Opposition attacks UPA government over FDI in retail, wants rollback

Sushma Swaraj maintained that the concept of large supermarkets has failed in Western economies and wondered how the government was claiming it would create jobs in India

New Delhi: Slamming the United Progressive Alliance (UPA) government for allowing foreign direct investment (FDI) in retail, Opposition on Tuesday asked it to withdraw the decision in national interest fearing it would render retailers jobless, impoverish farmers and hurt consumers, reports PTI.
Initiating the debate on the issue, Leader of the Opposition Sushma Swaraj contended that Prime Minister Manmohan Singh, as Leader of the Opposition in Rajya Sabha in 2002, had opposed FDI in retail and questioned as to what has changed that the government is so determined to implement it.
In her nearly 90-minute speech, punctuated by repeated disruptions and heated exchanges, Swaraj maintained that the concept of large supermarkets has failed in Western economies and wondered how the government was claiming it would create jobs in India.
She asserted that Bharatiya Janata Party (BJP) was not opposed to FDI per se and as Leader of the Opposition she was willing to travel with the Prime Minister across the world to invite investments in other sectors like infrastructure. Singh was present when she spoke.
Appealing to parties like SP and BSP to support the motion moved by her and Khagen Das (CPI-M) against 51% FDI in multi-brand retail, Swaraj said any defeat during vote will not bring down the government but will force it to rollback the decision on FDI.
"Your fear that the government will fall because of this vote is unfounded," she said turning to members of SP and BSP, which have so far maintained ambiguity over their stand on voting.
Pressing for rollback of the "disastrous" FDI decision, she told the government "hum aapko hara ke jeetna nahin chahte, hum aapko mana ke jeetna chahte (We don't want the rollback by defeating you. We want the rollback by convincing you)," she said.


Indian couple in Norway convicted; father gets 18 months, mother 15

Chandrasekhar Vallabhaneni and his wife Anupama were convicted for child abuse and sentenced 18 and 15-months jail term, respectively 

Oslo: The Indian couple facing criminal charges of child abuse were convicted on Tuesday by a district court here with the father getting an 18-month jail term and mother being sentenced to 15 months, reports PTI. 
Chandrasekhar Vallabhaneni, a software professional from Andhra Pradesh, and his wife Anupama, who were arrested by the police in November, were convicted for gross or repeated maltreatment of their child/children by threats, violence or other wrong.
The prosecution had proposed a sentence of 18 months for the father and 15 months for the mother in the case which was upheld by the Court.
Reacting to the Court verdict, Indian officials in the Ministry of External Affairs said, “Our embassy in Norway has been in touch with the Indian nationals involved in the case. Even during the course of their detention the Consular Officer has been in touch with them. We will continue to render necessary consular assistance and will be in touch with their lawyer.”
Justifying the arrest and charges, Kurt Lir, Head of Prosecution, Oslo Police Department, had said that “there were burn marks and scars on the body of the child, who has also been beaten by the belt.”


Are some fund houses taking advantage of SEBI’s sloppiness to pick investors’ pockets?

Some funds are re-routing applications of the top 15 cities through other cities to claim the additional expense ratio at the expense of investors. This is exactly what we had suggested would happen in a Moneylife seminar on mutual funds recently

Fund houses are allowed to charge an additional total expense ratio (TER) of up to 30 basis points (bps) based on inflows from beyond 15 cities, as per regulations of the Securities and Exchange Board of India (SEBI). According to The Economic Times, mutual fund companies are said to be directing applications from top 15 cities through other cities to show a higher inflow from beyond the top 15 cities to grab the extra expense. Such malpractices were bound to happen. An unaccountable and lackadaisical SEBI has a left a huge gap in regulations which is being exploited by fund houses. In a special seminar on the new rules conducted by Moneylife Foundation on 26 September  (Read: Mutual Funds Seminar: How will SEBI's new rules affect your investment?), Debashis Basu, editor and publisher of Moneylife magazine, brought up this fact and had forecast that fund houses would find a way of earning this additional fee, considering that major inflows come from the top 15 cities. As per the latest AMFI report, as much as 87% of the assets managed by mutual funds come from the top 15 cities. Before this regulation came in force from 1 October, we had mentioned that the calculation is complicated and there is low accountability. (Read: Mutual funds to be expensive from 1st October)


