Wednesday, February 29, 2012

Earning up to Rs 5-L salary? No need to file returns

Individuals with annual income up to Rs 5 lakh are now exempted from filing personal income tax return for the current financial year. This relief was proposed in the Union Budget last year. However, a circular from the Central Board of Direct Taxes (CBDT) last week indicates that this relief has been extended for this financial year. An individual can now file tax returns for this financial year by July 31, 2012. However, the exemption comes with some terms and conditions, which determine the eligibility of an individual to seek the exemption from filing returns.

Who can seek this exemption -As per the Notification, only individuals who satisfy the following conditions are eligible for exemption from furnishing the tax return for the tax year 2011-12:

a) Total income does not exceed Rs 5,00,000.
b) Total income consists only of income under the following heads:
'Income from other sources' by way of interest, not exceeding Rs 10,000, from a savings bank account

Avail an exemption -Apart from the above conditions, an individual should also fulfill the following conditions to avail an exemption from furnishing tax return with the authorities:

Report his Permanent Account Number (PAN) to his/her employer
Report savings bank account interest income to employer and the employer should withhold tax on such interest income
Employer provides tax withholding certificate (Form 16) to employee which mentions the PAN, details of income and taxes withheld
There should be no further tax payable by the employee by way of advance tax or self-assessment tax
No refund claim for the relevant tax year
The employee should receive salary from only one employer for the tax year

Apart from the above-mentioned conditions, an individual should keep in mind that the exemption under this notification is restricted to voluntary filing of tax return and does not apply to tax return to be furnished in response to notice issued by the tax authority for regular assessment or reassessment or assessment pursuant to search/ survey proceedings," says Amarpal Chadha, tax partner, Ernst & Young.

Monday, February 27, 2012

Postmen to now collect data for calculation of rural Consumer Price Index (CPI)

The postman in rural areas across the country has his hands full. Apart from his regular job, he now has to go out three to four times a week to collect data from retail outlets which is then used to calculate the rural consumer price inflation. Faced with an acute manpower shortage, the ministry of statistics and programme implementation tied up with the department of posts to get over the problem of collecting such massive amount of data from rural areas across the country. "When we were discussing about the comprehensive CPI data we were looking for a department which had reach across the country. We zeroed in on the postal network," said Pronob Sen, adviser in the Planning Commission and former chief statistician of the country.

It was a perfect opportunity for the postal department, which readily accepted the offer. Rising competition and new technology has posed serious challenges for the department of posts. It is working on several ideas to maximize revenues and use its vast network to help other government departments. "We were looking at new avenues for raising our revenue and we entered into a memorandum of agreement with the ministry of statistics and progamme implementation," said Sachin Pilot, minister of state for communications and information technology.

He said the rural CPI data is being collected by 1,181 rural post offices. About 1,800 employees undertake the exercise for 3 to 4 hours a week. The statistics ministry paid the department of posts Rs 6.32 crore in 2010-11 and is to pay Rs 7.66 crore in 2011-12. "We just collect the data, the CPI is calculated by the statistics ministry on department of posts and National Sample Survey Office (NSSO) inputs," Pilot said. Price data is collected from selected towns by the Field Operations Division of NSSO and from selected villages by the department of posts. This data is then fed into web portals being maintained by the National Informatics Centre.

Postal employees identified for the mission were put through intensive training sessions. "They were taught how to collect the data, the questions to be asked and how to put the data in the portal," Sen said, adding most employees had education up to Class 8. "There were initial hiccups for about 3-4 months but then it settled down. They collect data and then feed it into the computers available in the post office. The data is carefully examined before it is used," said Sen, adding that the department of posts compensates the employees for collecting data.

Source: The Economic Times

Saturday, February 25, 2012

Services rendered from outside India to be taxed

Services rendered from outside India for use within the country will now come under the tax net, following the recent amendment to the I-T Act. The amendment in Section 9 of Income-Tax Act, proposed in the Budget, will now bring all services, including fees on technical service or royalty that are typically charged as consultation fees, under the tax net. This would also be irrespective of whether the service provider has business connection in India, or residence or place of business.

The SC, in its decision on Ishikawajima Harima Heavy Industries, had concluded that in order to tax a non-resident's income, the services should be "rendered and utilised" in India. But the government wanted to make it clear that it would levy tax on the payment to a non-resident, if the service is utilised in India, irrespective of whether the service is rendered in India or not.According to people familiar with legal developments, if a non-resident architect is paid for consultation on a building situated in India, it means that his services have been utilised in India. Prior to the amendment, the architect's consultation fees would have been taxed had he been based in India.

Going by this example, the government will now tax the non-resident architect, even if he doesn't come to India and renders the service from outside India. According to M Lakshminarayanan, national tax head at Deloitte India, "It's a clarificatory amendment making the intention of the legislature clearer." Vispi T Patel of Vispi T Patel & Associates, a chartered accountant firm, said: "The amendment has serious implications. It will certainly lead to litigations. Moreover, the amendment is not clear as regards its applicability on income by way of interest and royalty earned by a non-resident outside India where there is no nexus between such interest and royalty and Indian state."

Source. The Economic Times

Health, home and vehicle insurance set to cost more

Buying general insurance such as health, motor or property cover could cost more from April. The finance ministry has asked the national reinsurer, General Insurance Corporation, to stop underwriting loss-making businesses. The government has also said if insurers take on loss-making businesses, they should bear the risk in their books or increase premium rates.

