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Understanding the effect of rolling back petrol prices
While Petrol prices seem to be running astray, what one must understand is that causing “Bharat Bandh” and other protests and eventually rolling back prices may not help the situation.
For example, India sells 100 units of produce at Rs 1000. This means as long as India spends Rs 1000, it can recover it by selling 100 units. At this stage, the economy is balanced. Now, let’s say India sells a liter of petrol at Rs 50 instead of Rs 75 (its true value) thus making a loss of Rs 25 per liter. To compensate for this Rs 25 loss, India will either borrow Rs 25 or print currency of Rs 25.Whatever be the case, for the additional Rs 25, India does not produce any goods. The number of units continues to remain at 100. In the absence of any real production, India will recover the Rs 25 from its citizens by spreading the loss across the 100 units.
So, the system had 100 units and was sold at Rs 1000. However, due to the loss, an additional Rs 25 (borrowed money or printed currency) was added into the system. So while the units remained 100, the money in the system became 1025. While the price per unit in the previous situation was 1000/100 = Rs 10, now the price per unit would become 1025/100 = Rs 10.25. This is how the recovery takes place across all the units. In other words, the value of the rupee goes down because the same number of units is now purchased at a higher amount.
A very similar thing is happening in India. People are spending more than they are producing. This is causing fiscal deficit or a gap between what we spend and what we earn. So naturally, the value of money is eroding in the economy as explained in the earlier example. India does not produce enough petrol and therefore imports because petrol is an essential commodity. As shown in our earlier example, the increase in petrol prices is not being passed on to the end consumer. Had the increase been passed on to the consumer, the system might have self regulated itself by way of the consumer and reducing the consumption because of higher prices.
Since the price rise does not get fully passed on, the demand for petrol remains unabated and India has to import more quantity of petrol. This naturally leads to more paper money (or borrowing) in the economy without a commensurate increase of real goods in the economy. This means that the price of goods in the economy increases to offset the loss of petrol sales. Thus, instead of fewer people paying for the increase in the price of petrol, now they pay by way of higher prices of goods. This is what is commonly called inflation. So in essence, by rolling back prices, the people at large may not benefit as they are hit by inflation which erodes the value of their money.
Hope this note gives you an idea on the effect of rolling back petrol prices.
@B@R_0_0_D wrote:@
Get Aadhaar to obtain PAN card now
http://economictimes.indiatimes.com/news/econom…
i wnt othr way
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Fill up forms 15H & 15G to avoid TDS on interest earned
The Financial Express
With the start of the new financial year, it is time to file Form 15H and Form 15G to avoid the tax deduction at source (TDS) while computing the interest earned during the financial year. These forms help a person avoid TDS in case one does not have to pay income tax at the end of the year. Form 15H has to be filled by an individual who is of the age of 65 years or more and Form 15G has to be submitted by an individual below the age of 65 years and by a Hindu Undivided Family (HUF).
This form should be submitted to all the deductors where you have a deposit. Banks deduct 10% TDS on the interest paid and deposit it to the government and, to get back the money, one will have to file tax returns and, then, wait for the tax refund. So, if you file Form 15G and 15H, banks will not deduct the 10% TDS.
If you have a bank deposit in, say, four various banks or in three branches of the same bank, then you have to file the form in all the branches. Depositors have to submit Form 15H/15G to banks if interest from one branch of a bank exceeds Rs 10,000 in a year.
One must submit the form before the first payment of the interest and, in case of delay the bank may deduct the TDS and issue a TDS certificate at the end of year.
Form 15 H and 15G are self-declaration forms, which have to be submitted by an individual if the total taxable income of the person is going to be less than the permissible limits.
So, if an individual is sure that he will not have to pay any tax in a particular year, then he can submit form 15H or 15G to avoid deduction of TDS from his interest income and other kind of incomes where TDS is applicable.
