not seen anywhere else in the world.

8. Now, let’s compare today’s situation with what was in place in 2004, when only 4,800 branches offered RTGS. The rapid acceptance of RTGS by users can be measured by the daily transaction volume: today, we settle close to 100,000 transactions a day in the RTGS mode, up from just about 6000 transactions a day in 2004-05. In fact, quick, safe and efficient electronic movement of funds from virtually any part of the country to any other location is now almost guaranteed. This is enabled by the coordination with the National Electronic Funds transfer (NEFT) System and the National Electronic Clearing Service (NECS). In 2005, RBI was clearing about 2.70 lakh NEFT transactions a month. This number has jumped exponentially to nearly 40 lakh a month today. The establishment of the legal framework for all of this – in the form of the Payment and Settlement Systems Act, 2007 – provides the requisite supportive structure for these systems.

9. I also want to highlight here the extent of customer migration to electronic payments in India. From less than half a percent of transactions in the electronic mode in 2001, today we process close to about 30 crore transactions per year in the electronic mode. The same holds true for RBI’s recent initiative away from High Value Clearing to electronic modes – a move aimed at creating a safer, secure and credit-push based funds transfer route that has gained considerable traction.

10. We have also seen developments in the communication network and messaging system in India. This institute, the Institute for Development and Research in Banking Technology (IDRBT), set up by the RBI in 1997, implemented the INdianFInancialNETwork – the INFINET – a ‘one-of-a-kind’ initiative for the banking sector aimed at sharing expensive IT resources so as to achieve economies of scale. One of IDRBT’s notable achievements has been the implementation of Public Key Infrastructure (PKI) - based electronic data transfer with very high security levels. The Institute also developed a messaging standard called Structured Financial Messaging System (SFMS) with security features superior even to SWIFT. Today INFINET has migrated to the latest MPLS technology in an effort to provide a state-of-the-art network.

11. IDRBT also set up the National Financial Switch for interconnecting ATMs. It’s interesting to note that at the turn of the century, there were only about 4000 ATMs in all of India, and today there are more than ten times this number, and all of them interconnected. These changes have enabled RBI to take two major steps in this area in recent months. First, ATM card holders can use any ATM in the country irrespective of which bank issued them the card; and second, use of ATMs has become free of charge since April 1, 2009. So, now a customer can go to any ATM and withdraw money free of charge regardless of which ATM is being used and which bank issued the card.

12. IDRBT also spearheaded research in the field of banking technology and has been the centre for excellence in training in this area. Over the years, the role of the institute has extended beyond research to providing various services to the banking community. Now, a committee headed by Dr C Rangarajan is looking into redefining IDRBT’s role. Recommendations from this committee are anticipated soon.

13. Given the growing importance of IT in the banking sector, it is appropriate that the IDRBT provides incentives to the IT-based operations of commercial banks by evaluating their IT capabilities and motivating them to push for improvements by instituting these awards, which are going to be presented today.

IT in the Financial Sector: the Continuing Agenda

14. Information technologies and the innovations they enable are strategic tools for enhancing the value of customer relationship. They reduce the costs of financial transactions, improve the allocation of financial resources, and increase the competitiveness and efficiency of financial institutions.

15. Even as the achievements of IT in the banking sector are impressive, we have a big agenda on the way forward. Current financial sector leaders still need to take greater advantage of new technologies and information-based systems and expand the coverage of the Indian banking and financial system.

16. What do I mean by this? For instance, the potential of IT in extending banking services to under-served markets in rural and semi-urban areas is enormous. The use of Smart Card technology, mobile ATMs, coverage of post offices under electronic payments networks in out-of-reach areas – all could play significant roles in providing financial services to more people and thereby serve financial inclusion.

17. There is tremendous potential for the business growth of financial institutions on the one hand and the inclusive growth of India on the other. We have already seen banks using innovative approaches such as solar power- and mobile technology-based connectivity for branches. A variety of options are available which enable extended reach of such services. I urge banks to identify the technological model that is right for them. We have already seen the positive benefits that come from extending the reach of banking services through pilot projects in Andhra Pradesh and parts of the North East. The Reserve Bank also has announced its intention to expand the reach of banking in the North East even further by funding the cost of connectivity using VSAT technology. IBA is working on the details of this effort.