State-owned GIC is a reinsurance company which has been designated national reinsurer by the government. Reinsurance companies provide wholesale cover to insurance companies. By virtue of this cover, insurers are able to protect their balance sheet if claims in any portfolio exceed a certain level. Regulations require that all general insurance companies compulsorily reinsure a portion of their risks with GIC. While insurance companies have a choice in accepting or rejecting insurance proposals, GIC has to accept the risks that are passed on. In addition to the compulsory portion, insurance companies reinsure other parts of their portfolio with GIC to protect their own balance sheets. In a communication on February 7, the finance ministry has informed GIC that it should not provide reinsurance for covers that are loss-making and, for such covers, insurers should make arrangements on their own or take risks on their own books.

According to IRDA's annual report for 2010-11, motor insurance and health insurance had high claims ratios at 103% and 100%, respectively. This means these two businesses have been unprofitable for insurers as claims have outstripped premiums. General insurers are set to see their earnings come under pressure for another reason. In the communication where the finance ministry has advised GIC not to accept loss-making business, the government has asked GIC to halve the commission it pays out to insurance companies on businesses that have to be compulsorily reinsured to 5%. Reinsurance commission is paid by the reinsurance company to the primary insurance companies to defray (provide money to pay for) the expenses that they incur in acquiring business. A cut in commission paid out is equivalent to increasing the cover cost.

Earlier, the ministry had directed GIC not to pay commission at all on businesses that are compulsorily reinsured. Following complaints from insurers who felt short-changed, IRDA asked GIC to abide by its contract with insurers and restore the 10% commission. The government has once again intervened and asked GIC to pay out 5% against the promised 10%. This will increase the cost of reinsurance cover for primary underwriters and would add to price pressures.

Source: The Economic Times

Pricey gold no more the preferred investment: Farmers opting for bank deposits and insurance schemes

Satya Prakash Saini, a small farmer from Rajasthan's Jhalawar district, had a reasonably good harvest last year when he managed to save Rs 25,000 after all expenses. As most villagers would do, Saini visited a local jeweller to buy some gold for his second daughter, who he plans to marry off four years from now.

But, alas, his precious saving was not enough to even buy 10 gram of 24 karat gold, priced at about Rs 28,000. Saini changed his plans and parked his savings in a three-year bank deposit. Some 750 km away to the north in Saharanpur district of Uttar Pradesh, horticulturist Rajpal Singh put his savings in a life insurance-plus-investment product for the same reason. "Gold has been preferred by our family as it is a symbol of prosperity and is a safe instrument. But this time I could not buy gold because of its steep price," says Singh, who belongs to Jaghetta Gujjar village.

Farmers in India, who have traditionally bought gold and silver for asset creation, are now increasingly opting for banking and insurance products due to soaring prices of bullion.So, while rural jewellers report a 25-30% fall in gold demand over the past five months, bankers say term deposit collections in rural areas have grown in double digits in recent months.

Economists say it's a welcome development not just for banks, but for the economy as well. "Gold as an asset class is unproductive in nature as it largely remains locked up in households. But banking instruments such as term deposits can be deployed for the benefit of the rural economy," says Anish Chakravarty, director and senior economist at Deloitte, Haskins & Sells, a financial advisory firm. "However, one critical component is that farmers should remain invested in these products to accrue the benefits," he adds. It's not just rural folks drifting away from the yellow metal. Gold demand in the country fell 42% during October-December to 173 tonnes, the World Gold Council (WGC) said in a report last week. The country's gold imports dropped 44% during the quarter to trail China for the first time as gold's popularity as an investment safe haven and a weakening rupee pushed prices to record highs. The WGC expects China to overtake India as the largest gold consumer in 2012 when Indian gold imports may fall by a fifth to 770 tonnes. Average gold price (24 karat) in 2011 was Rs 23,620 per 10 gram, 31% more than the previous year.

Now, it's more than Rs 28,500. Viraj Singh, a jeweller from Gurdaspur in Punjab, confirms gold demand has slipped. "Footfalls have dwindled as prices have gone up. They (farmers) must be investing in other instruments," he says. Banks are now aggressively selling products in rural areas. Kotak Mahindra Bank's Consumer Bank President KVS Manian says the maximum response has come from rural Punjab, Rajasthan and Uttar Pradesh, where his bank has increased deposit mobilisation in rural areas year-on-year by 70%, 85% and 39%, in the past five months. "People were lured by higher deposit rates and pumped in more money into term deposits.

Source: The Economic Times

IRDA wants cap on sum assured on policies

Insurance Regulatory and Development Authority (Irda) has proposed to set a maximum limit for sum assured on life insurance policies. The move is to ensure that insurers take on the maximum risk on themselves rather than the current practice of heavily relying on reinsurance companies to honour insurance claims.

In a letter to insurance companies, the regulator said most products filed for clearance assign "no limit" to the maximum sum assured, which leads to fronting, which means more reliance on the reinsurer. Insurers that have reinsured very little risk may find it difficult to honour claims, which will damage the trust built on the industry, said the regulator. Separately, the regulator also said in its letter that insurers must make a clear distinction between group and individual policies. Irda observed that currently most group policies work as individual products, as insurers directly approach individual bank customers. Also, premium rates are similar for individual and groups members.

