The Indira Gandhi National Old Age Pension Scheme (IGNOAPS) is a social welfare scheme launched by the Government of India in 1995. It is aimed at providing financial assistance to senior citizens who are aged 60 years or above and are living below the poverty line.
Indira Gandhi National Old Age Pension Scheme
Under the scheme, eligible beneficiaries receive a monthly pension of Rs. 200 to Rs. 500, depending on the state they reside in. The pension amount is fixed by the state governments, which implement the scheme in their respective states.
Do help a senior citizen by assisting him/ her to secure the IGNOAPS pension, refer to – https://nsap.nic.in/login/cbtMainPage.html
To be eligible for the scheme, the applicant must be aged 60 years or above, must belong to a BPL (Below Poverty Line) family, and should not be receiving any other pension or financial assistance from the government. The beneficiary should also be a resident of the state where they are applying for the pension.
The application process for the scheme varies from state to state. Generally, the application form can be obtained from the local authorities, and the applicant needs to submit proof of age, BPL status, and residence along with the application form.
The pension amount is directly credited to the beneficiary’s bank account on a monthly basis. The scheme is funded by the central and state governments in a 75:25 ratio.
Overall, the IGNOAPS is a useful scheme for senior citizens who are living below the poverty line and do not have any other source of income or financial assistance. It provides them with a regular income to meet their basic needs and lead a dignified life.
How to Apply for the Indira Gandhi National Old Age Pension Scheme
To apply for the Indira Gandhi National Old Age Pension Scheme (IGNOAPS), one needs to follow the steps given below:
Check Eligibility: First, check if you meet the eligibility criteria for the scheme. You must be aged 60 years or above and belong to a BPL (Below Poverty Line) family.
Obtain Application Form: The application form for the scheme can be obtained from the local authorities, such as the Gram Panchayat, Municipality, or Block Development Office, depending on the state you reside in.
Fill the Application Form: Fill the application form with accurate and complete details. You will be required to provide information about your personal details, such as name, age, gender, and address, along with proof of age, BPL status, and residence.
Submit the Application Form: Once you have filled the application form, submit it along with the necessary documents to the local authorities.
Verification: The local authorities will verify the details provided in the application form and the documents submitted.
Approval: If your application is approved, you will start receiving the pension amount on a monthly basis directly in your bank account.
Follow Up: In case of any delay or issues in receiving the pension amount, you can follow up with the local authorities or the bank where your account is held.
It is important to note that the application process and documentation requirements may vary from state to state. It is advisable to check the specific requirements for your state before applying for the scheme.
The National Savings Certificate (NSC) is still a popular investment scheme offered by the Indian Government. It is a fixed-income investment that offers attractive interest rates and tax benefits to Indian investors. Here are some benefits of investing in NSC:
National Savings Certificate
Guaranteed Returns: NSC offers a fixed rate of interest that is guaranteed by the Indian Government. The interest rate is decided by the government and is revised periodically. The current rate of interest is 6.8% per annum (as of February 2023). This means that investors can earn a fixed return on their investment.
Tax Benefits: NSC investments are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The amount invested in NSC up to Rs.1.5 lakh can be claimed as a deduction from the investor’s taxable income. However, the interest earned on NSC is taxable.
Low Risk: NSC is a government-backed investment scheme, which means that the risk involved is low. The investment is not affected by market fluctuations and is a safe option for investors who do not want to take risks.
Easy to Invest: Investing in NSC is easy and convenient. Investors can open an account at any post office or authorized banks. The minimum investment amount is Rs.100 and there is no maximum limit.
Maturity Benefits: NSC has a maturity period of five years. At maturity, investors receive the invested amount along with the accrued interest. The maturity amount is paid out to the investor in the form of a lump sum.
Whether or not to invest in NSC depends on your financial goals and risk appetite. NSC is a safe investment option that offers guaranteed returns and tax benefits, making it a suitable choice for investors who prefer low-risk investments. If you are looking for a fixed-income investment option with low risk and tax benefits, NSC can be a good investment option.
