New #PF rule: You may have to re-look #Retirement saving plan

A recent circular about the manner in which the contribution to the Employees Provident Fund will be calculated will have far reaching impact on employees in the days to come. In a nutshell the manner of calculating the base for the application of the rate of deduction of provident fund contribution should include the basic salary, dearness allowance as well as allowances that are ordinarily, necessarily and uniformly paid to employees instead of the basic salary and dearness allowance that is used currently for the calculations. Here are some of the impacts that will be witnessed in the days to come.
Additional provident fund contribution:
One impact of the implementation of this change will be that the contribution to the Employees Provident Fund will increase on the part of both the employer and the employee. This will happen as the base for the calculation is larger than before due to the increase in the items that are considered as basic wages.  For the employee this will mean that a larger amount gets accumulated in the provident fund account each month which will mean a larger amount of earnings in the form of interest in the coming time period.  This will change the entire dynamics of the retirement planning calculations as this larger amount going towards this area will need adjustments in terms of savings and investments in other areas for the purpose of retirement planning.
Change in salary structure:
The amount spent by an employer on the employee is known as cost to company and when the change in the manner of provident fund contribution is considered if all other things remain as before then it will lead to a larger contribution from the employer. If the employer decides to absorb this rise then it will in effect be a salary hike for the individual to the extent of the extra amount contributed to the provident fund by the employer. However many employers might prefer to keep the cost to company figure constant by reducing the allowances to the extent that this compensates for the additional amount of contribution to the provident fund. This would lead to changes in the salary structure and in many cases even the manner in which the entire salary is provided.
Cash flow:
A major impact for the individual will be the cash flow changes that will be witnessed. A larger contribution to the provident fund from the employees side will mean that lesser amount of income will be available as take home salary.  This can put a severe dent in the management of the household budget because the individual will have to adjust their planning in such a way that the lower amount of income is taken into consideration for the various spends. If the employer decides to change the salary structure by reducing the allowances to keep the cost to company figure constant then the hit will be even harder as the income will fall and at the same time contribution will rise leading to a squeeze on the cash flow from both sides. Planning for a reduced take home salary in advance would be required to avoid a sudden shock later on.
Overall planning:
The overall planning with respect to investments and long term retirement needs will need to undergo a change for the employee. With a larger amount being compulsorily going towards retirement needs the individual might need to shift their overall planning focus to other areas. This could require allocation for other goals like education of children, buying a property, travel etc. There is also the question of the rate of return being earned by the investments and since the interest earned on provident fund is tax free it will be difficult for the investor to get similar rates on the debt side from other instruments. So the allocation towards provident fund would be earning a good rate of return and the remaining funds would need an appropriate asset allocation so that an overall balance in the portfolio is maintained for the employee.

Valentine’s Day Surprise by BMW for Indian Car Lovers – X1 Facelift leaked to be launched on 14th February

BMW X1 has already been introduced into globalmarket earlier which resulted in a huge success. The company has decided to regain the momentum again with the launch of face lifted version of X1 and has launched the same in Indonesia. The company was able to sell more than 3 lakh entities of X1 within 2 and half years from the launch of the vehicle into the global market. X1 is the most sold variant in the X series of BMW so far and thus the company has kept the model untouched for more than 3 years till now.

bmw-x1-exterior-120 bmw-x1-concept-car-pics1

The vehicle has been modified a bit on the outer side in order to make it much aerodynamic. The engine has been left untouched as there is no other better alternative for the 2.0 liter engine in X1. BMW will continue offering the diesel variant as well as the petrol variant of X1 with the same 2.0 liter engine. Diesel variant is capable of producing 150 bhp of power whereas petrol engine is capable of producing 177 bhp of power.

As per the information, BMW might include Start – Stop system in the face lift version of X1 for the first time. The basic design of the head lamps has been modified in this version and the front grill too has been altered. Design of the dash board of the car and interior has also been modified. However, X1 face lift might have a tough fight with the other appealing rival models such as V40 from Volvo that is going to be launched in few months, Mercedes B Class and Q3 from Audi.

bmw-x1-dashboard-059 reported recently that BMW is importing the spares of X1 and the vehicle has been getting assembled at the Chennai plant of the company. The assembled X1 face lift vehicles are getting exported to Indonesia through Chennai ports and thus BMW is planning to launch the variant in the Indian market on 14th February. We have to wait until the official announcement from the company gets out.

WTO grants Antigua right to launch ‘pirate’ site selling US media


The World Trade Organisation has granted Antigua and Barbuda the right to sell US media downloads without compensating its makers, after allowing a suspension of US intellectual property rights in the Caribbean country.

The ruling, made at a WTO meeting in Geneva, comes five years after the trade body gave Antigua preliminary permission for the suspension, which would allow the country to potentially sell US-made music, TV shows and films to the rest of the world (up to a copyright value of $21 million (£13 million) annually).