"Irda wants to make sure that only licensed intermediaries sell group policies and not bancassurance channels. Banks, acting as corporate agents, mostly offer policies to bank customers. It results in many complaints of premiums being deducted without the specific consent of the policyholder," a senior executive of a large insurance company said. The regulator also favoured multiple premium paying products to single premium and limited premium paying terms, where premiums are received well ahead of the policy term, thus accelerating commission payments to intermediaries and possible lapses due to high premium size.

Most products currently have single premium and limited premium paying terms, rather than premium paying term that is spread over the entire policy tenure. The regulator also raised concerns over the highest net asset value guaranteed products, which offer highest NAV during a period, as they invest in fixed income instruments. Irda said such products should have a minimum equity component for a specified period.

Source: The Economic Times

Parliamentary Standing Commitee in favour of hiking IT relief limit to 3 Lakhs

Parliamentary Committee, scrutinising the Direct Taxes Code (DTC) Bill, will recommend raising the annual income-tax exemption limit to Rs.3 lakh and hiking the limit on tax breaks for investments to Rs.2.50 lakh following a broad consensus among its members. “There is a consensus among the members that the annual tax-exemption limit be raised to Rs.3 lakh,” sources said after a meeting of the Parliamentary Standing Committee on Finance, chaired by senior BJP leader Yashwant Sinha.

Some members had earlier suggested that the annual income-tax exemption limit be raised to Rs.5 lakh from Rs.1.80 lakh at present, in view of high inflation and erosion in purchasing power of the rupee. The DTC Bill proposes the tax exemption limit at Rs.2 lakh and also provides for revising the tax slabs for all the three categories. At present, income in the bracket of Rs.1.80-5 lakh attracts 10 per cent tax, 20 per cent for Rs.5-8 lakh. It is 30 per cent for above Rs.8 lakh.
Members also felt that the limit for the total tax saving deductions, which include investment in provident fund, life insurance, children education and infrastructure bonds, should be raised to Rs.2.50 lakh from Rs.1.2 lakh, sources said. At present, investments up to Rs.1 lakh in specified instruments are deducted while calculating the tax liability.In addition, investments up to Rs.20,000 in infrastructure bonds are also exempted from tax.

The Standing Committee on Finance has decided to finalise its report on DTC by March 2, enabling Parliament to consider the ambitious reforms in the direct tax regime in the budget session beginning March 12. “The committee will present its report to Parliament in the third week of March”, sources said.

Source : The Hindu 25.02.2012

Compassionate engagement to Dependants of GDS discharged on medical grounds prior to 14.12.10.

Copy of Directorate letter on the above subject is reproduced below:

No. 19-19/2009-GDS Dated: 21 Feb 2012

Chef Postmaster General
Postmaster General

Subject :Consideration of compassionate engagement on GDS posts to Depandants of Gramina Dak Sevaks discharged on medical grounds based on proof of invalidation prior to 14.12.2010

A reference is invited to Para 7(d) of this Directorate letter No. 17-17/2010-GDS dated 14.12.2010 wherein it was provided that "this percentage of 10% shall only apply to cover cases of wards of deceased GDS and not to GDS acquiring disability during service defined in the Persons with Disabilities Act, 1995. Section 47 of the Persons with Disabilities Act, 1995 provides that no establishment shall dispense with or reduce in rank an employee who acquires a disability during his service as also no promotion shall be denied to a person merely on the ground of his disability. In case of a GDS acquiring a disability during his service and is considered to be unsuitable for the GDS post he was holding, could be shifted to some other post with the same TRCA." The ceiling of 10% was further removed with revised provisions under this Directorate letter No. even dated 01.08.2011.

2. The issue of allowing compassionate engagements to one of the dependant of the GDS discharged on invalidation on medical grounds supported by the invalidation proof has been considered in this Directorate and it has now been decided to allow considering compassionate engagement to one of the words of invalidated GDS discharged before the date of issue of this Directorate letter No. 17-17/2010-GDS dated 14.12.2010 on consideration of the indigent condition of the family taking recourse to the application of the same provisions of compassionate engagement and process as were in force at the time of discharge of the GDS on invalidation, without a further reference to this Directorate.

3. It is, however, clarified once again that the provision contained in Para 7 (d) of this Directorate letter No. 17-17/2010-GDS dated 14.12.2010 as amended may be observed scrupulously and no GDS is allowed to be discharged on invalidation observing the provisions of Section 47 of the Persons with Disabilities Act, 1995. In case a GDS acquires a disability during his service and is considered to be unsuitable for the GDS post he was holding, he/she may be shifted to some other post with the same TRCA. If at all some genuine difficulty arises about the nature of work to be extracted from him and the concerned HOC is personally convinced of the grounds in individual cases, the Circles may take up the issue of appropriate cases with the Training Division of this Directorate.

4. The instructions contained in Para 7(d) of this Directorate letter No. 17-17/2010-GDS dated 14.12.2010 & the present instructions would cover the cases of the GDS where a GDS was permitted to be discharged during the period from 01.01.1996 to 13.12.2010 by the prescribed appointing authority based on medical invalidation by a medical board of a Government Hospital and the disability would cover only the disabilities mentioned and defined in Section 2 of the PWD Act, 1995." While considering the cases under this provision, Head of the Circle would personally ensure that only the cases fulfilling the requisite conditions are considered for compassionate engagement.

