Govt to rectify import duty disparity between natural rubber, tyres

New Delhi: The government today said work was underway to correct within a month the import duty disparities between natural rubber and tyres, in order to protect the domestic industry, reports PTI.

At present, raw rubber imports attract 20% duty, whereas import duty on tyres is 10%. From China and South Korea, duty on tyre imports is only 8.6%.

"Give me a month's time, we are trying to sort out the problem of inverted duty
structure," Commerce Secretary Rahul Khullar told reporters on the sidelines of a
Confederation of Indian Industry (CII) event here.

According to Automotive Tyre Manufacturers Association (ATMA) estimates, the industry imports about 1.5 lakh tonnes of natural rubber every year. The finished tyre import for truck and buses stands at about 1.25 lakh tonnes a month and 2.5 lakh tonnes a month for passenger cars.

When contacted, ATMA director general Rajiv Budhraja told PTI: "We have been demanding that there should be parity between import and local production. The government proposed a fixed specific import duty on rubber at Rs20.46 per kg, but we want that import duty of raw material should be 7.5% only (on ad valorem basis)."

In March, the industry body had written to prime minister Manmohan Singh to either reduce import duty on natural rubber to 7.5% from existing 20% or to hike customs duty on imported tyre to 20% from 10% to help domestic manufacturers.

With natural rubber prices in India hovering around Rs160 per kg from below Rs100a kg level a year-ago, tyre manufacturers are looking at importing the raw material,but find it economically unviable due to current duty regime.

To cope up with such a situation, domestic tyre makers have hiked the prices of their products by 10%-15% since January this year.

Earlier in May, the government had removed restrictions on import of radial tyres in the wake of increase in prices and their cascading effect on inflation.

User

Equity schemes suffer 10.44 lakh folio closures since November 2009

While redemptions from equity mutual funds have reached Rs11,450 crore over the past 13 months, 10.44 lakh investor accounts have vanished since last November

Commensurate with redemptions of Rs14,450 crore from equity mutual funds over the past 13 months, there has been a drop of 10.44 lakh folios in this category since November 2009.

According to data provided by the Association of Mutual Funds in India (AMFI), the total number of folios in the equity category slipped by a massive 2.11 lakh in August, continuing the trend of the past eight months. Data between November 2009 and July 2010 shows that equity schemes have lost a whopping 8.33 lakh folios. 

Income and debt category funds added 86,879 investor accounts. There were three new fund offers (NFOs) in the income fund category like Benchmark Short Term Fund, Peerless Short Term Fund and Taurus MIP Advantage Fund - which amassed Rs7,981 crore in the month of August.

Balanced funds saw their investor base expanding by 33,607 folios while exchange traded funds (ETFs) added 50,189 folios. HDFC Gold ETF and ICICI Prudential Gold ETF were launched in August which together mopped up Rs366 crore. Canara Robeco Large Cap Fund garnered Rs178 crore. Industry sources are of the view that some portion of equity investments is moving towards fixed income and balanced funds.

HDFC Mutual Fund is turning out to be a winner in the chaos. It is adding to its assets and adding to its investor base as well. The fund added the maximum number of folios (87,450) followed by Axis Mutual Fund which added 45,836 investor accounts. Fund houses like UTI Mutual Fund, Reliance Mutual Fund, Tata Mutual Fund, Sundaram BNP Paribas, Kotak Mahindra Mutual Fund, HSBC Mutual Fund, Franklin Templeton Mutual Fund, JM Financial, Fidelity Fund Management and Birla Sun Life together lost 1.96 lakh investor accounts.
 
"Distributors are not servicing customers. As and when the maturity date approaches, intermediaries may not be pushing their clients to reinvest the money.

Customers are now becoming more discerning. They are looking at performance aspects. If performance is good then they are reinvesting otherwise they are exiting," said a sales head of a private mutual fund, preferring anonymity. 

Moneylife had reported first on 6 September 2010 that a massive Rs14,450 crore flew out of equity schemes since the last 13 months.
(See: http://www.moneylife.in/article/72/9016.html).

The continuing loss of investor accounts is becoming a cause of concern for the industry especially at a time when incentives for selling mutual funds have almost disappeared with rapidly-changing regulatory requirements. The increasingly tighter regulatory norms are already weeding out small independent financial advisors (IFAs). 