Speaking to Antigua’s legal representative Mark Mendel of Mendel Blumenfeld said he could not release any details on when we might see a website go live, but that “we are definitely working on it and are hopeful that the US will choose to negotiate fairly and honestly in the very near future so that we do not ultimately have to implement the remedy”.

The act would not be, as the US is arguing, “theft” or “government-authorised piracy”, but a legitimate means for the Caribbean island to make back some of the billions in earnings lost when the US violated a free-trade agreement that forced Antigua to shutdown its online gambling industry — reportedly putting five percent of the island’s 90,000-strong population out of work. The US continues to refuse to lift this blockade.

“This is probably the most appalling thing to come out of the last couple of days,” Mendel told, referring to the derogatory accusations made by the US. “For the US to resort to this untrue, unhelpful and irresponsible rhetoric and dissembling when one of the smallest countries in the world has used, to the letter, the processes of the WTO to get a remedy endorsed by international law to enforce a clear and unambiguous violation of international law by the US. I really am shocked by this, and had expected better of the Obama administration. In essence, they are saying that the US will punish or retaliate against a small country for pursuing its legal rights. Really incredible, sad and reminiscent of the worst of colonial thinking.

“As we said yesterday, ‘when you have nothing, you have nothing to lose’, and at this point I believe the Antiguan people and government are at the end of their respective tethers.”

The saga began when the US did a U-turn on its General Agreement on Trade in Services (GATS) schedule, which allowed cross-border online gambling. In a limitlessly condescending statement to the WTO Dispute Settlement Body, the US reduced its actions — actions that led to the loss of billions of dollars and the closure of an entire industry — to nothing more than an unfortunate mishap.

“As the United States has explained in the past, the United States never intended gambling and betting services to be included in its schedule under the GATS,” it stated, blaming the misunderstanding on “ambiguities in drafting”. Its intentions, or lack thereof, are irrelevant. In 2005 the WTO ruled that by backtracking on the terms of its GATS schedule, the US had violated free-trade agreements.

Under Article 22.3 of the WTO Dispute Settlement Understanding if a nation has suffered losses because of violation of a WTO agreement, it has the right to seek retribution under a different agreement, if retaliation under the initial agreement “is not practicable or effective”.

“Recourse to higher tariffs on goods, or the blocking of goods and services, would not be practicable because the volume of trade is so small that American businesses could easily divert to other markets and in general, to retaliate in goods or services would — to the extent those goods and services remained available — only punish Antiguan consumers,” explained Mendel.

Therefore Antigua sought to cross-retaliate under Article 22 using the Trade-Related Aspects of Intellectual Property Rights agreement, which the WTO allowed in 2007.

Such a ruling has been passed before, but no nation has ever actually acted on. However Antigua appears not to have received any kind of meaningful negotiations with the US (in spite of what the latter argues in its statement) so has decided to go ahead.

“The United States is disappointed with Antigua and Barbuda’s misplaced decision to abandon constructive settlement discussions and to pursue authorisation to suspend concessions or other obligations,” said the US, before delivering a mild threat/dig: “This course will not achieve a positive outcome for the Antiguan economy or people and will make resolution of this longstanding matter more difficult.”

According to Mendel, the US made no attempts to remedy the situation or offer compensation that might warrant such an arrogant response.

“Let me be clear on this — the US has offered nothing in settlement other than the same terms they have offered to other countries if the US gets to amend the treaty to not cover remote gaming, none of which would be useful to Antigua and none of which were negotiated with Antigua (it was basically a US/EU negotiation). Antigua has presented all of the proposed settlement terms, and rather than being rejected by Antigua, all have been either rejected or ignored by the US. It may be hard for many of your readers to believe, but in this case I can give my assurances that the United States is simply being untruthful.”

As with other nations which secured cross-retaliation permission from the WTO, Antigua hopes not to have to follow through. The threat could be enough to put Antigua in good stead for further negotiations considering, if it goes through with launching a download portal for international consumption, there’s nothing to say other far bigger wronged nations wouldn’t be tempted to do the same — and for a higher cost to the US. The whole affair does however show the US in a poor light, considering such measures had to be taken just to get them to the negotiating table. One related Wikileak document dated 2007, reportedly from the US Secretary of State’s office, appears to prove the focus rested mainly on the EU’s position; the US marginalised Antigua, which featured as a mere afterthought: “At a minimum, we are urging the EU to refrain from joining any arbitration which Antigua and Barbuda may request,” the document reads.

“We are not expecting this remedy to be anything other than a means to an end,” said Mendel. “Once put in place, it will, however, not even begin to compensate for the job and economic losses from the wrecking of the gaming industry.”