5. The above provisions may be brought to the notice of all concerned for strict compliance. This issue with the approval of Secretary(Posts).

(Surender Kumar)
Assistant Director General (GDS)

PSI to launch its activities in Kerala

It has been brought to the notice of the Association that Public Service International (PSI) is proposing to launch its activities in Kerala and we have been invited to join their activities.

As you all may be aware, Public Services International (PSI) is a global trade union federation representing some 20 million women and men working in public services around the world. It has 635 affiliated unions in 156 countries and territories around the world. PSI is an autonomous body, which works in association with federations covering other sectors of the workforce and with the International Trade Union Confederation (ITUC). PSI is an officially recognized non-governmental organization for the public sector within the International Labour Organization (ILO) and has consultative status with ECOSOC and observer status with other UN bodies such as UNCTAD and UNESCO.

PSI is founded (in 1907) on the principle of solidarity between public sector workers throughout the world promotes dialogue and international co-operation as a means of solving global problems. It envisages to promote econonomic development based on the principles of human rights, social justice and development, especially for poorer countries and regions in the world and also aims at promoting peace and environmental protection at the international, regional and national levels through sharing resources, representing affiliates, education, coordinating the activities of affiliates and reciprocal support.

An informal meeting of PSI is scheduled to be held at Trivandrum on 6.3.2012. Other Associations/Unions/federations from Central/State government and non-governmental organizations are also expected to participate in the said meeting. From our side, Circle Secretary and All India Asst. Secretary will be participating in the meeting. Further details will be announced thereafter.

Friday, February 24, 2012

Extra premium from Physically Challenged PLI policy holders- Delhi High Court raps Government

Complaints of discrimination against the disabled are common in matters of civic amenities, job appointments and admissions to educational institutions. But now one such case has emerged in relation to a life insurance scheme floated by the central government itself.

Slamming the Centre, the Delhi High Court has said it will quash its postal life insurance policy that charges the physically challenged extra premium. State and central government employees are the beneficiaries of this policy. As per its rules, the assured sum for the disabled is much less while the premium much more than what is applicable to ordinary employees. The discrimination was brought to the notice of the court by a PIL filed by a visually challenged lawyer, Pankaj Sinha.

"Why this discrimination? How can you charge the disabled extra premium? They have the same risk factor as ordinary policyholders. The premium should be linked to various ailments — not disability," a bench headed by acting chief justice AK Sikri told the Centre's counsel. "Disability is not a disease or a medical problem. We are going to quash the policy," the court said. Sinha told the bench: "While non-handicapped persons are insured for a maximum of Rs 5 lakh, disabled people are insured for a maximum of only Rs 1 lakh. The premium paid by disabled people is also more than the premium for non-disabled people."

The court rejected the Centre's argument that disabled people are more prone to accidental risks as compared to persons without any disability and therefore the premium charged should be marginally different.

Source : The Hindustan Times, Feb 20, 2

AIC Bangalore resolution conveyed to Department

Copy of letter given by GS to Member(P) is reproduced below for information of all concerned:

No. CHQ/IPASP/1/2012 Dated : 22/2/2012.

Ms Yesodhara Menon,
Member (P),
Department of Posts,
Dak Bhavan, Sansad Marg,
New Delhi 110 001.

Subject : Minutes of the meeting taken by the Member (Personnel) with All India Association of Inspectors and Assistant Superintendents Posts on 3/11/2011.

Ref. : Directorate Letter No. 01/01/2011-SR dated 14/11/2011.

Respected Madam,

The 37th All India Biennial Conference of this Association was held at Bangaluru on 28th and 29th January, 2012. In the Conference, the matter related to merger of the posts IP and ASP was deliberated in depth and the house passed a resolution unanimously as under:

“This Association is against the merger of Inspector Posts and Assistant Superintendents Posts Cadre. Inspector Posts should be granted Grade Pay of Rs. 4600/- with effect from 01/01/2006 at par with Inspectors of CBDT / CBEC in tune with directions of the Hon’ble CAT, Ernakulam Bench”.

In view of the above resolution, it is requested that action may please be taken to implement the orders of Hon’ble CAT, Ernakulam Bench to upgrade the grade pay of Inspector Posts from Rs. 4200/- to Rs. 4600/- with effect from 1.1.2006.

Yours sincerely,
(Vilas Ingale)
General Secretary

Sunday, February 19, 2012

Enhancement of various allowances by 25%


THE 24th JANUARY, 2012



The undersigned is directed to say that a number of references and queries have been received in this Directorate from various Circles seeking clarifications in respect of increase of various allowances consequent upon increase in the Dearness Allowance beyond 50% w.e.f. 1st January, 2011. The issue has been examined in consultation with Ministry of Finance (Department of Expenditure). It may be recalled that, on implementation of the recommendations of the 6th Central Pay Commission, necessary orders in respect of various allowances and certain advances were issued by the Government. Some of these orders inter alia stipulated that such Allowances/advances shall automatically increase by 25% whenever Dearness Allowance goes up by 50%.

2. It is, therefore, clarified that such orders in respect of the allowances and advances, which provide for their automatic increase by 25% whenever Dearness Allowance goes up by 50%, do not require further confirmation/clarification for complying with the said stipulations.

