Prince Harry 'to climb Mount Everest'

Source :PTI:London :Jan 1,2012:15.20 IST

Prince Harry, the third-in-line to the British throne, is all set to realise his long-held ambition of conquering Mount Everest this year, a report said. 

The 27-year-old Prince had dropped a broad hint about scaling the world's highest mountain in May this year at the end of his trek to the North Pole last year to raise money for 'Walking With the Wounded', a charity for wounded soldiers. 

Harry had, in fact, indicated that he wanted to join the group of wounded servicemen on their next challenge in May, which will see them climbing Mount Everest with a peak at 29,029 ft above sea level, 'The Sunday Telegraph' reported. 

However, Buckingham Palace has declined to comment on whether it would be possible for Harry to fit the climb into his schedule. "It will all depend on his Army commitments", his spokesman said. 

There has been no comment, either, from the charity, the newspaper said. 

But, Mollie Hughes, the 21-year-old mountaineer who plans to become the youngest British woman to climb Everest when she makes her own ascent with Kenton Cool in May, said that she has been told that the Prince will also be going up. 

"He won't be doing the full climb as it will take a long time and it requires rigorous training so I think he'll be joining at a base camp," she said

‘Primary concern is to control inflation

Source :Frontline :G Srinivasan :Dec 31,2011



C. Rangarajan: “India is one country where the growth rate is still high, above 7 per cent".

AS India's economic growth is in slowdown mode, the authorities are putting on a brave face on what in their view is a transitory phenomenon. In order to get a proper understanding of the underlying weaknesses in the economy and their fallout in terms of the prevalent pessimism, Frontline spoke to Dr C. Rangarajan, the ace economist and Chairman of the Prime Minister's Economic Advisory Council (PMEAC), at his Vigyan Bhawan Annex office in New Delhi.

 Known for demystifying jargons to make even complex issues easy to understand, Rangarajan is sanguine about the prospects of the economy, both in the short term and over the long haul. Excerpts from an interview with him:

What is your forecast on the gross domestic product (GDP) growth for the current fiscal, given the distinct slowdown of the economy?

It is my estimate that the Indian economy will grow between 7 and 7.25 per cent. We have lowered the growth estimate from the earlier level of 8.2 per cent. The factors responsible for the decline in growth rate are many. One, the external factors have not been very hospitable for a faster growth of the economy. In the current fiscal, agriculture will do well as the monsoon has been good, and farmers are expected to take advantage of it. 

The services sector is also growing at a reasonably high level. It is only with respect to industrial production one notes a slackening in growth. The reasons for the decline in the industrial growth rate can be traced to tighter monetary policy, rise in inflation and weak sentiments in the markets.

The fixed capital investment has come down from the pre-crisis levels of 33 per cent of GDP. Some of the areas in which decline in production has been noted include coal and electricity. Coal production has declined for three months in a row, but there was some improvement in November. But the decline in the output of some of the infrastructure areas has affected overall growth.

To some extent the rise in interest rates may also have affected the incentive to reinvest. It might have led to the postponement of investment in the hope that the interest rates will come down later. To this must be added the sentiments within the corporate sector which might have been affected by a variety of factors that happened in the last one or two years in the polity.

Now, what can be done in order to reverse the trend that has been seen?

 First, investment-output targets set for the various public enterprises must be fulfilled. There has been a shortfall in meeting coal output. Capacity creation in electricity has fallen short of the target. Hence, a strong growth in public investment can be the driving force for the revival of sentiment and for pushing the economy forward.

Are you suggesting another bout of fiscal stimulus after the ones we have had since 2008?

No, the fiscal space available now for any stimulus has narrowed since 2008. A fiscal stimulus is not possible, but the fulfilment of the targets set for the various entities in the public sector in the areas of road, railways, ports and electricity can act as a big force for reviving the economy.

Second, as inflation is coming down, there can be a reversal in the stance of monetary policy as well.

Is the trade-off between fighting inflation and promoting growth telling upon itself in the slowdown?