Moneylife contacted the Association of Mutual Funds in India (AMFI) to seek a clarification on the calculation for the additional expense ratio, whether it would be done on the basis of the address in the KYC documents or on the basis of from where the application has been filed. AMFI refused to divulge any information on this. However, according to a source from the fund industry, there is no clarity on the calculation for the additional TER. Up to 31 March 2013, additional TER charged would be based on the inflow from the respective city and post that it is likely to be based on the pin-code of the address mentioned in the KYC document. However, no official confirmation has been received, said the industry source. Till then it is likely that fund houses looking to gain that additional fee would re-route applications of top 15 cities through other smaller towns and cities and take advantage of the huge loophole left by unaccountable and lackadaisical SEBI officials.

  1. But still, this is just the first part of the clause to increase penetration beyond the top 15 cities. The second part states that the claw-back of additional TER charged, if the inflow from beyond 15 cities is redeemed within a period of one year from the date of investment. However, at present, there is no clarity if there are any checks for the same. The regulator’s move in order to ‘benefit’ the industry without any accountability seems to benefit just the asset management companies.




4 years ago

It is simple, if the address of the first applicant as per the KYC is from one of the top 15 centers, then it is an investment from one of the top 15 centers.

If such application is shown as application from a tier2 city then it must be deemed as violation of SEBI’s MF regulations and must attract penalty accordingly.

A better way could be to periodically review the effectiveness of the new measures issued by SEBI to revive MFs. If any of these measures are abused or found to be ineffective, there’s nothing that stops the Regulator from refining or redefining such measures.

Also, SEBI can always roll back the 30 bps additional TER.

Suiketu Shah

4 years ago

this is another reason why its best to avoid mutual funds.Go for FD's or if you have a risk appetite longterm shares like HDFC ltd,RIL,HDFC Bank,TCS,IDFC,etc.

The mutual funds industry is dying due to unscrupulous tactics of fund houses and agents.



In Reply to Suiketu Shah 4 years ago


Bad behavior must never escape punishment. This serves as a deterrent for others who may be tempted.

Also am curious to know what is your profession or business?


4 years ago

Similar reports have come in print media but reports like this are are vague isn't it?
The errant AMC's/MF's should be named otherwise every AMC/Fund house is now suspect!



In Reply to DEEPAK KHEMANI 4 years ago

Hi Deepak,

I wouldn't be surprised if Franklin Templeton is not among the list. I have been tracking expense ratios of various mutual funds since some time. Franklin Templeton is one of the first fund house to increase the expense ratio for all its funds. In some cases they have increased the expense ratio by more than 30 bps. And I am not talking about some obscure fund, but some of their well established funds.

You can refer to Morningstar website which as of now is showing the older expense ratio and compare that with the expense ratio in the FT website. You will notice a 30 bps difference.

What sursprises me the most is that are inflows to FT so large that right from October they could change the expense ratio? They haven't disclosed AUM by geography in their website since September 2012. And even for September 2012, their inflows from Top 15 cities are 83%. I wonder how they have charged the extra expense ratio.

I am not sure which other AMC are also doing this as there is very less (reliable) public data on expense ratio.


In Reply to pravsemilo 4 years ago

CORRECTION - Actually September 2012 has to be read as September 2011. The latest data on their site is for June 2012, which is however almost same as September 2011's data.

Also to mention that AMFI's website shows that almost 85% of inflows are from top 15 cities. Individually all the AMCs have a ratio in the same range. I wonder how do AMCs are able to charge extra 30 bps.

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