3. However, such Allowances and Advances are mentioned below for ready reference of all concerned :

1. Children Education Allowance including Hostel Subsidy, etc.
2. Special Allowance
3. Cash Handling Allowance
4. Washing Allowance
5. Split Duty Allowance
6. Bad Climate Allowance
7. Special Compensatory (Remote Locality) Allowance
8. (a) All components of Daily allowance on tour,
(b) Mileage Allowances for road and bicycle journeys on tour
9. Special Compensatory (Hill Area) Allowance
10. Special Comp. Scheduled Tribal Area Allowance
11. Project Allowance
12. Fixed Conveyance Allowance
13. Cycle Maintenance Allowance
14. Special Allowance for Child care for women with disabilities
15. (a) Advance for purchase of Bicycle
(b) warm Clothing Advance
(c) Festival Advance
(d) Natural Calamity Advance
16. Desk Allowance

This issues with the concurrence of Integrated Finance Wing vide their diary No.28/FA/12/CS dated : 24/01/2012



Wednesday, February 15, 2012

United States Postal Service Ranked No. 1

A review of the performance of universal postal service providers by the Oxford Strategic Consulting (OSC) firm ranks the U.S. Postal Service the best postal service within the world's top 20 largest economies for access to services, resource efficiency and public trust. "We're proud to lead the world in postal services and we will continue to deliver superior performance for future generations," said Postmaster General and CEO Patrick Donahoe. "Our best days are ahead of us. I have no doubt the Postal Service will overcome its current financial challenges and endure as the world's leading postal service." The review ranked USPS, Japan Post, Australia Post, Korea Post and Deutsche Post in its top five. USPS earned the premier ranking due to its high operating efficiency and public trust in its performance.

The ranking considered such factors as the average number of citizens served by the postal system in a country, the number of letters and parcels delivered by each postal employee and data on service reliability and public trust measured over three years. The report found that USPS delivers nearly double the number of letters per employee as its closest competitor and more than five times more letters per employee than fifth-place Deutsche Post.

Friday, February 10, 2012

Kumarakom Circle Conference............

All the members are requested to confirm their participation for the Circle Conference proposed to be held on 28th & 29th at Kumarakom. All the members who wants accomodation on 28th may forward their names to Sri. Manoj (NR), Sri. B. Padmakumar(CR) and B. Gopakumar (SR) at the earliest so as to enable us to proceed with the arrangements.

Tuesday, February 7, 2012

Circle Conference at Kumarakom

As decided in the group meetings, the Circle Conference of the Association is proposed to be held at Kumarakom, Kottayam on 28th (sat) and 29th (sun) April, 2012. The Conference is proposed to be conducted in one of the prominent tourist resort at Kumarakom.

The CWC will be held on 28th morning followed by the subject committee. Election of the new office bearers will take place on the same day itself. The Open Session will be held on 29th morning. In the afternoon, a house boat trip is being arranged which will be over by 5.00 Pm. Accommodation for all the members is being arranged for 28th night at the resort itself.

As all the members would realize, the budget for conducting such an event, that too at the tourist spot Kumarakom during this peak season is on the higher side and so it is requested each member may contribute Rs 1000/- towards the Circle Conference fund. The amount may please be forwarded to our treasurer Sri. Manoj at the earliest by on line transfer (SBI Olavakkot A/c No. 10281700675) or by way of eMO.

As this is a novel venture attempted by the Association, the support and cooperation of one and all is earnestly solicited for making the same a grand success. Please follow the blog for further details of our Circle Conference......


Voluntary retirement of Sri. Shibu.M.Job

Sri. Shibu.M.Job, former DPS (CR) has retired voluntarily with effect from 2.2.2012. The Association acknowledges with gratitude the yeoman services of the Officer in the department and the special love and affection which he always showed towards IPs/ASPs. We wish him all the very best in his coming days. Happy retired life sir....we will miss u....

Monday, February 6, 2012

Life insurance sale must be need based, says IRDA

The sale of life insurance policies are set to become more scientific soon.
The life insurers should ensure a need-based sale of life insurance products by their direct sales personnel, the Insurance Regulatory and Development Authority said in the draft guidelines on product matrix released on Tuesday.
“It is important and necessary for insurers to have in place a suitability index (or a prospect product matrix) that can serve as a self governing tool to assess the quality of sale,” Mr J. Hari Narayan, Chairman, IRDA said.
As per the draft guidelines, an insurer or a distributor must make reasonable efforts to obtain a consumer's suitability information prior to making a recommendation to the consumer on a product.
Suitability information means information should include factors such as age, annual income and financial resources used for funding the purchase of the life insurance product besides risk tolerance.
The regulator is planning to bring the product matrix (or need-based sale) from April 1, 2012.

Sources The Business line

PLI / RPLI Maximum sum assured limit enhanced.

PLI Directorate Memo No. 25-3/2003-LI dated 17/1/2012 is reproduced below for information of all concerned:

The President is pleased to make the following amendments to “Post Office Life Insurance Rules 2011” published on 28th April, 2011 in Gazette of India No.85(Part-I Section –I Extraordinary)

a) The amount of maximum or aggregate sum assured mentioned as Rs.Ten Lac (Rs.10.00.000/-) in Rules No.7, 14 and 17(e) may now be read as Rs. Twenty Lac (Rs.20,00,000/-) in respect of PLI.

b) The amount of maximum or aggregate sum assured mentioned as Rs.Three Lac (Rs.3.00.000/-) in Rules No.9(a), 10(a), 15 and 17(e) may now be read as Rs. Five Lac (Rs.5,00,000/-) in respect of RPLI.

