E-Banking in India: Risk Management in Payments and Settlement System
http://www.igi-global.com/chapter/e-banking-in-india/94299
Understanding the Relationship Between Liquidity and Inflation in the Post Crisis Period in India: from Bank Dealers’ Perspectives
http://www.sciencedirect.com/science/article/pii/B9780124115491000053
Citations of my papers
- Journal of Applied Economic Sciences Volume VI/ Issue 1(15)/ Spring 2011, pp 43-60, URL: www.jaes.reprograph.ro/articles/spring2011/SinhaP_GuptaS.pdf
- Asia Pacific Journal of Research in Business Vol 1, Issue 1, pp 114-31, URL: http://www.skirec.com/images/download/vol-1-issue-1-%20final/vol-1-issue-1-art-8.pdf
- International Journal of Applied Financial Management Perspectives Vol 1, Issue 1, URL: http://pezzottaitejournals.net/index.php/IJAFMP/article/view/116 (This is not open access)
- International Journal of Economic Practices and Theories, Vol. 1, No. 2, 2011, pp 77-87, www.ijept.org/index.php/ijept/article/download/15/15
- MBA Project on “Haryana State Industrial and Infrastructure Development Corporation”, URL: http://www.slideshare.net/bhavna0789/bhavna
These links exist now 11.30 pm IST but may expire anytime.
Regarding copula
One of my banker friends asked me "A thinking is going on about replacing value at risk with copula. What do you think?"
Reply: Some firms are searching a better formula than VaR like copula - but that is more technical and difficult to understand for non-quant bankers, hence BIS or RBI has not come out with any such guideline to the best of my knowledge, copula is used by few academicians in derivative analysis like commodity futures and CDO (collatalized debt obligations)- but it is yet to be accepted by regulators. I am open to knowledge. Please check my comments from other sources.
My View
1. How to control inflation?
That too much money is chasing too few goods is self-evident. There is now more purchasing power in the hand of organized sector employees, who constitute a sizable chunk of middle class and public by large is more than before interested in real estate investment whenever more liquidity available. Hence what is necessary is a combination of moping up some of excess purchasing power and increasing productivity of the economy instead of raising interest rate which discourages investment? Then why not finance the additional productivity with above excess purchasing power? So government would need more money to finance productive activities and hence need to issue more debt, i.e. T-bills and dated securities. The financial system may not be able/willing to absorb it since nowadays average risk appetite of the market participants have increased and they prefer corporate bonds and other instruments offering higher returns as revealed by perusal of the changes in the composition of investment portfolios of corporates and FIs over last couple of years. So central bank may need to come in the picture to rescue the government, but this is tantamount to printing money. Better increase the income tax exemption limit income slab-wise (as per progressive taxation principle in normative economic sense). It should not be uniform for everybody and a part of that exemption may be allotted to govt securities, e.g. instead of 20000/- for infrastructure bonds, make it 1 lac additional investment in govt securities, this 1 lac should not be constant irrespective to the level of annual income. Rather the % of annual income allowed for exemption may be like 10% for those whose income is below 10 lacs, 20% for those with income between 10 and 20 lacs and so on. Similar practice may be introduced for corporate tax. Overall there should be tax incentive to every entity for investment in public debt.
Above is the reply from an administrative perspective.
From academic perspective, I think India may be entering the crisis zone of capitalism with an explicit need to invoke a post-Keynesian and neo-classical synthesis, the culprit behind the crisis may not be the asset bubble but it may be black-money bubble, which again is an issue of how you define it and essentially a fruit of market failure. The solution may not be located in an economic framework where fund pricing amounts to setting interest rate (a legacy of J R Hicks etc). But the current framework cannot be dismantled on the eve of Basel III era. Hence crises would be there in some form or other.
2. The day after SBI stock touched 52-week low, I was asked by a neighbor "suggest some good buy?" I replied "SBI or any other stock included in CNX or Nifty whose prices are low now and hold them for long period.""Why?""These will as usual catch up the trend behavior after sometime"."Is not the economy down when stock market crashes""If economy means shareholders, yes it is; if it means savers, then it is the good time to buy select stocks; if it means the component of our society who are in a position to neither save nor invest, I shall say when stock market is up they do not reap any benefit - so the question of their suffering out of plunging indices do not arise""But if RBI hikes rates again floating rate borrowers for car, housing etc will suffer""At the same time prices of car and property would also increase in a price spiral and hence sellers benefit. This is a redistribution of income. With every combination of economic variables emerges some unique pattern of income distribution - there is one to one correspondence, you cannot have one without the other". "You economists give ornamental names to stress events"."That is why I like to interview us once and often"(Dear Reader, Please give feedback whether I am wrong/right and to what what extent.)