However, if you are looking for higher returns and are willing to take risks, you may consider other investment options such as mutual funds or stocks. It is important to assess your financial goals, risk appetite, and investment horizon before making any investment decisions.
Additionally, keep in mind that NSC has a lock-in period of five years and premature withdrawals are not allowed. Therefore, if you have a short-term investment horizon or require liquidity, NSC may not be the best investment option for you.
It is always advisable to consult a financial advisor before making any investment decisions to ensure that your investments align with your financial goals and risk profile.
Owning own business, leading it to greater heights is dream of many individuals. What starts with a hobby or a passion, needs some efforts and discipline to make it a long-lasting and system based model. Once the business idea starts forming the business owners should take a few steps to strengthen its finances to ensure personal and business success.
Image by Steve Buissinne from Pixabay
As a self-employed individual or business owner, it is essential to have a basic understanding of finance to manage your finances effectively. Here are some finance basics that you should learn:
Understanding Cash Flow: Cash flow is the movement of money in and out of your business. As a business owner, it is essential to know how much cash you have on hand and how much you need to pay your bills. You should also be able to forecast your cash flow to plan for future expenses and investments.
Bookkeeping: Bookkeeping is the process of keeping track of your business’s financial transactions, including income, expenses, and other financial activities. You should have a good understanding of bookkeeping basics to keep accurate records of your finances.
Financial Statements: Financial statements provide a snapshot of your business’s financial health, including income statements, balance sheets, and cash flow statements. Understanding these statements can help you track your business’s performance, identify areas for improvement, and make informed financial decisions.
Taxation: As a business owner, you need to understand the tax laws and regulations that apply to your business. This includes knowing which taxes you need to pay, when to pay them, and how to file your tax returns.
Budgeting: Budgeting involves setting financial goals and creating a plan to achieve them. You should have a budget for your business to help you manage your finances effectively, make informed financial decisions, and plan for future investments.
Risk Management: Risk management involves identifying potential risks to your business and taking steps to mitigate them. This includes having insurance coverage, creating a contingency plan for emergencies, and monitoring your business’s financial health regularly.
Investing: If you have extra money, investing can be a great way to grow your wealth over time. It’s important to understand the risks and benefits of different investment options and work with a financial advisor if necessary.
Plan for emergencies: It is important to have a plan in place for unexpected events that could impact your business financially. This could include having an emergency fund or having insurance coverage to protect your business.
By learning these finance basics, you can manage your finances effectively, make informed financial decisions, and grow your business successfully.
Debt mutual funds invest in fixed-income securities such as bonds, treasury bills, and corporate debt. These securities are subject to market risks and fluctuations in interest rates, credit ratings, and other economic factors. If these factors move unfavorably, the value of the securities held by the fund can decrease, resulting in negative returns for investors.
Debt mutual funds invest in fixed-income securities such as government bonds, corporate bonds, and money market instruments. The value of these securities can fluctuate based on factors such as changes in interest rates, credit ratings, and economic conditions. If the value of the underlying securities in a debt mutual fund falls, the NAV (net asset value) of the fund will also decline, potentially resulting in negative returns for investors.
It’s important to note that debt mutual funds are generally considered less risky than equity mutual funds, but they are not risk-free. Investors should carefully evaluate their risk tolerance and investment objectives before investing in any mutual fund.
Several factors can impact negative returns for debt mutual funds in India, including:
Interest rate risk: Debt mutual funds invest in fixed-income securities such as bonds, which are subject to interest rate risk. If interest rates rise, the value of the bonds in the fund’s portfolio may decrease, leading to a decline in the NAV of the fund and potentially negative returns.
Credit risk: Debt mutual funds may invest in lower-rated bonds or bonds issued by companies with weaker financial positions. If these bonds default, the NAV of the fund may decrease, leading to negative returns.