The amendments shall be effective from the date of issue of this Notification.

(Shekhar K. Sinha)
Chief General Manager (PLI)
Equivalent to Addl. Secy. to Govt. of India

Minutes of AIC Bangalore

The 37th All India Biennial Conference of our Association was held at Bangaluru on 28th and 29th January, 2012. Out of 22 circles, 234 delegates from 19 circles attended and actively participated in the deliberations. There was no representation from Assam, J & K and Himachal Pradesh circle branches.Deliberations on following issues have been taken place and approved by the august house.

1. Confirmation of the minutes of Biennial Conference of the Association held at New Delhi on 3rd and 4th April 2010.
Shri Roop Chand, General Secretary read out the minutes of the 36th AIC held at New Delhi on 3rd and 4th April, 2010 and it was unanimously approved by the august body.
2. Approval of Biennial report of CHQ for the period from 02/04/2010 to 26/01/2012.
General Secretary read out the report and it was unanimously adopted and approved by the house.
3. Approval of Audited accounts of CHQ for the period from 02/04/2010 to 26/01/2012.
Shri Jeetram, CHQ Treasurer presented the accounts for the period from 02.4.2010 to 26.1.2012. The Treasurer answered/clarified to queries raised by members satisfactorily and accounts were finally passed by the house.

4. (a) Upgradation of grade pay of Inspector Posts from Rs. 4200/- to Rs. 4600/- w. e. f. 01/01/2006.

General Secretary explained that determination of the pay structure is the job of experts sitting in Pay Commissions entrusted with the specific job and the Government cannot attempt selective revisions without addressing its impact on analogous cadres. Having restored parity by virtue of the recommendations of Fifth Pay Commission, the Government can not try to undo the same and create a blatant discrimination between analogous cadres. Strange it is to find that the Ministry of Finance, having disturbed the relativities are trying to find new logic to deny the well merited parity to the cadre of Inspectors and Assistant Superintendent Posts.The consistent attempts by this Association to bring into focus all these facts to the Department and to the Government have fallen into deaf ears. Instead the Department has been toying with the idea of abolishing the cadre of Assistant Superintendent Posts and merging the two posts into one without any specific assurance to enhance the career progression of this cadre. The posts of Assistant Superintendents exist in the Department from the inception of the cadre of Inspector of Post Offices and the Assistant Superintendents are the second level officers in the Postal Division and in reality the de facto administrators of the Postal Division. Assistant Superintendent Posts were conferred with ‘Gazetted status’ in the year 2005 as the Government was convinced that the nature of duties performed by them are higher and the responsibilities shared by them are unique to the Department and therefore deserve a higher level of recognition and now just to remove the man-made anomaly which has caused undue discrimination to the cadre of Inspectors, neither the Department of Posts nor the Government can demand our passive and unconditional acceptance to the merger of the Inspector and Assistant Superintendent Posts which have different degrees of responsibilities. While the Department has rightly recognized the need to place the Inspector Posts in higher pedestal on par with Inspectors of CBDT/CBEC and accordingly recommended to the Ministry of Finance also, the same Department cannot now demand unconditional acceptance from our Association to accept an unified single cadre of Inspectors or unilaterally alter the cadre structure for the simple reason that the MOF does not accept the proposal from the Department to restore parity without any valid reason and such a step would definitely be retrograde in nature.
The Hon’ble CAT, Ernakulam Bench has dealt at length the background of our claim seeking parity and has rightly appreciated our earnest efforts to secure parity with the Inspectors of CBDT/CBEC and has therefore allowed the OA with further directions to the Ministry of Finance to have a re-look in the matter at the level of Secretary and consider the case of the Inspector (Posts) for upgradation of their grade pay at par with that of the Inspector of Income Tax, CBDT and CBEC and to consider upward revision of the grade pay of ASPs as well.Opinion of all Circle branches was obtained. Shri.S.Samuel ex-General Secretary, Shri.G.P.Lahiri ex CHQ President and Shri.P.R.Satyanarayanan ex CHQ President spoke in length about the circumstances under which the post of ASP was sanctioned and how gazetted status was obtained after a long struggle. While all other cadres in the central government are expanding their cadre strength and number of posts, why this cadre alone is asked to surrender the promotional avenues and go backward. Finally, the house decided to oppose merger and passed the following resolution:

“ We are against the merger of Inspector Posts and Assistant Superintendents Posts Cadre. Inspector Posts should be granted grade pay of Rs. 4600/- w. e. f. 01/01/2006 at par with the Inspectors CBDT/CBEC in tune with the direction of the Hon. CAT Ernakulam Bench”.

