Mumbai, The Reserve Bank on Thursday tightened norms for unsecured personal loans for banks and non-banking financial companies. The revised norms wherein risk weights have been increased by 25 percentage points will not be applicable on certain consumer loans, including housing, education, and vehicle loans. Besides, the norms will not be applicable on loans secured by gold and gold jewellery. These loans will continue to attract 100 per cent risk weight. Higher risk weight implies that banks have to keep aside more money as buffer when it comes to unsecured personal loans. In simple words, a higher risk weight restricts banks' lending capacity. Recently, RBI Governor Shaktikanta Das had flagged the high growth in certain components of consumer credit and advised banks and Non-Banking Financial Companies (NBFCs) to strengthen their internal surveillance mechanisms, address the build-up of risks and institute suitable safeguards, in their own interest. The high growth seen in consumer credit and increasing dependency of NBFCs on bank borrowings were also highlighted by the governor during the interactions with MD/CEOs of major banks and large NBFCs in July and August, respectively. "On a review, it has been decided to increase the risk weights in respect of consumer credit exposure of commercial banks (outstanding as well as new), including personal loans, but excluding housing loans, education loans, vehicle loans and loans secured by gold and gold jewellery, by 25 percentage points to 125 per cent," the RBI said in a circular. The central bank has also increased the risk weights on credit receivables by 25 percentage points to 150 per cent and 125 per cent for banks and NBFCs, respectively.

RBI tightens norms on personal loans for banks, NBFCs

<ul class="summary-list"><li>Households are being hit hard by inflation and higher interest rates, Kevin O'Leary says.</li><li>Consumers can afford less so they're having to settle for smaller, cheaper homes and cars, he says.</li></ul>Americans are suffering lifestyle erosion because surging prices and steeper borrowing costs mean their incomes don't go as far as they once did, Kevin O'Leary says."We're looking at a downsized America," the "Shark Tank" star <a href="https://www.youtube.com/watch?v=sxXEhRZgxgc" target="_blank" rel="noopener">recently told Fox News</a>. O'Leary noted that <a href="https://markets.businessinsider.com/news/commodities/housing-market-explained-mortgage-rates-fed-inventory-home-prices-house-2023-6">mortgage rates have soared</a> from below 5% to upwards of 8% within the last two years, meaning people have to settle for a home that's 20% to 25% smaller than what they could <a href="https://markets.businessinsider.com/news/commodities/housing-affordability-crisis-shortage-inventory-high-mortgage-rates-middle-class-2023-6">previously afford</a>. The veteran investor — whose nickname is "Mr. Wonderful" — also flagged that interest rates on auto loans have jumped from 5% to 8% or even 9%, forcing drivers to <a href="https://www.businessinsider.com/tesla-elon-musk-economy-credit-card-debt-real-estate-war-2023-10">downsize to smaller, cheaper vehicles</a>. Moreover, climbing oil prices mean drivers could soon have to "pay a fortune in gasoline," O'Leary said."People are looking at the cost of energy, protein, car loans, mortgages," he said about the impact of inflation. "It hits you every day at the pump. It hits you every day at the grocery store. It's nasty."The annualized pace of price increases hit a 40-year high of more than 9% last year, spurring the Federal Reserve to hike interest rates from virtually zero to over 5% in the space of 18 months. Higher rates encourage saving over spending and make it costlier to borrow money, which can help cool demand and curb price growth.Inflation has slowed to below 4% in recent months, but that's still well above the central bank's target rate of 2%.O'Leary warned that inflation doesn't appear to be slowing anymore, and suggested that could prompt the Fed to raise rates to about 6% by early next year.<div type="image" title="bernie marcus home depot" height="1333" width="1777" msid="105068398" hostid="261" sizebytes="101502"></div>Bernie Marcus, the billionaire cofounder of Home Depot, issued a similar warning about surging prices during another <a href="https://www.foxbusiness.com/markets/home-depot-co-founder-my-customers-getting-killed-bidens-inflation" target="_blank" rel="noopener">recent Fox News interview</a>.He said the retailer's customers are "getting killed," adding: "They can't afford to fill their cars with gas. They can't afford to put a good meal on the table for their families. They can't afford their rent. They can't afford their insurance.""Every freaking thing that there is, is up," Marcus continued, underscoring that when inflation cools, prices still rise – just at a slower pace.

'Shark Tank' star Kevin O'Leary warns of a 'downsized America' as rising prices and loan payments force consumers to cut back

<img class="gwt-Image" src="/photo/51725572.cms" />The slowdown in deposit growth in banks continued and hit a 50-year low, causing problems for the <a href="http://www.businessinsider.in/searchresult.cms?query=banking+sector+in+India&amp;sortorder=effectivedate">banking sector</a>. 
 
On the contrary, the <a href="http://www.businessinsider.in/searchresult.cms?query=loan+growth&amp;sortorder=effectivedate">loan growth</a> is on a growth trajectory after five-year low. 
 
Now, if the trend continues likewise, banks will have to increase the <a href="http://www.businessinsider.in/searchresult.cms?query=deposit+growth&amp;sortorder=effectivedate">deposit rates</a> and even government borrowings could get costlier. 
 As per the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>, banks are lowering proportion of their government bond holdings owing to increase in lending. 
 
The <a href="http://www.businessinsider.in/searchresult.cms?query=credit+to+deposit+ratio&amp;sortorder=effectivedate">credit-to-deposit ratio</a> has also surged to 77.6% in March 2016, pointing out that banks are lending a bigger portion. 
 "Retail loans have been the largest contributor to bank credit growth in the past one-two years. In the past couple of months, corporate working capital borrowings through commercial paper have partially reverted to banks (due to falling gap in their respective <keyword id="6371181" type="UNKNOWN" weightage="20" keywordseo="interest-rates">interest rates</keyword>)," Saugata Bhattacharya, chief economist Axis Bank, told ET. 
 
These factors may also affect transmission of <a href="http://www.businessinsider.in/searchresult.cms?query=rate+cut&amp;sortorder=effectivedate\">rate cuts</a>.

Banks are in a tight spot as deposit growth falls further, loan growth goes up

With <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>) Monetary Policy Committee (<keyword id="6369693" type="General" weightage="50" keywordseo="mpc" source="Orion">MPC</keyword>) set to meet to decide on the policy rate revision, industry lobby body <keyword id="6355988" type="General" weightage="100" keywordseo="assocham" source="Orion">ASSOCHAM</keyword> has urged the former for a moderate hike. ASSOCHAM has also requested the RBI to treat retail loans for purchase of electric vehicle (EV) as priority sector lending. According to ASSOCHAM, the interest rate hike should be moderate so that the rising cost of borrowing does not have an adverse and disproportionate impact on the nascent economic recovery post the pandemic. At most, the new rate hike should not exceed the 25-35 basis points (bps) band, ASSOCHAM said in a letter to RBI Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword>, along with highlighting other issues facing the industry. One of the key recommendations advanced by ASSOCHAM is to treat retail loans for purchase of EVs as priority sector lending, with a concessional rate of interest. "Retail advances against EVs may be included under priority sector lending. This may help in catalysing India's EV story," ASSOCHAM Secretary General Deepak Sood said. As regards increasing cost of borrowing, the chamber said that the recovery in the Indian economy is quite noticeable, especially in the backdrop of the global head winds. However, it is still in the nascent stage and needs to be supported. "Signs of inflation peaking are visible when it comes to the domest ic economy. Even in the developed markets, early indications of inflation peaking are visible, thus setting a stage for the RBI-MPC to move towards halting the rate hike cycle," Sood said. In another suggestion, the chamber said RBI may consider a special window of borrowing for IREDA at repo rate, to ensure availability of low-cost funds for renewable projects. In a unique proposition, ASSOCHAM urged the central bank to consider a time bound approach for getting all banks under Account Aggregator (AA) framework. The framework helps an individual to access and share information from one financial institution to any other in the AA network securely and digitally. Other financial institutions, regulated by SEBI/IRDAI may be encouraged to join the framework as information providers and information users. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rupee-at-80-against-the-usd-a-possibility-say-analysts-as-us-fed-hints-at-slower-rate-hikes/articleshow/95940818.cms">Rupee may hit 80/$ aided by trifecta of softer rates, cooling crude and stronger macros, say analysts</a> <a href="https://www.businessinsider.in/business/corporates/news/globalbees-to-cred-and-two-adani-group-companies-companies-which-command-high-valuations-with-low-revenues/articleshow/95929044.cms">The curious case of companies which command high valuations with low revenues</a> <a href="https://www.businessinsider.in/business/auto/news/maruti-suzuki-announces-price-hike-from-january-2023/articleshow/95941950.cms">Maruti Suzuki cars will get costlier from January 2023</a>

