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Thursday, January 31, 2013



How to plan a vacation to Australia, what to see, where to stay and how much it will cost you.

If you book online or via a travel agent, you’ll pay 55,000-65,000 per person for a return flight. However, low-cost airlines like Air Asia and Jetstar will be cheaper due to the stopovers. So, you could save 1,500 per head by taking Jetstar’s Singapore-Melbourne flight ( 34,380) and Delhi-Singapore flight ( 25,451).
At the moment 100 will get you Australian dollar (AUD) 1.73. However, the AUD is expected to appreciate this year.
The online application route is not open to Indian citizens. Submit a paper application, Form 48R, at the Australian High Commission or via VFS Global. The Australian Visa Office has arranged with the latter to take visa applications for a service fee of 601, and a visa fee of 6,600. You can only pay the visa fee via a bank draft in favour of Australian High Commission, Delhi, at a Delhi branch.
For a backpacking trip, the average daily expense per person (stay, food, local transportation) will be 1,800-2,500. Most mid-range tour packages without air fare will cost 8,500-10,000 per person per night. A ballpark figure for allinclusive deluxe tours is 25,000-30,000. As per Kashikar, the average expense for Indian visitors is 2.69 lakh.
It won’t come cheap. While hostel dorms cost 1,100-1,500 a night in most tourist places, private rooms cost upwards of 3,500 per night. The average price of hotels in the country in the first half of 2012 was 8,429. It will obviously be higher this year.
Make the most of the hopon-hop-off buses in major cities. Also check out Oz Experience, which applies the same concept to longer tours across Australia ( The only way to pack as many places as possible in a short time, is to take flights. Trains are for romance and fun, not speedy travel.
Royal Botanical Gardens, street performances at the Darling harbour, Sydney harbour walk, the Rocks, Port Campbell National Park, Koorie Heritage Trust, the Great Ocean road (including Wye river for Koala spotting), Brambuk Cultural Centre.
Madame Tussauds wax museum:
AUD 38 Whale watching cruise: AUD 75 onwards Shark Dive Xtreme at Manly Sea Life Sanctuary: AUD 195 onwards Australian museum: AUD 12 Dreamworld: AUD 94.99 Sydney Tower Eye: AUD 26 Aboriginal heritage walk in Victoria:
AUD 25 Eureka Skydeck 88: AUD 18.50 Snorkelling or scuba diving trips to discover the Great Barrier Reef: AUD 128 onwards (indicative rates)
You can buy the Merlin Attraction Pass, offering unlimited entry to 11 best attractions, such as the Under-Water World, Sea Life Aquarium, Sydney zoo, Illawarra Treetop Adventure, and some of the abovementioned places. The pass costs AUD 100 and is valid for a year (
* Rate per person
Beach: Bondi and the Gold Coast may be more famous, but Cape Peron, Casuarina and Adventure Bay are good too.
Culture: Mount Borradaile, Wilpena Pound, Canberra.

Avoid a trip in Dec-Jan. Summer lasts till Feb-Mar, then autumn sets in. So, plan in May and skip the high season rates. Skiers can aim for Jul-Sep.

The two-night Laura Aboriginal Dance Festival will be held from June 21-23 this year. This biennial event celebrates and showcases the culture of over 25 of the continent’s aboriginal communities through song and dance, crafts workshops as well as boomerang and spear throwing contests.

If you want to see this vast continent, a minimum stay of 14 nights is advised by Nishant Kashikar, country manager, India, Tourism Australia. Here is a sample itinerary to help you plan. Start with an overnight stay in Brisbane and drive down to the Gold Coast the next day. On day three, take a flight to Cairns and the Great Barrier Reef. After three nights, making time for trips to Daintree Forest National Park and Kuranda, fly to Sydney for another three nights, including trips to the Blue Mountain and Hunter Valley for a wine tour. You could add a night and stay at the valley to take a hot air balloon ride. Then head to Melbourne for three nights (with a trip to Phillip island) and another three in Adelaide. From the latter, you can make a full-day trip out to Kangaroo island, a wildlife sanctuary without fences. You can take a flight back home from Adelaide.
Sushmita Choudhury Agarwal ET130128

PERSONAL FINANCE SPECIAL... Gain fall in from interest rates

Gain fall in from interest rates 

Interest rates are set to come down this year. While it’s good news for borrowers, investors can also benefit by using these smart strategies. 

