Inflation, slowing growth to impact revenue collection: Finance ministry

“Any roll-back of customs duty on crude oil or of excise duty on petroleum products on account of rising crude prices or on account of deregulation of diesel prices will significantly impact our indirect tax collection,” revenue secretary Sunil Mitra said

New Delhi: The government could miss the revenue collection targets during 2011-12 mainly on account of high inflation and moderating economic growth, reports PTI quoting a senior finance ministry official.

“Inflation can affect domestic demand and thereby adversely affect GDP growth... and consequently our tax collection,” revenue secretary Sunil Mitra said while speaking at the annual conference of chief commissioners and directors general of income tax.

Mr Mitra opposed any roll-back of customs or excise duty on petroleum products and said such an action could also impact indirect tax collection.

“Any roll-back of customs duty on crude oil or of excise duty on petroleum products on account of rising crude prices or on account of deregulation of diesel prices will significantly impact our indirect tax collection as well,” Mr Mitra said.

“Given these possibilities, I have serious apprehensions in respect of our tax revenue collection this year,” he added.

Finance minister Pranab Mukherjee, who was also present during the event, concurred with Mr Mitra’s views.

“He (Mr Mitra) has raised the issue rightly... situation is not conducive,” he said.

Mr Mitra, in his speech, also said that while the last fiscal has been a good year for tax revenue collection, the same may not be true in 2011-12.

“I would like to sound a note of caution in respect of targets for direct tax that has been set for this year at Rs5.32 lakh crore,” Mr Mitra said.


HSBC’s new home loan pay-back offer: Is it such a big deal?

The British bank promises to refund half the interest component on three EMIs. It’s a first in the home loan business. But does it amount to very much any way?

HSBC India has announced a new home loan package offering to pay back part of the interest to borrowers. Yes, like the foreign bank claims, it is a first in the home loans business. But if one takes a careful look it might not be such a big deal after all.

The scheme which was prominently advertised last week, promises to give back 50% of the interest on the 12th, 24th and 36th EMIs (equated monthly instalments). It reads, "If the interest on your 12th EMI is Rs50,000, you get Rs25,000 paid back to you after you pay the instalment." That does seem quite a large refund. According to figures available, the interest on the 24th EMI would be about Rs48,000 and the refund Rs24,000, while the interest on the 36th EMI would be about Rs47,000 and consequently the borrower would receive a refund of Rs23,500.

This adds up to a hefty refund of Rs72,500. Please note that this kind of refund would be available to borrowers taking a loan of Rs80 lakh. However, for the average home buyer taking a loan in the region of Rs30 lakh, the component of interest refund promised in the three instalments would add up to about Rs27,000 only. Is this such a big deal?

Of course, the first thing that a borrower looks for is the interest rate on the loan. HSBC's rates start at 10.25% on loans up to Rs30 lakh, 10.50% up to Rs75 lakh and 10.75% on loans exceeding Rs75 lakh. These rates are 25 basis points higher than the rates offered by HDFC, the housing finance market leader. But HSBC's rates are on level with State Bank of India's home loan rates.

There is one further condition, whereby a borrower must have a savings/current account with HSBC and maintain a minimum balance of Rs25,000. The bank says it will credit the refund to this account. While, most foreign banks have this minimum balance condition for savings/current accounts, HSBC says that it is willing to waive the minimum balance for home loan borrowers.

HSBC has a constant EMI for the entire loan period, in spite of the fact that some funds are parked in the savings/current account, and there is no compensation on the interest component. Perhaps, the only concession from HSBC is the flat Rs10,000 loan processing fee which is lower than the 0.5% on loan amount charged commonly by home finance companies.

HSBC also has a higher prepayment charge of 3% (against the industry average of 2%) when more than 25% of the loan amount is prepaid in one go.

HSBC will not finance under construction properties through this scheme and any new property must be ready for occupation at the time of the disbursal of the loan. The bank also allows loans under this scheme for existing properties as well. The special offer is valid on floating rate home loans, but it is not valid on Smart Home and SmartLAP schemes of the bank.