People talk of trade-off between inflation and growth but this is not a genuine trade-off. A low level of inflation is most conducive to economic growth in the medium-term. One should therefore look at the efforts to tame inflation as a move to maintain the appropriate environment for medium-term growth. 

Therefore, to some extent, the tightening of monetary policy may have had some effect on the growth of the economy in the short-term. Investors might postpone taking on new projects in the hope that the interest rate will come down later.

Nevertheless, taking action to control inflation has become increasingly important because inflation rates had touched very high levels. Since January of this year until November the inflation rate has remained above 9 per cent. The primary concern of the monetary authority is to control inflation.

But there are signs of inflation coming down. Food inflation showed a sharp decline in the first week of December. Unlike last year, when food prices, including vegetable prices, rose sharply during winter, this may not happen in the current year.

 Therefore in the first quarter of the calendar year 2012, we will see a very sharp decline in food prices. I expect that by March 2012 the inflation rate will go down to 7 per cent or even below that.

Is there any worry over the soundness of the country's banking industry as the overseas rating agencies had questioned their asset quality in recent times?

The non-performing assets (NPAs) as a proportion of total advances have shown some increases in the recent period. Nevertheless it remains at a low level. 

The borrowing programmes of the government have been enhanced slightly, but this is partly because the collections from small savings have come down. Therefore it is really a compensatory effort. On the whole, the demands on the banking system by the government will not be much higher than what was originally envisaged.

 The banking industry needs to watch its lending programmes so that the NPA as a proportion of total advances is kept at the current level.

Well, when rating agencies talk about asset quality, they talk in terms of lending by the commercial banks to priority sectors. In one sense, when the economy is not growing fast, there is always a tendency for the NPAs to rise because the investments had been made on certain expectations of growth and if growth comes down below the expected level, there is always some problem. But if growth picks up, this problem will be resolved.

 Therefore I think the problem being faced by the banking industry may be temporary in nature. Once growth picks up, this problem should go. I do expect that in the next fiscal 2012-13, the economy will grow closer to 8 per cent.

What is your view on the rapid depreciation in the exchange value of the rupee and the sustainability of the current account deficit?

The current account deficit in the current year may be higher than 2.5 per cent of GDP, which we had indicated in our last report. But the problem on the rupee has developed because of a mismatch between the current account deficit and capital flows which are required to finance the deficit. 

Last year our current account deficit was 2.6 per cent of GDP, but the capital flows were adequate to cover the current account deficit and to add $15 billion to the reserves.

In the current fiscal, the capital flows have not been adequate and consequently the pressure on the rupee has developed. If capital flows revive in the course of the first three months of 2012, the pressure on the rupee will ease.

Are policy inertia and reversal of reform such as opening up multi-brand retail to FDI responsible for investors' reluctance to bet on India with their money?

Capital flows are dependent factors that operate in the rest of the world. Capital flows diminish towards the end of the year. December is not a month when one finds large capital flows. Since most of the companies work on the basis of the calendar year, the allocations to India will pick up in the first quarter of calendar year 2012 and that is the reason why I expect the capital flows to improve after the onset of 2012.

 No doubt, investors are influenced both by external and domestic factors. To the extent to which growth has been below expectations, it will affect the sentiments of foreign investors. The high level of inflation and decline in industrial output might have had some effect upon the investors' attitude. As India still maintains a high growth of over 7 per cent, India may still rank high when foreign investors are allocating funds among different countries.

Are the rights-based approaches to development by the United Progressive Alliance (UPA) and mounting subsidies out of sync with fiscal health?

 I  think it has to be managed. Obviously, if the food security Bill covers a much larger segment of the population, the subsidy will go up. What is therefore really required is prioritising the subsidies – one might give more subsidies under food security but some other subsidies have to be adjusted downwards in order to accommodate that. 

Therefore what is really relevant is the total amount of subsidy provided in the Budget. Perhaps we are now providing large subsidies for petroleum products and fertilizers. If the subsidy to support food security goes up, we must be willing to make necessary downward adjustment in petroleum and fertilizer subsidies.