That too much money is chasing too few goods is self-evident. There is now more purchasing power in the hand of organized sector employees, who constitute a sizable chunk of middle class and public by large is more than before interested in real estate investment whenever more liquidity available. Hence what is necessary is a combination of moping up some of excess purchasing power and increasing productivity of the economy instead of raising interest rate which discourages investment? Then why not finance the additional productivity with above excess purchasing power? So government would need more money to finance productive activities and hence need to issue more debt, i.e. T-bills and dated securities. The financial system may not be able/willing to absorb it since nowadays average risk appetite of the market participants have increased and they prefer corporate bonds and other instruments offering higher returns as revealed by perusal of the changes in the composition of investment portfolios of corporates and FIs over last couple of years. So central bank may need to come in the picture to rescue the government, but this is tantamount to printing money. Better increase the income tax exemption limit income slab-wise (as per progressive taxation principle in normative economic sense). It should not be uniform for everybody and a part of that exemption may be allotted to govt securities, e.g. instead of 20000/- for infrastructure bonds, make it 1 lac additional investment in govt securities, this 1 lac should not be constant irrespective to the level of annual income. Rather the % of annual income allowed for exemption may be like 10% for those whose income is below 10 lacs, 20% for those with income between 10 and 20 lacs and so on. Similar practice may be introduced for corporate tax. Overall there should be tax incentive to every entity for investment in public debt.
Above is the reply from an administrative perspective.
From academic perspective, I think India may be entering the crisis zone of capitalism with an explicit need to invoke a post-Keynesian and neo-classical synthesis, the culprit behind the crisis may not be the asset bubble but it may be black-money bubble, which again is an issue of how you define it and essentially a fruit of market failure. The solution may not be located in an economic framework where fund pricing amounts to setting interest rate (a legacy of J R Hicks etc). But the current framework cannot be dismantled on the eve of Basel III era. Hence crises would be there in some form or other.
2. The day after SBI stock touched 52-week low, I was asked by a neighbor "suggest some good buy?" I replied "SBI or any other stock included in CNX or Nifty whose prices are low now and hold them for long period.""Why?""These will as usual catch up the trend behavior after sometime"."Is not the economy down when stock market crashes""If economy means shareholders, yes it is; if it means savers, then it is the good time to buy select stocks; if it means the component of our society who are in a position to neither save nor invest, I shall say when stock market is up they do not reap any benefit - so the question of their suffering out of plunging indices do not arise""But if RBI hikes rates again floating rate borrowers for car, housing etc will suffer""At the same time prices of car and property would also increase in a price spiral and hence sellers benefit. This is a redistribution of income. With every combination of economic variables emerges some unique pattern of income distribution - there is one to one correspondence, you cannot have one without the other". "You economists give ornamental names to stress events"."That is why I like to interview us once and often"(Dear Reader, Please give feedback whether I am wrong/right and to what what extent.)
Acknowledgement
All my acheievements are attributed to my mother's struggle for my welfare. Rituparna Das
Product VAR Modeling
http://ebooks.worldscinet.com/ISBN/9789814354998/9789814354998_0002.html, World Scientific author Thomas Sargent got nobel prize in Economics in 2011.
My contributions in interdisciplianry teaching
In addition to my core competence areas, which I have already delivered at NLU, e.g.
1.Financial Management (BBA III semester and MBA(Insurance) II Semester),
2.Managerial Economics (BBA II Semester and MBA(Insurance) I Semester),
3.Principles and Practice of Banking (BBA IV Semester),
4.Derivatives (MBA(Insurance) III Semester),
5.Management of Financial Services (MBA(Insurance) IV Semester)
6.Project Finance (MBA-MBL/LLM V Semester) etc
there are other different interdisciplinary subjects, where I have the expertise in terms of international publications and teaching experiences of one and half decades at the Institutions like NLUJ, National Institute of Bank Management Pune (RBI’s training establishment), WB National University of Juridical Sciences Kolkata, Indian Institute of Social Welfare and Business Management Kolkata (IISW&BM) and Goenka College of commerce and Business Administration Kolkata to contribute in a fruitful manner:
1.Corporate Law (LLM (Corporate Law) I Semester): Study of this course calls for prior knowledge of different functional areas of the corporate houses. Since a corporate house is a profit making body, Corporate Finance for the purposes like capital budgeting becomes the central pillar in successful governance of the corporate house. There will be a difference in understanding between a student who read Corporate Law as stand-alone from Corporate Finance and another who read it along with Corporate Finance.
