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 today because someone planted a

 tree a long time ago

-Warren Buffet

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We should not forget that the ongoing pandemic is not only affecting the revenue of states, it is impacting the Centre too 

The 43rd GST council happened on May 28 under the shadow of the COVID-19 second wave. needless to say , the difficulty of compensation to states was a key issue of dialogue aside from changes in GST rates on supply of products and services, and changes associated with GST law and procedure. As we all know , states agreed to hitch the new tax regime provided they were compensated for any revenue loss within the first five years from Dominion Day , 2017 to June 2022.

Today, state governments are battling their declining revenue and increased expenditures. The lower revenue growth curtails growth in expenditure and it seems that any revenue loss will further hurt spending. the most source of revenue for states are taxes. consistent with their allow FY21, about 70 percent of revenue comes from taxes. The revenue growth for states within the current fiscal is almost zero percent as compared to previous year. The second wave and accompanying lockdowns are likely to impact revenue this year too. it'll cause states demanding a better compensation.

Section 18 of the Constitution (101 amendment) Act, 2016 and Section 7 of GST (Compensation to State) Act, 2017 permits that the loss of revenue are going to be compensated to states at the top of each two months for five years. The shortfall is calculated assuming a 14 percent annual growth in GST revenue over the bottom year of 2015-16. Now, two questions arise: One, whether the compensation period should be extended; and, two, whether the compensation amount should be calculated at 14 percent revenue rate of growth .

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First, we are within the last of the five-year compensation period promised to states. Some states are asking that the amount of compensation be extended. Rajasthan Chief Minister Ashok Gehlot has written to Prime Minister Narendra Modi and asked that the payment of GST compensation to states be extended till 2027. The experts of Gulati Institute of Finance and Taxation (GIFT), which is affiliated to the Cochin University of Science and Technology, are of an equivalent view, and argue that as long as there's GST there should be GST compensation for states.

India is moving towards a one-nation, one-tax concept. Thus, the absence of GST compensation threatens the concept of GST. during this backdrop, minister of finance Nirmala Sitharaman assured states that a separate meeting of the GST council are going to be held to debate the difficulty of extending the GST compensation beyond 2022.

Second, whether the compensation should be calculated at 14 percent revenue growth. As per GIFT, while states had surrendered 51.8 percent of total tax income , the Centre sacrificed only 28.8 percent of gross tax income for getting into the GST regime. this suggests that the value of the introduction of the GST wasn't shared equally by the Centre and states, but they're sharing the GST revenue equally. This strengthens the case for the states to urge compensated at 14 percent.

At an equivalent time, one must not forget to ascertain the difficulty at hand from the Centre’s point of view.

We should not forget that the continued pandemic isn't only affecting the revenue of states, it's impacting the Centre too. The Centre’s total revenue has declined by 23 percent, the gross tax income by about 21.6 percent, and therefore the expenses have surged 13.4 percent in FY21. Hence, the fiscal deficit reached to Rs 18.2 lakh-crore (9.3 percent of the GDP) and Debt/GDP to about 90 percent.

Given this, is it right the a part of the states’ demand of a 14 percent compensation? Would the Centre be ready to compensate at that rate? Former Chief Economic Adviser Arvind Subramanian has suggested that the Centre and states negotiate a one-off political solution considering the effect of the pandemic on the economy.

The Centre, through the statement by Revenue Secretary Tarun Bajaj, has made its stand clear that the govt will take an equivalent methodology and formula as last year to calculate the gap for FY22. He expects the states’ revenue deficit would be around Rs 1.58 lakh-crore this fiscal. The Centre has estimated the entire state revenue deficit of Rs 2.69 lakh-crore, and expects to gather over Rs 1.11 lakh-crore though cess. Hence, Rs 1.58 lakh-crore would be borrowed this year. The formula for compensation borrowing is in situ since 2020.

In the last fiscal, the govt calculated Rs 2.35 lakh-crore of the entire revenue deficit for states after deducting the compensation cess of Rs 0.65 lakh-crore. The deficit was further bifurcated into GST revenue shortfall (Rs 0.97 lakh-crore) and therefore the rest was due to the pandemic. In FY21, the Centre had borrowed on behalf of the states and released Rs 1.10 lakh-crore for compensating the states.

It is hoped that this year the states are going to be entirely compensated by the Centre because the government is certain that the GST revenue collection will follow an equivalent path it's followed since October 2020. Data issued by the Controller General of Accounts for April 2021 also shows that there'll be limited impact on the economy as compared to 2020.

All said, it's likely that the Centre and therefore the states will find a middle way on GST compensation.

