Long-term investment prospects still bright for NRIs

Apartment Interior at The Grand Arch, Gurgaon

Apartment Interior at The Grand Arch, Gurgaon

Imagine a non-resident Indian (NRI) who shifted money to India two years back when the exchange rate was Rs.44 to a dollar. The Indian rupee has depreciated to Rs.59 per dollar now, leading to a staggering loss of 34%. On the other hand, in the last two years, equity markets have been almost flat, fixed income investment would have grown by 20%, while real estate investments may have appreciated around 25%. The net result is negative return on the investment in almost each asset class. So should NRIs invest in India now? To examine this issue better, we should break the problem into four parts. How is the long-term scenario of the Indian rupee vis-à-vis other currencies? Which are the asset classes that an NRI should invest in? What kind of tax regime is there in the source country? And finally, what is the time horizon for investments?

Read more: Mint

Banks seek lower tenure for non-resident deposits

To attract more dollars into the domestic market, bankers have requested the Reserve Bank of India to cut the minimum period of investment in Foreign Currency Non Resident (FCNR) and Non Resident External (NRE) account to six months from one year now.

FCNR deposits, which have a minimum tenure of one year and a maximum of five, can be opened by overseas Indians with banks in India.

NRE deposits are also opened with banks in India by non-resident Indians who can convert their dollar investments into rupee at the time of investment.

“We have requested that if the minimum investment period on FCNR and NRE deposits can be reduced to at least six months, it will help us bring some more dollars into the country,” said K.R. Kamath, Chairman and Managing Director, Punjab National Bank.

In the first two months of the current fiscal, FCNR(B) deposits in the banking system nudged up by just $207 million to $15.395 billion as at May-end 2013. FCNR deposits can be opened in US dollar, euro, British pound sterling, Canadian dollar. Australian dollar, Japanese yen, Swiss franc, New Zealand dollar, Danish krone, and Swedish krona.

Read more: Business Line

More options for your NRI relatives to send money home

On 27 June, the rupee plummeted to 60.73 per dollar and that was good news for non-resident Indians (NRIs) who send money to their families in India. According to the World Bank, India is the largest recipient country in the world; it received almost $70 billion in remittances in 2012. Like the numerous NRIs from the Gulf Co-operation Council, Rengish Antony, project development engineer, Johnson Controls Inc., too, sends money to his homeland. Says Antony, “I send money every month to India either through UAE Exchange or Western Union. It takes almost two-three working days for the money to reach my parents.”

Though Antony still follows the traditional way of remitting money, a few innovative ways have been introduced recently. Says Kiran Shetty, managing director, Western Union India, “People look for options to send money through Internet or mobile. This transformation will happen slowly.” Here are some of the innovative ways of remitting money to India.

Remittance card

It is a rupee-denominated prepaid card. Your relative in the US, the UK, Canada, the UAE or any other country can load cash in the prepaid card at any UAE exchange centre. The card is not issued to the remitter; it is only for the beneficiary or receiver in India. All you have to do is apply for it online on the bank website.

Read more: Mint

Infrastructure

Underpass, six-lane flyover to ease Gurgaon traffic woes

Gurgaon’s first six-lane MDI Chowk flyover-cum-underpass plan has finally been approved by the Public Works Department (PWD) and one-third of the total cost has already been sanctioned to kick-start the project.

N K Tomar, Executive Engineer (PWD B&R), said: “The flyover plan has been approved in-principle. The 1-km flyover will be constructed between NH-8 (Signature Tower) via MDI Chowk to Atul Kataria Chowk (in the direction of Sector-14) and an L-shaped underpass between Mahavir Chowk and Signature Tower will also be constructed, along with another underpass from IFFCO Chowk to Mahavir Chowk, keeping in mind the density of the traffic in future. The estimated budget of this project is around Rs 130 crore and we have received one-third of the amount (about Rs 42.5 crore) from the MCG (Municipal Corporation of Gurgaon). The initial plan was to build a four-lane flyover but it has not proved successful in some areas and, keeping in mind the increase in the density of traffic, we had to go for a six-lane plan. We will create a 30-feet wide service road on each side of the flyover so that traffic can pass through during the construction phase. We shall start the process of inviting tenders for this project soon.”

Slip roads will be constructed for taking a left turn from Sukhrali village to NH-8 and from the Park side to Atul Kataria Chowk, Tomar said.

According to a PWD official, the private consultant, Mathur and Associates, has now been asked to work on the next stage of the proposed flyover plan — preparing detailed structural landscaping, tunnel and rotary estimates.

Read more: Indian Express

Cabinet approves 381-km rail corridor around NCR

The Union Cabinet on Thursday approved the proposal to form a company — National Capital Region Transport Corporation Limited (NCRTCL) — to construct rail corridors in regions around the National Capital Region (NCR).

The 381-km rail corridor will include Delhi-Sonipat-Panipat, Delhi-Gurgaon-Alwar and Delhi-Ghaziabad-Meerut. The announcement is expected to prop up real estate development along the corridors.

The proposed company, which will implement the project with an estimated cost of Rs 72,170 crore (according to 2011 cost estimates), will have an initial capital Rs 100 crore. It may form three subsidiaries for implementing each corridor.

However, the official release added that the actual cost, financing plan, route alignments, real estate development, financing through transit-oriented development will be firmed up and frozen in the detailed project reports, which are under finalisation.

According to the release, the Cabinet approved the constitution of NCRTC with an initial seed capital of Rs 100 crore as per the Company Act, 1956 to “design, develop, implement, finance, operate and maintain the regional rail rapid transit system in National Capital Region”.

Read more: Business Line

Draft master plan for Chandigarh 2031

The Draft Master Plan for Chandigarh (CMP) 2031 prepared by the Master Plan Committee has been approved and objections from general public have been invited. The draft CMP shall be taken into consideration by the Chandigarh Administration through a board of inquiry after thirty days from the date of publication. The objections or suggestions will be received from the chief architect, Department of Urban Planning, Administration.

Based on detailed studies of the existing ground realities including detailed SWOT (strength, weaknesses, opportunities and threat) analysis, active engagements with various stakeholders, site visits, feedback from various departments of the Chandigarh Administration, presentations to the Administrator’s Advisory Council, High Powered Coordination Committee, New Delhi, the comprehensive document provides a good vision of the manner in which the development and future planning of Chandigarh should be undertaken. The draft CMP 2031 takes care of the imperative of maintaining the original character of the city and has appropriately incorporated follow up actions needed in pursuance of the report of the Expert Heritage Committee on the Preservation of Heritage of Chandigarh accepted by the Government of India.

Read more: The Times of India

Market

Sensex jumps 382 points as US Fed chief backs stimulus

The stock market, along with bourses globally, perked up today on news that the US Fed will continue its quantitative easing until the job scene in the US stabilises.

The BSE Sensex surged 2 per cent or 382 points to close at 19,676.The Nifty closed at 5,935 up 118 points.

Gold prices bounced back strongly and hit a near two-week high on renewed offtake by stockists and traders amidst positive cues from overseas markets. Silver also recovered.

However, the rupee, which rose to a one-week high in early trade, erased those gains to close marginally weaker at 59.69 against the dollar.

Motilal Oswal, Chairman and MD, Motilal Oswal Financial Services, said: “It is a good time to pick up fundamentally good stocks as price levels are still attractive.” However, market players were worried on the rising crude oil prices. Sanjeev Zarbade, Vice-President, Private Client Group, Kotak Securities, said, “While the recovery in the markets is comforting, crude oil has again firmed up and is trading at close to about $108 a barrel. We remain concerned on this front.”

Read more: Business Line

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