Maximising returns can harm financial health

Trying to maximise returns can be injurious to your financial health. Harsh’s article in Business Standard today uses cricket analogy on why the decision-making process (even if the outcome is not the highest) is more important than just a successful outcome. When our ancestors lived in the jungles the outcome of one mistake meant instant death. Hence the need to always be right is baked into our evolutionary consciousness. But in investing you don’t need to be always right. Being mostly right is sufficient. “I would want this batsman to be in the team” said one of the selectors cited in the article. “Only if I was the captain of the opposite side” he went on to add. 😊 . He enjoys receiving your comments and suggestions and will respond to queries as quickly as he can.

Landmark reforms: Costs for some, benefits for all

The 100% made in India Account Aggregator framework once active will transform India by giving the citizen power over her own data and allowing digitisation and speedy reforms. But like the credit bureau reforms it may take a long time in having an impact because existing players will see costs and benefits will be for everyone. India cannot wait for a decade and in Harsh’s article in business standard he write about how the financial sector regulators need to set a firm date for IPs to comply. India needs to hasten the slow pace of furious change. Your comments are welcome.

Limit Section 54 benefit to curb money laundering

Why the price of your flat is so high? The demand from ” Investors” with black money keeps the flat prices high for genuine users. The exemption for long term capital gains under section 54 encourages such money laundering activities. Harsh’s article in Business standard today suggesting how the government can limit the exemption so as to prevent money laundering and at the same time not impact the genuine buyers who may be upgrading their flats. This tax loophole should be closed to bring down the cost of flats for genuine buyers. Your comments are most welcome

More is less in client communication

Regulations and custom dictate a deluge of communications to an investor from advisors, platforms, mutual fund houses/PMS companies. With pre-and post communication coming in for each transaction it is a barrage of communication that overwhelms most investors. They respond by ignoring even the important communications that may be buried deep inside this barrage of communication. To top it most such communication is worded in non understandable legal language. One of the progressive regulators can take a lead to at least attempt much needed simplification and rationalisation exercise in the matter. A good first step would be to allow consumers to actively choose what kind of communication they wish to receive (or not receive) from their service providers. The second step would be to penalise service providers who disregard the active choice made by the consumer. Language and process simplification can follow later. Harsh’s article in Business Standard. Comments welcome.

Win or endure? Choose advisor based on goal

A good coach who is coaching you to complete the marathon (not win it) may appear counter intuitive by asking you not be happy about the quick completion of a 10 km practise run quickly or be dejected because you got breatheless when you navigated a uphill stretch during another practise stretch. The coach may instead ask you to concentrate on the speed at which the heart rate returns to normal after the practise run. Similarly an Investment advisory coach helps you ignore the short term gains or losses while working out the right metric to monitor while completing your exercise. Harsh’s article in todays Business Standard on “Why to have a coach who does not help you win”.

Big Data can at times spell trouble for taxpayers

The tax departments initiative to harness the power of big data and automation has already provided several benefits to taxpayers. These steps that reduce tax evasion and make life simpler would , in the normal course, have been welcomed by the honest tax payers. It has already speeded up return processing and issuance of refunds. In the normal course therefore honest taxpayers would welcome this initiative if only…… the implementation process was smoother and the tax department officials attitude was not misaligned (they view taxpayers as evaders unless proven otherwise) with the finance ministers stated view of trusting tax payers unless proven otherwise. Harsh’s article in Business Standard today gives specific examples of the Tax officials misaligned attitude and the smaller implementation issues besides the bungled introduction of the new portal.

Avoid financial dependence on children post retirement

You are likely to live well into your eighties or nineties & there is a distinct possibility you will spend the last few years of your life being physically dependent on your children. You have an obligation to work on your wellness to minimise that possibility. Like the airline announcement about putting on your own oxygen mask first before helping others, make provision for your own (and your spouse’s) retired life before distributing the deceptively “large” looking retirement kitty among your children. Involve your spouse in every discussion to avoid making the spouse dependent on the children after your death. Also, make a clear will to avoid disputes among your children. On investment of the retirement kitty remember the old saying that a fool and his money is invited to every wedding in town. Make an effort to get invited to the good weddings in town. Don’t be lazy and only choose from the weddings you get invited to. Harsh Roongta’s article in Business standard today

Overseas investment limit of MFs must be hiked now

USD 4 Billion were reportedly invested by retail investors in International equity through Indian mutual fund schemes using up the 7 billion dollar limit set way back in 2008 with unexpected speed. is this increasing popularity of international equity investing making the regulator wary of adding one more drain on the precious forex kitty (like gold which is the second largest item of import in India’s trade basket). Whatever be the reason any delay in increasing these limits causes unnecessary doubts about policy continuity in India. Hopefully increased limits will be released soon

Prevent NRIs’ PAN from being declared inactive

PANs not linked to Aadhar will be deactivated from April 1, 2022 leading to suspension of operations in the bank accounts, securities/MF accounts linked to such PANs. The tax department has not clarified how they will distinguish PANs of NRIs/OCIs or other persons who may not be eligible to apply for Aadhar and keep such PANs active. The tax department has not provided any facility for NRIs/OCIs to keep their PANs activated by marking themselves as ineligible for Aadhar. Deactivation of PANs will lead to serious consequences for affected individuals and the Income Tax department owes it to them not to wait till the last minute and to come out with a solution well in time. Harsh Roongta’s article in Business Standard today where he outlines that these are not the only tax travails faced by NRIs/OCIs.

Now, make central KYC registry fully operational

Ease of doing business rankings enjoys the govt’s attention for obvious reasons. “Ease of living” for citizens does not get the same attention though it can have a high impact on day to day lives of citizens. Many structural reforms have not delivered simply because the last 5% of the work has been dragging for years even though 95% of the hard work has already been done. Electronic toll collection that has not resulted in any significant reduction in pile up before toll booths is a prime example. In the financial sector the Central KYC registry has been in place since 2016 but lack of accountability has ensured that the benefits from this path breaking reform is still awaited while lots of inconvenience is being caused to citizens. Some work has also happened on bank account portability and loan portability without any tangible benefit on the ground. Harsh Roongta’s article in Business Standard.

Scroll to Top