A weaker rupee is not a bad thing By ET Bureau

It is the first corrective for a big trade deficit

Over three months, the rupee has slid 15% against the dollar, which is surging against most other currencies worldwide. The reason: economic recovery in the US and the continued faith in the dollar as the reserve currency of the world.

In India, there are yelps of agony over the rupee's slide, as if its value against the dollar is some sort of measure of India's standing in the world. India's economy is now more open than it ever was and the rupee's movements are subject to the vagaries of traders worldwide.

And a little depreciation is not a bad thing. Exports have been sluggish for many months as the US and Europe struggled with their own woes and lower-cost nations such as Bangladeshchipped away at our share of textile and garment exports. That could change with a weaker rupee.

The biggest gainer, of course, would be software exporter TCS as our analysis on Wednesday showed, followed by a clutch of software, auto and machinery manufacturers. What's good for exports is good for our current account deficit, which can narrow sharply on the back of this depreciation.

Remittances are expected to rise quickly, as Indians working overseas seize this window and send dollars back home.

Discretionary imports, like fine foods, personal care products and so on will be discouraged. And gold imports, a huge drain on foreign exchange reserves, are sure to get squeezed by higher rupee prices.

The government should now focus on reining in inflation, part of the reason for the rupee's weakness and likely to go up because of that weakening.

The Reserve Bank of India has done what it could by keeping interest rates fairly high, but a lot of inflation is related to administrative lapses. Release part of the 78-million-tonne grain mountain into markets to dampen food grain inflation, now at 17%.

Ask states to scrap the APMC Acts that keep farmers in the clutches of middlemen. Clear projects quicker, so that investment materialises. Do these things, the rupee will take care of itself. India has to get growth and investment going, first and foremost.

When and how can you withdraw from your EPF? By BankBazaar in ET

Almost all salaried people contribute a certain percentage of their salary towards their Employee Provident Fund (EPF) account every month. While most of us know that EPF is an effective tool that helps generate a corpus for life post retirement, many of us are unaware that you can make a withdrawal from your EPF account for urgent cash requirements.

However, an EPF account cannot be treated like any other saving bank account implying that there are certain specified criteria under which withdrawal is permitted from an EPF account. An individual needs to furnish all relevant documents and satisfy the necessary requirements in order to be eligible for premature withdrawal of EPF.

Here are the categories and other details with respect to premature withdrawal from EPF.

Reason	Requirement	Amount allowed	No. of times permitted
Education or marriage	> The employee should have completed at least 7 years of employment or service. > Withdrawal allowed for self, sibling(s) or children's marriage. > Withdrawal permitted for self or children's education only. > Proof of the education or wedding required to be submitted, such as a valid copy or a bonafide certificate of the payable fees or the wedding invitation. > In case of education, the individual needs to apply in Form 31 through his/her employer.	50% of the total corpus amount till date	Permitted thrice only during a person's total service tenure
Medical treatment	> Withdrawal permitted for medical treatment of self, spouse, parents and children. > There is no restriction regarding the number of years of service. > The proof of hospitalization for a month or more along with an approved leave certificate from the employer for the corresponding period needs to be produced. > The member needs to obtain and deposit a certificate from the employer or ESI stating that ESI facility is not accessible or available to him/her. > A certified proof or document of the disease should be submitted in Form 31 while applying for withdrawal.	6 times the monthly salary of an individual or the total corpus amount, whichever is lesser	Anytime
Purchase of a plot	> Should have completed at least 5 years of service. > The plot or property should be registered in the person's or his/her spouse's name or should be owned jointly. > The plot should not be entangled in any legal issues and the agreement registered under the Indian Registration Act with the Flat Promoter needs to be submitted along with the application form.	Up to 24 times the salary of the individual	Once during entire service tenure
Construction or purchase of a flat, house or plot	> Should have completed at least 5 years of service. > The house should be registered in the person's or his/her spouse's name or should be owned jointly.	36 times the monthly salary of the individual	Once during entire service tenure
Repayment of Home Loan	> Should have completed at least 10 years of employment. > The house should be registered in the person's or his/her spouse's name or should be owned jointly.	36 times the monthly salary of the individual	Once during entire service tenure
Alteration or Renovation of house	> Should have completed at least 5 years of service. > The house should be registered in the person's or his/her spouse's name or should be owned jointly.	Up to 12 times the individual's monthly salary	Once during entire service tenure
Pre-retirement	> The individual must be at least 54 years old.	90% of the total corpus amount	Once during entire service tenure

Check out your employer! :: Business Line

Pay freeze, delayed salaries, staff getting laid off – the difficult economic situation is taking a toll on workers across sectors.

