Principal Financial Well Being Index 2013 has been launched by the asset management company Principal. The Index is based on a survey of Indian households and covers issues related to household spending; saving and investment attitude and trends; financial priorities and attitude towards finances; availing services of financial advisors; perceptions and attitude towards retirement planning; and employee benefits and satisfaction levels. The survey attempts to highlight the Indian household’s perception of its own financial health and economy, in general. The Principal Financial Well Being Index will be based on an annual study charting the progress / movements on these topics year-on-year. The first study has been conducted with Principal’s research partner—Nielsen & Company—during the last quarter of 2013.
The study was conducted in 11 cities—Mumbai, Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad, Pune, Chandigarh, Lucknow & Jaipur and a total of 1,664 Indian households were interviewed. The respondent profile includes: age 25 to 60 years, SEC (socio-economic classification A & B), annual household income of Rs5 lakh, salaried or self-employed professionals and employed full-time/ part-time with either a small, medium, or large-sized company. Quantitative research was conducted using a structured questionnaire.
Defying the market expectations and those of the finance minister P Chidambaram, Dr Raghuram Rajan, to fight inflation, raised the repo rate 25 basis points to 8%— his third rate hike (of a total of 75 basis points) since taking charge in September 2013. “An increase in the policy rate will set the economy securely on the recommended disinflationary path,” RBI said. RBI’s decision came five days after the finance minister issued a veiled instruction to RBI, that it, too, had a duty to help in economic growth. But RBI has openly declared that its mandate is to fight inflation, and consumer price inflation at that.
Indian Railways Finance Corporation (IRFC) extended the closing date of its tax-free bond issue to 7th February. The struggle to raise subscriptions for AAA rated bonds of IRFC could be due to its big issue size of Rs8,663 crore, lower coupon rates than those offered by recent offers as well as the fact that IRFC had already raised money in the previous financial year. Investors rushed to small-size tax-free bond issues of NTPC, NHPC, NHB and NHAI; these were oversubscribed within a few days. It also means that investors are not swayed by just the ratings; there is a need for diversification. IRFC did not have the 20-year investment option which was available for the tax-free bonds of NTPC, NHPC and NHB.
NHAI offered retail investors 8.52% and 8.75% for bond with maturity of 10 and 15 years, while IRFC is offering 8.48% and 8.65% for bonds with tenure 10 and 15 years, respectively. Indian Renewable Energy Development Agency (IREDA) is planning to raise Rs1,000 crore through the issue of tax-free bonds for financing its renewable energy and energy-efficiency projects and to augment the company’s resource base. The bonds are rated AAA by CARE and Brickworks.