ASSOCHAM urges RBI not to hike repo rate beyond 25-35 bps

The price of cooking gas piped to household kitchens in the national capital and adjoining cities was hiked by Rs 2.63 per unit on Friday, the second increase in rates in less than two weeks. Piped cooking gas in <keyword id="66" type="General" weightage="50" keywordseo="delhi" source="Orion">Delhi</keyword> will now cost Rs 50.59 per standard cubic meter, as against Rs 47.96 previously, according to <keyword id="158375" type="General" weightage="50" keywordseo="indraprastha-gas-ltd" source="Orion">Indraprastha Gas Ltd</keyword> - the firm that retails CNG to automobiles and piped cooking gas to households in the national capital and adjoining towns. The increase is to "partially offset the increase in input gas cost," <keyword id="47940" type="General" weightage="80" keywordseo="igl" source="Orion">IGL</keyword> said in a tweet. This is the second hike in prices in less than two weeks. Rates were last revised on July 26, by Rs 2.1 per scm. The increase follows the government mandating the use of costlier imported <keyword id="79382" type="General" weightage="80" keywordseo="lng" source="Orion">LNG</keyword> to meet incremental demand. State-owned GAIL averages out the rates of gas produced locally with the imported one before supplying to city gas retailers like IGL. Similar increases in piped cooking gas (called piped natural gas or <keyword id="6355757" type="General" weightage="80" keywordseo="png" source="Orion">PNG</keyword>) have been affected by city gas retailers in other parts of the country. In Mumbai, <keyword id="332631" type="General" weightage="50" keywordseo="mahanagar-gas-ltd" source="Orion">Mahanagar Gas Ltd</keyword> hiked CNG price by Rs 6 per kg and PNG by Rs 4 a unit. "Due to the significant increase in input gas cost, we have decided to recover the cost. Accordingly, we've increased the retail price of CNG to Rs 86 per kg and hiked domestic PNG by Rs 4 to Rs 52.50 in and around Mumbai," MGL said in a statement. However, IGL has not increased CNG price and it continues to cost Rs 75.61 per kg. IGL said PNG in Noida, Greater Noida and Ghaziabad, which adjoin Delhi, will cost Rs 50.46 per scm, while in <keyword id="11900977" type="General" weightage="50" keywordseo="gurugram" source="Orion">Gurugram</keyword> it will be priced at Rs 48.79 per scm. Rates differ from state to state depending on local taxes. Natural gas is the basic input for CNG and PNG. Domestic production of natural gas is insufficient to meet demand and India imports roughly half of its needs in the form of liquefied natural gas (LNG). While the price of domestically produced natural gas was increased to USD 6.10 per million British thermal units for the six month period beginning April 1, international LNG rates shot to record high in the aftermath of Russia's invasion of Ukraine. LNG in the spot or current market currently costs upwards of USD 30. GAIL mixes about 2.5-3 million standard cubic meters per day of LNG with volumes available from domestic fields for supply city gas operators like IGL and MGL. The pooled rate is fixed every month. For August, the pooled price is USD 10.52 per mmBtu, up from USD 8.95 in the previous month. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/shaktis-gati-on-interest-rate-hike-to-continue/articleshow/93366502.cms">Shakti’s Gati on interest rate hike to continue</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/hdfc-seals-worlds-largest-social-loan-worth-1-1-billion-for-affordable-housing/articleshow/93366669.cms">HDFC seals world’s largest social loan worth $1.1 billion for affordable housing</a>

Piped cooking gas price hiked by Rs 2.63 per unit in Delhi NCR

<ul class="summary-list"><li>John Paulson said house prices could drop, but a decline wouldn't spark another financial crisis.</li><li>Paulson, who shorted the mid-2000s housing bubble, said there's much less risk in the system today.</li></ul>John Paulson, who called the implosion of the mid-2000s housing bubble, warned US home prices could slump again, but ruled out the decline sparking another financial crisis."We're not at risk of a collapse today in the financial system like we were before," he <a href="https://www.bloomberg.com/news/articles/2022-09-25/john-paulson-on-frothy-us-housing-market-this-time-is-different?">told Bloomberg</a> in a recent interview. "Housing may be a little frothy. So housing prices may come down or they may plateau, but not to the extent it happened."The billionaire investor and Paulson &amp; Co founder explained that about 15 years ago, the mortgage market and banking system were much less solid than today.At the time, many Americans could buy homes without undergoing credit checks or making down payments, and often had mediocre credit and lots of personal debt, Paulson said.Moreover, banks were highly leveraged with capital ratios of about 3%, compared with between 9% and 12% today, he noted. Plus, they were exposed to big risks not disclosed on their balance sheet."You don't have the degree of poor credit quality in mortgages that you did at the time," he said. "The banks were very speculative about what they were investing in. They had a lot of risky subprime, high yield, levered loans."The S&amp;P/Case Shiller index of national home prices has surged by over 40% since the start of 2020, while long-term mortgage rates recently climbed past 6% for the first time since 2008. In other words, US homes have grown more expensive and financing a home purchase has become costlier, creating an affordability problem that could result in a market downturn.Paulson also took aim at some of his fellow short sellers during the interview. He called them out for hyping up stocks to unwitting retail investors in order to drive up their prices, then stopping the promotion so that the stocks plummeted in value and the sellers' short positions paid off.The investor pointed to cryptocurrencies, which he <a href="https://markets.businessinsider.com/news/stocks/john-paulson-crypto-worthless-bubble-spac-overvalued-gold-inflation-warning-2021-9">dismissed as a worthless bubble</a> last year, as an example of short selling being risky because it has unlimited downside. Investors scoffed when bitcoin hit $20,000 and bet against it, he said, only to watch it more than triple in price to over $60,000 in November.Paulson <a href="https://markets.businessinsider.com/news/stocks/john-paulson-inflation-warning-gold-price-mining-energy-commodity-stocks-2021-9">predicted last year</a> that stubborn inflation would lead to higher interest rates, spurring investors to ditch cash and bonds for gold. He noted to Bloomberg that the yellow metal has served as a haven asset this year, given its smaller decline relative to stocks and bonds.Moreover, he suggested gold could jump in value if the Federal Reserve's campaign of interest-rate hikes fails to crush inflation. He argued that investors would lose faith in the central bank and their long-term inflation expectations would rise, boosting demand for the metal as a hedge.Paulson, who converted his hedge fund into a family office in 2020, <a href="https://markets.businessinsider.com/news/stocks/john-paulson-shorting-housing-bubble-mortgages-defaults-philanthropy-career-advice-2021-9">shorted about $25 billion of securities</a> during the mid-2000s housing bubble, and scored a $15 billion windfall for his clients. His wager was chronicled in a book titled "The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History."