    If there is one thing that investors, businessmen and consumers want right now, it is a cut in interest rates. When RBI governor D Subbarao unveils the monetary policy on 29 January, it is likely that he will oblige the teeming masses. In fact, a rate cut is almost a foregone conclusion, though the quantum of the rate cut is still a subject of intense speculation. Till about a fortnight ago, there were rumours that easing inflation will nudge the RBI to affect a cut of 50 basis points. Some were optimistic that rates will be cut by 100 basis points. However, the expectations were later revised to a 25 basis point reduction.
    How will a rate cut affect you as an investor and a borrower? ET Wealthreached out to experts to analyse how lower interest rates will impact your investments. We analysed the products and sectors that will benefit if rates are eased. Which companies are best placed to gain from a benign rate structure? We also looked at the strategy you should adopt at this juncture, both as an investor and a borrower.
    For now, a large section of the investor community has already priced in the rate cut. Over the past few weeks, the yield of the benchmark 10-year government bond has dropped significantly (see chart), reflecting the change in sentiment. Is this optimism justified? Some experts reckon that the stage is set for a decisive move from the central bank. Inflation is now within touching distance of the RBI’s stated comfort zone of around 7%. The government has also taken steps to manage the fiscal situation. Rahul Goswami, CIO, fixed income, ICICI Prudential AMC, expects the RBI to cut rates by 50-75 basis points over the next three months. The 10-year bond yield is likely to be in the 7.55-8.15% range during this period. Says Amit Tripathi, head, fixed income, Reliance Capital Asset Management: “Rates could be cut by 50 basis points over the next three months. Further action by the RBI will depend on how macro data pans out. It is likely to come down by 75-100 basis points over the next 12 months.”
    However, others believe the RBI will take a measured approach. A big rate cut at this juncture could cause inflation to flare up again. Experts say wholesale price inflation has come off, but the RBI could take the high consumer price inflation into account before embarking on a rate reversal. Says Indranil Pan, chief economist, Kotak Mahindra Bank: “We think that the RBI would be mindful of the CPI dynamics and also the risks to the economy from a continuing high current account deficit and loose fiscal. We continue to highlight a calibrated and cautious easing stance from the RBI and look forward to a 100 bps cumulative cut in the repo rate in 2013.”
Your investment strategy
Interest rates are cyclical and don’t remain stagnant for long, especially in a growing economy like India. The start of monetary easing provides investors not only an opportunity to lock in at high yields before rates are cut, but also enjoy capital gains from the resulting rally in bonds (see chart). Raghvendra Nath, managing director, Ladderup Wealth Management, says, “If the rate cycle turns as expected, a similar opportunity may not come by for years.”
    Of course, your investment decisions should be guided not only by the expected return but also by your needs for regular income, safety of capital and liquidity. A bank deposit or a government-backed instrument, such as the PPF or NSC, is very safe. But a debt fund offers greater liquidity—you can withdraw the money at short notice. The tax efficiency of the instruments is also important. See how your choices measure up on these parameters before you invest. Debt funds are not very popular with retail investors because they don’t offer assured returns. Yet, given the impending cut in interest rates, these funds may be the best option for small investors today. They can earn you a higher return than a bank FD. Although bond yields have  dropped significantly in recent  weeks, experts believe there is still scope for a rally in bond prices. Says Tripathi: “A further softening of bond yields is expected, which gives enough leg-room for the rally to continue.”
    Debt funds are also tax-efficient. The long-term capital gains tax is only 10% if you hold for more than a year. The tax could be even lower if you opt for the indexation benefit, which adjusts for inflation during the holding period. Vivek Rege, financial planner, VR Wealth Advisors, suggests, “Investors should take the debt fund route. These are not only tax-efficient, but also provide high liquidity.”
Long-term debt funds: Within bond funds, long-term debt funds (also known as duration funds) are a more attractive proposition. If interest rates come down, these funds will witness a more pronounced capital appreciation . These funds are more sensitive to fluctuations in rate movements than short-term funds. “This scenario provides an ideal opportunity to invest in duration products such as income funds and gilt funds,” says Sujoy Ghosh, head of fixed income, Religare Mutual Fund.