(b) Restructuring of Inspector Posts cadre and Second CRC.
The Second Cadre Review took place in the year 1986. The Committee recommended upgrading 245 posts of ASP to PS Group B. A Presidential order was also issued in this regard but till date it was not implemented by the department. Here also the Department Expenditure created a mess of it. Now the department is talking about another CRC after rendering injustice to this cadre by its failure to implement the earlier one. The department has constituted a Committee under the chairmanship of Shri. Ashutosh Tripathi, Chief PMG, M.P Circle. The terms of reference to the committee are as under:

(1) To revisit the norms for creation of new Postal Division and Regions as well as upgradation of Class II Divisions into Class I Divisions.
(2) To study the feasibility of organizational restricting of fields formations (Circle and below) keeping in view the emerging needs for India Post in new socio-economic environment.
(3) Review of norms for upgradation of Post Offices.
(4) To study the feasibility of strengthening / creation of Postal Assistants/ Sorting Assistants posts in view of increased need of System Administrators.
{5} Any other relevant issue as may be assigned by the Competent Authority later.
( {6} The time period of this Committee to submit its recommendations is three months.
Here also the department is planning to upgrade Class II divisions into class I divisions which will mostly beneficial to IPoS officers only. Many of the Class II divisions in which promoted officers are working are likely to lose promotional prospects. The house decided to deal with the subject separately without linking it with up-gradation Grade Pay to IPs.
(c) CAT Ernakulam Judgement dated 19/10/2011 in OA No. 381/2010.

General Secretary informed that Directorate would be submitting the required information in this regard to MoF. The house requested the General Secretary to pursue the case at appropriate level and see that the orders of Hon’ble CAT is implemented.
(d) Regular promotion to PS Group B cadre.
General Secretary elaborated the issue and informed the house that two DPCs had already been convened, one on 27/11/2011 & the second on 17/11/2011. Total 344 members have been promoted to PS Group B cadre and supplementary DPC is also likely to be convened soon.

(e) PS Group ‘B’ and Sr. Postmaster Examination.

General Secretary informed that the examination for the promotion to the cadre of Sr. PM was notified by the Department to be conducted on 31st December 2011. Department took a decision not to allow ASPs for the examination. This order was challenged before the CAT Chandigarh and Hyderabad. Finally, Department postponed the examination until further orders. Both the cases are still pending before the Honourable CATs. Department has notified the date of PS Group B examination on 27th May 2012 and Sr. PM Examination in November 2012 without waiting for the final decision of Honourable CATs.The representatives of Maharashtra, Kerala & Odisha participated in the discussion effectively and pointed out that ASPs & adhoc PS Group B officers should also be made eligible for Sr. Postmaster examination. It was finally decided that the CHQ will take up the matter with Directorate.

(f) & (g) Provision of infrastructure to Sub Division / Re-organisation of sub divisions.

Many of the sub-divisional offices are functioning from sub-standard accommodation. The venture into new area of business development, Rural PLI etc. has increased the work load and public contact in many folds. Hence, the house requested the department to provide proper justified accommodation to all Sub Divisions.

(h) Supply of Laptops / computers with broad band connection for all Inspector Posts / ASP except Sub Divisional Heads.

Secretary Posts, in her address in the last AIC New Delhi assured to supply Laptop not only to Sub Divisions but also to all IPs/ASPs working in other offices. Supply of Laptops has commenced to all Sub Divisions but yet to reach to few more Sub Divisions. Representatives of Karnataka Circle informed the house that none of the Sub Divisions in their Circle has been supplied with Laptop. Circle Secretaries of Rajasthan & Punjab also took part in the discussion and it was unanimously decided that CHQ will take up the case with Directorate for supply of Laptops to all IPs & ASPs including pending sub divisions. Though Lap top have been supplied partially, broad band connections are yet to be provided.

