Rupee down 27 paise to Rs 61.79 against dollar in early trade

Extending its Monday's losses, the rupee lost 27 paise to Rs 61.79 against the US dollar in early trade on Tuesday on the Interbank Foreign Exchange due to appreciation of the Greenback against other overseas currencies.

Dealers attributed the fall in rupee to gains made by US dollar against the euro and other overseas currencies ahead of US jobs data and a lower opening in the domestic equity market.

Increased demand for the dollar from importers and banks also put pressure on the local currency.

The rupee weakened by 25 paise to close at Rs 61.52 against the dollar in Monday's trade on persistent demand from importers and banks as the US currency strengthened overseas.

Meanwhile, the BSE benchmark Sensex fell 31.74 points, or 0.15 per cent, to 20,862.15 in early trade on Tuesday.

Reverse mortgage scheme: Tax break for senior citizens on income from house

With an aim to make the reverse mortgage facility more attractive for senior citizens, the government has decided to give tax break on installment earned by pledging his residential property.

Now it has been decided that annuity would be tax exempt, National Housing Bank Chairman and Managing Director R V Verma said.

The scheme is operated by National Housing Board and housing finance companies, banks and insurance companies.

Besides income tax benefit, he said, the installment income or annuity is expected to increase at least three times to the benefit of retired person.

According to a conservative estimate, the reverse mortgage loan market is upwards of Rs 20,000 crore.

Banks have so far sanctioned Rs 1,800 crore and disbursed Rs 800 crore under reverse mortgage loan since it's launch in 2008, he said.

The revised scheme now enables a person above the age of 60 years to avail of monthly payments from insurance company as annuity till the life time against the mortgage of his/her house while remaining the owner and occupying the house.

Earlier, the period of reverse mortgage loan was 20 years from the date of signing the agreement by the reverse mortgagor and the approved lending institution. But, now period has been extended to "the residual life time of the borrower," said a notification by the Central Board of Direct Taxes (CBDT).

As per the amendment, Life Insurance Corporation of India (LIC) and other insurer registered with the Insurance Regulatory and Development Authority (IRDA) have included as annuity sourcing institutions.

As per the scheme, on the borrower's death or on the borrower leaving the house property permanently, the loan is repaid along with accumulated interest, through sale of the house property. The borrower or heir can also repay the loan with accumulated interest and have the mortgage released without resorting to sale of the property.

CAD will reduce below $70 billion: Rangarajan

Stating that there has been improvement in the trade account, Chairman of the Economic Advisory Council to Prime Minister C Rangarajan on Tuesday said the Current Account Deficit (CAD) will go down well below $70 billion.

Pointing out that in August and September, India's exports showed a double digit growth rate, Rangarajan said at an event here that India's trade deficit in the first half of this year was $80 billion as compared to $92 billion in the previous year.
If the present trend in exports and imports continue, the overall CAD will reduce even lower than $70 billion.

Noting that the Indian rupee over the last few weeks had remained stable at around 61-62 against the US dollar, he said the rupee was well corrected for inflation differential.

Referring to the USA's indication of tapering on May 22 and the resultant fall in capital flows, he said this affected capital inflows not only to India but to all the emerging economies including Brazil as investments were moved to the USA.

However, now, there has been a change and investments flows have turned positive, he said.

Gold prices down in futures trade on weak global cues, profit-booking

Gold prices moved down by 0.11 per cent to Rs 29,496 per 10 gm in futures trade on Tuesday as participants indulged in trimming their positions, tracking a weak trend in the global market.

At the Multi Commodity Exchange, gold for delivery in February next year eased by Rs 33, or 0.11 per cent, to Rs 29,496 per 10 gm in business turnover of one lot.

Likewise, the metal for delivery in December shed Rs 11, or 0.04 per cent, to Rs 29,745 per 10 gm in 138 lots.

Market analysts said apart from a weak trend in the overseas markets, profit-booking by speculators also weighed on gold prices at futures trade.

Globally, gold traded $3.30, or 0.25 per cent, lower at $1,313.30 an ounce in Singapore on Tuesday.

BSE Sensex trades flat during pre-noon trade

The BSE benchmark index was trading flat and was down over 30 points in Tuesday's trade on selling pressure. At 12.17 pm, Sensex was down 32.51 points at 20861.38. Similarly, Nifty was down 9.35 points at 6195.60 during the same time.

Good buying was observed in IT, metal and public sector undertakings (PSU) sectors; while selling pressure was seen in fast moving consumer goods (FMCG) sector.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 20,863.15 points, was trading at 20,893.70 points in the early morning session, down 0.19 points or 0.00 percent from previous day's close at 20,893.89 points.

The Sensex touched a high of 20,948.91 points and a low of 20,849.78 points during trade so far.

The S&P BSE IT index gained 20,849.78 points, metal index inched up by 46.92 points and PSU index moved up by 39.65 points; however, FMCG index dipped by 12.80 points.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading down by 0.30 points or 0.00 percent at 6,204.65 points.