Gilt funds: If the reversal plays out as expected, gilt funds are likely to offer the best rewards. These schemes invest in government securities (or gilts) and, therefore, have very high-quality portfolios. As mentioned earlier, the yields of long-term government bonds have softened, which bodes well for long- and medium-term gilt funds. Aided by the rally in bond prices, gilt funds have managed to deliver double-digit returns over the past year. Most of these funds have been steadily increasing the average maturity of their holdings in tune with the falling bond yields. Between 2001 and 2008, when interest rates were slashed aggressively, these funds delivered as high as 25% annualised returns. But don’t expect history to repeat itself.
    The only risk that you face with these funds is a heightened sensitivity to interest rate movement. If, for some reason, the expected cuts don’t happen or not to the anticipated extent, government bonds could lose value and investors in gilt funds could lose money. Rege says, “Gilt funds best capture any downward movement in interest rates, but they are also very volatile.” Income and dynamic bond funds: A safer bet are income funds, especially dynamic bond funds, which can quickly increase or decrease the maturity profile of their portfolio based on the interest rate outlook. They also invest across a variety of debt instruments, such as corporate bonds and fixed deposits, apart from government securities. This diversification also helps an income fund to provide more stable returns, says Nath. Income funds have been the best performing debt funds in the past year (see table) because they had increased their portfolio maturities in the past few months.
Tax-free bonds: During the past year, a number of tax-free bond issues have hit the market. These do not offer any tax deduction to investors, but the interest is tax-free, which makes them very attractive for those in the higher tax slabs of 20-30%. While the coupon rate of 8% is lower than that offered by bank fixed deposits, the post-tax yield is much higher. The income from a fixed deposit is fully taxable. The post-tax returns from a fixed deposit that offers 9% is only 6.3% for someone with an annual income of over 10 lakh. For those earning 5-10 lakh a year, the 20% tax will pare the yield of the fixed deposit to 7.2%. Keep in mind that the tax is payable on an accrual basis every year even if you have opted for the cumulative option.
    The government had allowed state-owned infrastructure companies to raise up to 60,000 crore from the Indian public during 2012-13. However, so far only a fraction of this amount has been raised through tax-free bonds from companies like Power Finance Corporation, Hudco, India Infrastructure Finance Co, National Highway Authority of India and the IRFC. One such issue from IRFC closes on 29 January. If you missed this bus, consider other forthcoming issues before 31 March. This may effectively be your last chance to lock in at the existing high rates. Indications are that the Budget may not allow state-owned firms to float tax-free bonds.
    Most of the tax-free bonds have high credit rating, which means the risk of default is very low. The tenure of these bonds is 10-15 years, so it gives investors an opportunity to lock in for a fairly long period. The best part is that these can be traded in the secondary debt market. You can cash out after a few years. If interest rates are down by then, you will pocket a neat sum in capital gains as well. “Tax-free bonds are ideal for investors in the high tax bracket. They provide enough liquidity and have no reinvestment risk,” says Nath.
Fixed deposits: For those in the lower income brackets, bank and corporate deposits are a better option. Banks and companies are offering attractive rates on fixed deposits, but this could change in the next few months. The deposit rates have already started moving south. Don’t be lured by very high rates of short-term deposits. A 6-9 month deposit could offer you up to 9.5%, but there is a very high reinvestment risk. When the deposit matures, you will not be able to reinvest the proceeds at a high rate. Given that the RBI is likely to ease rates further, the prevailing rate 6-9 months from now may be in the region of 7-8%. It’s best to opt for a longer duration so that you can benefit from the high rates for the rest of the tenure. However, only a few banks offer fixed deposit tenures of 8-10 years.
    The deal is sweeter for senior citizens, who get 0.25-0.75% higher interest on their deposits. Some companies, such as housing finance major HDFC, offer their customers an additional 0.25% interest on deposits.
Recurring deposits: If you don’t have a large sum to put away in a fixed deposit immediately, consider starting a recurring deposit, where you invest a fixed sum every month. Once you start a recurring deposit, the rate remains uniform for the rest of the tenure. However, unlike fixed deposits, you can’t just walk into any bank and open a recurring deposit. Banks insist that you have a savings bank account with them from which a fixed amount will move to the recurring deposit every month.