18. India is experiencing an explosion in the use of mobile communication technology. And this is a development that the financial sector can exploit. Mobile phone users belong to all strata of society, spread across metropolitan centres, towns and villages. Banks can take advantage of this expanded reach of telecom if they provide services through this medium. The phone’s integrated chip can function as a multi-application smart card, thus making banking services available to virtually every mobile phone owner. This holds substantial promise as the delivery vehicle of the future: there is huge potential and an exciting opportunity. However, the expansion of such capabilities must be accompanied by a minimum level of essential security features and continued compliance with established covenants relating to privacy of customer transactions.

19. The potential of IT for the near future also includes:

• Enabling differentiation in customer service;

• Facilitating Customer Relationship Management (CRM) based on available information, which can be stored and retrieved from data warehouses;

• Improving asset-liability management for banks, which has a direct bearing on the profits of banks;

• Enhancing compliance with anti-money laundering regulations; and

• Complying with Basel II norms

Implementation Challenges

20. New technologies set off a process of change. That, in turn, poses its own set of challenges to institutions as well as to consumers. IT is not yet a very comfortable choice for millions. Therefore, if we are to encourage IT proliferation, we must facilitate a change in customer mindsets and attitudes. Consumer awareness is a major challenge. It must be addressed as a whole. As automation increases and as products come with ever more technology based components, bank customers must understand up front the pros and cons of various products. Banks have to share the responsibility of providing this education. It is not just about the mere listing of all the terms and conditions on the agreement which, if we are being honest, rarely get the attention or focus that they deserve. People should read this information, but do they? Beyond that, people should understand all that is written in technical and legal language, but can they? Real education will lead to breakthroughs in understanding. More consumers would be more eager and willing to move towards use of technologically-enhanced products. In turn, this will act as a multiplier, with a positive impact on bank performance.

21. Banks also must pass on the benefits of lower costs from technology-based products and services to their customers. I was surprised to note that transfer of funds from one branch of a bank to another, both under the Core Banking System, entailed a service charge for the remitting customer. It does not make sense that the charge for such funds movement within a bank is much more than for inter-bank funds transfers! Let me be candid. The entire institution of banking is built on consumer trust. By imposing charges not commensurate with the cost of services provided, we risk losing this fundamental trust that underlies a banking relationship.

22. No doubt deployment of IT offers ample rewards. But these rewards can be claimed only by organizations which successfully address the alignment challenge. Alignment of IT and business, alignment of IT and HR and alignment of IT and organizational structure. These are all critical to derive true value. Working in silos deprives several benefits. All this should culminate in IT governance as an important component of corporate governance.

23. Security in an IT-based transaction processing environment is also critical. Adequate security controls must be in place. This includes the validation of transactions using the maker-checker concept, transmission of electronic messages over a network in encrypted form, due authentication by means of providing for digital signatures and storage of electronic records in conformity with the provisions of the IT Act, 2000 and amendment Act 2008. There is also the human element, and this is an issue as well: studies from around the world show that a significant proportion of IT frauds is the work of insiders. This underscores the need for ensuring that proper controls are in place and that they work properly.

24. Another serious challenge, particularly for public sector banks, is capacity building and talent retention. The success of IT implementation is ultimately manifested at the counters of the bank or at the ATMs and not in the data centres. If IT implementation in the early stages faced challenges from the trade unions today banks face different kinds of challenges. If a customer is turned back on the last day of tax payment (any facility will not change this habit!) or a cheque gets returned because CBS can not be accessed at the branch, the entire edifice of efficiency collapses in the eyes of the common man! Banks must make sure to avoid such interfaces which erode trust and confidence.

Conclusion

25. Let me now conclude. We know that investments in newer technologies must be made to modernize existing operations, to face competitive challenges, and to meet customer expectations. Some of these investments will also be made with the goal of achieving cost savings, energy efficiency and environmental friendliness. In the years ahead, the ability of banks to harness new technologies to meet the demands of households and businesses will be tested. I am confident that banks and other financial institutions will meet these challenges head on, continue to find new and better ways to put technology to their and their customers’ best use, and that they will manage the technology and business risks associated with these investments.