SBI, 14 other banks to get Rs 16k-cr funds by March

Source  : BS :Vrishti Beniwal / New Delhi December 30, 2011, 0:41 IST



About two months after the Moody’s downgraded outlook on Indian banks on concerns over asset quality, the finance ministry has proposed to infuse Rs 15,000-16,000 crore in about 15 public sector banks by March 31, 2012. More than one-third of this amount (Rs 6,000 crore) is likely to go to the country’s largest lender, State Bank of India, while the demand for most other banks is less than Rs 1,000 crore each. SBI saw its financial strength rating cut by Moody's earlier this fiscal.


Those who are not likely to get capital infustion include Canara Bank and Central Bank of India.


To shore up the capital base of public sector banks amid rising bad loans, the Department of Financial Services, is seeking an additional Rs 10,000 crore in the third supplementary demand for grants to be tabled in the Budget session of Parliament in February, which might further distrub the fiscal consolidation story. The Budget had provided for Rs 6,000 crore for bank recapitalisation in 2011-12 and nothing from this has been given to banks yet. “We need to strengthen the capital base of our banks at a time when non-performing assets (NPAs) are rising. Almost all banks will be recapitalised, including those which have a tier I capital (core capital including equity and disclosed reserves) of 8 per cent and above,” said a finance ministry official.
The department has written to the banks asking them to take all necessary approvals and be prepared for capital infusion after Parliament’s approval is received by the end of the financial year.


However, another official in the Department of Economic Affairs, which will sanction the requirements, said a final decision on actual requirement of banks this year would be taken after looking at the capital adequacy ratio (CAR) and tier I of the banks at the end of quarter ending December 31, 2011.


CAR or a ratio of bank’s capital to its risks signifies a bank’s health. The higher the CAR, the better is the financial condition of the bank. Finance Minister Pranab Mukherjee has repeatedly said that the government was committed to 8 per cent Tier I capital, core measure of a bank’s financial strength, in all public sector banks by March 2012.


Another official said since the government’s fiscal situation was tight only those banks would be capitalized which have a tier I of 8 per cent or lower in December-end.


Globally the tier I requirement is only 4 per cent, but in India the regulator has fixed it at 6 per cent and the government wants it higher at 8 per cent to provide adequate buffer. For CAR, the regulatory requirement is 9 per cent, but the government wants it above 12 per cent.


The Planning commission has already given its approval for a Plan allocation of Rs 14,000 crore for bank recapitalisation this year. Last year also the government had infused over Rs 20,000 crore in banks.


Meanwhile, a committee headed by Finance Secretary Rs Gujral, has assessed the capital infusion needs of state-run banks over the next 10 years. The report, awaiting the approval of the finance minister, is expected to be released next month. The panel may suggest a holding company structure which can raise money globally to meet the capital requirements of banks. However, the government would not take that route to infuse capital this year since there is very little time left.


Capital infusion became critical for Indian banks after Moody's downgraded outlook on the banks to 'negative' from 'stable' over concerns that domestic monetary tightening and a potential global economic crisis would severely affect their profitability and asset quality. NPAs rose 34 per cent in July-Sep 2011. It had also lowered SBI's financial strength rating in view of its deteriorating asset quality.


SBI was earlier planning to come up with a right issue of Rs 20,000 crore, but the government was not willing to subscribe to the issue given its fiscal situation. The Centre's fiscal deficit has already toched 6.7 per cent of GDP in the first half of this fiscal. For the first seven months, fiscal deficit stood at over 74 per cent of the Budget target for the entire 2011-12. The target is to rein in fiscal deficit to 4.6 per cent of GDP in this financial year against 4.7 per cent in the last fiscal.