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Fund managers across the planet speak an identical language while addressing investors who look to allocate money across equities. it's common parlance to talk about equity investing with a 5-year horizon in mind. However, watching data across investments in funds over the last 40 years shows that a mean investor holding in mutual funds is currently at 2.2 years.

The same number was at a mean of three .3 years, 10 years back. Fidelity Investments conducted a study on their Magellan fund from 1977-1990, during Peter Lynch's tenure. His average annual return during this era was 29 percent. this is often an interesting return over the 13-year period. He was easily one among the best-performing fund managers for his asset class. It should be noted that this wasn't a secret. Fidelity's Magellan fund became one among the most important mutual funds thanks to its success under Peter Lynch. Given all that, you'd expect that the investors in his fund made substantial returns over that period. However, what Fidelity Investments found in their study was shocking. the typical investor within the fund actually lost money – again has got to do with how long the investors held the fund, and once they entered the fund.

A look at an alternate asset class in investors' portfolios, land , and land combined paints a really different picture. the typical holding period for the asset class for investors within the residential asset class has been 9.5 years in India and eight .6 years globally. this is often in sharp contrast to the holding period of equities. the 2 reasons one can attribute to the present relate to the high transaction costs and therefore the relatively low liquidity of the asset class as compared to equities.

Every fund manager wants their investors to remain with their fund and increase their duration that they will manage their client's money. However, it's important for the fund manager to understand that the chances of doing an equivalent are against them. There are some learnings from the important estate holdings of investors that one can apply to equities to extend an equivalent odds, and successively , ensuring investors stay invested for a extended cycle within the fund.

One of the important aspects of equity investors that land investors wouldn't need to see is news-based volatility that immediately translates into price moves. These for the foremost part are unnerving for investors which tends to form them pull out money during times of volatility – though they often tend to be periods of opportunity (with the advantage of hindsight).

It is important that fund managers consider it imperative to teach their investors and clients on the investments they hold alongside the rationale. The human mind derives comfort out of the known and panics out of the unknown. While land prices may fall too, we derive comfort with the situation at which we own the asset. However, in many cases, an equivalent comfort doesn't come from the fund, as that has predominantly been the world of the unknown for investors.

The second aspect that fund managers would be better doing is to manage the downside risk for investors. While the pressure to be the simplest performing fund annually exists for all funds, it's imperative for the fund to be the foremost consistent (rather than the simplest performing) - consistency is measured from how often the fund is among the highest 10% of the funds annually . This puts a much bigger onus on risk management instead of watching absolute performance annually .

While it's easy for responsible investors and says that they are doing not check out the asset class from a long-term perspective, it's imperative that the industry looks inward and takes steps as an attempt to consciously increase the holding period of investors – this may provide an outsized win-win situation for the industry and tremendous tailwinds to equity investing as an asset class in our country.

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"Do Not Save What is Left After

 Spending, But Spend What is Left 

 After Saving."

-Warren Buffet

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Stock market trading or just trading is typically identified because the process of shopping for and selling securities or shares of any company for brief term with the intention of extracting profits. stock exchange trading isn't a simple task and requires discipline, finesse and knowledge of market insights. Discipline is one among the foremost important aspects for being a successful trader.

Trading isn't only limited to intraday, it's several different styles and methods counting on the trader. Different traders choose different styles because all of them has their own requirements and features. there's a standard myth out there that trading only refers to intraday but that’s not the case. There are various other trading styles which assist you to trade the marketplace for short term. Let’s discuss about a number of the commonly practiced trading styles and determine which one are going to be the right bet for you.

1. Positional Trading:

Positional Trading may be a preferred trading style by most of the traders because it features an extended time implication in comparison with Intraday. Positional trading aims to form the foremost out of market opportunities and thus the span varies largely from few days to few weeks to even a few months. Traders who trade with position trading make use of a mixture of fundamental triggers, technical charts and news flow so as to require trading decisions. Positional traders usually use news flows as a trigger and fundamentals are wont to ratify the story. The entry and exits within the position are timed using the elemental charts.

Unlike intraday, positional traders ignore short-term price fluctuations and aim at extracting profits from medium term and future market trends. you would possibly be thinking that positional trading is analogous to investing, but that’s not the case. The key difference between position trading and investing is that investors check out only long trades where they will earn profit by the rising market whereas positional traders choose both short side also as long side strategies supported the trigger strength.

2. Intraday Trading:

Intraday trading or day trading is perhaps the foremost preferred trading style within the Indian share markets. It involves buying and selling of securities on an equivalent trading day. Intraday traders avoid deliver-based trades because an overnight position isn't preferred by them. Intraday positions are held from jiffy to few hours by the traders. A trader can purchase first and sell afterward an equivalent day, or maybe sell first and buy afterward an equivalent day. the method of selling first and buying later is understood as short sale .

