Wednesday, November 30, 2011

National Savings Certificate ( IX - Issue ) Rules, 2011


Processing of files referred to DoP&T for advice / clarification - Procedure to be followed

Posted by : AIPEDEU,Odisha Circle.

Notifications issued by Ministry of Finance (Department of Economic Affairs), Govt. of India

1.         Payment of Commission to SAS and MPKBY Agents.
2.         National Small Savings Fund ( Custody and Investment ) Amendment Rules, 2011
3.         Public Provident Fund ( Amendment ) Scheme, 2011
4.         Discontinuance of Kisan Vikas Patras
5.         Increase in rate of interest in Post Office Savings Accounts
6.         Post Office ( Monthly Income Account ) Second Amendment Rules, 2011
7.         Post Office Time Deposit ( Second Amendment ) Rules, 2011
8.         Post Office Recurring Deposit ( Second Amendment)  Rules, 2011
9.         National Savings Certificates ( VIII Issue ) Second Amendment Rules, 2011
To view all Notifications Click Here
                                    Posted by : AIPEDEU,Odisha Circle.                                                                        

Notification for Launch of 10-Year National Savings Certificate (IX-Issue), 2011 Issued

In accordance with the decisions taken by the Government on the basis of the recommendations of the Committee for Comprehensive Review of National Small Savings Fund (NSSF), headed by Smt Shyamala Gopinath, the then Deputy Governor, Reserve Bank of India, Notifications on changes made in various small saving schemes except 10-Year National Savings Certificate, have already been issued on 25th November 2011. 

                The Notification for launch of new savings instrument, namely 10-Year National Savings Certificate (IX-Issue), 2011, has been issued today, the 29th November, 2011. 

                The major highlights of this scheme are as follows:

·         Investments in Certificate will earn Interest at the rate of 8.7% p.a. compounded semi-annually.
·         On investment of Rs. 100, the depositor will get Rs. 234.35 on maturity of the Certificate.
·          This Certificate will be available in the denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 and Rs. 10,000. 
·         There is no upper limit for investment in the Certificate. 
·         This Certificate can be transferred from a post office where it is registered to any other post office and it can be pledged as a security.

                The scheme will come into effect from 1st December 2011. Details of the notification are attached herewith and can also be seen on the website of the Ministry of Finance i.e.
Source : PIB Release, November 29, 2011
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Population of the Country Under Insurance Net

              Based on the  working population as per census 2001 data, the Insurance Regulatory and Development Authority (IRDA) has reported that the approximate total number of insurable persons in the country is  57,03,35,944.
                The names of the insurance companies, both private and public sector is at Annexure.
The IRDA has informed that the details of insured persons, institutions  etc.  company-wise are not maintained.
As at 31.03.2010, the total number of policies in force relating to private life insurers are 4,03,63,200 and the lives covered under group new business by private life insurers are  4,19,59,796.  IRDA has informed that the details of insured people belonging to Above the Poverty Line (APL) and Below the Poverty Line (BPL) category are not maintained.

The objectives achieved are as follows:

(i)            The insurance penetration has increased from 2.32% to 5.51% over the period 2000 to 2010.
(ii)           The number of insurance offices has increased from 2,199 in 2000 to 12,018 in 2010.
(iii)          From the single channel system of tied agents which was predominant before opening up of the sector in 2000, multiple channels of distribution comprising brokers, bancassurance, corporate agents emerged in the decade and accounted for nearly 21 percent of the new business in the year 2009-10. These channels have aided in expanding the market as well as in better outreach.
(iv)          The first year life insurance premium grew from Rs.19,857.28 crore in 2001-02 to Rs.1,09,894.02 crore in 2009-10. The total life insurance premium rose from Rs.50,094.46 crore in 2001-02 to Rs.2,65,450.37 crore in 2009-10.
Life Insurers (As on 20.06.2011)
Non-Life Insurers(As on 05.08.2011)
Public Sector:

Life Insurance Corporation of India

     Private Sector:
1.    Bajaj Allianz Life Insurance Company Ltd
Birla Sun Life Insurance Company Ltd
HDFC Standard Life Insurance Company Ltd
ICICI Prudential Life Insurance Company Ltd
ING Vysa Life Insurance Company Ltd
Max New York Life Insurance Co Ltd
Met Life Insurance Company Ltd
Kotak Mahindra Old Mutual Life Insurance Company Ltd
SBI Life Insurance Co Ltd
Tata AIG LIFE Insurance Co. Ltd
Reliance Life Insurance Co Limited
Aviva Life Insurance Co Ltd
Sahara India Life Insurance Co. Ltd
Shriram Life Insurance Co. Ltd
Bharti AXA Life Insurance Company  Ltd
Future Generali India Life Insurance Co.Ltd
IDBI Federal Life Insurance Co. Ltd
Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd
AEGON Religare Life Insurance Co. Ltd
DLF Paramica Life Insurance Co. Ltd
Star Union Dia-ichi Life Insurance Co. Ltd
India First Life Inasurance Co. Ltd.
Edelweiss Tokio Life Insurance Co. Ltd.
Public Sector:
National Insurance Co. Ltd
The New India Assurance Co. Ltd
The Oriental Insurance Co. Ltd
United India Insurance Co. Ltd.
Private Sector:
Bajaj Allianz General Insurance Co. Ltd
ICICI Lombard General Insurance Co Ltd
IFFCO Tokio General Insurance Co. Ltd
Reliance  General Insurance Co. Ltd
Royal Sundaram Alliance Insurance Co. Ltd
Tata AIG General Insurance Co. Ltd
Cholamandalam MS General Insurance Co. Ltd
HDFC ERGO General Insurance Co. Ltd
Export Credit Guarantee Corporation of India Ltd
Agriculture Insurance Co. Ltd
Star Health Insurance Co. Ltd
Apollo Munich Health Insurance Co. Ltd
Future Generalli India Insurance Co. Ltd
Universal Sompo General Insurance Co. Ltd
Shriram General Insurance Co Ltd
Bharti AXA General Insurance Company Limited
Raheja QBE General Insurance Company Limited
SBI General Insurance Co. Ltd
Max Bupa Health Insurance Co. Ltd
L&T General Insurance Co. Ltd
General Insurance Corporation of India

This information was given by the Minister of State for Finance, Shri   Namo Narain Meena in written reply to an Unstarred Question in Rajya  Sabha today.
Source : PIB Release, November 29, 2011
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National Policy for Senior Citizens

             The Government had constituted a Committee on 28.1.2010 under the Chairpersonship of Smt. Mohini Giri, to inter-alia draft a new national policy on older persons. Other members of the Committee were:
(i)            Shri. M. M. Sabharwal, President Emeritus, Helpage India;
(ii)           Dr. K. R. Gangadharan, Chairman, Heritage Foundation;
(iii)          Smt. Shielu Sreenivasan, President, Dignity Foundation;
(iv)          Representatives of Ministries of Health & Family Welfare, Rural Development, Finance, Home and Women & Child Development; and
(v)           Principal Secretaries/Secretaries in charge of Welfare of Senior Citizens of Andhra Pradesh, Assam, Delhi, Maharashtra and West Bengal.
(vi)          Joint Secretary, Ministry of Social Justice & Empowerment as Member Secretary.
             The Committee submitted the draft National Policy on Senior Citizens 2011 on 30.3.2011 which inter-alia, accords priority to the needs of senior citizens aged 80 years and above, elderly women, and the rural poor. Some of the salient policy objectives are to:
              Mainstream the concerns of senior citizens, especially older women, and bring them into the national development debate;
                Promote income security, homecare services, old age pension, healthcare insurance schemes, housing and other programmes/ services;
                Promote care of senior citizens within the family and to consider institutional care as a last resort;
                Work towards an inclusive, barrier-free and age-friendly society;
                Recognize senior citizens as a valuable resource for the country, protect their rights and ensure their full participation in society;
                Promote long term savings instruments and credit activities in both rural and urban areas;
              Encourage employment in income generating activities after superannuation;
                Support organizations that provide counseling, career guidance and training services; etc.
The Committee also suggested the areas of intervention to be made by Central/ State Governments towards implementation of the policy objectives.
The draft Policy has been circulated to State Governments, seeking their comments. It has also been placed on the Ministry’s Website ( for information of the general public and feedback, if any. The draft policy will be finalized after the process of consultation with State Governments and concerned Central Ministries/ Departments is completed.
This information was given by the Minister of State for Social Justice and Empowerment, Shri D. Napoleon in a written reply to a question in Lok Sabha.
Source : PIB Release, November 29, 2011
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Tuesday, November 29, 2011

Enhancement of rate of various Allowance by 25% to Central Government employees, when DA goes up by 50%

No AN-XIV/14162/6th CPC/Corr./Vol-XII
Dated: 24.11.2011

Subject: Enhancement of rate of various allowance by 25% to CentralGovernment employees, when DA goes up by 50%.