Also, Form 15H has to be filled by those people whose estimated tax for the previous assessment year is nil, that is, when a person did not pay any tax for the previous year because his income wasn’t under the taxable limit. Also, an individual needs to submit Form 15H if earns interest on loan, advance, debentures and bonds.
Certain specified entities whose income is unconditionally exempt under Section 10 of the Income Tax Act and who are statutorily not required to file return of income as per Section 139 of the Act are granted blanket TDS exemption. These are life insurance companies, provident funds, gratuity funds or any other insurer eligible to receive interest on securities without deduction of tax at source, if such securities are owned by them or they have full beneficial interest in the same.
Tax rebate:
· · Form 15H has to be filled up by an individual who is of the age of 65 years or more
· · Form 15G has to be submitted by an individual below the age of 65 years and by a Hindu Undivided Family
· · If you have a bank deposit in, say, four various banks or in three branches of the same bank, then you have to file the form in all the branches
· · Depositors have to submit Form 15H/15G to banks if interest from one branch of a bank exceeds Rs 10,000 in a year
· · One must submit the form before the first payment of the interest and, in case of delay, the bank may deduct the TDS and issue a TDS certificate at the end of year
Most of us dnt kno frm were banks gt money to gve Loans…those of u think it comes frm what we deposit.. r wrong..
banks create money out of thin air—
Oh,, that is also revealed by tube.
47+46 min. pretty long presentation,
@B@R_0_0_D wrote:@
Oh,, that is also revealed by tube.
yaa still many wnt undrstand,…
i had to gve it a lot of time to undrstand it in whole…read many stuff frm RBI site..
then i was so perfect in it …i taught many this..
too much intrsting…
another awsum learn for economy students….
http://www.flipkart.com/ascent-money-financial-…
youtube doc…no need to read this book…instead 4 hr documentry…
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Kingfisher Airlines’s 15 leased planes may land in scrapyards
The Economic Times
KFA till recently had 40 planes— 10 owned by it and 30 leased.
Of the 30 leased, 15 are stuck on ground and 13 were de-registered
New Delhi, April 8: A majority of the 15 leased planes that still remain on Kingfisher Airlines’s (KFA) name may be headed to the scrapyards. While 13 aircraft leased to the grounded airline have been de-registered from the airline’s name and will now be flown out of India, lessors of 15 planes have discovered that their Airbus planes are in simply no condition to fly.
“These lessors have discovered that aircraft parts have been so badly cannibalized that it is very difficult to restore the planes. In its last few months of operation (KFA stopped flying from October 1, 2012), the airline kept taking parts from its fleet to keep a handful of planes airworthy. Now the planes have been ravaged beyond repair and they can’t fly,” said a senior Airports Authority of India (AAI) official.
The planes rendered unfit to fly are the Airbus A-320s, each of which today costs upwards of Rs 500 crore and leasing a new one costs about Rs 2 crore per month at current rates. Now AAI brass are going to hold an internal meeting this week to see how precious airport parking slots occupied by these planes across Indian airports could be freed up. “The only way for these aircraft may be the junk yard. Lessors will drag KFA promoters to court to recover their losses,” the official said.
Lessors have not even applied to the Directorate General of Civil Aviation (DGCA) to get these 15 planes de-registered. The reason: While allowing some planes to be de-registered last month, DGCA chief Arun Mishra had ruled that lessors will have to pay parking charges to airports from the date their planes cease to be in KFA’s name to the date they fly out. Something these 15 planes can’t do.
KFA till recently had 40 planes — 10 owned by it and 30 leased. Of the 30 leased, 15 are stuck on ground and 13 were de-registered. Two aircraft have been seized by service tax authorities. Aviation secretary K N Shrivastava recently met the tax authorities for freeing these planes but since they are co-owned by the airline, they remain impounded.
Shrivastava, who is trying to restore India’s credibility in the eyes of foreign aircraft lessors so that other desi carriers do not find it tough to rent planes, recently made it possible for lessors to start re-possessing their planes rented to KFA but which had been impounded by various agencies the airline owed money, like airports, banks and tax authorities.