Intraday trading requires great knowledge and knowledge . It aims to extract profits from small market movements. Intraday traders are great chartists and thus enter in very acute level based positions. However, intraday trading requires time and this is often the rationale that intraday traders and full time traders. Market Pro can assist you if you're new the market and don’t have proper knowledge and knowledge .

3. Swing Trading:

Swing trading may be a trading style which mostly relies on technical analysis. This includes breakouts, news flows. The exit and entry levels are determined using [price action. Swing trading hardly requires any fundamental analysis which is perhaps the most important benefit. Swing traders aim at capturing short term market movements and hold their position for a span of few days to weeks.

Swing traders close the trade with discipline i.e. a trade is closed after reaching a previously established target price or if the trade is stopped. Swing trading strategy is widely utilized in derivatives. Delta Derivative Plus may be a swing trading strategy which helps you create the foremost out of the derivatives market.

4. Arbitrage Trading:

Arbitrage is more of a trading strategy than style, and may be performed during a number of the way . This includes cash and futures arbitraging which give good returns as compared to the bond returns. there's exchanging arbitraging also which is extremely rarely employed by traders. Arbitraging is additionally through with option mispricing by the traders but it requires the assistance of algos.

The scope of profit is extremely little just in case of arbitrage trading but the incurred risk is additionally very less because these are long short positions. Arbitraging may be a preferred trading sort of mutual funds, proprietary desks and institutional investors because it requires locking from your capital.

5. Scalp Trading:

Scalp trading is vital trading styles for the market because it helps to make liquidity and also aids in compressing the bid ask spreads of the market. Frequent buying and selling is required throughout the session, therefore scalp trading are often considered as a highly active trading style. Scalp traders attempt to capture tiny price movements but trade large volumes. They believe the strategy of small gains by churning there capital multiple times.

Scalp traders or scalpers got to be extremely cost-sensitive and typically trade on low commissions. the rationale for this being the massive volume they trade. It is often considered as a high-risk trading style because it relies on having a high percentage of winning trades. a couple of bad trades and your portfolio start bleeding. it's vital to urge your risk profile analysis to understand your risk-bearing capacity before being a scalper.

5. High Frequency Trading::

High-Frequency Trading or HFT may be a newly introduced trading style within the Indian financial markets which operates by using algorithms and technology-driven executions. High-Frequency Trading requires you to trade across multiple assets and classes and even across multiple markets so as to balance your risk. so as for HFT to be meaningful, it should be practiced with low latency. The complex nature of HFT makes it impossible to execute the trades manually.

High-Frequency Trading has been within the headlines within a previous couple of years because it had been held liable for various flash crashes within the financial markets.

Conclusion

Choosing the proper trading style may be a vital factor for a trader. It should be done to support the danger profile analysis, time commitment, and invested capital. If you're still confused with choosing the right trading style for you, it's better to consult a SEBI registered investment adviser who won't only assist you with selecting the right trading style but also will guide you thru the trading journey.

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There is a boom in offshore accounting jobs in India with remote working becomes the new normal. Indian professionals in various levels of their CA qualifications can now get a chance to join global accounting firms.

An unlikely impact of the COVID-19 pandemic has been that accounting jobs that might require a physical presence within the workplace are now going offshore.

Consultants are now seeing offshore accounting jobs come to India with remote working becoming the new normal. this is able to mean that entry-level chartered accountants who have cleared CA Intermediate or second level of the examination could become eligible for applying for these roles.

Shalin Parikh, President, and CEO of Integrity Group said that accounting firms would have high levels of client confidentiality and remote offshore roles wouldn't are a preferred option earlier. But this stigma was removed amid the pandemic.

Integrity Group is an offshore staffing solutions provider to quite 550 accounting and tax firms situated across us and Canada.

"It remains initial days but the numbers are slowly growing. The stigma around building offshore accounting firms goes away. The pandemic has helped make the shift," Parikh added.

The companies that are hiring include large, mid-sized, and little companies, especially from markets just like the US and Canada.

India features a good talent pool within the accounting space. When it involves CA Inter, on the brink of 3,500 passes the Group I exam per annum. About 5,400 pass Group II. Both groups put together, about 1,200 clear the exam.

Delhi-based hiring consultant Gizelle Lobo told Moneycontrol that while there are always job roles open for qualified CA professionals, the pandemic has forced companies to travel cautiously.

"While CAs would be considered the crème de la crème in India, not most are hiring. So, offshore accounting jobs are an honest fit for such candidates," she added.