A number of references have/are been/being received in this HQrs office regarding enhancement of the rate of various allowances by 25% consequent upon increasing rate of DA beyond 50%. The case has been examined in this HQrs office with reference to the recommendation of 6th CPC which has been accepted by the Govt. and it has been decided that the rate of following allowances will automatically be increased by 25% with effect from the date on which the Dearness allowance went up by 50% i.e. 01/01/2011.

No. & date.
Special Compensatory (Remote Locality) Allowance
No. 3(1)/2008-E.II(B)29.8.2008
Special Compensatory Hill Area Allowance
No. 4(2)/2008-E.II(B) 29.8.2008
Bad Climate Allowance
No. 5(1)/2008-E.II(B) 29.8.2008
Project Allowance
No. 6(3)/2008-E.II(B) 29.8.2008
Daily Allowance on Tour
No. 19030/3/2008-E.IV 23.9.2008
Mileage for road journey by taxi/own car/auto rickshaw/own scooter/bicycle etc.
No. 19030/3/2008-E.IV  23.9.2008
Transportation of personal effects.
No. 19030/3/2008-E.IV  23.9.2008
Schedule/Tribal Area Allowance
No. 17(1)/2008-E.II(B) 29.8.2008
Cycle Maintenance Allowance
No. 19039/3/2008-E.IV 29.8.2008
Washing Allowance
No. 14/3/2008-JCA 11.9.2008
2. It is therefore requested to all concerned that necessary action may be taken accordingly.
This issues with the approval of Jt.CGDA(AN).


Post-office savings products

While passive investors can still park funds in post-office schemes, those looking to maximise gains will have to be more nimble on their feet.
Come December 1, post-office savings products are set to offer higher interest rates. While this announcement has been cheered by investors, it may be premature to rejoice based on this proposal alone.
First, if you have read up a bit more, you would know that these new rates are not really ‘fixed' for many years, as was the case so far. The interest rates for a five-year time deposit, for example, will no longer stay put at 7.5 per cent. A new rate will be announced on April 1 each year, and this rate will be linked to the average yield on a five-year government security during the previous calendar year (actual rate will be 25 basis points higher than average yields).
Today, the proposed rate on a 5-year deposit is 8.3 per cent. But it so happens that these changes have come at a time when market interest rates may be at their peak, making the picture look rosy. If market rates plummet later, so will the interest rates on your post-office savings.
Wind out of popular schemes
This is not the only tweaking these products have undergone. Other changes may force investors to reconsider whether they are still attractive at all. Consider the Monthly Income Scheme (MIS). As on March 31, 2011, MIS (outstanding of about Rs 2,18,674 crore) were the top small-savings product, constituting 35 per cent of the total outstanding of all small savings schemes put together. Aside from being popular for providing a steady stream of cash-flows every month from an initial investment, the MIS is considered an alternative to bank fixed deposits. For example, an investment of Rs 4,50,000 (upper limit) in an MIS, at 8 per cent, brings in Rs 3,000 interest every month. If this interest was invested in a post-office recurring deposit (RD) giving 7.5 per cent interest, the gain at the end of a six-year tenure, along with a bonus of 5 per cent, works out to Rs 49,254 per annum, or a return of 10.94 per cent (pre-tax).
Thus, this proved to be a good alternative at all times for people who had surplus cash to invest. More so, when long-term fixed deposit rates were much lower. Now, apart from the fact that the interest rates will change every year, there are two other changes to this scheme. One, the tenure is reduced to five years. Two, the bonus component is out. An immediate check at the current MIS (8 per cent) and RD (7.5 per cent) rates but with a five-year tenure and no bonus shows that the return from a MIS plus RD strategy falls from almost 11 per cent earlier to only about 8 per cent now. Besides, investors will also have to brace for year-to-year volatility, not only in the MIS rates but also RD rates.
Even if you lock into an MIS at an attractive rate, such as the proposed 8.2 per cent, returns on your recurring deposit investments from this cannot be locked in and will vary each year, making your ‘effective return' calculation go haywire.
Similarly, the Kisan Vikas Patra (KVP), forming 25 per cent of the total outstanding as at March 2011, has been another popular scheme.
Kisan Vikas Patra
Attributes such as free transferability, no limits on total investment, absence of TDS (tax deduction at source) on the interest amount, in addition to a promise of doubling investment in eight years and seven months, made KVPs an instant hit. Investors with income below taxable limit didn't have to worry about filing a return to claim refund of the TDS. But a wide usage of the KVP for parking unaccounted money, (given its opaque nature) has prompted the government to discontinue the scheme.
The withdrawal nevertheless narrows the choices for genuine investors, especially seniors, looking for risk-free investment options, which also promises good returns. There could, however, be a small window of opportunity in the next two days. As all the changes will take effect only on December 1, KVP sales would be discontinued only from November 30.
Calls for active money management
To give you the choice to pull out your money, schemes like the MIS, Senior Citizens' Savings Scheme, RD and time deposits already allow premature closure /withdrawal with a penalty. Now, with interest rates set to become volatile, you may be forced to take stock more often if rates turn really unattractive.
For example, if the MIS returns are unattractive and you can take some risk, you can consider investing at least a part of the amount in MIPs (Monthly Income Plans) of mutual funds. Offering a monthly dividend payout, these funds invest in short- and long-term fixed income instruments issued by governments or corporates, debentures and commercial paper. They also have a 15-20 per cent exposure to equities to provide some push to your returns (with additional risk!).
On that note, to enable you more actively manage your money, the government has lowered the burden on withdrawal of 1, 2, 3 and 5-year deposits. Premature withdrawal will now be allowed at a one per cent lower rate (2 per cent lower earlier) than the time deposits of comparable maturity. For premature withdrawals between 6-12 months of investment, Post Office Savings Account interest of 4 per cent (nil, earlier) will be paid.
There is also an interpretation that for schemes that require recurring investments, such as the PPF, every year's investment would earn the same year's rate of interest throughout the tenure of the PPF. If this is valid, it would make sense to invest the maximum possible amount when the PPF interest is high at 8.6 per cent from December 1- March 31, 2012 and then take a call on how much to invest the following year, based on the rates offered. This, again, calls for active management.
Saving for retirement
The new rules, however, seem to discourage liquidity for PPF, having raised the interest rate on loans from PPF from 1 to 2 per cent. This may be because the government wants people to look at it from a ‘saving for retirement' point of view. This is supported by the fact that the annual ceiling for investment in PPF has been raised from Rs 70,000 to Rs 1,00,000.
Two other facts also show that the government is trying create a ‘social security' net. One, the proposed introduction of a 10-year NSC instrument. NSCs, again, are locked in and don't generally provide a premature encashment facility. Two, the higher spread for the interest rate on this new NSC ( 50 basis points over g-sec rates) and the Senior Citizens' Savings Scheme (100 bps spread)
In all, passive investors looking for a reasonable risk-free return, can still park their funds in post-office schemes. But those investors looking to maximise returns or beat inflation will now have to be more nimble on their feet.
Still attractive?

