SEBI has asked mutual funds to simplify new fund offers as some schemes have become too complex for average investors. The regulator is also slowing approving structured funds that allow flexible investment strategies. The government will increase longer term bonds to reduce borrowing needs and maintain an average debt maturity of around 9.8 years. Foreign direct investment in India declined 26% in the first nine months of 2010 compared to the same period in 2009, with major investing countries being Mauritius, Singapore, US, Netherlands, Cyprus, Japan, Germany and France. Food inflation fell to a three month low of 10.15% but prices continued to rise, with vegetable prices increasing 4.48%. The upcoming budget will look into problems with CENVAT credit claims

1. Weekly NewsWeekly News

2. SEBI asks MFs to simplify N.F.OSEBI asks MFs to simplify N.F.O
 Mutual funds schemes are becoming too complex forMutual funds schemes are becoming too complex for
average investors. SEBI has asked several assetaverage investors. SEBI has asked several asset
management companies to rework on some of theirmanagement companies to rework on some of their
proposed new schemes.proposed new schemes.
 Regulator is going slow on approving structured mutualRegulator is going slow on approving structured mutual
fund schemes where instead of investing in equities andfund schemes where instead of investing in equities and
debt market in pre-determined ratio, the fund manager isdebt market in pre-determined ratio, the fund manager is
given the flexibility to adopt complex strategies.given the flexibility to adopt complex strategies.

3. Government banks on long-termGovernment banks on long-term
bonds to cut borrowingsbonds to cut borrowings
 The government will increase the share of longer tenureThe government will increase the share of longer tenure
government bonds to reduce the borrowing that is justgovernment bonds to reduce the borrowing that is just
for redemption of maturing securities by reducing thefor redemption of maturing securities by reducing the
level of debt it needs to raise every yearlevel of debt it needs to raise every year
 The average maturity of center's debt has inched upThe average maturity of center's debt has inched up
marginally in the current year to 9.81 years aftermarginally in the current year to 9.81 years after
dropping in the aftermath of the financial crisis to 9.67dropping in the aftermath of the financial crisis to 9.67
years due to preference for shorter maturity securities.years due to preference for shorter maturity securities.

4. FDI down 26% during January-FDI down 26% during January-
SeptemberSeptember
 Foreign direct investment in India stood as just $15.97Foreign direct investment in India stood as just $15.97
billion during the January-September, 2010 down bybillion during the January-September, 2010 down by
26% from the value of FDI in the same period for last26% from the value of FDI in the same period for last
yearyear
 In January-September, 2009 the country attractedIn January-September, 2009 the country attracted
foreign direct investment worth $21.44 billion. Theforeign direct investment worth $21.44 billion. The
countries that pumped the maximum foreign capital intocountries that pumped the maximum foreign capital into
the Indian economy were Mauritius, Singapore, US,the Indian economy were Mauritius, Singapore, US,
Netherlands, Cyprus, Japan, Germany and France.Netherlands, Cyprus, Japan, Germany and France.

5. Tax evaders in troubleTax evaders in trouble
 The issue of foreign bank accounts had figured in theThe issue of foreign bank accounts had figured in the
discussions at an internal conference of IT department.discussions at an internal conference of IT department.
Specific data on bank accounts will help the taxSpecific data on bank accounts will help the tax
department seek information from other countries aboutdepartment seek information from other countries about
Indian assets.Indian assets.
 Under OECD model of tax treaties, a country can sourceUnder OECD model of tax treaties, a country can source
data on foreign assets and bank accounts of its nationalsdata on foreign assets and bank accounts of its nationals
from countries with it has “Double Taxation Avoidancefrom countries with it has “Double Taxation Avoidance
Agreement” but only in cases where it has specificAgreement” but only in cases where it has specific
information.information.

6. Food inflation falls to 3-month low ofFood inflation falls to 3-month low of
10.15%10.15%
 Food inflation fell for the sixth straight week to a threeFood inflation fell for the sixth straight week to a three
month low of 10.15%, but there was no respite formonth low of 10.15%, but there was no respite for
consumers as prices continued to rise during the week.consumers as prices continued to rise during the week.
 Index for food article rose 0.7% during the week endedIndex for food article rose 0.7% during the week ended
November 13, indicating that the decline in inflation isNovember 13, indicating that the decline in inflation is
largely because of the base effect.largely because of the base effect.
 The arrival of winter vegetables has not done much toThe arrival of winter vegetables has not done much to
moderate vegetable prices which rose 4.48% during themoderate vegetable prices which rose 4.48% during the
week.week.

7. Budget to look into CENVAT creditBudget to look into CENVAT credit
claimsclaims
 Union budget for next fiscal would look into the variousUnion budget for next fiscal would look into the various
problems being faced by the companies under theproblems being faced by the companies under the
central value added tax credit claims. CENVAT rate iscentral value added tax credit claims. CENVAT rate is
currently fixed at 10% and companies get credit for taxcurrently fixed at 10% and companies get credit for tax
paid on inputs under the scheme. Many of the currentpaid on inputs under the scheme. Many of the current
problems would disappear when goods and services taxproblems would disappear when goods and services tax
(GST) gets operationalised as it was accrual based(GST) gets operationalised as it was accrual based
instead of cash based .instead of cash based .