Billionaire investor John Paulson warns US house prices could tumble - and touts gold as an inflation hedge

Hi. Aaron Weinman here. The "Bond King" has spoken! Jeffrey Gundlach, the chief executive of DoubleLine Capital, is convinced recession is headed our way in 2023.But not all is doom and gloom. He likes the look of lower-rated investment-grade securities, specifically those classified as triple B. He also fancies the double B bond, which is the highest rung of the high-yield market.These are companies, or sometimes countries, securities that yield a lot more than the highest-rated borrower like Google or Apple, but do come with risks.For Gundlach, that risk is worth it, especially with short-term interest rates rising. Borrowers living in the triple- or double-B spaces will have to make more costly interest payments in the coming months.Insider's Hayley Cuccinello listened to the outspoken billionaire at an event in Huntington Beach, California. <a href="https://www.businessinsider.com/jeffrey-gundlach-bond-yield-strategy-bear-market-tips-futureproof-2022-9">Check out her story here.</a>And, happy Friday, readers. It's time for the <a href="https://www.businessinsider.com/banker-of-the-week-graham-weaver-chief-executive-of-alpine-investors-2022-9">Banker of the Week!</a><hr />If this was forwarded to you,<a href="https://www.businessinsider.com/subscription/newsletter/10-things-on-wall-street"> sign up here</a>. Download Insider's app <a href="https://www.insider.com/app">here</a>.<hr /><a href="https://www.businessinsider.com/jeffrey-gundlach-bond-yield-strategy-bear-market-tips-futureproof-2022-9"></a>1. DoubleLine Capital's Jeffrey Gundlach has a thing for bonds. Despite believing a recession is around the corner, it's not all doom and gloom for the billionaire.He shared his playbook for the bond market, and believes the sweet spot for double-digit growth for investors is between the lines of the investment-grade and sub-investment-grade markets.Gundlach recommended buying securities rated double B (the highest non-investment-grade level) and triple B (the lowest investment-grade level).He acknowledged that there is risk in this strategy, but not enough to ward him off gobbling up these securities. He said this move could net an investor as much as 12% yield.That is helped by a rising interest-rate environment. Borrowers' bond and loan repayments are only going to get costlier for those with floating-rate repayment schedules.Gundlach spoke at the Future Proof Festival. <a href="https://www.businessinsider.com/jeffrey-gundlach-bond-yield-strategy-bear-market-tips-futureproof-2022-9">Read the full story here.</a><hr />In other news:<a href="https://www.businessinsider.com/figma-adobe-deal-kleiner-perkins-greylock-vc-investor-winners-2022-9"></a><div type="image" title="In this photo illustration, the Adobe Inc. logo seen displayed on a smartphone screen." height="3332" width="4443" msid="94248989" hostid="261" sizebytes="206594"></div>2. Adobe has agreed to buy Figma for $20 billion. Investors believed Adobe overpaid for Figma, and the company's market value <a href="https://www.reuters.com/markets/deals/adobe-nearing-deal-buy-online-design-firm-figma-bloomberg-news-2022-09-15/">tumbled by more than $30 billion</a>. Allen and Company advised Adobe, and Wachtell, Lipton, Rosen &amp; Katz was legal counsel to <a href="https://www.businesswire.com/news/home/20220915005546/en/Adobe-to-Acquire-Figma">the Photoshop maker</a>. The deal is also one of the biggest for a venture-backed startup. Early investors like Greylock and Kleiner Perkins <a href="https://www.businessinsider.com/figma-adobe-deal-kleiner-perkins-greylock-vc-investor-winners-2022-9">stand to win big</a>.3. Ethereum's Merge has finally arrived. The Merge will transition Ethereum's blockchain from a proof-of-work verification system to a proof-of-stake system. Fifteen crypto CEOs and founders share their thoughts on what this means for <a href="https://www.businessinsider.com/ethereum-merge-bitcoin-crypto-ether-price-solana-web3-blockchain-buterin-2022-9">the digital-assets space</a>.4. Apollo is appealing directly to bond investors to finance M&amp;A as banks pare back risk to private-equity firms' buyouts, Bloomberg reported. Barclays and Deutsche Bank are selling bonds for Apollo-backed Lottomatica on a best-efforts basis. That means they're raising the financing from investors without underwriting the debt <a href="https://www.bloomberg.com/news/articles/2022-09-15/apollo-taps-bond-investors-for-m-a-as-banks-retreat-from-risk?utm_content=business&amp;cmpid=socialflow-twitter-business&amp;utm_medium=social&amp;utm_campaign=socialflow-organic&amp;utm_source=twitter&amp;sref=5xrDvJna">on their own balance sheets</a>.5. Coming soon from Walmart: checking accounts. The world's largest retailer is expected to launch digital-bank accounts to its employees and customers, <a href="https://www.bloomberg.com/news/articles/2022-09-14/walmart-backed-startup-one-to-offer-bank-accounts-to-shoppers-workers?sref=ZoyErlU1#xj4y7vzkg&amp;leadSource=uverify%20wall">according to Bloomberg</a>.6. Student loan startup CommonBond is quietly winding down operations. The pandemic's interest and payment pause massively hit its <a href="https://www.businessinsider.com/student-loan-startup-commonbond-shutting-down-after-payments-pause-2022-9">core business of refinancing</a>.7. NextEra Energy sold $2 billion of equity units to Citi, Goldman Sachs, and Mizuho. The deal, which priced at $50 a unit, is one of the largest trades in the equity capital markets in recent months, where deal flow has <a href="https://finance.yahoo.com/news/nextera-energy-announces-sale-equity-123000531.html">slowed to a trickle</a>.8. Companies like Zoom and Roku are giving away more stock to woo talent, but that could dilute existing shareholders. Insider has compiled a chart that highlights some tech companies with the <a href="https://www.businessinsider.com/chart-new-data-shows-amazon-google-dilute-shareholders-the-most-2022-9">most expensive stock compensation</a>.9. The ultra wealthy are taking the concept of remote work to the next level. Demand for private islands has shot up since the onset of the pandemic. Here are four private islands <a href="https://www.businessinsider.com/photos-private-islands-for-sale-in-the-bahamas-50-million-2022-9">for sale in the Bahamas</a>.<hr /><a href="https://www.businessinsider.com/banker-of-the-week-graham-weaver-chief-executive-of-alpine-investors-2022-9"></a><div type="image" title="Graham Weaver" height="419" width="559" msid="94248990" hostid="261" sizebytes="11826"></div>10. And here's our Friday Banker of the Week. Meet Graham Weaver, founder and chief executive officer at Alpine Investors, a private-equity firm focused on software and services companies.Weaver drummed up the idea for Alpine in a dorm room at Stanford Business School in 2001. He started out by borrowing against his credit card to invest in companies. Today, the firm manages $8 billion in assets.<a href="https://www.businessinsider.com/banker-of-the-week-graham-weaver-chief-executive-of-alpine-investors-2022-9">Check out the full story, and Weaver's love of blogging and TikTok, here.</a><hr />Curated by Aaron Weinman in New York. Tips? Email <a href="mailto:aweinman@insider.com">aweinman@insider.com</a> or tweet <a href="https://twitter.com/aaronw11">@aaronw11</a>.

DoubleLine's Jeffrey Gundlach is convinced a recession is coming. But the  'Bond King' is finding stellar returns in some risky pockets of the capital markets.