In July 2010, equity funds recorded a decline of 2.93 lakh folios. It is not clear what the exact base of fund investors is now. Some estimates put the figure at 20 lakh. The industry is in the process of identifying unique customers since individual investors tend to posses multiple folios. "We are trying to work out something to identify unique customers. But unfortunately the system as a whole has not been able to do it," HN Sinor, chief executive officer of AMFI had told Moneylife earlier.

User

COMMENTS

Ranjan D Gupta

6 years ago

The so called high level officers of AMFI and SEBI failed to realise so far that the things are moving in wrong direction.I don't know how long they will take to grasp the vulnerability of the situation.SEBI is an organisation whom has been given the responsibility only to introduce regulations.SEBI is not at all concerned about the outcome of the rules on the industry.Finance Ministry should add another responsibility to SEBI to see that Mutual Fund industry not only follow the regulation but there must be a continuous development in AUM.Because SEBI is not answerable to anybody for deterioration of health of Mutual Fund industry so it has no worry.If the wealth of MF industry will increase then only it can complete with FIIs.If Mutual Fund will not have money for investment then all the indian investors are at the mercy of FIIs.If FIIs will take away the money from indian market investors will suffer.In that case Mutual Funds will also suffer. Who will give protection and support in that case.All regulations has shackled the industry.Otherwise by this time AUM of Mutual Fund industry would have been very high. It is shameful that a small country like Mauritius has AUM in Mutual Fund to the extent of $163 billion whereas India with more than 1 billion population has AUM of just $149 billion.Mr.Bhave and big officers of SEBI should take these figures and try to do something to save the industry.

ARUN PRAKASAN

6 years ago

i think each mnc company's in india seprately arranged own office for maintained thier share market customer&other service.when their try to arrenge it .they don't go to lost their customer.or otherwise create one site for customer to what going on in our company

Ravindra Shetye

6 years ago

I expect a more balanced write-up stating not only the number of accounts closed but also the inflow figure (which is very important) and outflow figure (not only net figure) as also the possible reasons for outflow. e.g. a substantial outflow was caused due to the withdrawal by the Banks to finance Telcos for 3G licenses. Reduction in folios could also be removel of dead folios from pre KYC days with no holdings or such dead folios not providing the KYC. Definitely more analysis is called for.

RAMESHKUMAR GP

6 years ago

WHY SEBI ALLOWED AMC S TO COME OUT SO MANY NFO MOST OF THEM STILL FINDING DIFFICULT TO BREAK EVEN RS 10 NAV.

,,BANKERS ARE CHURNING HEAVILY INVESTORS MONEY IN EVERY NFO ,NOW BANKERS ARE SELLING EVERYTHING EXCEPT BANKING ,BUT SEBI CLOSING THEIR EYES SINCE THEY ARE ALL BIG FISHES ,BUT WHEN THEY SEE SMALL FISHES LIKE IFA S THEY ARE SO COURAGEOUS . OVER &ABOVE AMFI &AMC S ALSO SHEDING SHEDING CROCODILE TEARS ,ONLY TIME WILL TELL THEIR TUGHLAQ POLICIES &ITS CONSEQUENCES.I

kishore ghiya

6 years ago

in jan 2008 sensex was 21000 went down to 8000 in oct. 2010,reliance power ipo scam and satyam scam still no punishment has made retail investors lose faith in share market. They are exiting at every 1000 point gain. Mutual fund indsustry they themselves have to blame because of chrning and misselling the product and entry of hundreds of part time distributors like CA and small savings agents.With discontinue of big entry load commission they have lost the interest.
Only and only formation of more and more investors clubs to self educate investors by govt and industry will bring new fresh investors.It is hard work and sebi should relax rules for new small brokers,companies and exchanges and foreign brokers to serve retail investor will result in u turn.Till then let us see if Assochem or ficci comes out with suggestions. Their members are worst hit because of unable to tap capital market.

Ashok J Verma

6 years ago

It seems MOF is comfortable with:
a) small mutual fund investor vanishing
b) Valuation/market cap of AMc eroding
c) eccentric dictator taking decesion which benefits NSE & NSDL.
d) instead of punishing mis-sellers, killing the whole distributing network which will require huge money and time torebuild
e) in the meantime investors will be lured by other intermediaries of un-regulated and un-organised investment sectors like real estate, jewellwes, chit funds, one two ka four scheme, private hundi finance schemes and many more...