Investors will feel the pinch from fluctuating interest rates more when the tax impact comes into the picture. Interest on the Monthly Income Scheme, Recurring Deposit, Time Deposits and Senior Citizens' Schemes (SCSS) are all taxable, and at times when interest rates are low, the post-tax returns will be even lower.
Unlike the 5-year time deposits and SCSS, the others don't qualify for deduction on initial investment under Sec 80C of the Income Tax Act. That said, even this will change under the Direct Taxes Code (DTC), which is expected to replace the Income-Tax Act from April 1, 2012. The SCSS scheme could then become less popular. Not only will the interest rates offered fluctuate from year to year and the interest be taxed but the deduction under Section 80C will also not be available.
Similarly, for the 5-year time deposits and the NSC, the 80C deduction will not be available under the DTC. Moreover, although interest on NSC is taxable every year, it is considered as a reinvestment and eligible for deduction currently. Once the DTC comes in, interest on NSC will also fall into the tax net.
All this is in addition to the reduction of the tenure of NSC from six years to five years, which could itself curtail the interest outgo. Assuming that the new 10-year NSC scheme will have the same product features as the existing one, its attractiveness remains to be seen as, historically, all these have become popular because of their tax benefits.
Fluctuating interest rates notwithstanding, the Public Provident Fund (PPF) appears to be attractive for those looking for long-term investment avenues.
Along with government PFs, recognised PFs and pension schemes administered by PFRDA, the PPF will continue to fall under the EEE method of taxation (i.e. no tax at the time of investing or on returns or the final proceeds) under the DTC, providing scope for overall returns to be higher.

Information supplied by Shri P K Patra, PM, Puri HO quoting businessline.
Posted by: AIPEDEU,Odisha Circle.