Issue of combined All India Seniority List of IPs from the year 1999.
It has been decided that CHQ will get the information through RTI.
(j) Revision of rates of remuneration for Invigilator duty.
GS informed to the house that, the case has already been taken up with the Directorate and it is under consideration.
(k) MACP scheme.
GS appraised the house that, DOPT has already framed rules and regulations and therefore our Department could not make any changes therein.
(l) Decentralization of PLI / RPLI work to divisions.
Delegates from circles participated in the discussion and it has been decided that, separate set-up with full fledged manpower consisting of MTS, PAs, IPs, ASPs & AAOs should be provided in all divisions for smooth functioning of PLI/RPLI work. CHQ will take up the case with Directorate.
(m) Women and Youth participation in the activities of the Association.
GS made an appeal to all circles to motivate and increase the participation of women & youth members Circle and CHQ level activities. Women and youth members should be encouraged for effective participation in Association activities. They must be roped in for organizational work by electing them to Circle/CHQ body. Smt.T.V.Sundari, AGS-I commended the excellent work done by women members of our Association particularly women IP/ASP from Karnataka Circle in the successful conduct of the All India Conference.
(n) Activities in the Association with PSI.
Shri. Dinesh Khare, President, Smt. T.V.Sundari AGS-I and Shri.Manjunatha Huballi informed the house various work place campaigns, seminars/workshops organized in Tamilnadu/Karnataka Circles in co-ordination with Public Services International (PSI). The President stated that Karnataka Circle was always associated with PSI and its affiliates in the state of Karnataka and he desired that CHQ might continue the Trade Union activities in co-ordination with PSI.
(o) Any other item with the permission of the chair.
Many circles participated in various issues effectively and placed the following demandeds:
i. Rule 38 cases to be considered quickly.
ii. The cases of surplus qualified candidates should also be considered quickly.
iii. Clerical assistance to the sub divisional head.
iv. Delay in MACP cases in MP circle
v. Negative Valuation in all examinations.
vi. Cases of up-gradation of ASPs in the scale of Rs. 7450/- as per Fifth Pay Commission.
vii. Non-payment of RPLI incentives since 2009 to sub divisional heads in Karnataka Circle.
CHQ will take up these cases with the Directorate.
5. Organisational review.
The august body took review of organization functioning. GS informed that CHQ took efforts and revived the defunct Branch of Jharkhand Circle. But despite such efforts in J&K, the defunct Branch in that circle remains defunct.
6. Financial review.
The financial position of CHQ is not so sound. GS informed the house that Circle Branches are not prompt in remitting 40% due quota to CHQ as required vide Article 39 of our Association’s Constitution. He appealed to all Circle Secretaries to remit the CHQ quota in full and in time so that the CHQ could function effectively.
7. Merger of Postal Officers’ Association, India with All India Association of Inspectors & ASP.
Members mooted the idea of merger of our Association with Postal Officers’ Association India. After a detailed discussion it was decided not to go with merger proposal.
8. Postal Inspector / CHQ blog.
GS explained the house that due to want of fund/support from circles, the mouth piece of our Association could not be brought out monthly. “Postal Inspector” can be published every month or at least on quarterly basis if all members subscribe to it. Circles can also extend support by placing a constant demand for certain number of copies by remitting subscription in advance.
9 & 10. Approval for draft resolutions / Amendment to Constitution.
In all, 7 resolutions are adopted unanimously by the august house.
i) To amend Article 38 of the Constitution; this stipulates a monthly subscription of Rs. 30/- from every member increasing the same to Rs. 50/- p. m.
ii) To amend Note 2 below Article 44 (a) inserting the word “or Assistant Circle Secretary” after the word ‘Organising Secretary’.
iii) To provide separate establishment at Divisional Level for carrying out works related to PLI / RPLI consequent upon decentralization. The work relates to verification of policies and sanctioning claims to be got verified by a separate Accounts Officer or divisional accountant rather than by the ASP (HQ). The Association also resolved to request the Department to issue clear cut orders with respect to payment of incentives and to clear all pending incentive bills of IP / ASP at the earliest.
iv) To conduct DPC for PS Gr. B in time. Instructions issued by DOPT to prepare an extended panel should be followed scrupulously and the department should into consideration vacancies that arise out of unforeseen circumstances including cases of unwillingness. This will reduce the increasing number of adhoc promotion given in PS Gr. B cadre in the Circles.
v) To urge the Secretary (Posts) to give direction immediately to Chief PMG Tamil Nadu to withdraw the cluster transfer policy being adopted in that circle for IPs/ ASPs; this is causing much resentment among the members of Tamil Nadu.
vi) To urge the Department to clearly lay down the roll of the Sub Divisional Head while handling loss and fraud cases which exceeds the limit of Rs. 20000/-. While monetary limits are fixed for officers at various level including DPS and PMsG, responsibilities of SDIs are not clarified with clear guidelines which should be put in place.
vii) We are against the merger of Inspector Posts and Assistant Superintendents Posts Cadre. The grade pay of Inspector Posts should be upgraded to Rs. 4600/- w. e. f. 01/01/2006 at par with the Inspectors CBDT/CBEC and analogous cadres in other Central Government ministries/departments in tune with the direction of the Hon. CAT Ernakulam Bench.

Our New GS Speaks....

The inaugural address of the newly elected General Secretary, Sri. Vilas Ingale is extracted below:

The 37th All India Biennial Conference of our Association was held successfully in the City of Gardens Bangaluru on 28th and 29th January, 2012. Total 234 delegates from 19 Circles attended the conference and good number of them actively participated in the deliberations held during the course of the conference. I am extremely thankful to every one of you for having me elected for the coveted post of General Secretary of our Association. I am overwhelmed by the affection all of you have shown to me. Our Association is currently passing through a crucial phase. I will surely make efforts to rise to the occasion and try to execute my duties as General Secretary to the fullest of my capacity. As you know, to run this Association is a team work and without your collective support it may not be possible for any GS to lead the Association from the front. In any case, I will require support from all of you and then only I will be able to carry out the legacy set by my predecessors. We will work together with all our office bearers and CWC members of CHQ as well as Circle Secretaries of all Circle branches, this is what I want to commit on this occasion from my side as a Torch Bearer of the Association.

I extend my heartfelt thanks to Shri Roop Chandji, the outgoing General Secretary for the hard and sincere work put up by him during his tenure. I shall be failing in my duty if I forget to mention the names of Shri S. Samuel our Ex-GS, Shri P. R. Satyanaran Ex-President, Shri G. P. Lahiry Ex-President and Shri Dinesh Khareji the outgoing President for conferring faith on me. The list will not be complete without including the name of Shri. P.M. Shirsat, Ex-CS/ Ex-President, Maharashtra Circle and Shri P. R. Parodhi Ex-VP CHQ and Ex-President Maharashtra Circle. All of these bigwigs together with their work continue to inspire me till now.

During this tenure of General Secretary of the Association, I shall remain approachable to all members through the following means on which all members are most welcome to convey their opinions and suggestions :-

1. Mobile No. : 09869417961

2. Email ID :

3. Office Address : ASP, New Mumbai Sub Division, Vashi (Maharashtra) PIN - 400 703.

4. Office Tele. No.: 022/27657041