Ranjan D Gupta

6 years ago

Unless AMFI is serious to evaluate the changes enacted by SEBI and the long term implications nothing is going to happen on the positive side of the industry.Under such dismal circumstances AMFI wants to introduce KYC for all investors. This will make things worse. Because lot of investors who do not afford to invest more than Rs.500/- per month will be prohibited to invest because of lack of KYC. The investors suffered particularly in rural and semi urban areas.I am not against KYC but it is not the right time to introduce this rigid rule and this rule can be slowly implemented.

REPLY

kishore ghiya

In Reply to Ranjan D Gupta 6 years ago

KYC norms are part of agreement we have signed with USA .They want identity of who brings money and we have to ocmply their wish. They are fighting terrorism and we are also.KYC norms are must to check havala and mafia money entering.If you wnat to earn honestly then we should not grumble it is in interest of our clinets. A person without pan card has to pay 20% deduction on tds.Let us be kyc comply and more fii investments will come when they are convinced in our financial system.

Roopsingh

In Reply to kishore ghiya 6 years ago

I fail to understand your point of validating KYC for all investors and to show ourselves as slaves to USA-do u mean to say that one million investors in MF are terrorist?a retired person puting his money in MF should be treated as a "possible"terrorist?do u think terrorist are so big fools that they will put few thousand rupees in MF?as per SEBI all indian people can be terrorist but foreigners puting money through participatory notes p-notes are very nice honourable people-so P-notes should not reveal identity of actual investor?Mr kishor you seems like a foll while talking about USA clubs and USA agreement-terrorist are not putting in stock market-they are putting money physical gold and real estate-and even in post office and LIC because any one can put black money in post office-even a terrorist can put his money in post office easily-si why he will put in stock market-all commentsput by you are just rubbish-

kishore ghiya

In Reply to Roopsingh 6 years ago

Roopsinghbhai, i am sorry if you do not agree,be practical it is fii money bringing cheers to stockmarket and i like them because he buys from me shares,land gold etc at high prices and gives me money.Pl atleast visit motley fool.com site and read how the clubs are functioning it is suggestion for our clients.Retired judge has to file IT return if he earns same way the investor has to be KYC complaint and that is policy of our govt and not that of sebi or amfi.You can be angry over me for disagreeing but we enjoy freedom of speech and now mahiti adhikar don't you think we are better than part of north pakistan.

Shabbir Haidermota

6 years ago

Add to this, AMFI wants Distributors to undergo and comply with "KYD" Know Your Customer norms. Pray what noble purpose is this exercise in futility going to serve other than harrass already disgusted Independent Financial Advisors ? If as an investor I wish to invest in mutual funds I need to be "KYC" Compliant anyways which provides the same information to CAMS / Karvy / AMFI / SEBI. Then why this farce of a "KYD" - Mr. Sinor, no other work to do so you indulge in this frivolity ?

REPLY

Roopsingh

In Reply to Shabbir Haidermota 6 years ago

If i am not wrong-you were in surat few months back to take a training session of reliance MF-reliance edge-am i right?pl let me know.

Rajeev kumar

6 years ago

Thanks again good news for devlop contiry india advisors & investor both away from market ie strory of INDIA Shine

SHANKAR

6 years ago

VERY VERY GOOD.ALL THE INVESTORS SHOULD REDEEMED THEIR MONEY AND PUT IT IN UNIPAY2U.I AM FROM ASSAM AND MANY PEOPLE ARE DOING IT.UNIPAY2U IS GREAT.IN 10 MONTHS YOU GET 200%.CAN SEBI DO ANYTHING

REPLY

Ravindra Shetye

In Reply to SHANKAR 6 years ago

Is possible only in a Ponzi scheme. Wait for a couple of years and see.

HCL Infosystems wins project worth Rs100 crore from Himachal Pradesh State Electricity Board

HCL Infosystems Ltd, a major information enabling company, said it has secured re-structured accelerated power development and reform program project worth nearly Rs100 crore from Himachal Pradesh State Electricity Board.

The project will involve use of a state wide solution to establish the baseline data and IT applications for energy auditing and IT based consumer service centres in 14 towns, comprising 30 sub-division offices and 293 other offices.

HCL Infosystems will be setting up a disaster recovery centre, and also modernise the existing data centre along with creating a wide area network.

On Monday, HCL Infosystems shares climbed 4.6% to Rs131 on the Bombay Stock Exchange, while the benchmark Sensex closed 2.2% higher at 19,208 points.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)