Interest rates have fallen from 12 per cent a couple of years ago to 7 per cent now. Your just-in-case money in the bank earns only 4 per cent. With no signs of a demand revival, the market feels the rbi will signal a further softening of interest rates in October. Calcutta's senior citizens Pratul Dey and his wife have seen their annual income from interest, whether from uti schemes or bank FDs, dwindling from Rs 35,000 to Rs 20,000 in one year.
Most people who've played the equity market recently have lost money. Investments in growth mutual funds have not paid returns, with some even losing the principal. Elaborates Alok Churiwala of Churiwala Securities, "The middle class never has the stomach for equities anyway. People who invest in securities have to be rich enough to take that risk. There's lot of discontentment on the streets. Jaswant Singh has no magic wand to boost investor confidence overnight."
Even insurance companies are feeling the pinch. Single-premium assured return insurance policies are either closing down or cutting yields with every passing month.
The only consolation is if you own the roof over your head. But if you want to sell it as an investment, you'll find that rates are stagnant. "The best way to feel safe about your money is to sit on it," says Dominic Costabir, director at the Hospitality Training Institute, Mumbai, and a hard-working family man. "You can't have a solid tax or investment plan with these guys.I'm thinking of buying a house and getting tax benefits but what if the government suddenly puts an end to this incentive?"
Paromita Shastri With Gauri Bhatia, Manu Joseph, Archana Rai, Sutapa Mukerjee, Amarnath Tewary, Ashis K. Biswas and S. Anand