2.Management Information System (MBA (Insurance) III Semester): The application of MIS consists of, inter alia, use of different softwares in investment portfolio management, asset liability management, regulatory compliances and financial modeling like cash flow projection etc. To teach MIS without computer-practices is similar to teach cycling/swimming without cycle/water. Knowledge of these is of immense use in Corporate Houses and Financial Institutions and expected from management students.
3.Investment Law (LLM II Semester): Study of this subject presupposes knowledge of (i) the process investments in on-balancesheet items like fixed capital, plant and machinery and financial investment, and off-balancesheet items like derivative contracts; any of these may involve transactions in multiple currency; (ii) prudential norms of above investments, and (iii) valuation and risk analytics as per regulatory guidelines. Quality of work in a law firm dealing with cases relating to investments becomes better with above knowledge.
4.Law of Infrastructure Development (LLM II Semester): This subject revolves around infrastructure projects for which project finance is the sine qua non. For a legal professional dealing with infrastructure development without the knowledge of strategic and regulatory aspects of project finance it is difficult to understand the project blueprint as well as the way the promoters manage the project.
5.Environmental Law (LLB VII Semester): A review of the treatment of this subject in major Universities in USA reveals that it can best be taught jointly with Environmental Economics because every environmental regulation is deemed to possess twin aspects of administrative and social costs and social benefits in a market based economy but in the emerging economies like India the externality aspects of environmental risk assessment in infrastructure project finance and technological innovation and diffusion are also going to be counted. When market fails to allocate resources efficiently to lead to the greatest social welfare it is imperative to compare alternative environmental regulations in terms of costs and benefits. In short Environmental Law and Environmental Economics are inseparable.
6.Jurisprudence (LLB VIII Semester): This subject contains several elements of economic theories (e.g. Theory of Utility) because economic reasoning is supposed to (a) explain the trade-off between justification and consistency of legal practice, (b) provide a framework of modeling legal outcomes, and homogenous objectives for unifying heterogeneous areas of legal activity, (c) examine how people’s behavior in a legal frame are influenced by rationality; (d) examine how legislation is effected by collective behavior; (e) help designing strategic action in a legal context. In a word, without inputs from Economics discipline Jurisprudence subject can not be delivered in a wholesome manner.
7.Quantitative Techniques and Business Statistics (BBA I Semester and MBA(Insurance) II Semester): The application of statistics in business consists of, inter alia, use of the tools like regression, standard deviation, hypothesis testing etc in forecasting demand, forecasting security prices, computing risk in financial securities etc. Without prior estimation of demand it is risky to invest in new projects and without an estimation of risk profile it is not prudent to park funds in financial securities and derivatives.
1.Financial Management (BBA III semester and MBA(Insurance) II Semester),
2.Managerial Economics (BBA II Semester and MBA(Insurance) I Semester),
3.Principles and Practice of Banking (BBA IV Semester),
4.Derivatives (MBA(Insurance) III Semester),
5.Management of Financial Services (MBA(Insurance) IV Semester)
6.Project Finance (MBA-MBL/LLM V Semester) etc
there are other different interdisciplinary subjects, where I have the expertise in terms of international publications and teaching experiences of one and half decades at the Institutions like NLUJ, National Institute of Bank Management Pune (RBI’s training establishment), WB National University of Juridical Sciences Kolkata, Indian Institute of Social Welfare and Business Management Kolkata (IISW&BM) and Goenka College of commerce and Business Administration Kolkata to contribute in a fruitful manner:
1.Corporate Law (LLM (Corporate Law) I Semester): Study of this course calls for prior knowledge of different functional areas of the corporate houses. Since a corporate house is a profit making body, Corporate Finance for the purposes like capital budgeting becomes the central pillar in successful governance of the corporate house. There will be a difference in understanding between a student who read Corporate Law as stand-alone from Corporate Finance and another who read it along with Corporate Finance.
