Business

In today’s world a nagging question for many Indians is, Will I have enough money to last through retirement?

It’s a valid worry. Life expectancy, already about 72.5 years, is expected to cross 85 by the end of this century. At the same time, healthcare costs are rising. And inflation? That’s silently eroding the value of our money year after year. A recent survey showed nearly 4 out of 10 working Indians fear they might outlive their savings. So, what can you do?

Long retirement years

If you retire at 60 and live till 85-90, retirement can easily last 25-30 years. That’s almost equal to your working life. Let’s say you plan to spend ₹50,000 a month in retirement or ₹6 lakh a year. Over 30 years it’s ₹1.8 crore without accounting for inflation.

Now add inflation at, say, 6%. That ₹50,000 monthly budget could become ₹1.6 lakh in 20 years. And that’s why you need more than a “big enough” retirement corpus. You need a strategy that helps your income keep up with rising costs. Let’s look at some key risks which can erode your wealth.

Think ₹1 crore is enough? At 6% inflation, the real value of that corpus halves in 12 years. To counter the effects of inflation, you should keep a portion of savings invested in inflation-beating assets that invest in equity market. Unit-Linked Pension Plans are specifically designed to help you build a retirement corpus which helps generate guaranteed income after retirement.

These plans work best if you start investing early. A ULIP Pension Plan has two phases: Accumulation phase and payout phase. During working years, you accumulate a big corpus by investing regularly and earning market-linked returns on the investments. And when you retire, you can withdraw a certain portion (up to 60%) of corpus tax-free and also get regular guaranteed income from balance amount.

A great feature is you can invest in a mix of equity and debt funds and switch between them. So you can stay equity-heavy in accumulation phase for faster growth and when nearing retirement you can remain debt-heavy to preserve capital.

Medical inflation Healthcare costs in India are rising by 12–14% annually. This problem has a simple solution: health insurance. A comprehensive health insurance policy with lifetime renewability can ensure you won’t have to dip into savings for any medical emergency. You must also explore topping up your insurance plan.

Longevity risk

If you’ve planned finances to last till 80 but live till 90, you could run out of money. The guaranteed regular income from Pension ULIPs on maturity ensures you get income for life irrespective of age.

Withdrawals Pulling out big chunks for lifestyle expenses or emergencies early in retirement can put strain on future needs. Unit Linked Pension Plans ensure at least 40% of corpus is set aside to give you guaranteed return for life, thus securing your retirement.

Thus, Pension ULIPs help you to counter these risks by providing the flexibility of partial withdrawals allowed for specific life events while the discipline of ensuring 40% of corpus is always set aside to give you guaranteed returns for life ensures you never run out of money. The rest can be withdrawn tax-free under Section 10 (10A) and Clause 23AAB of Income Tax Act, 1961

You can also consider National Pension Scheme (NPS), a government-backed plan which allows up to 75% of contributions to be invested in market-linked instruments with balance in safer debt options. Once you hit 60, at least 40% of the corpus goes into an annuity, giving a steady, guaranteed income for life.

A checklist

Figure out how much monthly income you need to live a comfortable life post retirement. Then use the 4% rule to arrive at the corpus size. For example, if you need ₹50,000 every month, then you need a corpus of ₹1.5 crore. But if you are expecting to retire after a decade or two, you need to adjust this number for inflation.

Rupee cost averaging Markets go up and down. But over time, consistent investing pays off. By consistently investing in unit linked pension plans you ensure you earn higher number of units when markets fall and lower number of units when markets rise. This helps grow your corpus irrespective of market conditions. That’s rupee cost averaging. So start early, stay consistent and let compounding do its magic.

Investing early Starting to invest early helps save more and investments get time to grow. With right planning, retirement can be one of the most rewarding chapters of your life.

(The writer is head, Investments, Policybazaar.com)

Goods and Services Tax (GST)

NEW DELHI:

Goods and services tax (GST) collections rose 16.4% to Rs 2,01,050 crore in May, the fastest pace of expansion since Oct 2022, on the back of a jump in taxes on imports.Latest data estimated that during May (for transactions in April), GST collections from imports rose 25.2% to Rs 51,266 crore, while the mop-up from domestic sources, which is almost three-fourths of the overall kitty, was 13.7% higher at just under Rs 1.5 lakh crore.