10 New Year’s Resolutions For Your Budget

Source ; TIME :MARTHA C. WHITE : December 30, 2011 :




So you’re going to lose 15 pounds, organize your closets and stop biting your fingernails. Great — now how are you going to improve your personal finances in 2012? Having a budget for your personal or household expenses is a great place to start, but New Year’s resolutions are about improving on the good habits you’ve already established. Read on and resolve to try one, two or maybe all 10 of these suggestions. Learn how much you really spend: Successful diet programs tell participants to write down every bite or sip that passes their lips to find out how much they actually eat on an everyday basis. When people see how little snacks add up and when they chow down without thinking about it, it’s easier to target those trouble spots. The same principle works for your money. For one week, keep tabs on every penny you spend — cash, check, debit or credit card. If you spend it, jot it down. Having a record of your spending will help you pinpoint your impulse purchases.


Start an emergency fund: The “experts” say you should have three to six months’ worth of living expenses in a savings account you can tap into if you lose your job, have a medical crisis or the like. That’s really good advice. But for many of us, that can seem like such a huge amount that we’re discouraged from even starting to save. Put the six-month goal out of your mind for now. Figure out how much you can spare from your budget to sock away every month. It doesn’t have to be a lot of money, but it does have to be done regularly.


Own your splurges: We all have our weaknesses — fancy coffee drinks, tabloid magazines, takeout dinners. No, we’re not going to tell you to cut them out. But if you leave them out of your budget, you’re not going to stop buying those things; you’re just going to blow your budget. So be honest with yourself about the discretionary stuff you splurge on and include it along with your more sensible expenses.




Set at least one long-term goal: By the end of 2012, what do you want to have accomplished? Maybe you want to be debt-free or to save $5,000 towards your child’s college education. If you’re already there, great; how about setting a goal to make two extra mortgage payments over the course of the year? If all of this sounds hopelessly out of reach, set a goal that reflects where you are right now. Maybe you want to qualify for a credit card or not incur any overdraft charges.


Pack a lunch one day a week: Yes, all the gurus say you can save bundles of money if you pack a lunch every day, but let’s be honest: That’s a lot of work if you’re not used to it. You have to build a decent chunk of shopping and preparation time into your schedule. The result is that many of us get intimidated and don’t even bother with this advice. Instead of skipping it this year, start small. Bring a lunch from home on Mondays — maybe leftovers from a weekend meal. Or stock up on microwavable dinners when your supermarket runs a special and throw one of them into an insulated bag for the commute. If the savings motivates you to brown-bag it more frequently, that’s an added bonus.


Prepare for “surprise” expenses: A lot of people dig themselves into a hole with credit card debt when they have to pay for an expense for which they didn’t plan or save. Of course, some things really are emergencies — say your car gets rear-ended, or your dog eats something he can’t digest. But many of the big bills that catch us unawares are events we should have seen coming. Start socking away money for back-to-school clothes, snow tires and other infrequent-but-predictable expenses


Score cheaper splurges: The jury’s still out on whether the explosion of daily deal sites is good or bad for merchants, but it’s definitely a boon for consumers. If you live in or near a major city, sites like Groupon, Living Social and BloomSpot deliver deals for cut-rate haircuts, dinners and fitness classes. If you’re willing to try something new (and read the fine print), these sites can sometimes reward you with significant savings.


Teach your kids how to budget: Kids are bombarded with marketing messages practically from birth, and countless influences send them the message that they need to spend to be satisfied. Unfortunately, there’s really no counterpoint to that; there isn’t a class in school where kids learn to distinguish what they need from what they want and how to pay for what they do buy. They need to hear it from you. Let your children see and be a part of your budgeting process so they learn how it works. Introduce them to the ideas of bank accounts and credit cards at age-appropriate intervals. Teach them about savings and debt, maybe by giving them an allowance so they can learn to manage money — and make mistakes — on a small scale, so they don’t wind up getting into big money trouble once they get out on their own.


