Honorable Prime Minister Mr. Narendra Modi formally launched the Digital India Project on 1st of July. The project, a pet scheme of the NDA government, aims to connect India by broadband Internet, promote e-governance and transform India into a connected knowledge economy. The possibilities and benefits of such a project, in time, will prove to be immense and trans formative in nature. With E-Commerce, it also has the seeds to change how we all deal with our financial activities. At this time, the need for acknowledging these under-currents of technology transformation in India cannot be overlooked. The question now arises, are we ready for Digital India? Are we going to be a part of it or refuse to change ourselves and stay stuck in the past? This article attempts to connects us, as investors, to a digital, on-line world on the go.

eCommerce in India:
The eCommerce sector has seen unprecedented growth in recent years. The increasing use of devices like smart-phones and tablets, easy access to internet, better internet speeds have driven rapid technology adoption and increase in consumer base across India. eCommerce is today seen spreading across a very wide range of products and services and set to grow further. It has changed the industry landscape and unsettled old players in industries like classifieds, training & education, financial services, communications, logistics, music, travel, transport, real estate broking, retail and so on. Apart from volumes, even value of transactions has increased many fold. For some it may be hard to believe that recently Tata Housing, a pioneer in online selling of flats, sold a villa worth Rs 5.50 Crores through its' ecommerce portal. eCommerce sector in India has grown by 34% (CAGR) since 2009 to touch 16.4 billion USD in 2014. eTailing, which comprises of online retail and market-places, has become the fastest-growing segment in the larger market having grown at a CAGR of around 56% over 2009-2014. There are projections for a growth of over 700% in next 5 years!

Case for Online Investments:
In the use of digital technologies, financial services in India lags behind other categories. Technology discontinuities such as the mobile Internet, cloud storage, automation of knowledge work, digital identity verification and digital payments provide tremendous opportunity to reinvent financial services. We are already seeing the change taking shape in banking industry where innovative solutions are emerging that allow you to make payments and transfer amounts. Today we can access information, compare and do research in virtually any financial product. The scope of products which you apply for and/or transact online today is larger than ever. The list is dominated by shares and mutual funds at the top followed by fixed income securities, insurance, loans, credit cards, etc. Since long we are used to having equity shares in the demat mode with online trading facility. Now there is an increasing awareness and appreciation for the advantages of going for online transactions in other financial products, especially mutual funds. To start investing online through mutual funds, the investors need to have a "NJ E-Wealth A/c" or Trading Account and Demat Account. While trading account is needed to undertake transactions, the online demat account is needed to hold the securities in dematerialised form.

Advantages of having NJ E-Wealth A/c Service:
Avoiding physical transactions: Among the greatest advantages of having NJ E-Wealth A/c is that you can completely avoid any physical transactions in mutual funds. Through NJ E-Wealth A/c, you would be able to make virtually every type of transaction like purchases, redemptions, switch, SIP and STP. Doing multiple transactions and inter AMC switches would is also possible through NJ E-Wealth A/c. Thus you save on time and efforts in filling form and form submission. With NJ E-Wealth A/c, transactions can be done instantly through the online NJ E-Wealth A/c Account, mobile application or through Call & Trade service.
With online transactions you would …

• Enjoy freedom to transact from anywhere, any time
• Save time & effort on form filling
• Avoid physical travel and submission process
• Ensure timely transaction processing and update on email /SMS
• Avoid manual mistakes of form filling and increase accuracy of transactions

Consolidation of All Holdings:
With a demat account, you would be able to see all your actual holdings of securities at one single place. This would avoid any confusion and cases of queries in terms of what your holdings are. You may no longer bother to collect and store account statements. Further, in addition to mutual funds, your demat account would also hold other securities like equity shares, bonds, ETFs, etc. One would also be able to apply in NFOs and IPOs through the demat mode. Having a consolidated holdings across different financial products would be challenge had things been in physical mode.
Here are the advantages in brief...

