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## 1 Euro = USD1,449

I went to the money changers today and the board there read something like that. Natually I thought that either they are quoting the rate of dollar after a 100 years of depreciation or the display is broken. So I went to the next shop which quoted I USD = 0,684 Euro.

However before this tempts you all to expliot the arbitrage opportunity by exchanging 1 euro coin for a 1400 USD and then change the USD bills for 684 euro each, you must realize that the french use “,” to denote decimal place and not like in USA/India where it is used to help count the number of digits in a large number.

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## Insurance

3 years ago I had written about the exhorbitant commissions charged by Insurance Agents (which along with the advertizing and agency margins come to close to 40% of the first year premium)
Also I had repeatedly stressed that insurance is mis-sold in India.. it should not be taken as an investment avenue but a risk mitigating option.

However this blog summarized the fraud floated by insurance companies in the best way:

An ad at www.simpleinsurance.in from ICICI shows you how, if you invest Rs. 2,000 per month for 20 years, you could get a pension of 15,315 per month after 30 years (at 10% annualized return).

But let’s have a closer look. Let us put the Rs.2,000 per month in a bank fixed deposit (FD) at a nominal 8% interest compounded annually. That makes Rs.24,000 annual investment in FD. For the next 30 years, let us assume that the interest rate remains constant at 8%. The Rs.24,000 per annum investment at 8% will accumulate to Rs.29.36 lakhs.

This amount (Rs.29.36 lakhs) if reinvested again in FD at 8% interest will give annual interest of Rs.2.35 lakhs or a monthly interest of Rs.19,575 for life. Now compare with this the Rs.15,315 per month ICICI’s Retirement Plan. The FD comprehensively beats the returns of ICICI by a massive Rs.4,260 per month (21.8% more). And don’t forget that the FD return is more or less guaranteed where as ICICI’s 10% return in risky and market dependent (it could be less, or more). Also, the accumulated Rs.29.36 lakhs is preserved for passing on to the next generation

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## NGO accountability

Abroad NGOs are treated like any other business organization. Their accounts are audited and they even pay taxes (although at a very low rate and govt grants exceed the taxes paid). However in India most NGOs don’t audit their account. They might have assets worth millions of rupees, yet instead of a finance controller, there will be part time clerk who voluntarily (or at marginal salary) would update the ledger over the weekend.
Very few of the NGO’s in the country are self sustaining. Also even amongst those who are self-sustaining often require capex support whenever they want to expand their operations. There are Indian nationals, Govt of India, NRI or even foreign agencies which are more than willing to support these NGO in their noble causes. However if you take someone’s money, then it is expected that
a. You prove that you need the money
b. You have spend wisely whatever you have received
c. Share the results of the actions.
Unless all the above 3 are taken care of, the donor will not feel proud of his donation. It makes financial sense for the NGO also because a satisfied donor will not only repeatedly fund your cause, but will also promote and solicit funds from his/her friends.
The problem in India is that NGOs in India have evolved from the Trusts which the rich use to lessen their tax burden (both personal tax and wealth tax). Via inflated/fake bills the trustees used the trusts to fund their lavish lifestyle. I have known families were almost every member is on the board of different trust and they use it as an expense account to bill almost anything and everything to these trusts.

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## Indian Tea retail

It is said that anything that can/cannot be sold is sold online these days. However as one of my friend recently pointed out that neither ebay or any other online retailer actually houses a good selection of Indian Tea. I wonder what is the reason behind that:
is it because outside India (Asia) there is hardly any market, or the Levers and Tetley are doing such a good job in selling tea via traditional stores that online retail via ebay etc does not make sense.

Would like to have the viewers inputs on the possible reasons.