Imports during April had shot up 19% to nearly $65 billion due to a spike in crude oil and fertiliser shipments, among other things. “A 16% growth in GST collections shows a renewed upward momentum after few months of growth in the range of 11% to 12%. If the growth continues in this range for next couple of months, it might provide the cushion for govt to look at rate rationalisation on which a lot of work has already been done,” said Pratik Jain, partner at consulting firm PwC.Last week, govt sources indicated that the finance ministry is working with the states to rationalise GST rates with a review of the slabs on the table. On a net basis, collections were 20.4% higher at Rs 1,73,841 crore as refunds were 4% lower at Rs 27,210 crore, despite domestic refunds soaring 53.7% to Rs 18,314 crore.There was, however, wide variation among the states. Arunachal Pradesh (53%), Nagaland (46%) and Delhi (38%) topped the growth charts, with Tamil Nadu (25%), Kerala (24%), Bihar (23%) and Karnataka (20%) in the middle. At the other end, were Andhra (2% dip), Uttarakhand (13% decline) and Mizoram (26% fall) which reported lower collections.“The average growth across the country does not appear to be uniformly reflected across states, possibly due to sectoral or seasonal factors, which require a deeper data based analysis, said M S Mani, partner for indirect taxes at Deloitte India.

MUMBAI: Bank lending to non-banking finance companies slowed sharply in April, with outstanding loans to the sector falling by Rs 25,512 crore to Rs 16.1 lakh crore. At the end of March 2025, bank credit to NBFCs stood at Rs 16.4 lakh crore, marking a modest growth of 5.7% in FY25.This was significantly lower than the overall bank credit growth of 11% during the year, to Rs 182 lakh crore, indicating a cooling in lending appetite toward shadow banks.The slowdown in credit to NBFCs was part of a broader trend. Lending to large industries also moderated in April. The share of loans to large corporates declined to 15% of total bank credit, down from 16% at the end of March 2024. In comparison, housing loans now account for a larger share at 16.6%, underlining the shift in bank lending preferences toward the retail segment. Overall, the industry’s share in total bank credit fell to 21.4% from 22% a year ago.Bank loans to individuals against gold jewellery continued to grow adding Rs 3,427 crore during April 2025 taking the total outstanding to Rs 2.2 lakh crore. In FY24, bank loans against jewellery had risen 103% to Rs 2.08 lakh crore a large part of which was due to reclassification of gold-backed agri loans.Data from 41 major scheduled commercial banks, which account for about 95% of all non-food credit, showed that year-on-year bank credit growth stood at 12% in the fortnight ended March 21, 2025. This was lower than the 16.3% growth recorded in the same period last year, reflecting a broad deceleration in credit expansion.Credit to agriculture and allied activities grew by 10.4% in March 2025, compared to 20% in the corresponding period last year. Lending to industry rose by 8%, the same as the previous year. While sectors such as petroleum, metal products, engineering, and construction saw higher credit offtake, lending to infrastructure slowed. The services sector also saw a deceleration, with credit rising by 13.4%, down from 20.8% a year earlier. This was mainly due to a sharp slowdown in bank loans to NBFCs, although credit to professional services and trade remained robust.In the personal loan segment, growth eased to 14% from 17.6% in the previous year. The deceleration was mainly due to lower growth in vehicle loans, credit card outstandings and other personal loans, indicating a cooling in consumer demand for credit.