26. The identification and recognition of technology leaders in the form of these Technology Awards underscores our ability to excel in our respective fields. The awards of today are not a culmination; instead they mark another milestone in our journey towards an efficient, effective and, may I add, sensitive and user friendly financial system.

27. My congratulations to all the award winners today.

Purchase of Hindi books by Government offices

Adoption of Integrity Pact-Standard Operating Procedure- CVC OM Dated 18/05/2009

CVC released its standard operating procedure reagrding adoption of Integrity pact during major purchase by Government Departments/PSU/ Autonomous Oragnisation.
Integrity Pact (IP), a vigilance tool conceptualized and promoted by the Transparency International. The Commission has, through its Office Orders No. 41/12/07 dated 04.12.07 and 43/12/07 dated 28.12.07 and Circulars No. 18/05/08 dated 19.05.08 and 24.08.08 dated 05.08.2008 , recommended adoption of Integrity Pact and provided basic guidelines for its implementation in respect of major procurements in the Government Organizations.

Details can be found here

Revision of pension of pre-2006 Pensioners/ family pensioners , GOI OM Dated 21/05/2009

Revised pay scales for Official Laguage post- corriendum dated 27/11/2008

CGHS launched new website

CGHS today launches its revamped & improved version of website. Take a look here

Discontiuation of continous empanelment scheme of CGHS

stoppage of emergency service at CGHS wellness centers

Revision in CGHS subscription/ entitlement w.e.f 1/6/2009

Government implements Modified ACP Scheme

Please see the other details here
http://persmin.gov.in/WriteData/CircularNotification/ScanDocument/35034_3_2008-Estt.(D).pdf

World Environment Day- 2009

World Environment Day (WED) was established by the UN General Assembly in 1972 to mark the opening of the Stockholm Conference on the Human Environment.

Commemorated yearly on 5 June, WED is one of the principal vehicles through which the United Nations stimulates worldwide awareness of the environment and enhances political attention and action. The day's agenda is to:

1. Give a human face to environmental issues;
2. Empower people to become active agents of sustainable and equitable development;
3. Promote an understanding that communities are pivotal to changing attitudes towards environmental issues;
4. Advocate partnership which will ensure all nations and peoples enjoy a safer and more prosperous future.

The theme for WED 2009 is 'Your Planet Needs You-UNite to Combat Climate Change'. It reflects the urgency for nations to agree on a new deal at the crucial climate convention meeting in Copenhagen some 180 days later in the year, and the links with overcoming poverty and improved management of forests.

This year’s host is Mexico which reflects the growing role of the Latin American country in the fight against climate change, including its growing participation in the carbon markets.

Mexico is also a leading partner in UNEP's Billion Tree Campaign. The country, with the support of its President and people, has spearheaded the pledging and planting of some 25 per cent of the trees under the campaign. Accounting for around 1.5 per cent of global greenhouse gas emissions, the country is demonstrating its commitment to climate change on several fronts.

Mexican President Felipe Calderon states that the WED celebration will “further underline Mexico's determination to manage natural resources and deal with the most demanding challenge of the 21st century – climate change.”

GOI clarification dt 18/05/2009 for pensioners/ family pensioners

Modification in eligibility criteria and procedure for call of tender for specialised works- CPWD

Composite tender- Modidification CPWD

Clarification regarding Plastic card for individual CGHS beneficiaries

GOI resolution on Public Interest Disclosure & Protection of Informer

Usage of Inter-bank window for customer transactions

RBI/2008-09/476
DPSS (CO) RTGS No.1959/04.04.002/2008-2009

May 11, 2009

Chairman and Managing Director /
Chief Executive Officer of all banks participating in RTGS

Dear Sir,

Usage of Inter-bank window for customer transactions

We invite a reference to our earlier circular No.RBI/2008-09/362 dated January 28, 2009 advising extension of cut off timings for various types of RTGS transactions.