The pass percentage for the CA exam conducted by ICAI is on the brink of 10 percent making it the toughest examination within the country. per annum, about 4.50 lakh candidates give the examination.

Considering the talent pool available in India with this qualification, global accounting firms are now eyeing candidates from this market.

Parikh explained that for the mid-sized and little international firms, it's not feasible to line up a physical presence in India.

"These firms do not have the time to line up offices in India to access the worldwide talent pool. So, the structure of offshore jobs work well for them," he added.

For Indian candidates, the sole thing to recollect is that while salaries would be at par with the Indian firms or maybe better, there might be time-zone differences.

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For instance, if you're employed with a US-based company, you'll be required to follow their zone which could impact your work-life balance.

As cloud technology is being strengthened to guard data theft and cybersecurity, Parikh added that more companies are going to be hospitable hiring remotely.

"We have just scratched the surface for offshore accounting roles. The market will boom over subsequent few years," he added.

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The broader market has been a marked outperformer in the recent past. The brokerage firm expects the broader market outperformance to accelerate wherein catch-up activity would be seen in small caps.

The S&P BSE Sensex is just 3 percent away from retesting its record high of 52,516 while the Nifty50 is just about 1 percent away from creating history, as of May 26 closing date.

Nifty hit a fresh record high on May 28.

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Indian stocks will continue to command value, perhaps even more than now, depending on the pace at which the real economy canters back to normal activity. Until that happens, the risk of an asset bubble will always remain.

Bloomberg Intelligence's strategists said these stocks are "very well aligned to a couple of catalytic events that the market is presciently sniffing out" like infrastructure spending, fiscal support to spice up consumption, and global tailwinds for exporters. (Representational image)

For the sake of study , it's sometimes useful to divide the economy into two slices: the financial sector and therefore the real sector. very often , the developments during a country’s stock markets function a harbinger of what could happen within the real economy.

The trends during a country’s equity markets are among the foremost noticeable markers in an economy. Indian markets have vaulted to a $3 trillion market capitalization last week. This begs the question: is that the real economy on the verge of a takeoff too?

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Let’s examine this.

Ceteris paribus, Latin for other things remaining an equivalent , is that the most elementary assumption in any economic modelling and analysis. as an example , the connection between demand and price of an honest .

The law of demand states that as price rises, the good’s demand falls. Likewise, as price falls, the number demanded increases. the connection is inverse, but only under ceteris paribus conditions, that's other things remain an equivalent .

But, what if the demand for a particular good goes up but its supply is restricted or constant? therein instance, the good’s price will start rising as people attempt to outbid one another to urge hold of the merchandise . Since supplies can't be replenished to satisfy the growing demand, prices will rise.

Who is driving the market rally?

That precisely seems to be playing call at India’s stock markets currently. Prices of mid-cap and small-cap stocks have fuelled the surge in record market capitalization .

Importantly, domestic institutional investors (DIIs), open-end fund and insurance companies are driving this rally, reflecting their optimism in these classes of shares when foreign institutional investors (FIIs) are moving out of Indian equities. for instance , in April and should , FIIs have net sold Rs 9,659 crore and Rs 3420 crore.

The demand for a stock price is, among other things, is additionally a function of the company’s growth prospects and what investors believe it. it might appear that Indian DIIs have firmly placed their bets on a category of small and mid-caps that has pulled the worth of Indian markets to above USD 3 trillion.

This, clear , appears to be a stimulating paradox. what's it that investors are seeing differently in Indian stocks that's not exposure within the real economy?

The paradox at play

Most of the country is within the midst of a lockdown of some nature. The 15-20 biggest cities that generate about two-thirds of India’s gross domestic product (GDP) in value terms still remain during a state of economic standstill.

The services sector, the strongest edifice of India’s real economy, remains during a state of inaction. There are fewer cars on roads. Restaurants, malls, shops have remained shuttered down for weeks on end.

Demand for non-essentials have remained tepid. The looming economic uncertainty has also prompted people to defer planned purchases. The lackluster activity within the property market may be a marker for these.

Car sales, too, will likely take successful as households hold on to new buys. Such goods, and assets like houses, are mostly bought through loans. Demand for such goods are determined not just by people’s current income but also their expectations about future earnings which will ensure confidence in their ability to repay debts.

With consumer confidence, at now , wobbly, if not plummeting, the important sector, then, is mirroring a special picture.

The key question is how long the investors’ confidence will last? the solution thereto lies within the real sector, which has quickly slipped from a pointy V-shaped rebound to a W-shaped fall.