Japanese concepts of design and colour are driven not just by aesthetics; they have deeper philosophical and spiritual underpinnings

    It is often a challenge to distinguish between people from the South-east or Far-east; but there are many clues if you look carefully. Of all the countries and regions of the world, the Japanese are easily distinguishable through their restrained choice of colours.
    Japan has had a history of unique aesthetic concepts that are not yet known or understood by the world. Most of these concepts are deciphered as aesthetics, but are actually much larger and deeper. Japanese scholars fear that the world will adapt them as shapes and colours without imbibing the spiritual principles.
    Wabi sabi is one such traditional Japanese concept of beauty that doesn’t quite translate well into English. It is inspired by nature with complete acceptance to transient, evolutionary and imperfect; yet elegant.
    Pottery used in Japanese tea ceremony typically would display wabi sabi characteristics; simple, rustic, not quite refined or symmetrical and yet, a discerning elegance.
    It is a concept that liberates beauty from physical or material world and keeps the focus on sensorial experience of beauty. So it goes beyond visual perceptions. Barely finished minimalist Japanese poems called Haiku are also considered wabi sabi.
    There are more familiar and interesting examples like the Ikebana floral arrangement that focuses on stems, branches, basically parts of the plant other than flowers to attain balance and beauty. Bloom is the more obvious and near perfect part of a plant. Japanese Ikebana considers it vulgar to use just colourful blooms to make an arrangement look good. The point is to make a graceful crea- tive expression with certain discipline and restrain. It is measured, never abundant. A wellpracticed Ikebana adheres to wabi sabi principles and is arranged in silence.
    Enso is another Japanese concept that goes beyond its literal meaning; circle. It represents the universe and the void within, among other things. A calligraphy artiste reveals his spirituality by the way he draws enso. A balanced and enlightened mind would draw a complete circle; but if it is open, it may mean the artiste is still looking out for ideas and would lean towards wabi sabi principles of asymmetric beauty. enso, associated with Zen, symbolises Japanese aesthetics itself and is the most frequently drawn symbol by Japanese calligraphers. Just as singers practice their musical notes, many artistes draw enso everyday as a spiritual practice. Have you noticed how some Japanese women wear beige, pale browns, grays and deep blues in unusual proportions to create a very sophisticated look? Despite years of measured play with hues and tones, I cannot imagine myself getting those ratios just so. This specific style of colour selection is a part of another very powerful and lesserknown Japanese concept called iki. There is no good English translation of this word either, but at first level, it represents chic style. Iki is used as an adjective in Japanese language. The concept started in the urban districts of Tokyo (then called Edo) in the 18th century. Though the style had emerged as a way of pleasing intellectual merchants and therefore encompassed erotic allure, pride and sophisticated indifference, it was hardly deciphered as a concept till 1930s. By then, it had become a part of middle class aspiration as people wanted to be iki, wear iki fashion and have iki relationships; almost the way we use “cool” today. A song from that era goes; “Iki crow does not caw at dawn”. Japanese philosopher Kuki Shuzo believed iki is an attitude and is quite contrary to the demure, coy, stereotypical image of Japanese women. He is credited for deciphering iki to a large extent. Prof Yamamoto Yuji and Prof Gentarow Ohmi have also interpreted iki at length. Their essays provide good starting points for diving deeper into the concept. Post aristocratic era, Japan’s colour culture was based around dying. Different colours could be obtained by reducing/ adding dyes; especially indigo. Brown has the lowest saturation of red/ orange and any more extraction or reduction would make it a non-colour. Indigo can be taken to a point where it ceases being blue and becomes near black to lose colour saturation completely. With iki being the aspired style, Japanese dyers or color makers explored browns, grays and blues to an unparalleled extent. Japanese language distinguishes 48 different shades of browns and over 100 shades of gray. Postmodern interpretation of iki colours or fashion lies in simplicity to the edge of being non-art, non-design, non-brand. Muji started with a philosophy of being a nonbrand and has stuck to its simplicity. Muji would never stitch a label on its clothes to stay under-stated or non-stated.
    German philosopher Martin Heideggar believed it was not necessary to limit iki to Japan anymore. He defined it as an everyday experience and not an artistic expression. Everydayness does not mean mundane here, it means an individualistic everydayness filled with unique characteristics.
    I am tempted to share an amazing insight by Vanessa Friedman of The Financial Times recently. She found great parallels between the American president and a British supermodel. US president Barack Obama in an interview in the Vanity Fair revealed that he had decided to wear only dark blue or grey suits “so I don’t have to think about what to put on”.
    In the same magazine, British supermodel Kate Moss noted that she wore only “black jeans now. Or grey. If you do a different look everyday, they are going to be waiting for the next look… Whereas if you wear the same thing, they get bored and leave you alone.”
    In my mind both these are Western interpretations of iki principles.
    Japanese have a fond theory that Steve Jobs limited the use of colours on Apple devices as he believed in “non-colour” aesthetics.
    Because it is not about extremes, iki has survived the transition from pre-modern to postmodern society and is not obsolete.
    Lastly, one more Japanese concept that most of us know as the song Sayonara from the movie Love in Tokyo. It translates as farewell or goodbye at the first level. But it carries a deeper dialogue that carries “if it must be so” or “if we must (part)…”