1. It is brought to our notice that many RTGS participants are routing RTGS customer payments in the inter-bank session i.e., after the customer window is closed. This is probably done to accommodate late transactions of high net worth customers.
   
   
2. We advise that different time windows are prescribed for different types of RTGS transactions taking various things in to consideration. For example, a gap of one hour and thirty minutes is kept between customer timings and interbank timings to ensure that a customer transaction where credit cannot be afforded to the beneficiary would have to be returned to the sender’s account within one hour and thirty minutes. Therefore, routing of customer transactions in the inter-bank session is a violation of return discipline since the gap of one hour and thirty minutes is not maintained.
   
   
3. All RTGS participants are, therefore, advised to strictly adhere to the RTGS procedural guidelines and desist from the practice of pushing customer transactions in the interbank mode. Violations, if any, brought to our notice would be viewed seriously and would attract penalty under Section 30 of the Payment and Settlement Systems Act, 2007(51 of 2007).
   
   
4. Please acknowledge receipt of the circular.

Yours faithfully,

(G. Padmanabhan)
Chief General Manager

Issue of analogue insulin to CGHS beneficiaries, GOI OM Dated 13/05/2009

clarification regarding no change in pension rule w.e.f 2/9/2008

Fairness & trasparency in maintenance & prepration of Annual performance appraisal report ( formally ACR) w.e.f 1/4/2009

Classification of post as per 6th pay commission

Helpline from CGHS

Tel. 011-66667777

e-mail- helpline-cghs@nic.in

Beneficiaries can contact the Helpline by phone or e-mail for

(1) any information about CGHS including Medical Reimbursement Claims

(2) any Grievance or Complaint

CGHS Helpline operates on all working days from 9:30 A.M. to 5:30 PM.

Additional relief on death/ disability of Government servants covered by the NPS

Closing of Central Government Offices in connection with election- Guidelines

Video conferencing to help RTI applicants

CHENNAI: For the past three years, M Sivaraj, an RTI activist from Vellore, has been spending Rs 1,000 every month towards travel and other expenses. The former tahsildar travels at least 900km a month to appear at hearings conducted by the State Information Commission (SIC) at its headquarters in Chennai.

With SIC planning to introduce video conferencing for petitioners, Sivaraj and other petitioners will have less trouble in future.

The hi-tech facility funded by the Union government will be introduced after the general elections. "The contract has been awarded to the Electronic Corporation of Tamil Nadu (ELCOT), for development. We hope that petitioners will not have to travel all the way from different parts of the state to Chennai, spending time and money. Officials, too, need not reclaim amounts from the public exchequer for travel expenses," SIC chief commissioner S Ramakrishnan told The Times of India.

With the district headquarters in Tamil Nadu having video-conferencing facilities at the collectorates, it would take only a few months to stabilise the system, Ramakrishnan added.

The plan envisages the commission having a state-wide area network connectivity from ELCOT's data centre in Taramani or the common service centre at the DMS campus in Teynampet. ELCOT will install equipment and related infrastructure, costing Rs 13 lakh.

On an average, SIC receives 40,000 petitions every year, the highest in India, seeking details from various government departments. Almost 90% of the petitions come from the southern districts. About 30 cases are taken up for hearing daily.

"If such devices are not introduced forthwith, there will be deterioration in services rendered by the commission," Ramakrishnan pointed out.

The commission has six commissioners, besides the chief commissioner, to look into appeals.

The commission is holding talks with the Centre for Good Governance (CGG), a central government agency, to develop software modules for designing a website, complete with the decisions and cause list so that applicants from any part of the state can get updated information on cases.

It also plans to include success stories and the status of applications on the website, with the application status being conveyed through SMSes, too.

"The decision to seek CGG support came about after the National Informatics Centre, which designed the SIC website, failed in uploading relevant data over the past four months," official sources said.

The urgency in dealing with a flood of applications has put SIC in a spot. With only 15 stenographers available for administrative work, analysing information has become a problem area.

julie.mariappan@timesgroup.com

Govt staff earn 14.82% on NPS

Central government employees who joined as a part of the contributory New Pension Scheme (NPS) have earned a weighted average return of 14.82 per cent during 2008-09, the first year when three fund managers managed a corpus of around Rs 2,000 crore.