Liquidity risk: Debt mutual funds may invest in bonds that are illiquid or difficult to sell. If there is a lack of buyers in the market, the fund may be forced to sell bonds at a loss, leading to negative returns.
Inflation risk: Inflation can erode the purchasing power of the fixed-income securities in the fund’s portfolio, leading to a decrease in the NAV of the fund and potentially negative returns.
Currency risk: Debt mutual funds that invest in foreign bonds are subject to currency risk. If the currency of the country in which the bond is issued depreciates against the Indian rupee, the NAV of the fund may decrease, leading to negative returns.
Macroeconomic factors: The performance of debt mutual funds can also be affected by macroeconomic factors such as inflation, GDP growth, and geopolitical risks. If these factors adversely impact the economy or the bond market, the returns from debt mutual funds may be low or negative.
Management of the fund: The performance of debt mutual funds can also be impacted by the quality of the fund manager and the investment strategy followed by the fund. If the fund manager fails to invest in the right bonds or follows an inappropriate investment strategy, the returns from the fund may be low or negative
It’s important to note that debt mutual funds are not risk-free investments and may experience negative returns depending on the prevailing market conditions and other factors that affect the performance of the underlying securities in their portfolio. It’s important to note that past performance is not indicative of future results, and investors should carefully evaluate the risks associated with debt mutual funds before investing in them.
Investors should carefully consider the risks associated with debt mutual funds before investing in them. The impact of the RBI policy hike on debt mutual funds will depend on various factors such as the portfolio strategy of the fund, the types of bonds held in the portfolio, and prevailing market conditions. Investors should carefully evaluate the risks associated with debt mutual funds before investing in them.
Retired life can be comfortable and fun with a little bit of planning
This blog is for anyone who is retired, looking at retirement in next few years, or have retired parents. Golden years should be relaxed, comfortable and fun. It needs a little bit of planning earlier years,, also little bit of relook at the changing priorities can help set goals and allocate resources and budget towards the same.
Here are some ideas on how they can senior citizen plan their post-retirement finances, to ensure senior living is comfortable:
Determine your expenses: Start by identifying your monthly and annual expenses, including basic needs like food, housing, healthcare, and transportation, as well as discretionary expenses like travel and entertainment.
Assess the income sources: Consider all potential sources of income, including pensions, Social Security, retirement savings, and other investments. Determine how much you can expect to receive from each source.
Create a budget: Based on your expenses and income, create a budget that will allow you to live comfortably within your means. Be sure to leave some wiggle room for unexpected expenses.
Manage debt: Pay off any outstanding debt as soon as possible, as it can be a significant burden on your retirement finances.
Invest wisely: If you have savings or investments, make sure they are diversified and appropriate for your risk tolerance. Consider working with a financial advisor to help manage your investments.
Consider downsizing: If your home is too large or expensive for your current needs, consider downsizing to a smaller home or apartment. This can significantly reduce your expenses and free up funds for other uses.
Plan for healthcare costs: Healthcare costs can be a significant burden in retirement, so it’s important to plan ahead. Consider purchasing long-term care insurance or a Medicare supplement policy to help cover these costs.
Stay involved: Finally, stay engaged and involved in your community. Participating in social and volunteer activities can help keep you active and engaged while also providing opportunities to connect with others and reduce expenses.
Remember, it’s never too early or too late to start planning for retirement. By taking the time to carefully plan your finances, you can help ensure a secure and enjoyable retirement.
Being born in a service class family, I have seen a steady flow of money all my life. The childhood was spent hearing rant of elders on how things are getting expensive and why we need to get secured job with Tatas, Bank, LIC or Railways. The 1991 globalisation had minor or no effect in the the routine discussions and thinking process. However by 2000, the Jamshedpur township had changed. I am not a statstician, still every third/fourth high school passout I met were heading for further studies at Pune, Bangalore, Chennai, Kolkata or Delhi.