Mendel says the US has just two options now — comply, or work out a settlement. It can only take its case to the WTO if Antigua implements the ruling incorrectly.

Why then, has the US pursued such a futile course of action, failing to engage in any real negotiations on level-footing with Antigua and resorting to condescending and unproductive rhetoric that does not appear to take the WTO’s legitimacy and authority into account?

“I do think that the US has a mixed, immature and difficult domestic situation with respect to gambling in general and remote gambling in particular,” Mendel told “However, I think the main reason the US has not complied with the WTO rulings is that Antigua is such a small country they think they can get away with it. I also think that, unfortunately, some people in the US government were almost offended that Antigua chose to challenge the US and have been so persistent in its pursuit of justice that the US government has adopted unusually harsh and unyielding lines that have made it difficult to consider our issue in its proper context.”

Image: Shutterstock / Author – Liat Clark

#Dubai’s underwater hotel promises submersible luxury


Dubai‘s fascination with bombastic architecture has moved below sea level thanks to the announcement of The Water Discus — billed as the world’s largest underwater hotel.

With an aesthetic not too many light years removed from the Starship Enterprise and an evacuation mechanism not dissimilar to that of a cafetiere plunger in reverse, the design by Polish firm Deep Ocean Technology reveals a hotel split into two parts — one permanently above the water and the other capable of submerging to a depth of 10 metres.

The submersible part of the hotel is intended to contain 21 hotel rooms as well as an underwater diving facility and a bar. Deep Ocean Technology are also keen to point out that from this location visitors will be able to observe the minutiae of the lives of their aquatic neighbours:

“Special lighting system of the area around the room and the miniature underwater vehicles which can be operated from inside will allow you to take a closer look at even the most microscopic underwater creatures using macro photography.”

Although, that said, they are less keen on fish and fellow guests being afforded the same prurient privileges:

“We also ensure that our guests can protect their privacy whenever necessary. All rooms are sound-proof and have curtains of different levels of transparency.”

President of BIG InvestConsult AG (a Swiss firm who have partnered with Deep Ocean Technology for the project) Bogdan Gutkowski previously informed World Architecture News that The Water Discus is also intended as an environmentally conscious research centre as well as a tourism hub.

“We would like to create here in the UAE the International Environmental Program and Center of the Underwater World Protection — with Water Discus Hotel as a laboratory tool for ocean and sea environment protection and research.”

By Philippa Warr

#WhatsApp breached data privacy laws by storing non-user contact details


WhatsApp has been found guilty of breaching international privacy laws because it forces customers (bar those using iOS 6) to grant it access to their entire address book. It indiscriminately retains all that information, meaning millions of non-consenting, non-users have had their data given up over the years.

The announcement was made by the Office of the Privacy Commissioner of Canada and the Dutch Data Protection Authority, which both maintain WhatsApp directly breached its privacy laws. However, the joint investigation took place in 2012, giving the company time to make some adjustments before the public ever found out — it has encrypted messages (from September 2012), strengthened its authentication process and also plans on developing manual addition of contacts. There are, however, still “outstanding issues” that the authorities intend to follow-up on, despite the instant messaging provider claiming non-users’ numbers are encrypted and that they don’t store corresponding names and emails.

WhatsApp has been dogged with security flaws since its launch, with one hacker releasing a Windows tool to show how easy it is to change user statuses in early 2012. This latest find, with even non-users being drawn into a privacy data dispute, has somewhat irked the authorities since international law clearly states data should only be kept “for so long as it is required for the fulfilment of an identification purpose”.

“This lack of choice contravenes privacy law,” said Jacob Kohnstamm, chairman of the Dutch Data Protection Authority, in a statement. “Both users and non-users should have control over their personal data and users must be able to freely decide what contact details they wish to share with WhatsApp.”

It flags up an issue Facebook, Google and others are currently having to deal with: user consent, or the lack thereof.

“This case puts the spotlight on a key issue within privacy law: can the use of a service be made conditional on access being given to personal data?” Stewart Room, a partner at Field Fisher Waterhouse specialising in privacy law, told “On my reading of the law, the EU data protection regime does recognise the legitimacy of making service use conditional in this way, but the law will expect sufficient mechanisms to be put in place to draw the user’s attention to the data access before the service commences. In other words, people need to know what they are signing up for in advance.”

It’s taken the Dutch and Canadian authorities a good few years, and plenty of warnings from the public over the app’s security issues, to carry out its investigation and apply some pressure on the US-based company. So what other less high-profile apps are getting away with more?

“I suspect that these breaches are much more common than we think, with many businesses not paying due attention to their data collection practices when developing or deploying their services,” Daniel Cooper, head of global privacy and data security at Covington and Burling, told “Many companies simply collect data, despite having no clear business need for it, on the basis that it may be useful in the future [WhatsApp says it keeps the data on file to populate its own contact list]. This situation has not been helped by the relatively limited amount of regulatory enforcement that has occurred to date.”