This makes it all the more important for you to ask the right questions while considering a job change or evaluating an employment offer. Here’s a checklist to avoid getting short-changed.

ARE THEY GENUINE?

Taking up a job is a big investment of your time and effort – it should pay off well. So it makes sense to verify the credentials and claims of a potential employer.

“Gone are the days when reference checks were one-sided. Today, candidates actively use their networks and relationships to unearth the genuineness of claims made by prospective employers. The opportunity to ‘socialise before joining’ with the manager and team is fast becoming a healthy practice in the industry,” says Nishchae Suri, Partner and Head of People and Change Management, KPMG in India.

Check out the LinkedIn profiles of the business and its staff. Contact and enquire with a cross-section of current employees to make an informed opinion.

Ask whether the business treats its employees fairly and pays on time, whether appraisals are conducted objectively and adequate reward and recognition follow.

How your pay is structured is important too. For instance, is it too skewed towards variable pay? This could mean low take-home for you in a tough market situation. Use the Internet to research a prospective employer. Go through news at least a year back.

ARE PAYMENTS DELAYED?

A business which delays payments and does not settle dues on time is likely in financial distress. In your enquiries with current employees and over the Internet, check whether this is the case.

Staff salaries not paid for months on end could sooner or later mean a business shutdown. Focus on sustainability than on glamour.

Likewise, businesses facing cash crunch often hold on to money which they owe to the Government. For instance, they may delay depositing tax deducted at source and service tax. Delays in depositing employee provident fund are also common among such businesses.

Also, an inordinate delay in paying vendors, beyond usual credit periods is a red flag. Supply shortages and legal cases may ensue.

ARE THERE GOVERNANCE ISSUES?

Entities which constantly run into trouble with regulators and have serious governance issues are best avoided. Restrictions on operations are a real risk in such entities – this could mean employees rendered redundant.

ARE FUNDAMENTALS SOUND?

This may seem like drudgery, but go through the financial statements and annual reports of the company to see if it has been posting good results. These statements are usually available on the company portal or on Web sites of the stock exchanges where the company is listed.

Is the company growing and profitable? Does it have too much of debt compared with its equity, and are interest costs eating into its profits? You may be better off not taking up a job with a company which is running losses consistently.

However, note that even otherwise financially sound companies may post losses in bad economic conditions.

So, read the management’s discussion and analysis (in the annual report) to know the reasons for the performance.

See if the troubles are temporary and if the company is expected to do better in the future.

Make sure to read the auditors’ report to find out whether there are worries about the going-concern status (long-term financial viability) of the business.

Reading the reports of third-parties such as brokerages and rating agencies on the company will give you a more objective view about the company.

In case you are considering an opening with an unlisted entity, try to obtain financial details of the business from the Web site of the Ministry of Company Affairs.

Ok, so you’ve ticked the above check-boxes and decided to take up the job. Now, don’t let your guard down. Be alert for signs of financial distress in your company. If it warrants, cut your losses and shift before it’s late.

EMPLOYER’S STOCK

Don’t invest too much in the employer’s stock. If the company fails, you will suffer not only loss of salary but may also lose your investment (remember the crash of Lehman Brothers in 2008). So, distribute your eggs across different baskets.

NOT WITH SPOUSE

Try to avoid a situation where both you and your spouse work with the same employer or in the same sector. If the organisation or sector falls upon bad times and starts laying off, the income of both bread winners may be in peril. What if you decide to marry a colleague? It may be wise for one of you to seek a new job, but after doing your homework well.

India Strategy The Great Transfer :: Morgan Stanley Research,

India Strategy
The Great Transfer
The Great Debt Transfer and its implications for
equity returns: India’s policy response to the global
financial crisis has been to reduce public savings to
boost growth. The collateral damage has been
persistent consumer inflation and declining corporate
savings or profit share in GDP.
Consequently, in the past five years, debt has been
transferred from the public sector to the private
corporate sector (the opposite of what’s taken place in
DM).
Persistent inflation has deflated public debt relative to
GDP – but it has also punctured corporate profits (and,
thus equity), causing corporate financial leverage to rise.
This also means that ROE is overstated relative to ROA.
Rising US bond yields imply that India will need to keep
real rates high – creating downside risks for ROE.
In such a situation, the valuation template for investors is
as it was in 1998 – not the P/B multiple – but the
earnings yield minus the short-term bond yield. This
metric is in negative territory – implying that equities are
not cheap, as they may have appeared before mid-July
policy action.
India’s macro construct threatens its relative gains
against its most relevant peer group (the BRICs) in the
18 months preceding mid-July.