New options for investments

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Haryana: The Boomtown.
Haryana: The Boomtown.

Talk of investments in India and even the sky can no longer be called the limit. New instruments, both debt and equity oriented, are coming into the market with fair regularity. New offerings from mutual funds claim to calm the nerves of those with an aversion to the choppy stock market.

Vying with the MFs are a dozen or more insurance policies designed to suit every pocket and need.

There are unit-linked schemes (ranging from high-risk-high-return to low-risk-low-return), term insurance and endowment policies, both with a propensity to tap the bond market.

Then, there are the time-tested postal savings and fixed deposits as also a variety of bonds that seek to mark the country's resurgence on the infrastructure front. Indeed, a plethora of saving options that keep most of us fairly happy.

So little did I expect Vijay Pande, my driver for a day in Delhi last week, to offer fresh insights into investment options.

It took Vijay, who began as a driver in Panipat in 1997, three years to save enough to make his first investment of Rs 50,000. It was a 50-


(square yard) plot in a small colony coming up outside Panipat and he sold it for Rs 1,10,000 in 2001.

"Chautalaji (the then Haryana Chief Minister, Mr Om Prakash Chautala) was going in for a lot of development of the State. And the major investment opportunity was in land, if you had the patience," said Vijay.

Then he invested in a 100 square yard plot but remained stuck with it for almost two years, a period that was marked by uncertainty and despair. "I managed to sell the plot for about Rs 2.6 lakh. By then I had a fair idea that Sector 18 in Panipat was going to see a major boom, though not immediately. I bought a 140-


plot there for about Rs 4 lakh," Vijay said.

Two years on, the Haryana government has begun developing the sector and the going price is Rs 18 lakh for a 140-square yard plot. He is now sure the price will touch Rs 25 lakh in a matter of months.

Not unlikely, as the area has been identified by the likes of Reliance Industries and Ansal Properties for growth.

Vijay, all of 29 years old, who shifted to Delhi last year, is clear that he will retire with Rs 25 lakh to his home town of Mau near Varanasi, that has been witnessing riots following the blasts in the temple city.

Vijay plans to start an automobile service station there by the year-end. It will be a Rs 30-lakh project; banks are giving enough loans these days. Of course, he will continue with his investments in land, as most villagers like him are wont to do.

I was planning to tip him Rs 100 before he came out with this discourse on investment options. Now, I am not too sure.

Vinod Mathew

(This article was published in the Business Line print edition dated March 15, 2006)
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