Campbell Wilson, Air India

Tata Motors shed its “taxi” image after the acquisition of UK’s JLR when it started to churn out world class cars. Vistara’s merger into Air India could prove to be a similar moment for Air India as the Maharaja has crossed more than half way of the transition to become a much better airline that was promised when Tatas took over AI and AI Express in Jan 2022. In a freewheeling interview, AI MD & CEO Campbell Wilson discusses the airline’s revamp, the IndiGo wet lease controversy and regulatory challenges. Excerpts:Why has revamping of old planes, especially wide bodies, taken longer than anticipated?We are getting the ordered new planes, including Boeing 737 MAX for AI Express and will get a B787 & Airbus A350 for AI this fiscal. So, they are coming. But they are later than we had originally contracted to receive them for reasons Boeing and Airbus can tell you. Depending on the 6 to 12 months (delay), this is a little bit frustrating for all involved, including the original equipment manufacturer. But it’s an industry issue. The other thing that has caused challenge to the original timelines is the certification, production and installation of business class seats, in particular on the legacy aircraft. So, the refit programmes, which we had hoped to have largely completed by now on the wide body fleet, are still underway. Why does on time performance (OTP), again particularly for long hauls on wide bodies, remain a challenge?OTP of international flights on wide body fleets is improving significantly. It’s not where we want it to be. There are a few reasons for that. The aircraft were terribly neglected, not well maintained and have old components. They hadn’t kept paced with the advances in technology. All of that needed to be replaced and upgraded. It is taking time, particularly because of supply chain constraints. But technical despatch reliability of aircraft has gone materially up. Has it reached the global average? In some cases, yes. But in most cases, no, because there is still more work to do. There were several other issues, which are being taken care of, including AI not recruiting people for 20 years before privatisation. The staff not being exposed to contemporary best practices. People had been promoted because of tenure, not talent. That had needed to be changed. That takes time.

Are you satisfied with pace of change at AI Group?We’ve completed the merger of four airlines. We finished the year with an OTP that was higher than Vistara. The financial trajectory, particularly for the full service carrier, is going very well. New Air India is in service to New York and to London with the A350. Passengers are very pleasantly surprised on what we are delivering on that. . We have a training academy now seeing 2,000 people being trained and upgraded today. All of the foundation pieces that are necessary to build the future Air India, are either in place or coming up. We’ve achieved a lot and there’s clear evidence that things are on the right track.Are you having a relook at your tie-up with Turkish Technic, following the country’s role during Operation Sindoor?We are reviewing our agreement with Turkish Technic where we send some of our wide bodies for checks. It takes some time to adjust when the situation changes. But we are aware of the national sentiment and what people expect us to do. We will look to recalibrate where we send our aircraft. We are looking at options to send our planes for maintenance repair and overhaul.IndiGo is wet leasing planes to launch long hauls. What do you feel about wet lease policy?There’s a place for wet lease for short-term capacity augmentation. (However) it can be abused in terms of duration. It can be abused in terms of circumventing air traffic rights between countries. Ultimately, it’s something that regulator needs to have a view on.

UPI transactions hit new high in May but cash still thriving

MUMBAI: Even as the country hurtles toward a digital future with the Unified Payments Interface (UPI) clocking 60 crore transactions a day, a curious contradiction persists: cash is thriving.In the month of May, UPI transactions hit a a record 1868 crore transactions for Rs 25.1 lakh crore, up from 1789 crore (Rs 23.9 lakh crore) in April.However, at the end of March, currency in circulation was a record Rs 36.86 lakh crore. The Rs 500 note, in particular, has become the dominant form of cash, making up 41 per cent of all banknotes by volume and accounting for a staggering 86 per cent of total value. In contrast, smaller denominations such as Rs 20, Rs 50, Rs 100 and Rs 200 together account for less than that, both in number (35.6 per cent) and value (10.9 per cent) -despite the state’s push for a more granular, digitised cash economy.Finance minister Nirmala Sitharaman recently reiterated the government’s commitment to smaller denominations and digital payments, noting efforts to ensure that “currency will be in the lower denominations, used much more than the higher.” In April, the Reserve Bank of India mandated that by Sept 30, 2025, at least 75 per cent of ATMs must be capable of dispensing Rs 100 or Rs 200 notes, with this figure rising to 90 per cent by March 2026. The goal is to reduce dependence on high-value notes and improve everyday transactional ease.Yet the resurgence of cash is not driven by transaction needs. Bankers say the phenomenon is better explained by precautionary hoarding, a behavioural legacy of the Covid pandemic. An RBI study supports this view, drawing links between cash usage and perceived economic insecurity. The study, intriguingly, uses satellite images of nighttime illumination as a proxy for economic activity. It finds a correlation between brighter regions-indicative of higher GDP and tax collection-and lower currency use. As formal economic activity rises, cash in circulation tends to fall. The recent spike in cash, the RBI suggests, reflects a lingering preference for liquidity in uncertain times.This is not unprecedented. From 2005 to 2014, the rapid rollout of ATMs corresponded with a drop in household cash holdings, as easier access reduced the perceived need to store wealth in physical currency, the RBI study said. But the pandemic has reversed some of that progress. For now, even in a nation where Rs 10 can be paid by QR code, cash-especially in large denominations-continues to loom large.The RBI has successfully withdrawn most of the Rs 2000 banknotes from circulation without any disruption. The recent comments by the finance minister and the RBI have led many to believe that measures to reduce Rs 500 banknotes may be in the offing.