<ul><li>The rupee has been staggering since the beginning of the year.</li><li>The Indian currency plunged to a record low for a second time this week at 77.55 against the US dollar in early trade on Thursday.</li><li>This depreciating rupee is likely to have a direct impact on your daily expenditure. Here’s what happens to your money when rupee falls.</li></ul>Earlier this week, the <keyword id="91748" type="General" weightage="20" keywordseo="indian-rupee" source="Orion">Indian rupee</keyword> nosedived 51 paise, <a href="https://www.businessinsider.in/finance/news/rupee-hits-all-time-low-of-77-42-against-us-dollar/articleshow/91439581.cms">hitting an all-time low</a> of ₹77.41 against the US dollar. It was followed by another record low for a <a href="https://www.indiatoday.in/business/story/rupee-hits-record-low-against-us-dollar-2nd-time-this-week-1948409-2022-05-12" data-type="tilCustomLink">second time </a>this week at ₹77.55 against the US dollar on May 12, 2022. <div type="image" title="BISN2221" msid="91535525" hostid="261" caption="&amp;lt;p&amp;gt;Rupee hit a lifetime low of 77.55 on Thursday&amp;lt;br /&amp;gt;&amp;lt;/p&amp;gt;"></div> Earlier last week, the Indian rupee had appreciated eight paise after India’s central bank, the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>, <a href="https://www.businessinsider.in/finance/banks/news/rbi-hikes-repo-rate-by-40-basis-points-to-4-4-as-it-seeks-to-reign-in-inflation/articleshow/91311941.cms">increased interest rates</a> by 40 basis points on May 04, only to tumble further below this week. 100 basis points make one percent. The rupee has been staggering since the beginning of the year. <div type="image" title="Rupee depreciation in last one month" msid="91535481" hostid="261" caption="&amp;lt;p&amp;gt;Rupee depreciation in last one month&amp;lt;br /&amp;gt;&amp;lt;/p&amp;gt;"></div> This depreciating rupee, which is a fall in the value of a currency in terms of its exchange rate versus other currencies, is likely to have a direct impact on your daily expenditure. <cmsannotation type="cmsannotation" annotationid="Imports now more expensive, while exports are cheaper" text="Imports now more expensive, while exports are cheaper">Imports now more expensive, while exports are cheaper</cmsannotation> With a small dip in the Indian currency, the Indian government has to pay a little extra for the same goods it was importing earlier. So, importing items get more expensive. Oil imports will get costlier, which has a direct impact on prices of many other things – anything that needs to be transported will (if it hasn’t, already) now see an increase in its prices. India currently imports <a href="https://www.businessinsider.in/finance/news/crude-oil-surges-significantly-to-109-per-barrel-as-countries-look-for-options-other-than-russia/articleshow/89936843.cms">85% of its oil demand </a>and the rise in crude oil prices directly increases import bill and expenses. <cmsannotation type="cmsannotation" annotationid="Your investment portfolio is likely to be affected" text="Your investment portfolio is likely to be affected">Your investment portfolio is likely to be affected</cmsannotation> If foreign investors pull out of Indian equities, Indian currency depreciates, leading to a sharp decline in equity markets. Foreign investors have already <a href="https://www.businessinsider.in/stock-market/news/foreign-investors-have-pulled-out-1-5-lakh-crore-from-the-indian-markets-in-2022-so-far-heres-why/articleshow/91485411.cms">pulled out over ₹6,400 crore</a> from the Indian equity markets in the first four trading sessions of May when the Reserve Bank of India (<keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword>) and <a href="https://www.theguardian.com/business/federal-reserve">US Federal Reserve</a> raised interest rates. Given the headwinds in terms of elevated crude oil prices, inflation, and monetary tightening (also known as Quantitative Tightening), market volatility is expected to remain high as foreign investors could continue to withdraw funds. <cmsannotation type="cmsannotation" annotationid="Foreign education could get more expensive" text="Foreign education could get more expensive">Foreign education could get more expensive</cmsannotation> If you are planning to study abroad, you might have to restructure your budget. You will have to shell out more rupees for every dollar you spend. Simply put, you will have to spend over 21% more in terms of rupee to buy the same number of dollars. If you budgeted ₹20 lakh for your education abroad, you will now have to increase it to ₹24.2 lakh. <div type="image" title="thats-a-lot-of-money-expensive" msid="91535599" hostid="261" caption="&amp;lt;p&amp;gt;Foreign education will get more expensive&amp;lt;br /&amp;gt;&amp;lt;/p&amp;gt;"></div> International travel now more expensive During summer, the travel sentiment is high among consumers. As the rupee loses value against the US dollar, your plans to travel abroad will burn a deeper hole in your pocket – like everything, paying for your purchases in foreign currency, moreso the US dollar, is now more expensive than ever before. A weaker rupee results in expensive imports, and contributes to inflation <a href="https://www.livemint.com/economy/indias-inflation-likely-accelerated-to-18-month-high-in-april-poll-11652181052993.html">India's retail inflation</a> surged to an 18-month high in April, largely driven by rising fuel and food prices and staying well above the RBI's upper tolerance limit for a fourth consecutive month, a Reuters poll found. As the rupee weakens against the dollar and import prices hike, companies may not be able to absorb this increase in cost and may pass it on to consumers. <cmsannotation type="cmsannotation" annotationid="Increase in your home loan EMIs and more" text="Increase in your home loan EMIs and more">Increase in your home loan EMIs and more</cmsannotation> To keep inflation in check, RBI resorts to increasing its interest rates. If the RBI expects that inflation will rise beyond its tolerance limit, it hikes the rate at which banks borrow money from the RBI, which is also known as the repo rate. When repo rate increases, the cost of borrowing for banks also increases, which is passed to their account holders by increasing the interest rate on loans and deposit rates. Some banks have already announced an increase in interest rates on home loans – HDFC has <a href="https://economictimes.indiatimes.com/wealth/borrow/hdfc-hikes-home-loan-interest-rates-this-is-how-much-your-emi-will-go-up-by/articleshow/91434723.cms">increased</a> its interest rates for retail home loans by 30 basis points, with the new rates now in the range of 7-7.45%. <cmsannotation type="cmsannotation" annotationid="But what has caused the decline of the Indian rupee?" text="But what has caused the decline of the Indian rupee?">But what has caused the decline of the Indian rupee?</cmsannotation> The value of any currency depends on its demand in the market. If the demand increases, its value goes up, which is known as appreciation. And if the demand for a currency declines, its value depreciates. If more foreign investors invest in Indian businesses and projects, the demand for Indian currency goes up. To be able to invest in India, foreign companies have to first convert their currency into Indian rupees. This increase in demand for the rupee strengthens its value against the US dollar. Recently, more and more overseas investors have pulled out a big chunk of their money from the Indian market, consequently <a href="https://www.businessinsider.in/stock-market/news/the-stock-markets-are-going-through-a-short-term-correction-and-now-might-be-a-good-time-to-invest-in-valued-stocks-say-analysts/articleshow/91369077.cms">affecting market sentiment</a> and currency’s decline. <div type="image" title="foreign-investors" msid="91535645" hostid="261" caption="&amp;lt;p&amp;gt;How Foreign Institutional Investors (FII) are pulling out their investments from India, month-on-month&amp;lt;br /&amp;gt;&amp;lt;/p&amp;gt;"></div> The <a href="https://www.theguardian.com/business/federal-reserve">Federal Reserve</a> has raised interest rates for the first time since 2018, as the US central bank struggles with soaring inflation, the impact of the war in Ukraine and the COVID crisis. As interest rates soar, investors start pulling money out of riskier investments like equities, commodities and foreign markets. The annual <a href="https://www.businessinsider.in/policy/economy/news/inflation-slowed-in-april-for-the-first-time-in-8-months/articleshow/91496347.cms">inflation rate in the US</a> is now at 8.3%, which also affects market sentiment. Here’s an <a href="https://youtu.be/eADkfR1PUeU">explainer by Stocktwits India </a>on how the global inflation rate affects India and what the government is doing to combat it. Therefore, foreign investors are exiting their investments in India, and shoring up their investments in the relatively safer markets in the US. On the other hand, when Indian businesses and companies import foreign goods and products, such as crude oil, gold, consumer electronics, among other things, they convert their rupees into dollars, which is the global currency for international trades. If imports exceed exports, demand for the dollar goes up and the rupee weakens against it. Since India has been a <a href="https://www.indiatoday.in/news-analysis/story/current-account-surplus-india-net-exporter-explainer-1705281-2020-07-28">net importer</a>, we import more than we export, the rupee has gradually depreciated over time. <div type="image" title="rupee-decline-5y" msid="91535676" hostid="261" caption="&amp;lt;p&amp;gt;Decline of Indian currency against US dollar in last five years&amp;lt;br /&amp;gt;&amp;lt;/p&amp;gt;"></div> As the upward trend of the graph shows, you had to shell out ₹64 in May 2017 for 1 US dollar. Today, you have to pay ₹77.26 in exchange for a dollar. To deal with this rupee depreciation, you can reevaluate your investment portfolio and consider companies that have a substantial amount of foreign exchange earnings such as in sectors like pharma, FMCG, and IT. Disclaimer: This is not investment advice, it is for informational purposes only. <div type="Video" msid="91526183" hostid="261" title="SIMPLY PUT: How a small dip in Indian currency could affect your expenses" dataSource="BUSINESSINSIDER" thumbUrl="https://denmark.timesinternet.in/cmslite/api/app/images.jpg?msid=91526183"></div>

