Budget 2008 encourages higher consumption. Hikes in income tax rate slabs will increase disposable income, and the decrease in excise duty and Central Sales Tax will bring down the cost of goods (Budget Made Simple & Smart, 20 March). Non-taxation of reverse mortgage income will further add to urban consumption.
— Sheel Bhardwaj, Kanpur
In addition to consumption, higher disposable income increases investment opportunities too. People must judiciously distribute the hike in savings (up to 8%) between investment and expenditure according to their financial goals. It is yet to be seen to what extent the benefits of duty reductions announced in the Budget are passed on to the consumer.
I have recently started investing in mutual funds. Your magazine has been very useful in educating me about this. Please mail me your mutual fund calculator as it will help me evaluate the returns from my investments better.
— Naresh Kumar, Jaipur
There is no mutual fund calculator. We assume you are referring to the systematic investment plan (SIP) calculators. Please check out our website for a list of calculators on the home page which should be useful to you.
This refers to 7 IPO Sins (20 March). You have used very strong words in the article but they are indeed true in context of what we have witnessed in the last few months with IPOs of Reliance Power, Wockhardt and Emaar MGF. Your article has provided a set of guidelines that people should follow to safeguard their hard-earned money from such debacles.
— Bal Govind, Bareilly
Initial public offerings or IPOs had been creating enormous wealth for retail investors in the last three years. Thanks to Reliance's brand value, chances of making a killing seemed certain with Reliance Power's IPO. However, most investors suffered because they overlooked certain fundamentals of investing. We have highlighted the same in the story The IPO Treasure dated 30 November 2006.
The hard-earned money of tax payers is being wasted on loan waivers and no concrete steps are being taken to strengthen the economy. Instead the election-oriented Budget is toeing a populist line. IPOs of companies demanding hefty premiums should be taught a lesson. Investors should be aware of the working of a company before investing in it (7 IPO Sins, 20 March).
— Akhilesh Kumar Sah, Email
Discussing the political obligations of a Budget is beyond the scope of this magazine. However as the national and household economy integrates, it is essential to track macroeconomic indicators. Equities have given best returns among all asset classes in the long term. So instead of blindly following the crowd-as was the case with recent IPOs-investors must try to make more informed choices.
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