2.Management Information System (MBA (Insurance) III Semester): The application of MIS consists of, inter alia, use of different softwares in investment portfolio management, asset liability management, regulatory compliances and financial modeling like cash flow projection etc. To teach MIS without computer-practices is similar to teach cycling/swimming without cycle/water. Knowledge of these is of immense use in Corporate Houses and Financial Institutions and expected from management students.
3.Investment Law (LLM II Semester): Study of this subject presupposes knowledge of (i) the process investments in on-balancesheet items like fixed capital, plant and machinery and financial investment, and off-balancesheet items like derivative contracts; any of these may involve transactions in multiple currency; (ii) prudential norms of above investments, and (iii) valuation and risk analytics as per regulatory guidelines. Quality of work in a law firm dealing with cases relating to investments becomes better with above knowledge.
4.Law of Infrastructure Development (LLM II Semester): This subject revolves around infrastructure projects for which project finance is the sine qua non. For a legal professional dealing with infrastructure development without the knowledge of strategic and regulatory aspects of project finance it is difficult to understand the project blueprint as well as the way the promoters manage the project.
5.Environmental Law (LLB VII Semester): A review of the treatment of this subject in major Universities in USA reveals that it can best be taught jointly with Environmental Economics because every environmental regulation is deemed to possess twin aspects of administrative and social costs and social benefits in a market based economy but in the emerging economies like India the externality aspects of environmental risk assessment in infrastructure project finance and technological innovation and diffusion are also going to be counted. When market fails to allocate resources efficiently to lead to the greatest social welfare it is imperative to compare alternative environmental regulations in terms of costs and benefits. In short Environmental Law and Environmental Economics are inseparable.
6.Jurisprudence (LLB VIII Semester): This subject contains several elements of economic theories (e.g. Theory of Utility) because economic reasoning is supposed to (a) explain the trade-off between justification and consistency of legal practice, (b) provide a framework of modeling legal outcomes, and homogenous objectives for unifying heterogeneous areas of legal activity, (c) examine how people’s behavior in a legal frame are influenced by rationality; (d) examine how legislation is effected by collective behavior; (e) help designing strategic action in a legal context. In a word, without inputs from Economics discipline Jurisprudence subject can not be delivered in a wholesome manner.
7.Quantitative Techniques and Business Statistics (BBA I Semester and MBA(Insurance) II Semester): The application of statistics in business consists of, inter alia, use of the tools like regression, standard deviation, hypothesis testing etc in forecasting demand, forecasting security prices, computing risk in financial securities etc. Without prior estimation of demand it is risky to invest in new projects and without an estimation of risk profile it is not prudent to park funds in financial securities and derivatives.
Handbook of Fixed Income Securities Volume II: Monographs on Term Structure in India
Fixed Income Management practices carried out by the Banks in India are covered in ‘Handbook of Fixed Income Securities: Indian Banking Perspective' (ISBN 9783639255478) by the same author. Since the Fixed Income literature revolves around the term structure, this volume covers construction and behaviour of the same. The target audience includes officers in treasury and risk management departments of banks in India and students of investments and risk management. This book is also useful to those officers in banks in the emerging economies who lack the quantitative skills imperative for current style of fixed income management or who are not specialized in this area but transferred from a lending or marketing branch to the treasury or risk management department and entrusted with fixed income management.
URL: http://www.amazon.com/Handbook-Fixed-Income-Securities-II/dp/3639352637/ref=sr_1_5?s=books&ie=UTF8&qid=1304868746&sr=1-5
Research Methodology in Social Sciences and Management: Models on Indian Issues
Research Models as a part of Research Methodology course are taught in major post graduate degree programmes and employed in research by both of social scientists and management experts. An emerging economy India with fast economic growth is experiencing increasing number of social and corporate issues e.g. crime on women, default of bank loans because of inability to manage business caused by lack of education, poor quality of management education imparted by growing number of B-schools etc. Addressing these problems and designing remedial policy measures call for the skill of modeling. This book includes seven models on diverse social and management issues.The target audience includes post graduate students in Social Sciences, Policy Science, Law and Management, legislators, bureaucrats and economists of Governments and industries. Key features of the models in this book are contemporary issues, easy-to-understand but innovative techniques, policy research and futuristic analysis.
http://www.amazon.com/Research-Methodology-Social-Sciences-Management/dp/3639295463/ref=sr_1_1?ie=UTF8&s=books&qid=1287679266&sr=1-1
Training Programme for Banks and FIs
Programme Title: Fixed Income in Excel: Basics and Risk Analytics
About the Course and target Audience: This course is conducted on invitation from a Bank or
Financial Institution for its Officers/Executives in Treasury and Risk Management.