So we’ll probably start seeing more cases such as these arise as attention is drawn to the issue.

With that in mind, Stewart says: “I would encourage all app developers to look at how they bring key privacy issues to the attention of users during signing-up… I expect that where there are problems these are more often the result of a lack of focus or clarity of thought, rather than a deliberate attempt to have people over. I do expect that many app developers are in a similar position to WhatsApp.”


Loans to become cheaper as RBI cuts policy rate

For the first time in nine months, the Reserve Bank of India on Tuesday cut the indicative policy rate (repo) by 25 percentage points, from 8 per cent to 7.75 per cent, and the Cash Reserve Ratio (CRR) by 25 percentage points, from 4.25 per cent 4 per cent.

The step is likely to benefit retail borrowers, as lending rates are likely to come down. After meeting RBI Governor D. Subbarao, bankers said they would pass on the benefit to borrowers.

The RBI first cut the repo rate in the current fiscal in April 2012, with a reduction of 50 percentage points, from 8.5 per cent to 8 per cent. It reduced the CRR from a peak of 6 per cent to 4.25 till mid-December 2012.

Repo is the rate at which banks borrow funds from the central bank. CRR is the portion of deposits banks must keep with the RBI.

In its third quarter review, Dr. Subbarao said: “While the series of recent policy initiatives by the government has boosted market sentiment, it will take some time to reverse the investment slowdown and reinvigorate growth.”

The RBI has scaled down the projection for GDP growth for the current year, from 5.8 per cent to 5.5 per cent, and for the wholesale price inflation in March 2013, from 7.5 per cent to 6.8 per cent.

“This provides space, albeit limited, for monetary policy to give greater emphasis to growth risks,”

Dr. Subbarao said.

However, the RBI has warned that retail inflation is still at a higher level.

Sarkozy was paid £128,000 for Davos speech in which he insulted Israel to room full of Jewish businessmen

  • Former French president talking at a fundraiser by the United Israel Appeal
  • Suggests Palestinian homeland is only secure future for the Middle East
  • Goes on to attack Israel for ‘surrounding herself with the walls of Jericho’
  • Many in the audience so offended they threaten to withdraw donations
  • Sarkozy celebrates 57th birthday with wife Carla Bruni on night out in Paris

Nicolas Sarkozy was paid more than £128,000 to criticise Israel to a room full of enraged Jewish business people, it emerged today.

Delivering a master class in how not to perform a paid-for conference speech, the former French president caused offence at the prestigious world economic forum at Davos, Switzerland.Incendiary: Former French President Nicolas Sarkozy was paid £128,000 to make at a Jewish fundraiser

Despite being hired to make his speech at a United Israel Appeal, Mr Sarkozy made it clear that he saw a proper Palestinian homeland as the only secure future for the Middle East. 

He attacked Israel for ‘surrounding herself with the walls of Jericho’, saying ‘it will be necessary to bring these walls down to prevent disaster.’

Mr Sarkozy’s words last Friday called for international pressure to be brought on Israel, so that it complied with Palestinian demands.

This outraged many in the room, who included influential business people with close links to the state of Israel.

His words were highlighted in the Times of Israel, which wrote: ‘The speech was reportedly poorly received by those present, who felt Sarkozy was venting his disappointment with Prime Minister Benjamin Netanyahu.

‘Many of the participants complained to the organisers and even threatened to withdraw their donations and convince others to do the same.’ 

The notoriously controversial Mr Sarkozy then left the room in the President Wilson Hotel in Davos, as many of the audience threatened to withdraw their donations.

Flashpoint: The former French president suggested a Palestinian homeland was the only secure future for the Middle East

Mr Sarkozy’s maternal grandfather was a Greek Jew. Sarkozy is a Catholic, but maintained strong links with Israel when he was French president up until last May.

He is currently at the centre of a number of corruption enquires, including one in which he is accused of accepting illegal cash payments from France’s richest woman.

The allegation is that Liliane Bettencourt, the l’Oreal heiress helped to fund Mr Sarkozy’s 2007 presidential election campaign.

Anniversaire: Sarkozy celebrates his 57th birthday on a night out with his glamorous wife Carla Bruni in Paris yesterdayAnniversaire: Sarkozy celebrates his 57th birthday on a night out with his glamorous wife Carla Bruni in Paris yesterday

As Mr Sarkozy’s lawyers deal with such scandals, he is trying to establish himself as an international conference speaker in the style of Bill Clinton and Tony Blair.

Mr Sarkozy’s efforts  at becoming a highly-paid raconteur have been hampered by the fact that he does not speak very good English, and his latest gaffe will also set his ambitions back.