Representational file image.
| Photo Credit: P.V. SIVAKUMAR

The price of jet fuel, or ATF, was on Sunday (June 1, 2025) slashed by 3% – the third straight monthly reduction on softening international benchmark prices.

The fall in international benchmark oil and gas prices also led to a ₹24 per 19-kg cylinder cut in rate of commercial LPG used in hotels and restaurants.

The price of aviation turbine fuel (ATF) was reduced by ₹2,414.25 per kilolitre, or 2.82%, to ₹83,072.55 per kl in the national capital – home to one of the busiest airports in the country, according to state-owned fuel retailers.

The price cut follows a 4.4% (₹3,954.38 per kl) reduction on May 1 and a steep 6.15% (₹5,870.54 per kl) reduction effected from April 1. Together with Sunday’s reduction, the price cuts have more than offset the hikes that occurred earlier this year.

A reduction in price of ATF will ease the burden on commercial airlines, for whom fuel makes up for almost 40% of the operating cost.

No immediate comments could be obtained from the airlines on the price reduction.

The ATF price in Mumbai was slashed to ₹77,602.73 per kl from ₹79,855.59, while those in Chennai and Kolkata were reduced to ₹86,103.25 and ₹86,052.57 per kl, respectively.

Oil firms also reduced the price of commercial LPG by ₹24 per 19-kg cylinder. Commercial LPG now costs ₹1,723.50 in the national capital and ₹1,647.50 in Mumbai.

This reduction follows a ₹14.50 cut on May 1 and a ₹41 per cylinder cut in rate effected on April 1.

International oil prices have softened in the last couple of months as global trade war eroded the outlook for fuel demand.

Prices of ATF and LPG differ from state to state depending on the incidence of local taxes, including VAT.

The rate of cooking gas used in domestic households, however, remained unchanged at ₹853 per 14.2-kg cylinder. The price of the domestic LPG was hiked by $50 per cylinder in April.

State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) revise prices of ATF and cooking gas on the first of every month based on the average price of benchmark international fuel and foreign exchange rate.

While international oil prices have softened, domestic rates of petrol and diesel continue to remain frozen. Rates were cut by ₹2 per litre in mid-March last year, ahead of the general elections. Petrol costs ₹94.72 a litre in Delhi, while diesel is priced at ₹87.62.

Emirates Airline President Tim Clark. File.
| Photo Credit: Reuters

India’s aspirations to develop hub airports for connecting passengers and grow economically are not “compatible” with its restrictive policies for foreign carriers, Emirates President Tim Clark said on Sunday (June 1, 2025), adding that the airline won’t be able to provide flights for the upcoming second airports in Delhi and Mumbai to open shortly.

“To grow hubs in the aviation world you have to have open access. It doesn’t work one way,” Emirates President told journalists on the sidelines of a three-day global airlines event being hosted by International Airline Transport Association. Mr Clark has been urging the Indian government to raise the number of seats airlines of Dubai and India are allowed to fly into each other’s territory.

“When you look at the other aspects of Indian economy- defence, media, technology- the government here is minded to expand those as quickly as it can. It’s not compatible with that expansive economic policy to restrict their access.”

The UAE has requested the Ministry of Civil Aviation to raise the seat capacity of 66,000 seats allowed to the airlines of the two sides to 1,40,000 seats. The UAE has also offered a 4:1 seat sharing ratio between the two sides, which will imply that Dubai will offer four seats to India for every additional seat offered by the latter to the former.

While Emirates has the highest number of flights deployed to India, the country’s importance for the airline is diminishing.

“It’s no longer as significant as it used to be because of the restriction on capacity,” Mr. Clark said.