Rupee continues to fall to record lows and it might affect your food, education, healthcare and other expenses

Earlier this week, the Indian <keyword id="6355302" type="General" weightage="100" keywordseo="rupee" source="Orion">rupee</keyword> nosedived 51 paise, <a href="https://www.businessinsider.in/finance/news/rupee-hits-all-time-low-of-77-42-against-us-dollar/articleshow/91439581.cms">hitting an all-time low</a> of ₹77.41 against the US dollar. <div type="image" title="Rupee hit a lifetime low of 77.41 earlier this week" msid="91525914" hostid="261" caption="&amp;lt;p&amp;gt;Rupee hit a lifetime low of 77.41 earlier this week&amp;lt;/p&amp;gt;"></div> Earlier last week, the Indian rupee had appreciated eight paise after India’s central bank, the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>, <a href="https://www.businessinsider.in/finance/banks/news/rbi-hikes-repo-rate-by-40-basis-points-to-4-4-as-it-seeks-to-reign-in-inflation/articleshow/91311941.cms">increased interest rates</a> by 40 basis points on May 04, only to tumble further below this week. 100 basis points make one percent. The rupee has been staggering since the beginning of the year. <div type="image" title="Rupee depreciation in last one month" msid="91525962" hostid="261" caption="&amp;lt;p&amp;gt;Rupee depreciation in last one month&amp;lt;/p&amp;gt;"></div> This depreciating rupee, which is a fall in the value of a currency in terms of its exchange rate versus other currencies, is likely to have a direct impact on your daily expenditure. Imports now more expensive, while exports are cheaper With a small dip in the <keyword id="50739" type="General" weightage="20" keywordseo="indian-currency" source="Orion">Indian currency</keyword>, the Indian government has to pay a little extra for the same goods it was importing earlier. So, importing items get more expensive. Oil imports will get costlier, which has a direct impact on prices of many other things – anything that needs to be transported will (if it hasn’t, already) now see an increase in its prices. India currently imports <a href="https://www.businessinsider.in/finance/news/crude-oil-surges-significantly-to-109-per-barrel-as-countries-look-for-options-other-than-russia/articleshow/89936843.cms">85% of its oil demand </a>and the rise in crude oil prices directly increases import bill and expenses. Your investment portfolio is likely to be affected If foreign investors pull out of Indian equities, Indian currency depreciates, leading to a sharp decline in equity markets. Foreign investors have already <a href="https://www.businessinsider.in/stock-market/news/foreign-investors-have-pulled-out-1-5-lakh-crore-from-the-indian-markets-in-2022-so-far-heres-why/articleshow/91485411.cms">pulled out over ₹6,400 crore</a> from the Indian equity markets in the first four trading sessions of May when the Reserve Bank of India (RBI) and <a href="https://www.theguardian.com/business/federal-reserve">US Federal Reserve</a> raised interest rates. Given the headwinds in terms of elevated crude oil prices, inflation, and monetary tightening (also known as Quantitative Tightening), market volatility is expected to remain high as foreign investors could continue to withdraw funds. Foreign education could get more expensive If you are planning to study abroad, you might have to restructure your budget. You will have to shell out more rupees for every dollar you spend. Simply put, you will have to spend over 21% more in terms of rupee to buy the same number of dollars. If you budgeted ₹20 lakh for your education abroad, you will now have to increase it to ₹24.2 lakh. <div type="image" title="Foreign education will get more expensive" msid="91525979" hostid="261" caption="&amp;lt;p&amp;gt;Foreign education will get more expensive&amp;lt;/p&amp;gt;"></div> International travel now more expensive During summer, the travel sentiment is high among consumers. As the rupee loses value against the US dollar, your plans to travel abroad will burn a deeper hole in your pocket – like everything, paying for your purchases in foreign currency, moreso the US dollar, is now more expensive than ever before. A weaker rupee results in expensive imports, and contributes to inflation <a href="https://www.livemint.com/economy/indias-inflation-likely-accelerated-to-18-month-high-in-april-poll-11652181052993.html">India's retail inflation</a> surged to an 18-month high in April, largely driven by rising fuel and food prices and staying well above the RBI's upper tolerance limit for a fourth consecutive month, a Reuters poll found. As the rupee weakens against the dollar and import prices hike, companies may not be able to absorb this increase in cost and may pass it on to consumers. Increase in your home loan EMIs and more To keep inflation in check, RBI resorts to increasing its interest rates. If the RBI expects that inflation will rise beyond its tolerance limit, it hikes the rate at which banks borrow money from the RBI, which is also known as the repo rate. When repo rate increases, the cost of borrowing for banks also increases, which is passed to their account holders by increasing the interest rate on loans and deposit rates. Some banks have already announced an increase in interest rates on home loans – HDFC has <a href="https://economictimes.indiatimes.com/wealth/borrow/hdfc-hikes-home-loan-interest-rates-this-is-how-much-your-emi-will-go-up-by/articleshow/91434723.cms">increased</a> its interest rates for retail home loans by 30 basis points, with the new rates now in the range of 7-7.45%. But what has caused the decline of the Indian rupee? The value of any currency depends on its demand in the market. If the demand increases, its value goes up, which is known as appreciation. And if the demand for a currency declines, its value depreciates. If more foreign investors invest in Indian businesses and projects, the demand for Indian currency goes up. To be able to invest in India, foreign companies have to first convert their currency into Indian rupees. This increase in demand for the rupee strengthens its value against the US dollar. Recently, more and more overseas investors have pulled out a big chunk of their money from the Indian market, consequently <a href="https://www.businessinsider.in/stock-market/news/the-stock-markets-are-going-through-a-short-term-correction-and-now-might-be-a-good-time-to-invest-in-valued-stocks-say-analysts/articleshow/91369077.cms">affecting market sentiment</a> and currency’s decline. <div type="image" title="Foreign investors have pulled out `1.5 lk cr in 2022 so far" msid="91526033" hostid="261" caption="&amp;lt;p&amp;gt;Foreign investors have pulled out `1.5 lk cr in 2022 so far&amp;lt;/p&amp;gt;"></div> The <a href="https://www.theguardian.com/business/federal-reserve">Federal Reserve</a> has raised interest rates for the first time since 2018, as the US central bank struggles with soaring inflation, the impact of the war in Ukraine and the COVID crisis. As interest rates soar, investors start pulling money out of riskier investments like equities, commodities and foreign markets. The annual <a href="https://www.businessinsider.in/policy/economy/news/inflation-slowed-in-april-for-the-first-time-in-8-months/articleshow/91496347.cms">inflation rate in the US</a> is now at 8.3%, which also affects market sentiment. Here’s an <a href="https://youtu.be/eADkfR1PUeU">explainer by Stocktwits India </a>on how the global inflation rate affects India and what the government is doing to combat it. Therefore, foreign investors are exiting their investments in India, and shoring up their investments in the relatively safer markets in the US. On the other hand, when Indian businesses and companies import foreign goods and products, such as crude oil, gold, consumer electronics, among other things, they convert their rupees into dollars, which is the global currency for international trades. If imports exceed exports, demand for the dollar goes up and the rupee weakens against it. Since India has been a <a href="https://www.indiatoday.in/news-analysis/story/current-account-surplus-india-net-exporter-explainer-1705281-2020-07-28">net importer</a>, we import more than we export, the rupee has gradually depreciated over time. <div type="image" title="Rupee vs Dollar in the last five years" msid="91526067" hostid="261" caption="&amp;lt;p&amp;gt;Rupee vs Dollar in the last five years&amp;lt;/p&amp;gt;"></div> As the upward trend of the graph shows, you had to shell out ₹64 in May 2017 for 1 US dollar. Today, you have to pay ₹77.26 in exchange for a dollar. To deal with this <keyword id="688216" type="General" weightage="20" keywordseo="Rupee-depreciation" source="Orion">rupee depreciation</keyword>, you can reevaluate your investment portfolio and consider companies that have a substantial amount of foreign exchange earnings such as in sectors like pharma, FMCG, and IT. Here's a short video <div type="image" title="Here&amp;#39;s what happens when the Rupee depreciates" msid="91526220" hostid="261" caption="&amp;lt;p&amp;gt;Here&amp;#39;s what happens when the Rupee depreciates&amp;lt;/p&amp;gt;"></div> Disclaimer: This is not investment advice, it is for informational purposes only.