Somehow the children and their middle class parents were the Tata labour benefit jobs. They felt thirst for new. Though not a statstian I can still say, majority of us were again leading a service class life leading else where, only the pin code changed. Looking at the better quality education and inflation factor salary was hardly a factor. Then came a thought, if People moving out of a small town to have a better life in bigger cities, why there is no change in the core thought process about lifestyle, status or society. The answer may be lying in the thought process in how they look at money, earning, living, life goals and what they want to leave behind at legacy for their offsprings.
There is a lot of bitter sweet tale to this relationship with money. The thought process originates at the way we feel about the term money. Money in majority of the bottom of pyrmaid earning crowd is seen with a negative emotions like envy, hatred, difficult, far-off, false etc. The emotions ultimately create the relationship with money.
The mindset shift is harder than acquiring new skillsets. It comes with reading, observing, unlearning a few things and most of all treating money like what it is — enabler of a good life!
Did you know you can earn money on your idle portfolio stocks without increasing risk? Yes! BSE and NSE empanelled brokers allows SLBM facilities for their customers such facility, which allows investors to earn extra income on their long term portfolio. Let us understand the nuances of it, points to consider and other details in this blog.
What is stock lending and borrowing & how it works?
SLBM is stock lending and borrowing mechanism used by future and option traders, also for arbitrage opportunities. This facility allows stock investors to access the stock lending and borrowing opportunity. To avail SLBM, investors need to connect with their stock brokers from the stock portal/ application/ email the broker to activate this facility.
Both BSE and NSE allows this mechanism. Unlike other developed nations, in India, stock exchange clearing units take the responsibility of fulfilling the contract obligations.
What is the process of stock trading mechanism?
In India, stock lending and borrowing is a mechanism through which investors can lend their securities to other investors who wish to borrow stocks for a specified period of time. This process is facilitated by intermediaries known as Securities Lending and Borrowing (SLB) agents who operate under the guidelines issued by the Securities and Exchange Board of India (SEBI).
Link to NSE Active SLBM Page – https://www.nseindia.com/market-data/securities-lending-and-borrowing
Here’s how the stock lending and borrowing mechanism operates in India:
Borrower places a request: The borrower (usually a trader or a short seller) places a request with the SLB agent to borrow a specific quantity of securities for a certain period of time. The request is then matched with a lender who is willing to lend the securities.
Agreement between lender and borrower: The lender and borrower enter into an agreement, which specifies the quantity and type of securities being lent, the duration of the loan, the lending fee, and other terms and conditions.
Securities are transferred to borrower: The lender transfers the securities to the borrower’s demat account, and the borrower provides collateral (usually cash or bank guarantee) to the lender.
Lender receives lending fee: The lender receives a lending fee from the borrower for lending the securities. The lending fee is usually a percentage of the market value of the securities being lent, and it is calculated on a daily basis.
Return of securities and collateral: At the end of the loan period, the borrower returns the securities to the lender, and the lender returns the collateral to the borrower. If the borrower fails to return the securities or collateral, the lender has the right to sell the collateral to recover their securities.
The stock lending and borrowing mechanism in India has provided investors with an additional avenue to generate revenue from their securities. The mechanism also provides liquidity to the market by allowing short sellers to borrow securities and sell them, which can help stabilize market prices.
Benefits for stock lenders
Benefits for stock borrowers
Additional source of revenue: SLBM provides an additional source of revenue for stock lenders. By lending their securities, they can earn a lending fee, which is usually a percentage of the market value of the securities being lent. This fee can be an attractive source of income, especially for long-term investors who are not actively trading their securities.
Diversification of portfolio: Stock lending can help stock lenders diversify their portfolio. By lending their securities, they can invest the lending fee earned from stock lending into other investments, which can help them spread their risk.