Until last summer, Emirates had 171 weekly flights to India, followed by 133 weekly flights to the U.K. and 96 weekly flights to the U.S. In the absence of more seats from India, Emirates will also be unable to deploy flights for the upcoming second airports in Delhi and Mumbai, i.e Noida International Airport and Navi Mumbai airport.

NEW DELHI: Housing sales in India’s tier-II cities witnessed a mixed performance during the January-March quarter of 2025, with a decline in volume but an increase in value, according to data from real estate consultancy PropEquity, as reported by PTI.A total of 43,781 housing units were sold across 15 tier-II cities in Q1 2025, marking an 8 per cent drop from 47,378 units in the corresponding period last year. However, the overall transaction value rose 6 per cent to Rs 40,443 crore, up from Rs 38,102 crore a year ago.The analysis covered cities including Ahmedabad, Surat, Vadodara, Gandhinagar, Nashik, Nagpur, Goa, Lucknow, Jaipur, Mohali, Visakhapatnam, Kochi, Coimbatore, Bhopal, and Bhubaneswar.Explaining the contrasting trends, PropEquity Founder and CEO Samir Jasuja said, “The lesser supply in March quarter resulted in lower sales in tier 2 cities. State capitals performed relatively better.” He added that demand continues to be supported by improvements in infrastructure.Jasuja also pointed to monetary policy as a potential driver for future growth. “RBI has made 50 basis points cut in repo rate since January 2025 and is expected to cut rates further. As this gets transmitted by banks, home loans will decline going forward thereby giving a boost to housing demand,” he said.Among the cities, Lucknow led with a 25 per cent year-on-year increase in units sold at 1,301, followed by Coimbatore (21 per cent), Gandhinagar (18 per cent), and Mohali (2 per cent). In contrast, 11 cities saw a fall in sales, with Visakhapatnam registering the steepest decline at 37 per cent.Ahmedabad, the largest among the surveyed markets, saw a marginal 1 per cent dip in sales volume to 14,583 units. However, the total value of transactions in the city rose 7 per cent to Rs 13,565 crore, compared to Rs 12,730 crore in the same quarter last year.NeoLiv Founder and CEO Mohit Malhotra said tier-II cities are increasingly becoming prominent housing markets. “Tier-II cities are rapidly emerging as prominent housing markets, driven by expanding corporate presence, employment opportunities, and aggressive infrastructure development. These cities are witnessing a transformation fuelled by strategic public and private investments. This has led to a surge in demand and property prices across various micro-markets,” he said.Royal Green Realty Managing Director Yashank Wason also noted the growing appeal of emerging markets. “As metropolitan regions face saturation, these cities offer a compelling blend of opportunity and lifestyle, positioning them at the forefront of India’s next real estate growth wave,” he said, naming Indore, Sonipat, and Rohtak among those benefiting from rapid infrastructure development.VS Realtors Founder Vijay Harsh Jha expressed optimism about the future of tier-II housing markets. He said the current decline in sales is temporary and anticipated strong economic growth, along with lower home loan rates, will revive demand.

Ernst & Young (EY) India’s Chairman and CEO, Rajiv Memani, has assumed office as the President of the Confederation of Indian Industry (CII) for the 2025-26 term, the industry lobby said on Sunday, June 1, 2025.
| Photo Credit: PTI

Ernst & Young (EY) India’s Chairman and CEO, Rajiv Memani, has assumed office as the President of the Confederation of Indian Industry (CII) for the 2025-26 term, the industry lobby said on Sunday.

He takes over from Sanjiv Puri, Chairman and Managing Director of ITC Ltd.

Mr. Memani is also a member of the EY Global Executive Board, serving as the Chair of its Growth Markets Council.

R. Mukundan, Managing Director and CEO of Tata Chemicals Ltd, has taken over as CII President-Designate for 2025-26.

Mr. Mukundan joined the Tata Administrative Service in 1990, after completing his MBA at the Faculty of Management Studies (FMS), Delhi University. He is a distinguished alumnus of IIT Roorkee, a Fellow of the Indian Chemical Society, and an alumnus of Harvard Business School.

Suchitra K. Ella, co-founder and Managing Director of Bharat Biotech International Ltd, has taken over as CII Vice President for 2025-26. She was instrumental in founding Bharat Biotech in 1996.