SIMPLY PUT: Why is the rupee falling and how it affects your food, education, healthcare and other expenses

<ul><li>On 1 August, five of the six members of the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>’s monetary policy committee voted in favour of a second consecutive rate <keyword id="44033" type="PERSON" weightage="20" keywordseo="hike">hike</keyword>. </li><li>The resulting repo rate, 6.5%, is the highest rate in two years, indicating the central bank’s desire to keep <keyword id="22195" type="COMPANY" weightage="20" keywordseo="Inflation">inflation</keyword> in check. </li><li>Domestic banks will pass on the higher rates to borrowers and depositors in the form of costlier loans, higher EMIs. </li></ul>To almost no one’s surprise, the monetary policy committee of the Reserve Bank of India (RBI) hiked the repo rate, the rate at which it lends money to banks, by 0.25 basis points to 6.5% on 1 August. The move came less than two months after it hiked rates to 6.25% at its last meeting in June. This was first time since October 2013 that the central bank had decided on consecutive rate hikes, indicating the need to keep inflation in check and prevent the further depreciation of the <keyword id="6355302" type="UNKNOWN" weightage="20" keywordseo="Rupee">rupee</keyword>. All about inflation The RBI’s big worry, as usual, is rising prices - both headline and core inflation have inched upwards since the June meeting. It expects the rate of inflation to rise to 4.8% in the second half of the current financial year and touch 5% by the first quarter of fiscal 2020. Urjit Patel, the governor of the central bank, pointed out the inflationary pressures of the central government’s <a href="https://www.businessinsider.in/indian-government-is-planning-a-price-support-scheme-for-paddy-that-it-cant-afford/articleshow/64841393.cms">minimum support price</a> (MSP) schemes. The MSP has been fixed at 150% of the cost of production of all kharif crops, and high price of fuel - both of which are leading to higher household costs. The idea behind the two rate hikes is to encourage saving and reduce the supply of the money circulating in the Indian economy, thereby moving the rate of inflation down to the central bank’s long-term target of 4%. In an election year, the central bank probably wishes to prevent overspending by the government. The RBI was not too worried about hurting domestic growth, given the solid monsoon, a rebound in private investment, a good earnings season for India Inc and the potential rise in rural consumption as a result of the MSP scheme. It kept its GDP forecast for the year unchanged at 7.4%. Higher EMIs, higher credit costs Domestic banks will pass on the higher rates to borrowers and depositors in the form of costlier loans and higher equated monthly installments (EMIs). The SBI hiked deposit rates a day before the meeting of the monetary policy committee. Earlier this year, in June, a number of banks, including ICICI Bank, SBI and Punjab National Bank, increased lending rates before the June rate hike. A major casualty of the double rate-hike will be the housing market, given the higher cost of mortgages and home loans. Hence, the real estate sector will remain sluggish as rate-conscious buyers steer clear. Another rate hike before year’s end? Two consecutive rate hikes usually point the commencement of a tightening cycle. There remains a high possibility that the RBI will hike rates again before the year is over if the 4% inflation goal isn’t met. The recent GST rate cut on a number of items could result in lower retail inflation, which will be countered by the upward effect of the MSP scheme on food inflation. The central bank decided to keep its policy stance “neutral”, however, likely in light of trade tension between the US and China. In the event of a trade war and an ensuing depression in global growth, the RBI will likely hold rates stable to encourage consumption.

Here’s why India’s central bank is hiking rates consecutively for the first time since 2013

New Delhi, Feb 6 () Economists and financial experts have welcomed RBI's widely expected status quo on repo rate, and other announcements to spur economic growth and ensure money supplies effectively. The RBI on Thursday kept the key policy rate unchanged at 5.15 per cent. This follows a cumulative 135 basis points (bps) cut in repo rate since February to December 2019. The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das unanimously decided to keep the repo rate unchanged. Bank of India CMD A K Das termed the RBI policy quite progressive and forward looking. "Notwithstanding unchanged policy rates, introduction of Term Repo opens up ways to transmit the signal rate changes," he said. "Measures like DCCO extension for realty, MSME window expansion for restructuring and CRR exemption for incremental funding to key segments are growth oriented and promise to provide the much needed impetus to bank lending," Das said. According to Rajni Thakur, Economist, RBL Bank, MPC's decision was on expected lines. "The changes in development and regulatory policies however were a positive surprise and could potentially turn out to be a big support to the troubled sectors in the economy," Thakur said. Specific announcements in terms of CRR relief or long-term durable liquidity for banks push the overall credit availability in the financial system. Whether these steps manage to improve demand conditions is another question all together, she added. The RBI has announced term repurchase agreements (repos) of one-year and three-year tenors of appropriate sizes for a total amount of Rs 1 lakh crore at the policy repo rate, from the fortnight beginning February 15. "It is an effort to ensure better monetary policy transmission. It will enable banks to reduce their lending rates," RBI Governor Das told reporters in the post policy conference. Upasna Bhardwaj, Economist, Kotak Mahindra Bank said very aptly, MPC has addressed the growth concerns through pushing transmission via tweaking the liquidity framework, providing long term liquidity operations and incentivising credit to select sectors. "We expect these measures to aid transmission with the shorter end of the yield curve expected to rally meaningfully. These measures should help availability of funds at lower costs and aid sectors in stress," Bhardwaj said. ICRA Economist Aditi Nayar said: "The tone of the MPC's statement was rather dovish, especially given the reiteration that policy space is available for future action. "The accommodative stance will be maintained for as long as necessary to revive growth, in spite of the headline inflation having breached the upper threshold of the MPC's medium term target." The RBI also raised upwards the retail inflation projection for last quarter of this fiscal to 6.5 per cent citing high input cost for milk and pulses besides costlier crude oil prices amid rising geo-political tensions. Nayar said the statement suggests the near certainty of at least one additional rate cut, even if its magnitude is modest, the timing of which will depend on how quickly inflation appears to be reverting towards 4 per cent. Umesh Revankar, MD and CEO - Shriram Transport Finance said the attention-grabbing aspect of the policy is marginal improvement in IIP, manufacturing index (PMI) and service index. These numbers depict beginning of increasing activity though still under wait and watch radar to bring in any further excitement, he said. "We believe that all the policy decisions along with pro-consumption budget corroborates that there would be better demand from the consumption side. Once that increases, automatically there will be better credit demand," Revankar said. The expansionary monetary policy stance was necessary and is an assurance that there will be no reversal of easing and that the RBI will not hike rates immediately, opined Rumki Majumdar, Economist, Deloitte India. Engineering Exports and Promotion Council (EEPC) Chairman Ravi Sehgal said RBI measures to provide one-time restructuring window for advances to MSMEs would help growth revival in the employment-oriented sectors. MSMEs contribute significantly to the country's exports. "With global markets being subdued, exporters, particularly those in the SMEs are facing challenges. The RBI measures through loan restructuring and providing CRR incentives to the banks to lend to MSMEs would certainly help the exporting sector," he said. Ample liquidity with the banks should lead to lowering of interest rates as part of effective transmission of earlier reductions, he added.Anarock Property Consultants Chairman Anuj Puri said the extension for restructuring of project loans by a year is a major relief to the real estate sector. It complements many of the previous initiatives by the government in 2019. "Loans for projects that have been delayed for reasons beyond the control of their promoters have been extended by another one year without downgrading the asset classification. This is a big move and will bring the much-needed relief to the cash-starved real estate sector - and to both developers and HFCs from the liquidity perspective," Puri said. KPM KPM ANUANU