Not much of festival season in as gold runs dry

 
In India's biggest bullion market, Mumbai's Zaveri Bazaar, gold dealers are busy -- not filling orders for customers, but busy avoiding phone calls because they don't have any gold to sell.

Battling a huge trade deficit and a weak currency, the government has taken various steps this year to make it harder and more expensive for Indians to get hold of gold, the biggest item on the country's import bill after oil.

Hardly any gold came in for two months until mid-September and industry is still feeling the pinch, especially now the festival season has started, a peak period for demand.

In the bazaar, jewellers wander around trying to get hold of a dealer who can find them gold right away , and wholesalers ask the same of banks. Retailers in half-empty showrooms try to dissuade customers from asking for immediate delivery.

"Even if someone wants 10 kg, we don't have the stock. So much so that we have stopped attending client calls," said Gautam Arora, a wholesaler, who ignored at least five phone calls during a 40-minute conversation with Reuters.

The government has set a record 10 per cent import duty on gold and imposed a rule that requires 20 percent of imports to be re-exported, meaning importers need to find a buyer who will guarantee those exports before bringing in any gold.

The complexity of the rules and sagging exports -- down 60 per cent this year -- have caused supplies for domestic use to dry up. Banks are required to supply three-quarters of the 20 percent meant for exports before delivering the 80 per cent that will be for domestic use.

Turnover at RiddiSiddhi Bullions Ltd (RSBL), the country's largest bullion dealer with 110 employees, has dropped to 20-30 kg a day from about 300 kg since the new rules kicked in.

"This is due to the government policy. I don't know what they are thinking," RSBL Director Prithviraj Kothari told Reuters from his Zaveri Bazaar office, a gold plate on his desk showing he was crowned "Bullion King of India - 2013".

"Why do I have 110 people if I don't have any consignments of gold? If they come in at 8 they say, 'Sir, I am going home early', and I say OK."

Gold is an integral part of Indian culture, given as a dowry for marriages, which tend to be timed around auspicious days that are often religious festivals.

The shortage of the metal sent Indian gold premiums to more than $100 an ounce over London prices this month when demand far exceeded supply due to the Dussehra festival, one of several connected with harvests and invoking Lakshmi, the goddess of wealth.

The related festivals of Diwali and Dhanteras fall in the first week of November.

"New imports for domestic use could start in the next 10-15 days, which could coincide with Diwali and Dhanteras. But despite new imports, the supply situation will be very tight and premiums may even go up to $150," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.

Premiums in other parts of Asia such as Hong Kong and Singapore were stable at less than $2 an ounce.

Wholesaler Arora, who works for NIBR Bullion, said some banks had begun accepting orders for delivery in 10 days.

But the supply shortage would persist as long as the government rules remained in force, Arora said. "Banks are giving stock only to big suppliers, so smaller jewellers are suffering due to this."

One side effect of the government measure will do nothing to improve the trade figures: in the six months from April, gold jewellery exports more than halved to $3.34 billion from $8 billion in the same period a year earlier.

SHOOING AWAY CUSTOMERS
India was the world's biggest gold buyer in 2012 but could lose the top spot to China this year after the clampdown.

Demand, nevertheless, is expected to stay strong, with the World Gold Council forecasting India would need up to 1,000 tonnes for the year after 864 tonnes in 2012.

Many suppliers are turning to smuggled gold, especially as that also avoids the 10 percent import duty. As a result, even smuggled gold commands a premium of $50 an ounce above London prices, according to the Bombay Bullion Association (BBA).

"I'm not getting supplies for exports, forget about for domestic use," said Mehul Choksi, chairman of jewellery retailer Gitanjali Gems (GTGM.NS), one of the largest branded jewellery retailers in the world. "Premiums are already up and they could go up even further. Some demand is being met by supplies through unofficial channels."

"As supply is very scarce, we have moved to diamond jewellery, which uses less gold content," Choksi added.

The desperate search for gold has even prompted digging under a ruined palace after a Hindu village sage dreamt that 1,000 tonnes might be buried there.

Meanwhile, those who are waiting for official gold imports are just having to turn customers away.

"We have postponed deliveries to our clients and serve only one customer each day," said Suresh Jain, a BBA director who runs a jewellery store in Zaveri Bazaar.

Indirect tax collections up 5.1 pc in Apr-Sept

 
Indirect tax collections grew by 5.1 per cent in the April-September period of this fiscal, a finance ministry official said.

Total collection of indirect taxes - excise, customs and service tax - stood at about Rs 2,28,550 crore during the first six months of 2013-14, the official said.

Excise collection dropped 6 per cent during the period to over Rs 89,000 crore, against the same period in the last fiscal year, reflecting slump in manufacturing activity.

Customs mop up was up 10 per cent to Rs 80,550 crore during the period, the official said.

Service tax collection, which has become a new focus area for revenue officials, grew by 16 per cent to Rs 59,000 crore during the period.

In September, total indirect tax collection stood at Rs 42,700 crore, up 13 per cent from the same month last year.

Government has set indirect tax collection target of Rs 5.65 lakh crore for 2013-14, up from Rs 4.73 lakh crore in the last fiscal.