Risk mitigation: Stock lending can help mitigate the risk of holding securities. By lending their securities, stock lenders can reduce the risk of losses due to market fluctuations, as they continue to earn a lending fee during the loan period. This can help protect their investments and minimize potential losses.
Flexibility and control: Stock lenders have the flexibility to choose which securities to lend and for how long, giving them greater control over their investments. They also have the right to recall their securities at any time, which can provide added security and control over their assets.
Short selling: Stock borrowing allows stock borrowers to short sell securities that they do not own. Short selling involves selling borrowed securities in the hope of buying them back at a lower price and profiting from the price difference. This can be an effective strategy for traders who anticipate a decline in the market or a particular stock.
Liquidity: Stock borrowing can help increase market liquidity by allowing traders to borrow securities and sell them, which can help stabilize market prices. This can also benefit stock borrowers by providing them with access to a wider range of securities to trade, potentially leading to better returns.
Flexibility: Stock borrowers have the flexibility to borrow securities for a specified period of time, which can help them manage their trading positions more effectively. They can choose the quantity and type of securities to borrow, and can also recall the securities at any time if they wish to exit their positions.
Lower costs: Stock borrowing can be a cost-effective way to access securities than purchasing them outright. Borrowing fees are typically lower than the cost of buying the securities in the market, which can help to reduce trading costs
How Safe is SLBM Transactions?
In India, the stock lending and borrowing mechanism (SLBM) transactions and closures are guaranteed by the National Securities Clearing Corporation Limited (NSCCL). NSCCL is a subsidiary of the National Stock Exchange (NSE) and is responsible for clearing and settling all trades executed on the NSE and other exchanges where it provides clearing services.
NSCCL acts as a central counterparty (CCP) for SLBM transactions, which means that it becomes the buyer to every seller and the seller to every buyer.
NSCCL ensures that SLBM transactions are settled on time by providing a settlement guarantee, which requires members to maintain sufficient collateral with the clearing corporation. The collateral acts as a buffer against potential losses and helps to ensure that the settlement process runs smoothly.
In summary, NSCCL is the entity that guarantees the SLBM transactions and closures in India. Its role is critical in ensuring the smooth functioning of the SLBM mechanism and maintaining investor confidence in the market.
Eligible securities for SLBM Mechanism: All F&O Stocks, eligible Non-F&O stocks and eligible index ETFs
Who can participate in SLBM? Following are the participants who can opt for SLBM facilities Retail investors, HNI, FIIs Mutual Funds, Insurance, FPI
Do remember:
The fee is per share unit and not priced like bank interest rates, so be mindful while quoting the fee per unit. SLBM is best utilised for stocks lying in the long term portfolio and do not wish to sell in short-term
Series B will have better liquidity than Series A securities.
In my opinion, for retail investors, Lending stocks are a good option to generate some income over idle portfolio. With lending stock, you retain to the right to get the bonus, dividend benefits and added fee income (on avg 5-10%) on the stocks.
Borrowing stock is a much for complicated process and are used by seasoned option traders, institutional desks for arbitrage opportunities etc.
Overall, stock lending can be a valuable tool for stock lenders, providing them with additional income, risk mitigation, and greater control over their investments.
Personal finance is not about only investing and savings. The pleasure of putting money in the right use, making most of your money is more than savings. Its satisfying. How much you love taking out the shopping bags during sale season!
November to March are pleasant in Mumbai so is the vacation. It is equally popular for summer holidays , who travel for summer vacation from many parts of the country. In the holiday season you may explore Mumbai being frugal and fun.
To begin, browse through some events lists which are free of cost online or check the tabloids like Mumbai Mirror and Mid-day.
Travel in Public Transport – Bus, Train, Metro, Sharing rickshaw and sharing taxis are available for tourist destinations from nearest railway station
Carryiing a water bottle and some dry snack can come handy and can help you save some unnecessary expense.
Do your research – On venue, tickets, pricing. Use google, Trip advisor etc, you can ask around in the local shops to check on best travel modes etc.