This is in contrast to the annual 8 per cent returns between January 2004 and March 2008 when the government had not transferred the money to the three fund managers – SBI Pension Fund, UTI Retirement Solutions and LIC Pension Fund.

The Centre moved all employees joining from January 1, 2004 to NPS, where they have to chip in with a contribution of 10 per cent of their basic salary with a matching contribution made by the government. While the money was being deducted, it was parked in a government account and earned a fixed rate of return.

Last year, based on the financial bids, the government allocated 55 per cent to SBI, which earned 16 per cent on the corpus managed by it, followed by UTI, which earned a return of around 13 per cent on 40 per cent of the corpus and LIC, which generated returns of around 12 per cent on the remaining corpus. Last week, the allocation was changed based on last year’s performance (see table).

While the corpus will increase this year, partly due to higher contribution and also due to the release of some of the arrears following the implementation of the Sixth Pay Commission’s recommendations, the equity investment is also expected to go up.

At present, around 5 per cent of the corpus is invested in equities against the permissible limit of 15 per cent.

“Initially, fund managers were slow on investment in equities and invested significant amounts in bank deposits. But now, they will step up equity investment, also because the overall environment has improved,” said a source associated with the asset allocation.

This year onwards, the fund management fee is also going to decrease to 0.0009 per cent (or 0.09 basis points), in line with the pension scheme for non-government employees, as against up to 5 basis points last year.

In addition, state governments are expected to join the scheme. While 21 states have shown their willingness to join NPS, none of them have started releasing the funds as some of them, unlike the Centre, are reluctant to bear the costs, such as those related to the record-keeping agency.

courtesy: Business Standard

Revised telephone/ broadband/ mobile reimbursment of CSIR Scientist/ Technical Officers/ CCO

Things investors need to know about New Pension Schemes

New Pension Schemes (NPS) are in news for quite some time now. With India finally gearing up to have its own government-regulated pension plan, on the lines of the ‘401K-retirement plan’ in the US, the excitement hovering around NPS is obvious.

While the scheme is already operational for central govt employees, its opening for general public on May 1, 2009. Unlike the traditional retirement solutions, such as PPF and EPF; NPS is not a defined benefit, but rather a defined contribution plan. Thus, while investment in PPF and EPF attract a fixed rate of interest, returns from NPS will be market determined.

The market here, however, is not confined to equity alone, but includes corporate bonds and government securities. Investment in these papers is to be actively managed by fund managers. Pension Fund Regulatory and Development Authority (PFRDA) have designated six asset management companies (AMCs) for the purpose.

So, does it imply that NPS is just another mutual fund scheme?

Though the NPS will be managed by fund houses, the autonomy lies with the PFRDA. While AMCs take investment decisions for NPS, their operational freedom shall be confined to the guidelines issued by PFRDA from time to time. Again, while an MF investor can enter and exit an scheme at free will, NPS will bind them till the retirement age of 58 years. The current guidelines do not permit a pre-mature withdrawal or any loan against the investment in NPS.

The onus of deciding the structure of investments and selecting the fund house has, however, been left to the investor. The investor is free to choose the right mix of equity (E), corporate bonds (C) and government securities (G) in his/her portfolio. Alternatively, investor can choose auto option, wherein his investment in NPS will divided in pre-determined proportion of 15% (E), 45% (C) and 40% (G). In the case of automatic allocation, the entire investment will be equally distributed among all six fund managers in the first year. From second year onwards, however, the allocation will be pro-rated on the basis of the first year’s performance.

NPS can also be distinguished from an MF scheme in terms of its cost structure. While an MF scheme charges an entry-load of about 2.25% and an average management charge of 1.5%, NPS carries a bare minimum fee of 0.0009%. Virtually free; as one might put it! But hold on. For, while NPS may prima facie appear an art of charity, investors would do well to note that there is never a free lunch.