• Avoiding hassles of remembering, tracking and consolidating investments
• Actual, real-time holdings in your demat account
• Single holdings statement across products like mutual funds, equities, bonds and ETFs

Synchronisation of Investor Information:
One of the many problems of physical transacting is having to remember and manage investor information across multiple AMCs. Quite often important investor details may differ leading to many problems. Updating any such information proves very troublesome for any investor. With NJ E-Wealth A/c, we are no longer worried about such non-financial information and records as they are maintained at the single level and are applicable for all your holdings.

• Standard investor information like bank details, contact information, nomination, redemption payout mode, etc.
• Single window update of all investor related information.

Conclusion:
We have adopted technology in many parts of our lives, be it socialising, communicating, learning, traveling or shopping. But we are yet truly embrace technology in an area which perhaps is most important comes closest your financial well-being – investments. In line with the digital India vision and the trend in our own lives, it is now high time that we go fully digital on our investments front. Opening a NJ E-Wealth A/c is an one time exercise but which can provide you with a lifetime of advantages with its' promise of convenience, ease, efficiency, mobility, control and choice. Its' is high time that we undertake this important task of opening NJ E-Wealth A/c by approaching.

Here is a headline even a pessimist cannot doubt. Indian E-Commerce is on fire. The hottest e-commerce market in the world is not in US or China or but it's in India. Experts predict that the industry is poised to grow at a phenomenal rate of at least 50% year on year for next four years. What is driving this change? We take a quick look at the underlying reasons for this change. We also explore how we can adopt our evolving online behaviour over our traditional way of investing.

E-COMMERCE IN INDIA
Today, technology is something that has the power to change history in a very short time and there are numerous industries which have changed their character. The most amazing transformation is being seen in how we shop. The e-commerce industry in India is expected to grow at 40% CAGR from US$ 5.9 billion in 2010 to US$ 34.2 billion in 2015E. One interesting observation is that the e-commerce wave has come after we became more comfortable with the social media sites. Today, the digital world has penetrated every aspect of our lives, from ordering grocery, booking hotels, making friends, buying homes, searching jobs, selling old items and of course finding your spouse. To make things even better, we now have mobile devices connected to internet so that we can do things at any time, anywhere. There are a number of factors behind e-commerce boom and here are some key enablers and trends that you would like to know...

• Rising household income and spending ability. Annual household income rising from $2632 in 2005 to estimated $3823 in 2015.
• The rise of the great Indian middle class. Estimates for 2015 predict the share of households under the bottom of the pyramid as 29% compared 64% in year 2006.
• Falling mobile & computing device prices, internet costs and the rise in internet speeds. Internet penetration is up from 5m in 2000 to 140m in 2012 and estimated at 400m in 2016.
• Credit and Debit Card penetration increasing along with the value of transactions. Together, they have risen from 4.5m cards in 1999 and expected to cross 420m in 2015.
• Phenomenal growth of mobile e-commerce. In 2016, mobile shopping likely to be 27 times of that in year 2012. Mobile shopping grew 800% in 2013 alone

THE CHALLENGES
However, there are also challenges that the industry faces. The above numbers may look very optimistic but the fact remains that in a huge country like India, the share of organised retail online was only 0.3% compared to 8.7% of organised retail off-line and 91% of unorganised retail. There are also challenges of internet broadband speed which is minuscule compared to the speeds in US, Japan or European countries. The infrastructure and logistics is also a big challenge for the players. There are also questions whether the ecosystem consisting of payment gateways, technology, skilled manpower, regulations, supply chains, etc. can match up with the opportunity. The good news is that 2014 also marked an inflection point in the Indian politics with the formation of the new government. Clearly there is new found optimism and confidence. The government is playing its' cards well with initiatives like Jan Dhan Yojana, Digital India, projects like National Bill Payment System, National Optical Fiber Network, the focus on infrastructure coupled with policy & procedural revamp efforts. The initiatives are today laying foundation for a new, connected, efficient and digital India tomorrow.

