Some major tweaks to the NPS in addition to the planned government contribution of Rs1,000 per account are set to provide a much needed leg-up to the nascent pension scheme
The Centre is planning some additional tweaks to the still-nascent New Pension Scheme (NPS) to attract the investing public. Sources from the regulator, the Pension Fund Regulatory and Development Authority (PFRDA), tell Moneylife that these changes will provide a significant boost to the struggling pension plan initiative from the government.
The PFRDA is apparently in talks with the central record-keeping agency, the National Securities Depository Limited (NSDL) to reduce the cost of record-keeping. If NSDL obliges, it would significantly drive down the cost of maintaining an NPS account, which would enable thousands of low-income category people to start their own accounts.
An official from PFRDA revealed some of the initiatives being taken up. Deepa Kotnis, general manager, PFRDA said, “We are working on reducing the cost. For a very low-income person, the current cost might be a lot, even though it is the cheapest product available. We are also trying to incentivise enrolment by attaching some promotional incentive to it.”
Already, the NPS is among the least expensive investment products in the offering. With such low expenses, it is a product tailor-made for the requirements of the masses.
To encourage people to save in the NPS, the recent Budget had announced the government’s intention to contribute Rs1,000 per year to every new NPS account opened this year. The scheme, ‘Swavalamban’, will be extended to those who join NPS with a minimum contribution of Rs1,000 and a maximum contribution of Rs12,000 per year during financial year 2010-11.
Speaking to Moneylife, Ms Kotnis said, “This is a direct subsidy for investors. The finance minister has set aside Rs100 crore for this project. We are hoping that this would benefit lakhs of investors. There are a lot of low-income people in the unorganised sector who would be very keen to get this Rs1,000 benefit.
Ultimately, it would add up to Rs4,000 as the scheme is extended for three more years. So not only is this a much cheaper product, but there is a direct subsidy coming into the investor’s account. The onus is now on all the points of presence (POPs) to popularise this initiative and get people on board during this financial year.”
Interestingly, the PFRDA is also thinking of extending this benefit to all the existing subscribers who have invested prior to this financial year. Ms Kotnis said, “We do not want to leave out people who have joined the scheme last year. So we are working on how to ensure that these investors are also included. After working out who all would be eligible for this benefit, we will see to it that these people are also given the benefit.”
Finance minister Pranab Mukherjee had also urged State governments to make a matching contribution to these NPS accounts. Some States like Haryana and Karnataka have already started offering the added contribution of Rs1,000 per year. This has taken the total government contribution to Rs2,000 per year.
With these initiatives on their agenda, the government and the regulator are indeed taking the pains to ensure that the NPS finds its rightful space in the minds of the investing public.
With two warehouses already operational, Allcargo plans three more warehouses which will be coupled with third party logistics services
Allcargo Global Logistics Ltd plans to have three more warehouses operational in the next 18 to 20 months. The company recently entered the warehousing space, with two warehouses already operational.
“In the next 18 to 20 months, we would see two to three more warehouses up and operational,” said Ashit Desai, director of corporate affairs, Allcargo Global Logistics Ltd.
Last year, the company had announced its plans to set up more warehouses in various parts of India. The logistics company has land banks across Nagpur, Indore, Hyderabad and Bengaluru. It plans the warehousing and third-party logistics projects in Bengaluru, Nagpur and Indore.
“We have been acquiring land now for the past three to four years, and now we have a sizeable amount of land in hand of about 250 acres at all these locations across India put together,” said Mr Desai.
The total investment in each warehouse planned has been pegged at around Rs5 crore to Rs10 crore.
Along with the planned warehouses, the company will also have its Inland Container Depots (ICDs) operational in the next 18 to 20 months.
“In the ICD business, as we have land in Nagpur, Hyderabad and Bengaluru, we will plan ICDs in these places,” said Mr Desai.
Allcargo already has two warehouses operational in Goa and Mumbai. “In the Goa warehouse, we are offering third-party logistics services to one of our customers in the white goods sector. The project has been operational for a year’s time now and is doing quite well,” said Mr Desai.
The investment is expected to scale up to $3.50 billion over 10 years, according to the company
Making a breakthrough in the US, Reliance Industries today said that it will invest $1.70 billion in a joint venture with Atlas Energy Inc to produce gas from shale, sedimentary rocks, in the Marcellus region.
The investment would be scaled up to $3.5 billion over the next 10 years, RIL CFO Alok Agarwal said.
Reliance will take 40% stake in the 300,000-acre Marcellus shale gas project, which spans parts of Pennsylvania, West Virginia and New York and could hold enough natural gas to satisfy US demand for a decade.
Nasdaq-listed Atlas will hold the remaining 60% and also the operatorship. RIL had earlier unsuccessfully bid for acquiring controlling stake in bankrupt chemical maker LyondellBassel.
It bid $14.5 billion for Lyondell but the offer was vetoed by creditors who filed a rival revival plan.
Flush with revenues from its eastern offshore KG-D6 gas field back home, the Mukesh Ambani-run firm has been on the lookout for acquisitions in the United States. Separately, its twin refineries at Jamnagar in Gujarat are looking at directly selling fuel into the US.
"Reliance Marcellus LLC (a subsidiary of RIL) has executed definitive agreements to enter into a joint venture with US based Atlas Energy Inc, under which Reliance will acquire a 40 per cent interest in Atlas’ core Marcellus Shale acreage position,” the company said in a statement.
The Indian firm will pay $339 million in cash to close the deal and foot Atlas’ drilling cost of up to $1.36 billion.
“The (300,000 acres) acreage will support the drilling of over 3,000 wells with a net resource potential of about 13.3 trillion cubic feet gas equivalent,” the RIL statement said, adding that the deal is expected to be closed by the month end.
Shale gas is natural gas stored in organic-rich sedimentary rocks. It is considered an unconventional source as the gas may be attached to or “adsorbed” onto organic matter. The gas is contained in difficult-to-produce reservoirs that require special completion, stimulation and/or production techniques to achieve economic production.
In addition to funding its own 40% of drilling obligations, Reliance has agreed to fund 75% of Atlas' respective portion of drilling and completion costs until the $1.36 billion drilling carry is fully utilised, Atlas said in a separate statement.
“Under the framework of the joint venture, Atlas will continue acquiring leasehold in the Marcellus region and Reliance will have the option to acquire 40% share in all new acreages,” Reliance said. “Reliance also obtains the right of first offer with respect to potential future sales by Atlas of around 280,000 additional Appalachian acres currently controlled by Atlas (not included in the present joint venture).”
Meanwhile, Reliance Industries has also informed oil regulator DGH that four smaller gas finds surrounding the D-1 and D-3 fields in the Krishna-Godavari basin can be commercially exploited. RIL has informed the oil regulator Directorate General of Hydrocarbons (DGH) that four smaller gas finds, surrounding the D-1 and D-3 fields, which are currently producing around 62 mmscmd of gas, can be commercially exploited, sources said.