It is unclear whether the refund amount will be liable for income tax. And finally, the offer is valid only till 31 July 2011. So why is HSBC in such a hurry to pick up customers in this two months period? Perhaps, there lies the answer to this innovation.


Airtel 3G: Emotion over logic

The Airtel commercials cut out the tech talk and stick to basic human emotions, making the ads watchable; so much better than the rivals’ ads

Must say, so far the 3G communication from various telecom companies has been mighty unimpressive. Given that the tech is a revolution in cell phone internet, one expected some really kickass advertising. Vodafone's cute zoozoos, who otherwise do pretty zippy stuff, lost steam in the 3G ads. The super zoozoo, who represents Voda's 3G, is a super letdown. And Idea's Bachchan Junior ads for their 3G pitch are downright irritating. (Though the actor did work for them in the 'Get Idea' number portability series.)

However, Airtel's ads for 3G are much better and more focused. And that's because instead of resorting to gimmicks and juvenile ads, they have kept emotion at the core of the communication. And it's the correct strategy. However revolutionary the 3G technology might be, it must deliver on the ground in terms of connecting people. That's what really matters to the end-users.

There are three commercials on air. The first one deals with video calling. In this one, an Air Force officer on duty video-calls his girlfriend back home, and they enjoy a naughty (almost erotic) banter. It's shot well, the models act nicely and the ad packs in the right mix of emotion and passion. So you don't mind the repeated exposures.

In another commercial that talks of high-speed connectivity, a young dude is able to, through his FB pals, instantly locate the cad who dared kiss his granny's cheeks many years ago-much to the joy of his revengeful grandfather. This commercial is funny and endearing. And is in fact already a hit on Facebook.

In the third ad, a lad is reluctant to go to Bangkok for a family function, and this upsets his father. But on his tablet he discovers Bangkok to be a happening, rocking musical place. And suddenly agrees to join in. Of course, the daddy has no idea what's behind the change of heart. As an aside, must say that the son would have discovered massage parlours rather than opera singers; but of course Airtel can't feature that. The hyper active moral policemen and women would arrive at their corporate office at the speed of 3G.


Yup, Airtel's doing the right thing: Creating disparate communications for various 3G applications, thus appealing to different consumer segments, each with their own needs. And cutting out the tech talk and sticking to basic human emotions is a sensible route. It also makes the ads watchable. So much better than the rivals' ads. Idea's Small B and Voda's super zoozoo have already become blind spots.




6 years ago

What are you talking about. Apart from the Kantilal ad I did not find any of the Airtel ads remotely amusing. Vodafone ads on the other hand still hold their charm. But I agree with you that the Idea ads dont work.


6 years ago

A soldier asking his babe to show the mole on her neck - actually suggesting to the young crowd what 'fun' they can have with their girlfriends thnx to video calling
A son seeing THAI MASSAGE video and agrees to his parent's demand of going to Bangkok... any son of a gun will die to go to bangkok but this dude decides only after seeing the HOT stuff available there... CHEAP again...
Oldie using his son's dude connections to locate an old foe and then kisses his 60+ wife... wow, what an example for your son

Way to go airtel, not only you are the worst cheater company EVAR, you are also the one with the CHEAPEST ADS around



In Reply to buzzz 6 years ago

I agree with you,especially,the Kantilal ad,wherein the wife of culprit is targeted,as if she is an object to retaliate.Whats the difference betwn uncultured people & so called educated one ?


6 years ago

Well the Airtel ads are nice. The kantilal godbole one is best of all. The first is nice mushy... but after the first few times you zap. Not so with the zoo zoos. The test of an ad is if you can keep watching it over and over again. The super zoo zoo is really super cute. I never zap!!
Another is the insurance ad with the cute blackmailing kid who extorts from grandma - the regular income one. But dashed if I remember whose ad it is. What a waste of money for them, even though the ad is terrific.
Ads are a matter of personal opinion ... what? but I like your reviews.


6 years ago

Paid ad...
Vodafone ads are by far the best.

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