Use comparison-shopping apps: Not everybody is on the iPhone/Android/Blackberry bandwagon, but people who are can benefit from some new high-tech tools that help you save. Several mobile apps put the kind of comparison shopping you used to need a desktop computer — or a trip around town to different stores — to accomplish. If you have a smartphone, you’re already paying for data use, so put the device’s instant connectivity to work for you. Some apps, for instance, let you scan barcodes and will tell you if the item on the shelf in front of you is cheaper on the other side of the mall on from an online retailer.


Go generic on one name-brand item: Again, personal finance experts sing the praises of house-brand goods, but if you’re not there yet, you don’t have to fill your pantry, medicine cabinet and linen closet with generic stuff in order to save. Again, start small. Pick just one thing: Breakfast cereal? Shampoo? Bathroom cleanser? It’s up to you. But give one a try. Save the receipt so you can return the generic if you notice a big difference in taste, performance or other dealbreakers. But maybe you’ll discover the the only thing you’re missing is the brand name — and the higher price tag.

5 Banking New Year’s Resolutions

Source :Time : MARTHA C. WHITE : December 30, 2011




This year was a tumultuous one for banking: Occupy Wall Street protests around the country focused Americans’ anger against the financial industry, while widespread outrage over banks’ attempts to charge fees for debit card use culminated in a call for Americans to pull their money out of big banks last month on what was dubbed “Bank Transfer Day.”


But whether your checking account is at a big national bank, small community bank, online bank or credit union, 2012 is a chance to begin afresh. Start 2012 on the right foot with these resolutions for better banking.


1. Audit your bank. The silver lining of the debit fee debacle is that it made many of us more aware of the fees our banks charge us and of what we’re getting in return. Start the new year by tallying up the fees you’re being charged for things like monthly account maintenance, overdraft protection transfers and out-of-network ATM use. How much are you paying each month? And what perks are you getting in return? Maybe you don’t need a branch in every mid-sized city. Maybe you love the high-tech bells and whistles like being able to deposit a check by taking a picture of it. Only you can make that determination. But if the math doesn’t add up, consider another institution.


2. Use cash when you can. If there was one thing we learned in 2011, it was just how expensive it is for small merchants to process debit card transactions because of interchange fees. Although the Federal Reserve set a cap on these fees last year, loopholes in the legislation mean that mom-and-pop businesses still get socked with hefty fees. So, maybe 2012 can be the year you pledge not to use a debit card for a cup of coffee. Maybe you want to take it a little further and go cash-only for stuff that costs less than, say, $5. You’ll help yourself, as well; many studies find that when people use cash, they spend less than they do when paying with plastic.


3. Set up text alerts. Many banks and credit unions will, at your request, send you an automated text message whenever your balance drops below an amount you select. Not only will it keep you from getting dinged with an insufficient funds fee, it can alert you if your account information has been compromised. If a criminal gets his or her hands on your account information and decides to take it on a shopping spree, you’ll be able to put a stop to it before they empty your account. Some financial institutions also let you receive alerts if transactions above a certain dollar amount are made; security experts say this is also a valuable tool to thwart unauthorized purchases.


4. Think of a better PIN. It’s your birth date, isn’t it? Or your dog’s name? Or maybe you’re lazy and you just key in “123456″ or “password” when you use your debit card. Stop it. You might as well print your password in permanent marker on the back of the card. Study after study of PINs and passwords show that an alarming number of us have easily guessable ones. Forbes.com has two lists of the most popular — that is, the least secure — passwords of 2011. If you see your PIN on either list, change it now. Even if you don’t, your security code is probably a lot more vulnerable than you think. Sophisticated criminals now coordinate their account number-gathering with infiltrating social networks like Facebook — which means they already know your dog’s name and your birthday.


5. Make saving automatic. Building up an emergency fund or saving for a big purchase is easier if you don’t have to think about it. Set up an automatic transfer from your checking account to a linked savings account each month. If you get a paycheck via direct deposit, see if the system lets you send money to two different accounts (many do). Arrange to have a portion of each paycheck deposited into a separate savings account. If you think you’ll be tempted to dip into your cash stash for everyday expenses, open that savings account at a separate institution to boost the “out of sight, out of mind” factor.