Wear clothes compatible to weather – Mumbai gets mild humid starting mid march. Cotton is the best option to go.
Carry cash only to stick to your budget – its easy to get carried away looking at attractive shopping and food options, carrying limited cash or Google pay with low account balance will help you keep a watch.
Try local food – Parsi cafes such as Jimmy Boy at Fort, Kyani restaurant near Metro cinema, Try Berry Pulao at Britannia, There are no dearth of Maharashtrian food joints in the area – Aaram, Opposite CST Station, Chetna, Pratap lunch home etc. If you search more, you ll find many more cuisine of your choice in the vicinity.
Mumbai local food
Make use of your Mobile Apps – For value buying, offers and discounts
What you should do with the saved money? Need I say more, go for another Mumbai Darshan
What is it in the Union budget you looked out for?
In one sentence – It is a wake-up call for Aam Aadmi ! I know! I know! you’d say, everyone is an economist today and has a view on budget. But, incidentally, I am not here to rant or praise the nuances of the great ‘Amrit Kal announcements’.
Today, I saw a different government, different minister who carefully announced the budget perfecting the texture and contouring ‘vibrant and confident India’. FM didn’t lure with tax sops for investing more in mutual funds, insurance and PPF. Today, she addressed the budget for ‘Young India’ who wants freedom of choice, options on platter and decide ‘who they are’ and ‘what they want’. —FM did take a note of the inflation and doubled the senior citizen deposits and monthly income schemes to reduce the frown lines of the pensioners. — Announced Mahila Samman Savings certificate for 2 years – likely to improve savings habit in women — FM raised tax slab limit to 7 lakhs who choose the nex-tax regime, while making it a default option.
This third announcement is what I found ‘remarkable’. Though it is definitely to lure and woo the salaried class to get into the next tax regime. But, moreover, this is a statement for the ‘aam nagrik’, a paradigm shift in the government’s approach. It is the decision to ‘choose what you want to do with your money’. Save/ invest/ spend on luxury. ‘It is not govt’s burden to coax you into savings, but its your choice – you want to live for today or save for tomorrow’. ‘You are mature, you vote, you earn, you live as you like.’
To summarise, for me, Union Budget 2023 was [voice of GOI 😉 ] ‘There are many opportunities at your disposal, we have taught and nurtured you for years on what is good for you. Today, You are grown up Indian, your well-being is your responsibility,’.
‘If you are illiterate, blame parents n govt, but, if you are financially illiterate, you yourself are to be blamed.’
“Mutual Funds SahiHai” the famous campaign spread the message of simplicity and importance of disciplined investing. You will find ample direction how to chose the best mutual funds etc. In this post I would like to focus on how to start investing in mutual funds. What is that first step for investing in mutual funds.
How to choose mutual Funds –
If you are a first-time investor, its a good idea to take a service of mutual fund online platforms like moneycontrol.com, scripbox.com, ET Money, Groww app etc.
In any age bracket, your first 2 mutual funds could be one liquid mutual fund and one hybrid fund, to give you head-start. Its a good idea to start investing in mutual fund on your own.
Taking inspiration of recipe writing..you need to know your ingredients for cooking, here are the ingredients to start the process of investing –
1. PAN Card
2. Aadhaar Card
3. Bank Details – Cheque book, Bank Account No., Bank branch, IFSC Code
4. Passport size photograph
Register yourself with feeding your email id and mobile no. in the new user tab.
You will be given an option of generating OTP through mobile no. or email id.
CAMS is a registrar to some reputed mutual funds, using their website or app, you will be able to invest in Aditya Birla, IDFC, IIFL, ICICI, Kotak, Tata, DSP Mutual Fund, SBI, L&T, Mahindra and PPAFs mutual funds can be bought.
In this app/ website, you can check your investment details, if you invested in schemes of any of the above mutual funds.