Monday, November 28, 2011

Amendment in Tatkal Scheme from 21/11/2011

  • As announced by Hon'ble Minister of Railways while presenting Railway Budget 2009-10 in the parliament on 03-07-2009, it has been decided to reduce Tatkal Charges as given below.
  • The Tatkal Charges have been fixed as a percentage of fare at the rate of 10% of basic fare for second class and 30% of basic fare for all other classes subject to minimum and maximum as given in the table below.
Class of Travel
Minimum Tatkal Charges
(in Rs.)
Maximum Tatkal Charges
 (in Rs.)
Second (sitting)
AC Chair Car
AC 3 Tier
AC 2 Tier
  • The above charges will be levied uniformly both in peak period & non-peak periods.
  • Tatkal tickets will be issued for actual distance of travel, instead of end-to-end, subject to the distance restriction applicable to the train. The same Tatkal berth/seat may be booked in multiple legs till preparation of charts. At the time of preparation of charts, unutilized portion may be released to the General RAC/Waiting list passengers.
  • Tatkal facility will be introduced in Executive Class of Shatabadi Express trains also, by earmarking 10% of the accommodation available i.e. 5 seats per coach.
  • Tatkal booking opens at  8 AM on One days in advance  actual date of journey excluding date of journey w.e.f. of 21.11.2011(commercial circular no:59 of 2011). e.g. for train leaving on 6th, Tatkal Booking will Commence at 8 AM on 5th.
  • No duplicate Tatkal tickets shall be issued. Duplicate Tatkal tickets shall be issued only in exceptional cases on payment of full fare including Tatkal
  • Tatkal tickets shall be issued only on production of one of the eight prescribed proofs of identity (as mentioned in Commercial Circular No.5 of 2011 issued vide letter No.2010/TG.I/20/P/Tatkal dated 28.01.2011) as per procedure explained below:-
a. For this purpose, a self attested photo copy of the proof of identity of anyone passenger shall be attached to the requisition slip.
b. The details of the identity proof shall be captured by the system and indicated on the reserved tickets as well on the reservation chart.
c. It will not be mandatory for the passenger(s) to go to the counter to book the Tatkal ticket, however, the proof will have to be sent in the
aforementioned manner.
d. During the journey, the passenger, whose identity card number has been indicated on the ticket, will have to produce original proof of identity indicated on the ticket, failing which all the passengers booked on the ticket shall be treated as traveling without ticket and charged accordingly. Indication will come on the ticket regarding carrying the same original proof of identity during the journey, as indicated on the ticket.
e. If the passenger whose identity card number is indicated on the ticket is not traveling, all other passengers booked on that ticket, if found
traveling in train, will be treated as traveling without ticket and charged accordingly.
  • Agents / RTSAs shall be restricted from the booking Tatkal tickets at thecounters between 0800 hours and 1000 hours. This restriction shall be
    enforced through frequent inspection at the counters. The agents both web service agents and web agents shall also be restricted from booking Tatkal tickets on the internet between 0800 hours and 1000 hours.

  • Even for internet booking for Tatkal tickets, the passenger shall enter the identity proof type and number, which is to be used for travel. These details shall be printed on the ERS/indicated on the MRMNRM as well as in the reservation chart.
  • It will be possible to book a maximum of only four passengers per PNR forTatkal tickets.
  • The web services agents of IRCTC will be permitted to book only one Tatkal ticket per train per day on the internet.
  • The facility of change of name is not permitted on the bookings made under Tatkal scheme
  • For the purpose of granting refunds & issuing TDRs for W/L, the time limit will be the same as applicable for refund of normal tickets.
  • REFUNDS   - No refund will be granted on cancellation of confirmed Tatkal tickets/duplicate tatkal ticket except in case of circumstances mentioned in para 2 of instructions contained in Commercial Circular no. 53 of 2006 issued vide letter no. 2006/TGII/ 20/P/Tatkal, dated 30.06.2006.               However, full refund of fare and tatkal charges will be granted on the tickets booked under Tatkal scheme in the following circumstances :-
    • If the train is delayed by more than 3 hours at the journey originating point of the passenger & not the boarding point if the passenger's journey originating point and boarding point are different.
    • If the train is to run on a diverted route and passenger is not willing to travel.
    • If the train is to run on diverted route and boarding station or the destination or both the stations are not on the diverted route.
    • In case of non attachment of coach in which Tatkal accommodation has been earmarked and the passenger has not been provided  accommodation in the same class.
    • If the party has been accommodated in lower class and does not want to travel. In case the party travels in lower class, the passenger will be given refund of difference of fare and also the difference of Tatkal charges, if any.

Posted by : AIPEDEU,Odisha Circle.