For course details, please contact
Course Director: Rituparna Das
Email: Dr.RituparnaDas@gmail.com, rdas@nlujodhpur.ac.in
Google search: http://www.google.com/profiles/Mr.RituparnaDas
About the Course and target Audience: This course is conducted on invitation from a Bank or
Financial Institution for its Officers/Executives in Treasury and Risk Management.
For course details, please contact
Course Director: Rituparna Das
Email: Dr.RituparnaDas@gmail.com, rdas@nlujodhpur.ac.in
Google search: http://www.google.com/profiles/Mr.RituparnaDas
Handbook of Fixed Income Securities: Indian Banking Perspective
Book Description
This book focuses on four components of the process of fixed income portfolio management with reference to government securities: Valuation and Return, Sensitivity, Value at Risk and Validation of VaR estimate. It also explores the problems with valuations on the basis of yield to maturity applying discreet discounting method as is the market practice, performing sensitivity measures by applying the modified duration method with the predicted yield shocks provided by RBI and making risk charges accordingly, calculation of VaR with different methods and back testing and stress testing; and suggests how to overcome those problems and which tools to use in which situation judiciously. Understanding of the text and the CD material would prevent frequency of breaches of risk measures and improve accuracy and speed of computation. This book covered the concepts, tools and techniques of fixed income to the extent they are warranted in daily practice by the officers in treasury and risk management without going into unnecessary academic details. For the above CD contact the author at the email id: Dr.RituparnaDas@gmail.com
Amazon Link: http://www.amazon.com/Handbook-Fixed-Income-Securities-Perspective/dp/363925547X/ref=sr_1_1?ie=UTF8&s=books&qid=1276718384&sr=1-1
Monetary History of India: Forecasting Perspective of Central Banks and Economists
Book Description
Traditional belief was that if one or a combination of the driver variables like interest rates, prices and outputs, pulls down a big economy the small economies are also affected in the same direction in an age where markets across the nations are increasingly being connected. But the Greek debt crisis led the policy makers, central bankers and economists to start believing the contrary. At the same time the above crisis has given birth to several myths (e.g. breakup of euro zone) and the consequent panic among the public. In absence of reference to the details of definitions, measures and creation/determination process of money supply, if subscribed to by governments, regulators and economists, such myths may lead to disasters. With this backdrop, this book is written, from the forecasting perspective of central banks and economists, about evolution of definitions, measures and models of money supply determination, in terms of research papers, in an economy like India which is relatively less affected by the international crises like East Asian crisis and sub prime crisis.
Amazon Link: http://www.amazon.com/Monetary-History-India-Forecasting-Perspective/dp/3639269470/ref=sr_1_3?ie=UTF8&s=books&qid=1278046862&sr=1-3
Handbook of Management Principles: Multinational Corporation Perspective
Book Description
Handbook of Management Principles:Multinational Corporation Perspective, (HMP) is designed to help the reader remember easily the crux of the teachings, with special focus on their uses and failures without going into too much details of theory. It begins with strategy and its link with organizational structure and resources. Then HMP discusses a host of aspects of business like culture, ethics and environment along with different functional areas like project management and control. HMP aims to make the managers learn that everything they do has multifarious implications directly or indirectly affecting the organization in its all parts and the way the organization behaves with the market. Chapters in HMP offer live lessons in different contexts from the corporates like Intel, Motorola, McDonald, Honda, Walt Disney etc. Executives, would-be executives, policy makers and strategy designers of multinational corporations and students of MBA Programmes are the target audience.