NPS requires maintenance of all records and the same will be done by NSDL, which will act as the central record keeping agency (CAR). Each investor will thus be required to pay NSDL an account opening charge of Rs 50. Besides, there will be a maintenance charge of Rs 350 per year and an additional charge of Rs 10 per transaction.

PFRDA has also appointed selected banks as point of presence (POPs) to facilitate quick and hassle-free transactions. However, these services are not free either. According to an industry source, POPs will also charge an investor an account opening fee of Rs 20 and an additional charge of Rs 20 per transaction. This implies that an investor seeking to invest Rs 500 per month will actually end up paying around Rs 560 per month. That’s nearly 11% transaction cost, considerably higher than 8% return offered by PPF.

So does this render NPS more costly visà-vis an MF scheme?

The current cost structure of NPS is as good as fixed in nature, while that of an MF is a percentage of investment. Thus, the higher the investment, the higher would be the charges in case of an MF scheme (See Table). Given the current cost structure, NPS appears to be more beneficial to those with a higher amount of periodic investment.

Another factor that needs major consideration is the tax treatment. NPS does not enjoy any tax benefits, either at the investment stage or at the time of maturity. This makes it less attractive vis-à-vis other retirement plans available in the market. While PFRDA is understood to have approached the government to grant NPS the tax status of (exempt-exempt-exempt) EEE, the fact that PFRDA bill is yet to be approved by Parliament may procrastinate the process. Thus, while the step in the right direction has been taken, a lot needs to be done to make NPS as competitive as 401K.
Courtesy : TOI

Tree Tracking goes Hi-tech in India

A team of botanists in Mumbai are planning to map trees with the help of GPS based etchnology. Environmentalist, Ramesh Madav and his team, who have founded Terracon Ecotech Pvt. Ltd, will be out with equipment that can determine the exact location of a tree using global positioning system, or GPS, a satellite-based technology typically used in vehicle navigation and location-based information search.

Each unit, costing around INR 85,000, records the latitude and longitude of a tree, achieving an accuracy of within 5m. In addition, the botanists will record other details such as the height, canopy and condition of each tree in digital format, all of which will be transferred to a master information system that will plot the data on maps. This will make it easier to audit data and regulate illegal or irregular tree felling. The company has signed a contract with Thane's municipal corporation to conduct a tree census for the district over the next few months.

The company is currently building a proprietary software platform called Vruksha Sharad to map and analyse the tree data more effectively. It also wants to increase its current team of 60 field officers, each a qualified botanist, to around 200.

'Go green': New IT Mantra

On the occasion of the Earth Day that was served April 22, 2009 most of IT companies pledge to conserve the environment's resources and save energy costs in the bargain. According to the study conducted by IDC in the Asia-Pacific region, 18 percent of the organisation consider the greenness of the IT suppliers before making a selection, and another 30 per cent are expected to do so in the near future.

Maharashtra-based Chitale Diary, for instance, consolidated its IT environment into three physical servers (from 10) in one data centre. These servers host 20 virtual servers running multiple applications and operating systems. With a virtualised environment, the firm reduced hardware acquisition costs by 50 per cent, server deployment time came down from three weeks to a few hours. And it brought in 50 per cent reduction in power, cooling, and real estate. IBM has committed over $1 billion to the Big Green Innovation initiative launched in 2007. The project focuses on intelligent energy (smart grids and alternative energy), carbon management, water management, and computational modelling. Intel, on its part, integrated 'Design for Environment' principles into its production.

The Climate Savers Computing Initiative (CSCI), co-founded by Intel and being led in India by Nasscom, CII, TERI and WWF works globally with manufacturers and consumers to increase the energy efficiency of personal computers (PCs) and servers by 50 per cent with the help of power-management tools. Cisco has also launched Energy Wise, a technology that makes it possible for businesses to reduce carbon emissions, by managing energy consumption of devices on the network when they are not in use. While Wipro has signed a Memorandum of Understanding (MoU) with WWF to collaborate in several areas of sustainability like the application of IT solutions to ecological sustainability. IT companies are aiming to reduce CO2 emission by 54 million tonnes a year and cut energy costs by $5.5 billion by 2010.

Courtesy: e Gov