Experts hail RBI measures to boost economy, improve money supply

<ul><li>While the legal drinking age in Delhi is 25 years, most of the youth in India’s National Capital starts consuming alcohol much before that — even below 18 years of age. </li><li>Many of the respondents agreed that they consumed alcohol without making their families aware. </li><li>There are no checks at retailers to assess the age of buyers while supplying them alcohol and no strict punishments imposed on people breaking the laws.</li></ul>While the legal drinking age in the National Capital Region of Delhi is still 25 years, most young people in India’s national capital start consuming alcohol way before that — including in teenager before reaching adulthood. A recent <a href="https://www.indiatoday.in/mail-today/story/most-delhi-youth-drink-before-legal-age-claims-survey-1455638-2019-02-14">survey</a> by the Community Against Drunken Driving (CADD), an NGO working against drunk driving and underage drinking, has shown that over 88% of youth below 25 consumes or purchases alcohol even though it’s illegal. At 25, the drinking age is admittedly higher than what is allowed in many countries -- drinking age is 21 in the UK for instance and 18 in the UK and Australia, for instance. Drinking age varies in India by state from 21 to 25. But according to the survey, there was <a href="http://www.thecommunique.in/2019/02/11/over-85-of-youth-consume-alcohol-before-25-years-of-age-cadd-survey/">nearly 23% </a>(2,310) incidence of youth consuming alcohol even before they reached 18. In fact, many of them consumed alcohol without making their families aware. The public survey, undertaken in September and December 2018, conducted research outside 50 liquor bars and restaurants on over 10,000 respondents under the age of 25 to evaluate alcohol intake and underage <keyword id="2096865" type="PERSON" weightage="20" keywordseo="drinking-patterns">drinking patterns</keyword> in the capital city among youths. The conclusions drawn from the survey have revealed that most of the youth involved in drinking, the majority -- 66% -- obtained alcohol from liquor bars, pubs and restaurants. While nearly 14% reportedly said that they secured it from public events such as food fests. About 98% of the respondents said they were already aware of the legal drinking age, showing that under-age drinking might be becoming a norm. What pushes the Delhiites to drink? One reason for the alcohol consumption is easy access. One can easily procure alcohol from liquor shops, without checks to assess the age of buyers. There is also lax punishment imposed on people breaking the law. Over 34% of the youth confessed that they were involved in some sort of a fight while drunk. Other than that, nearly half of the surveyed youth agreed to drunk driving and stunt biking under the influence. A <a href="http://www.newindianexpress.com/cities/delhi/2018/dec/25/seven-out-of-10-delhiites-say-they-indulged-in-drunk-driving-survey-1916137.html">research</a> conducted by CADD at prominent fuel stations in the city last year, found that over 72% people agreed for driving drunk on the city roads. See also: <a href="https://www.businessinsider.in/alcohol-may-become-costlier-in-indian-states-considering-farm-loan-waivers-report/articleshow/67363562.cms">Alcohol may become costlier in Indian states considering farm loan waivers: Report</a> <a href="https://www.businessinsider.in/indias-food-regulator-has-kicked-off-the-new-year-with-a-set-of-new-food-standards/articleshow/67347633.cms">India’s food regulator has kicked off the new year with a set of new food standards</a> <a href="https://www.businessinsider.in/in-goa-you-can-get-a-beer-for-20-used-cigarette-butts-and-10-beer-bottle-caps/articleshow/67894355.cms">In Goa, you can get a beer for 20 used cigarette butts and 10 beer bottle caps</a>

Most young people in India’s national capital who drink alcohol are under-age: Survey