Indian stocks will still command value, maybe even quite now, counting on the pace at which the important economy canters back to normal activity. Until that happens, the danger of an asset bubble will always remain.

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The rules only empower the ordinary users of social media when they become victims of abuse and misuse," Prasad posted on micro-blogging platform Koo and also tweeted.

IT Minister Shankar Prasad on Thursday said that WhatsApp users don't have anything to fear about new social media rules, that are designed to stop abuse and misuse of platforms, and offer users a strong forum for grievance redressal.

Prasad said that the govt welcomes criticism including the proper to ask questions.

"The rules only empower the standard users of social media once they become victims of abuse and misuse," Prasad posted on micro-blogging platform Koo and also tweeted.

The government fully recognises and respects the proper of privacy, he asserted.

"Ordinary users of WhatsApp don't have anything to fear about the new Rules. Its entire objective is to seek out out who started the message that led to commissioning of specific crimes mentioned within the Rules," Prasad added.

The new IT rules require the social media companies to line up an India-based grievance redressal officer, compliance officer, and nodal officer "so that many users of social media who have a grievance get a forum for its redressal", he said.

The government on Wednesday had staunchly defended its new digital rules, saying the need of messaging platforms like WhatsApp to disclose origin of flagged messages doesn't violate privacy, and went on to hunt a compliance report from large social media firms.

The new rules, announced on February 25, require large social media platforms -- defined as those with over 50 lakh users within the country -- to follow additional due diligence, including appointment of chief compliance officer, nodal contact person and resident grievance officer.

Non-compliance with rules would end in these platforms losing the intermediary status that gives them immunity from liabilities over any third-party data hosted by them. In other words, they might be responsible for criminal action just in case of complaints.

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High Net-worth Individuals (HNIs) are widely defined as those having an investible surplus of quite Rs 5 crore. By 2027, there'll 9.5 lakh HNIs from on the brink of 3 lakh currently. HNIs form 58 percent of India’s GDP, with on the brink of 30 percent based out of Mumbai and Delhi alone.

Traditionally, HNIs want to believe in a mixture of equity and debt investments for growing their wealth. However, over the years, that appears to possess change. Now there's a rising shift towards alternative asset classes.

Changing investment preferences

Commercial land is one such asset class that has witnessed a considerable increase in HNIs’ fund allocation. While retail investors prefer diversifying their portfolios to preserve the wealth, HNIs tend to specialize in concentrated holdings. Also, there's a notable growing shift towards financial assets over physical assets within the HNI fraternity.

Going by the figures, the property is that the third-largest investment class for HNIs, after equity and debt. Its share is sure to increase in the future. In 2019, equities remained the foremost preferred asset class within the portfolio with 29 percent allocation, followed by 21 percent allocation to bonds and 20 percent to property investments.

As a fallout of the pandemic, HNIs/UHNIs are forced to require a better check out their portfolios and align it as per the perceived risk. Broadly, we've seen a large impetus to portfolio re-balancing. Between 20 and 40 percent of wealth has moved from equity to debt – with the security of capital being the divisor – followed by 20-30 percent exposure to quality stocks during a phased manner. the autumn within the share markets led to the supply of quality stocks at attractive prices.

While it's pertinent to seem for the proper opportunities, alternatively, investors should hold take advantage of their portfolio also. In Warren Buffett’s words, “Cash to has real value, like many other aspects of investing. Cash isn't just an asset class that's returning next to zilch. it's a call option which will be priced.” Hence, when that option is reasonable relative to the power of money to shop for assets, it's prudent to allocate some a part of the portfolio to cash or cash equivalents, albeit the interest rates aren't so lucrative

Avoid being fussy

It is always better to be hands-on together with your finances and wealth. But many rich people tend to put an excessive amount of emphasis on minor or trivial details, making them lose sight of the “big picture.” Attaching unnecessary importance to either tax efficiency or resisting critical rebalancing of their portfolio for saving exit loads are but a couple of such examples.

 Avoid being an emotional pendulum while making investment decisions

Adopting a balanced and disciplined approach to one’s portfolios may sound easy to follow. However, in practice, it becomes extremely difficult. HNIs are often found oscillating between fence-sitting and being super active when FOMO (fear of missing out) kicks in. To be ready to invest successfully, HNIs must calmly specialize in asset allocation and avoid this evil habit of being an emotional pendulum.

Avoid drifting towards more complex products

The extra money you've got, the upper the choices you've got for its deployment far away from plain-vanilla options like stocks, mutual funds, fixed deposits, and bonds, to more complex products like private equity, art, land funds, and structures. Heed to your advisor’s guidance and invest only it merits incorporating the more complex products in your portfolio, not simply because they're exotic.

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