Situational sensing  the new LEADERSHIP MANTRA


    A common question being asked in the corporate domain is ‘what is situational sensing’ in the leadership context? “Situational sensing is adapting your leadership style based on a situation. Assessing the situation and waiting for the right time before taking any action or decision. A situational leader observes, discusses, listens, and understands the situation before taking any decision. For new leaders, it is important to understand the culture of the organisation and adapt their behaviour accordingly,” answers Keyuri Singh, VP HR, Blue Star Info Tech.

    So, what are the ways through which leaders can improve their situational sensing? “Situational sensing can be improved by observation, patience and listening to people. The leader should be regularly in touch with one’s immediate team-mates. He/she should be approachable for employees. He/she should develop the capability to hear both, the said and unsaid and draw inferences from those to understand the pulse of the organisation. This helps to understand work culture, the employees’ ‘feelings’ towards the organisation, what their expectations from the organisation are and how it aligns with the organisation’s goals. The leader should build confidence among the immediate team-mates, so that they can share important details about the business, challenges, and opportunities that they foresee,” answers Singh. Providing a further explanation on the same, Ashish Arora, founder, & MD of HR Anexi says, “Leaders must master the skill of situational sensing. Effective leaders understand that there is no universal formula, no guaranteed way of ensuring their leadership impact. On the contrary, they practice and hone their situational sensing skills. They observe and collect ‘soft data’, picking up behavioural cues and reading the atmosphere or ‘vibe’. Very often in a working environment, employees tend to hold back their feelings of fear, confusion, anger, or depression; whether triggered at home or at the workplace. There are the feelings and vibes that leaders must be able to pick upon, to further initiate conversations with their employees. They must confirm their assumptions and analyse the data to understand its implications for their leadership actions.”

    Explaining the ways through which leaders can improve their situational sensing further, Gyan Daultani, VP – HR and resource management group, Nihilent Technologies suggests, “Leaders need to enhance their observational and listening skills. These are the best ways to enhance one’s situational sensing ability. Observing involves scrutinising the behavioural aspects of the people involved, listening to what they are saying and understanding the purpose behind it. It requires communicating with people on a regular basis and understanding their points of view, strengths, weaknesses, and constraints.”

    “On an ending note, while possessing the ability to sense situations, leaders must also know where to draw the line when it comes to confrontation. An efficient and effective leader is the one who can gauge the tension/discomfort among his/her employees by sensing the situation and eventually being a coach and catering to those issues,” concludes Arora.