Amazon Link: http://www.amazon.com/Handbook-Management-Principles-Multinational-Corporation/dp/363926178X/ref=sr_1_2?ie=UTF8&s=books&qid=1276717173&sr=1-2
Computing Skills in Investment Management
http://nibmindia.org/NIBMSearch/TrainingProgSearchResult.aspx?area=Any&faculty=Dr%20Das%20Rituparna&duration=Any&month=All&prog_type=Any
Market Measure and Mitigation of Interest Rate Risk
The ongoing turmoil in the international financial markets especially in the
United States saw regulators as well as Governments responding with extraordinary measures to restore stability in the financial system. The plights of so-called invincible financial institutions like AIG, Lehman Brothers, Bear Sterns, Goldman Sachs, Morgan Stanley including Washington Mutual,
Wachovia, Fortis, HBOS, Bradford & Bingley etc. have caused shiver in the minds of investors worldwide. The ripple effect of such disturbances is also
being felt in our country which is already grappling with the high level of inflationary pressures during the recent times. In order to respond to the tight liquidity situation Reserve Bank of India (RBI) has raised the interest rate on NR(E)RA deposits in order to prevent premature cash outflow, has allowed scheduled banks to avail additional liquidity support under the liquidity adjustment facility (LAF) to the extent of upto one per cent of their net demand and time liabilities and introduced a second LAF (SLAF) on reporting Friday etc. Liquidity crisis and interest rate stress being the two ides of the same coin BIS has emphasized the design and use of severe stress test scenarios in the 2008 review of its “2000 Sound Practices for Managing Liquidity in Banking Organizations”. As per BCBS Chairman, Dr Nout Wellink, our limited or zero knowledge of unexpected events is causing the failure of the science of risk management in unveiling the events of the world completely. Hence, a globalized world requires “continuous education, discussion and peer to peer stimulation to keep up with the pace of exactly these unexpected events”. In this context, the captioned Programme aims to present the science of market measuring and the art of mitigating interest rate risk to those concerned and hence proposes the following menu for discussion in
URL: http://www.shiksha.com/getListingDetail/83009/course/course-Programme-On-Market-Measure-And-Mitigation-Of-Interest-Rate-Risk-Pune-India-college-National-Institute-Of-Bank-Management-Nibm
United States saw regulators as well as Governments responding with extraordinary measures to restore stability in the financial system. The plights of so-called invincible financial institutions like AIG, Lehman Brothers, Bear Sterns, Goldman Sachs, Morgan Stanley including Washington Mutual,
Wachovia, Fortis, HBOS, Bradford & Bingley etc. have caused shiver in the minds of investors worldwide. The ripple effect of such disturbances is also
being felt in our country which is already grappling with the high level of inflationary pressures during the recent times. In order to respond to the tight liquidity situation Reserve Bank of India (RBI) has raised the interest rate on NR(E)RA deposits in order to prevent premature cash outflow, has allowed scheduled banks to avail additional liquidity support under the liquidity adjustment facility (LAF) to the extent of upto one per cent of their net demand and time liabilities and introduced a second LAF (SLAF) on reporting Friday etc. Liquidity crisis and interest rate stress being the two ides of the same coin BIS has emphasized the design and use of severe stress test scenarios in the 2008 review of its “2000 Sound Practices for Managing Liquidity in Banking Organizations”. As per BCBS Chairman, Dr Nout Wellink, our limited or zero knowledge of unexpected events is causing the failure of the science of risk management in unveiling the events of the world completely. Hence, a globalized world requires “continuous education, discussion and peer to peer stimulation to keep up with the pace of exactly these unexpected events”. In this context, the captioned Programme aims to present the science of market measuring and the art of mitigating interest rate risk to those concerned and hence proposes the following menu for discussion in
URL: http://www.shiksha.com/getListingDetail/83009/course/course-Programme-On-Market-Measure-And-Mitigation-Of-Interest-Rate-Risk-Pune-India-college-National-Institute-Of-Bank-Management-Nibm
ECONOMICS OF THE COMPANIES ACT 2004
ECONOMICS OF THE COMPANIES ACT 2004
U. R. Daga, Rituparna Das
U. R. Daga, Rituparna Das
13 November 2004