<ul><li>In a year where the country hopes to recover from the coronavirus pandemic, the onus will be on Nirmala Sitharaman to bring much needed relief for sectors, while also ensuring that the economy bounces back. </li><li>From bringing back jobs in the market to tax deductions, there are a lot of expectations from <keyword id="8420431" type="UNKNOWN" weightage="20" keywordseo="budget-2021">Budget 2021</keyword>.</li><li>According to reports, India's Defence Budget could also see a hike to hit total allocations of ₹6 lakh crore.</li><li>Here are the major changes that could come with the <keyword id="10270141" type="UNKNOWN" weightage="20" keywordseo="Union-Budget-2021">Union Budget 2021</keyword>.</li></ul>India’s Finance Minister Nirmala Sitharaman is set to announce the annual budget on February 1, 2021 – paperless for the first time in the history of India. And in a year where the country hopes to recover from the coronavirus pandemic that ravaged almost every other sector, the onus will be on Sitharaman to bring much needed relief for people as well as sectors that need budgetary support to recover. Ahead of the Budget session of the Parliament, mandatory RT-PCR tests will be done on all the members and the question hour too is set to make a comeback. The Budget session is set to start on January 29, 2021. And here are the major changes that could reportedly come up with the <keyword id="6360189" type="ORGANIZATION" weightage="20" keywordseo="union-budget">Union Budget</keyword> 2021. <cmsannotation type="cmsannotation" annotationid="Income tax deductions" comment="subhead" text="Income tax deductions">Income tax deductions</cmsannotation> With thousands having lost their jobs, and many more having had to undergo a salary cut across the country due to the COVID-19 pandemic, Sitharaman might be looking at possible ways to put more disposable income in the hands of the people. According to <a href="https://economictimes.indiatimes.com/news/economy/policy/middle-class-set-to-gain-from-higher-tax-deductions-likely-in-budget-2021/articleshow/80264633.cms">reports,</a> Budget 2021 might take forward the relief announced with the Atma Nirbhar package with the basic tax exemption limit for an individual being raised to ₹5 lakh from the current ₹2.5 lakh. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"><colgroup></colgroup><colgroup></colgroup><colgroup></colgroup><colgroup></colgroup><colgroup></colgroup><col /><col /><col /><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Income Tax Slab </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tax rates - new regime </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tax rates - old regime </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹0 - ₹2,50,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2,50,001 - ₹ 5,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5,00,001 - ₹7,50,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12500 + 10% of total income exceeding ₹5,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12500 + 20% of total income exceeding ₹5,00,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹7,50,001 - ₹10,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹37500 + 15% of total income exceeding ₹7,50,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹62500 + 20% of total income exceeding ₹7,50,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10,00,001 - ₹12,50,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹75000 + 20% of total income exceeding ₹10,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹112500 + 30% of total income exceeding ₹10,00,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12,50,001 - ₹15,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹125000 + 25% of total income exceeding ₹12,50,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹187500 + 30% of total income exceeding ₹12,50,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Above ₹ 15,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹187500 + 30% of total income exceeding ₹15,00,000 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹262500 + 30% of total income exceeding ₹15,00,000 </td></tr></tbody></table> Until now, while the Modi government has pushed for a rebate on all payable taxes, the basic tax exemption limit has remained the same. The report also said that a higher standard deduction (salary that is not subject to income tax) could also be on the way – from the current ₹50,000 to ₹75,000-₹1,00,000. The government could also be planning a <a href="https://www.businessinsider.in/budget/news/india-may-be-considering-a-covid-cess-on-high-income-earners-aside-from-more-levy-on-fuel/articleshow/80208520.cms">COVID cess </a>on high income earners. <cmsannotation type="cmsannotation" annotationid="Defence Budget to get a massive hike" comment="subhead" text="Defence Budget to get a massive hike">Defence Budget to get a massive hike</cmsannotation> Amidst the long standoff between India and China, according to <a href="https://english.jagran.com/business/budget/union-budget-2021-centre-likely-to-hike-defence-budget-unprecedently-make-in-india-to-be-in-focus-report-10022520">reports,</a> India’s defence budget could see an ‘unprecedented hike’ to meet the urgent requirements of the Indian Army. In Budget 2020, the government had allocated a total of ₹4.71 lakh crore (including defence pensions). Reports now say that with Budget 2021, the total allocation could hit ₹6 lakh crore. <cmsannotation type="cmsannotation" annotationid="Farmers to get special attention" comment="subhead" text="Farmers to get special attention">Farmers to get special attention</cmsannotation> With the farmers’ protest going on for several months now, and the Republic Day farmers tractor rally also resulting in clashes in the national capital, Budget 2021 could take measures to soothe the pain of farmers. According to <a href="https://www.firstpost.com/business/union-budget-2021-centre-likely-to-hike-farm-credit-target-to-about-rs-19-lakh-crore-9240521.html">reports</a>, the farm credit target could be raised to ₹19 lakh crore with an aim to double farmers’ income. <cmsannotation type="cmsannotation" annotationid="Massive boost for construction and affordable housing on its way" comment="subhead" text="Massive boost for construction and affordable housing on its way">Massive boost for construction and affordable housing on its way</cmsannotation> The government may make way for a massive boost for the construction and affordable housing sector. An Indian Express report claimed that the government is likely to liberalise Foreign Direct Investment (FDI) rules in construction and to give a boost to home buyers, an allocation will be made for a credit-linked subsidy in the Budget 2021. In Budget 2020, Finance Minister Nirmala Sitharaman had proposed to extend the benefit of additional deduction of ₹1.5 lakh on interest paid on affordable housing loans by a year to March 2021. Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Fund, who is also a part of the Prime Minister's economic advisory council too said the focus could be on construction and infrastructure with this budget. "My first priority would be to support the needy sector of the economy – tourism, retailing, construction, bottom of the pyramid people MSME who have been hit hard. We must support them so that there’s better financial inclusion and they are also able to participate in growth. This can be done in various formats – you can give concessions, grants, you can create mechanism through which they can grow on their own," he said during a recent conversation with Business Insider. <div type="twitter" handle="BiIndia" handlename="Business Insider India🇮🇳" image="http://pbs.twimg.com/profile_images/1232926719016718336/sfffJHNV_normal.jpg" favoritecount="9" retweetcount="2" status="#BudgetInsider: @Iyer_Sriram in conversation with @KotakMF's @NileshShah68 ahead of #Budget2021, cuz the budget tra… https://t.co/k2YwAuyRPw" createdat="1610955127000" id="1351069844918194180"></div> According to<a href="https://www.hindustantimes.com/india-news/union-budget-development-finance-institution-likely-to-be-announced-101611026367782.html"> reports</a>,a Development Finance Institution (DFI) could also be announced with the budget. This new institution would look into infrastructure projects, whether new, stalled or currently in progress, worth ₹100 lakh crore. <cmsannotation type="cmsannotation" annotationid="Bringing back jobs in the market" comment="subhead" text="Bringing back jobs in the market">Bringing back jobs in the market</cmsannotation> Another top priority for the Modi government would be to bring back jobs in the market, after a year where thousands lost jobs across the country as companies tried to cut down costs. The boost in infrastructure and construction could also lead to the growth in jobs. “The Union Budget 2021- 2022 would likely focus on investments that create jobs and therefore infrastructure, construction and significant incentives for high employment-generating sectors (like textiles, affordable housing, MSME, etc) are key areas, which may get priority focus from the government end,” said a report by Sharekhan. <cmsannotation type="cmsannotation" annotationid="Smartphones, electronic items could get costlier" comment="subhead" text="Smartphones, electronic items could get costlier">Smartphones, electronic items could get costlier</cmsannotation> Indian government is set to hike import duties on over 50 items including the likes of smartphones, electronic items and others. According to a<a href="https://www.reuters.com/article/us-india-budget-tax-exclusive/exclusive-indias-budget-seen-raising-import-duties-by-5-10-on-dozens-of-items-sources-say-idUSKBN29N14M"> Reuters report</a>, the hike could be as much as 5-10%. <cmsannotation type="cmsannotation" annotationid="Duty on finished goods could be raised" text="Duty on finished goods could be raised">Duty on finished goods could be raised</cmsannotation> Finished goods made rubber, plastic and leather could see a hike in import levies. Meanwhile, according to an ET report, “inputs used in producing chemicals such as methyl alcohol, acetic acid and PVC could see a reduction in tariffs.” <cmsannotation type="cmsannotation" annotationid="Healthcare could be on the top priority list" comment="subhead" text="Healthcare could be on the top priority list">Healthcare could be on the top priority list</cmsannotation> With the COVID-19 pandemic having shown the need for better healthcare infrastructure and facilities in the country, it is likely that the sector will see renewed focus from Sitharaman. “Combined with the start of the 15th Finance Commission period, we may see a jump in healthcare spending,” said the Credit Suisse report. According to analysts at Sharekhan, within the healthcare stimulus we could also see the extension of tax benefits under Section 35AD. Analysts also expect that there could be an increase in deduction under section 80D of mediclaim premium to be increased to ₹50,000 (for self and spouse) and will remain at ₹50,000 (for dependant parents). <cmsannotation type="cmsannotation" annotationid="Raise the divestment target" comment="subhead" text="Raise the divestment target">Raise the divestment target </cmsannotation> As the Modi government looks to recover the economy, it may also increase divestment targets for the year. A news report said that the government is likely to raise its divestment target to ₹2.5-3 lakh crore. The government plans to achieve the same with the long-pending privatization of government-owned entities like Air India, BPCL, Concor and Shipping Corp. The government could also plan to <a href="https://www.timesnownews.com/business-economy/budget/article/budget-2021-govt-may-announce-plans-to-privatise-some-psu-banks/711735">privatize</a> PSU banks. In Budget 2020, the government had set a target of ₹2.1 lakh crore, however it has managed a <a href="https://indianexpress.com/article/business/lower-divestment-spectrum-auction-receipts-hit-non-tax-collection-target-7145297/">meagre amount </a>of it – ₹13,844.49 crore. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/heres-what-analysts-have-to-say-about-the-4634-crore-indian-railway-finance-corporation-irfc-ipo/articleshow/80323479.cms">The ₹4,600 crore IPO from IRFC is ‘attractive,’ and the best thing about the borrowing arm for Indian Railways is the assured margin</a> <a href="https://www.businessinsider.in/stock-market/news/how-rakesh-jhunjhunwala-backed-nazara-technologies-is-preparing-for-its-big-ipo-debut/articleshow/80321946.cms">The startup behind Chhota Bheem, Motu Patlu and Shikari Shambhu is back with an IPO plan ⁠⁠— after a series of acquisitions and fundraisings</a>

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