My Dear Fellow Niveshaks

Have we ever given a thought on why do we, “The investors”, invest in various financial instruments? Well yes. Most of us know the obvious reasons of savings, returns and reducing tax liabilities; which in turn garner our financial health. One financial instrument which has gained popularity off late is ULIP (Unit linked Insurance Plan). But the recent turmoil in the insurance industry caused due to the turf war between market regulator SEBI and insurance regulator IRDA has raised a question before us that whether ULIPs are good or not for our financial health as well as for the whole insurance industry per se. While we are familiar with the benefits, some of the facts about it do throw light on the other side of the coin.

Many investors complain about ‘misselling’ and report that insurance agents guide them towards ULIPs. However, this is not true. Agents’ behavior is driven by the commissions paid on various products. In order to avoid compliance with SEBI’s low cost and high transparency regime, insurers dress up market linked products as insurance products by adding a small percentage of insurance to it. An article in this issue delves deep into this topic to provide you the finer details and intricacies of this bone of contention between the two regulatory bodies. Whether the government will come to the rescue of ULIP victims or whether the powerful insurance industry will succeed in maintaining the status quo remains to be seen. However, regardless of what happens, I see the recent events as a great step forward for the Indian investor.

Our Sensex and other major global indices took a hit few days back when Greece’s economic crisis sent shivers of apprehension across the globe over concern that it could spread like wildfire through Europe and beyond. This crisis makes us ponder over a point that whether fiscal deficits do matter or not given the fact that India has run fiscal deficits of up to 10% of GDP for three decades, yet has enjoyed record growth. On the other hand, European countries that ran high fiscal deficits in good times, and went for even bigger deficits to provide a Keynesian stimulus out of the Great Recession — Greece, Portugal, Spain, Ireland and Italy — are in serious trouble. Our cover story gives a comprehensive coverage of this crisis including its origin, spread, debt restructuring and the impact on the euro.

For the current issue, I, on behalf of the whole team Niveshak, welcome Mr. Rajeev Karwal, CEO and Founder Director of the venture catalyst firm “Milagrow”. Known for his strategic abilities and excellent execution, Mr. Rajeev has worked on startups, turnarounds and more in a career spanning over 25 years. His contribution to the start-ups of Onida, LG and Reliance Retail has given the world a peek into his scale-up and start-up expertise. Winner of India’s Young Manager Trophy 2001, awarded by Confederation of Indian Industry, he has many such laurels under his belt. In the interview with Team Niveshak, he talks of how did he come up with the idea, philosophy and mission of Milagrow. To know more about his views on Micro, small and medium enterprises and their roles in the economic growth of a country, turn to “HeSpeakth” section.

Happy Investing.