The proposal of dropping the controversial clause in the Concept Paper on Companies Act 2004 (12 Nov 04, Economic Times) empowering the government to levy a cess on turnover of companies is apparently a step in the direction of ensuring free competition, though it may not prove an unmixed blessing. ‘Cess’ is a tax levied for some specific purpose. Entry 49, List 2 of the Government of India Act represents it as a tax. Refer to Kunwar Ram Nath v. Municipal Board, Pilibhit (All India Report 1983, Supreme Court 930, 934) or Section 14(1) of Cardamom Act (42 of 1965). Again the word ‘cess’ means a tax and is generally used when the levy is for some special administrative expense in connection with Shinde Brothers v. Hy Commissioner, Raichur (All India Report 1967, Supreme Court 1512, 1525). Therefore on production decision the impact of dropping the cess to be levied at a rate not less than 0.005% and not more than 0.1% of the value of annual turnover of every company or its annual gross receipt - whichever is more - is akin to the impact of a reduction in the unit variable cost of production. Any economic policy proposal has twin dimensions of efficiency and welfare. Removal of the cess on the turnover of a particular product would decrease the break-even level of production on the one hand and on the other increase the unit contribution and hence the profit. This would enhance efficiency in terms of a hike in the return on investments (ROI) in the business related with that product. If the structure of the market of that product is imperfect, the hike in the ROI may not induce the existing companies to reduce price though they can invest the excess profits in other businesses. But, if the market structure were competitive, removal of the cess would lead to excess profits thereby attracting new entrants. Thus total output would rise and market price would come down. In any case dropping of the cess can create an efficiency gain for either of the producers and the consumers. Now consider the welfare dimension of the policy. The Preamble to the Constitution of India commits to render economic justice to the people of the country. In the constitutional literature the term ‘justice’ connotes, among other things, an establishment the enforcement of which is the object of all law. ‘Justice’ includes three great objects – the security of life, liberty and the pursuit of happiness. Reform of the Companies Act must not disturb the working of the Constitution in delivering economic justice. The above kind of policy can have an adverse welfare impact in terms of loss of the utilities, which could generate out of potential generation and/or protection of employment resulting from (a) making interim payment of workmen’s dues, pending the revival or rehabilitation of the sick industrial company; or (b) payment of workmen’s dues due to the workmen of the sick industrial company; or (d) revival or rehabilitation of the sick industrial company. In a comparative analysis of the welfare impact of the two alternative policies – (a) dropping the cess and (b) not dropping the cess – the expected values of the above utilities when properly assessed can exceed sufficiently the expected value of the gain that could accrue out of removing the cess depending upon in what market frame the policy is introduced. In a competitive market frame, the gain in form of an enhanced consumer surplus through a reduction in price caused by the removal of the cess may be different than the gain that could arise in an imperfect market frame in form of higher profits of the companies caused by the same policy. Further, depending upon the elasticity of revenue generation with respect to the level of the cess, reduction in the level of the cess in lieu of its removal may be more fruitful. Therefore the Constitution may not endorse the abolition proposal. It provides room to the above cess in Entry 97 of List I in the Seventh Schedule (Article 246).
Debt Market Analytics
Generating income from investment book continues to be one of the prime drivers of the income streams of banks. The captioned program aims to equip the dealers with requisite tools & techniques to be an effective player in the G-Sec market. Participants learn what are various determinants of market prices of G-Secs, how to analyze the G-sec yield curve and its various shapes, how to value G-Secs, which security to buy and which one to sell, what kind of portfolio strategy to formulate, what alternative types of returns these securities generate, what kinds of risks they pose and how to measure such risks. This is presented against a backdrop of the national scenario where number of players in the market is rising as a result of economic reform and the spread, as was earlier enjoyed by the limited number of players, is becoming thin. Each trader/dealer should learn how to read every nuance of working of this market and its instruments.
Objective
The programme aims to develop awareness of debt market risks, its possible impacts on individual instrument and portfolio and how to hedge.
For contents and other details visit
http://nibmindia.org/NIBMSearch/TPBrouchers/broucher43.pdf
Objective
The programme aims to develop awareness of debt market risks, its possible impacts on individual instrument and portfolio and how to hedge.
For contents and other details visit
http://nibmindia.org/NIBMSearch/TPBrouchers/broucher43.pdf
Computing Skills in Market Risk Management
This monograph contains a detailed discussion of risk calculation methods for fixed income portfolios with particular reference to the securities held in Indian banks.
Keywords: VaR, Normal Distribution, Trading Book, HFT, Market Risk, Fixed Income
JEL Classifications: D8
URL: http://gloriamundi.org/detailpopup.asp?ID=453058975
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