e-Nagar

Two lawyers sat down at a bar and ordered drinks. Soon, they took sandwiches from their briefcases and started eating. The bartender said, “Excuse me, gentlemen, but you can’t eat your own sandwiches in here!” The lawyers shrugged and exchanged sandwiches.

Life is like a pen¡s: simple, carefree, soft, meek and modest.
It’s women that make it hard!

Guest post by T R Ramaswami
What exactly is the reason for the hullabaloo raised over the cartoon? It is nothing but symbolic hypocrisy like the one on the auction of Gandhi’s possessions. The more important question that no one has the courage to ask is this – If Ambedkar is the so-called “Father” and “Architect” of the Indian Constitution as many would want it to be claimed, did he do a good job? Then let them explain why he was such a poor visionary. We have had 100 amendments in less than 65 years. That‘s a far better strike rate than that of Gayle, Afridi or Sehwag. Contrast this with the less than 30 amendments in 230 years in the US Constitution. It is evident that Ambedkar’s name has been used as a vote gathering technique while his Constitution has been mauled and raped. The question is – when will the Dalits realize that they have been taken for a ride and that their poverty and consequent illiteracy has enabled this? The sucking up to vote bank politics of the Congress compelled that he be given the title of “Father of the Constitution” with a more than deserved share of the credit. If however the contrary is true, then is it not correct that the Congress governments, under whom most of the amendments were enacted, did so only for narrow political gains, thus destroying Ambedkar’s seminal work? It would be interesting to hear the responses of the Congress and the supporters of Dr. Ambedkar. If Ambedkar’s reputation has to be restored then let the Constitution be restored to its 1950 glory and let us run the country on that basis.

Since we have been correcting history/political science text books to suit various ethnic, social and political needs, there is one correction that needs to be made. History books tell us that Nehru, a leader of the Congress “fought” for independence. But there is no information on what dates and which places he did so – and what “fighting” he really did. Making provocative speeches (which every two-bit neta does today) and sending long memorandums to the Viceroy do not count. Could the text books please carry this information? Also if he was such a great freedom fighter, then why was he not sent to the Andamans where the real freedom fighters were sent? Why was he sent to jails with all comforts where he could letters that became books and on which royalty was earned later? I am told that the only fighting that Nehru only indulged in hand-to-hand ‘combat’ – with the Viceroy’s wife on the lawns of the present Rashtrapathi Bhavan. History books also tell us of the great crime Nathuram Godse committed in assassinating Mahatma Gandhi. But they do not tell us that he committed an even greater crime – he shot the wrong man. Who should he have shot – the Great Freedom “Fighter”. History books should also tell us why the Congress that claims to be a Gandhian party did not dissolve itself as desired by the Mahatma. Will the HRD Minister answer all these questions so that our censored knowledge of history is complete? Perhaps the above is the reason why many say ‘istri’ for history. They know that inconvenient facts have been istrified.

Note: This pertains only to Indian personal income tax laws.

Do you know that your bonus payout is taxed at a different rate than your fixed (monthly salary)?

Here is how:

Your bonus is always taxed at your highest tax bracket, while there are various exemptions available which are tax exempt.

1. Your HRA would be 40-50% of your basic. This is tax exempt if you have the proper rental receipts.
2. Employer’s contribution would be 12% of your basic which does not even show up in your IT records.
3. Based on company policy your LTA would be a % of your basic which is also tax exempt. (Say 2%)

So 54-64% of your basic salary is tax free. Assuming your basic compensation is 50% of your gross compensation (may vary based on company policy) this translates into 27-32% of your fixed salary being tax exempt.

This means that rather than a popular myth of income tax being 30%, your effective income tax on any increments (in your fixed salary) would be mere 20-22%

So 1L of bonus taxed at 30% leaves you with 70K, while 1L of additional fixed salary would leave you with 80K extra take home. (~15% higher)

Other merits of having high fixed salary (rather than bonus):

1. Since fixed salary is paid out monthly (rather than yearly/periodically), it eases your liquidity and ability to meet your regular expenses.
2. If you quit your job in the mid-year, no company pays you your due share of the bonus. Hence it’s always beneficial to minimize the receivables.
3. Gratuity/severance payouts are on the basis of your fixed
4. Your bank loan eligibility limit is determined on your monthly take home. So high fixed component makes it easier to buy that bigger car/home that you always dreamed of.
5. Also its beneficial to prepay the loan with a higher EMI, rather than using Bonus to pre-pay (as there are pre-payment penalties etc which you can avoid)
6. At 9% interest rate, and assuming that the bonus is paid annually at the end of the year, you would lose about 4.5% as interest/time value of money alone.

Bonus payouts are also not without merits:

1 Since bonus is often tied to the performance levels (personal + team + corporate), there is usually a very high chance to achieve higher bonus.

2 Being paid as a lump sum amount, it is a great morale boaster. It really helps you make the purchase/investment that you always wanted to.

3 Many companies use bonus as a retention tool, as employees usually wait till the Bonus payouts before expressing their desire to quit. Hence lesser value of the bonus, the more control you would have over the timing of the exit.

Hence don’t fall into the CTC (cost to company) trap; always calculate your salary on the basis of BTE (Benefit to employee) basis. A 119% bonus payout at the end of the year is financially equivalent to the same amount being added to your fixed salary. (15% +4.5%)

Regards,

Ankur Aggarwal

Practice Manager, Corporate Strategy

IP Extension – 66130

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I was watching the latest series of Flipkart tv ads and I could see a remarkable difference in the product positioning by this market leader and pioneer in India’s E-Commerce space.
1. Unless the rest of the folks, the ads don’t talk about discounts. Everybody (esp. Indians) love discounts, buts its never good for business and till 2011 had created a situation where almost all the online retailers were booking losses and burning cash (rather than generating it)
2. Returns/reverse logistics: Flipkart has one of the best infrastructure and policy for the dissatisfied customer to return the products. However still the current series of ads don’t talk about it. Maybe its like one of those features (like credit card payment, Cash on delivery) that almost all the online shoppers expect the website to offer. Hence they have realized that its no point wasting precious media time talking about it.
3. “Aapko bhi to photo dekhkar pasand kiya tha”
I loved this line as it will strike a familiar chord amongst the entire country where arranged marriages are prevalent. Here the wife effectively convinces her husband that there is nothing new is selecting goods (or even your spouse) by just a photograph.
4. Use of kids: I am not sure why they use it, but kids create a natural curiosity and grabs our attention. Also it helps to communicate that the website is so easy to use that even toddlers can shop.

The shift from discounts, cash on delivery, return policies to the fact that its not too risky to shop online is a wonderful change. It addresses the core issue which keeps most shoppers away from websites, while ensuring that e-commerce not mere discount stores.