UNLOCKING THE BEHAVIOURAL REASONS
There is no doubt a big sea change in how the Indian customer has evolved with time. Today he is not shy, afraid or illiterate to log on, create accounts, make posts, give orders and make payments. But what is driving this behavioral change? Here are some pointers that come to our mind...

1. Need for Convenience: Ease, comfort, efficiency and time savingsby going online.
2. Need for Choice: Availability is no longer an issue. Consumers can easily compare and choose from the many options available./li>
3. Need for Freedom: To be free from any dependence on physical stores, freedom from mobility, time and geographical restrictions. Any one can now transact any time and any where.
4. Need for Control: Being online is also about having a sense of control in your own hands at all times.
5. Increased Confidence: Much improved confidence in online brands and payment gateways.
6. Increased familiarity with technology: With almost everyone being a Facebook user, Indians are increasingly more comfortable with technology and are using same across different platforms.

EXPLORING POSSIBILITIES IN ONLINE INVESTING
Year 2014 saw the penetration of e-commerce to newer areas including health care, groceries, education, governance in India. However, there is one big area which is still relatively less penetrated – and its' “investing” online. Though, among investment products, online investing or perhaps 'trading' in equities has been already there for some time, its' suitability for retail investors has been in question.

Mutual funds, which is nothing but a vehicle to hold any asset class, is suitable for all kinds of investors. While India had very long ago shifted fully to the demat holding format for equities, mutual funds units are still being held by a vast majority in physical mode. Today one can hold mutual fund units in demat format just like shares. One can also very easily transact in mutual funds online. While we are very happy to benefit from ease of doing our transactions online and also fully understand the benefits of holding shares in demat form, a question must be asked – why are we reluctant to take the next step of transacting online in say, mutual funds?

No one can doubt the below list of the advantages that transacting & holding mutual funds and other financial products in online mode can offer...

1. Any Time, Any Where Investing: freedom from dependence on your financial advisor for processing transactions. With the advice, you can transact at your own convenience within matter of few seconds. There would be no time or geographical or mobility restrictions.
2. ncreased Accuracy & Efficiency: With freedom from paperwork, the chances of physical rejections, errors, etc. is almost eliminated and the overall system /data management gets much more efficient.
3. Know Your Holdings: your actual holdings in the demat account can be easily and accurately known at any time at just one place.This becomes a big challenge when the holdings are in physical format.
4. Better Information flow: With every online transaction, you can track the status of the transaction and also get instant alerts related to transactions requested. All information will be easily available on the online account.

WHAT YOU NEED TO DO?
It is high time that Indian investors truly adopt the online mode when in comes to managing their wealth. Today, in addition to equities, there are other products like mutual funds, Exchange Traded Funds (ETFs), Bonds, etc which are available in online mode. You can truly enjoy the benefits of freedom, convenience, control, choice and much more by taking the online route.

The journey of going online begins by opening of a Trading Account and Demat Account (NJ E-Wealth Account) with a registered distributor /broker. For this one time process, your financial advisor will help and guide you. After the opening of the Trading & Demat Accounts, you are good to begin transacting online in products of your choice. Your existing, physical mutual fund holdings can also be easily converted to the demat mode on submission of a simple request for mode conversion.

NJ E-Wealth Account with NJ
NJ India Invest Pvt. Ltd. a member of BSE & NSE and a registered DP with CDSL, also offers the services of Trading Account & Demat account with many unique features and benefits as listed below.

• Single Window Multiple Products– currently live segments are Mutual Fund & Capital Market. Even bidding for IPOs can be done through NJ NJ E-Wealth Account.
• Multiple modes of transactions (Online, Call & Trade, Mobile App and even Offline)
• Single access point for multiple AMCs and mutual fund schemes
• Inter AMC switch & STP is possible.

SUMMARY
We have been making giant strides in how we are connecting and transacting in our lives and are skilled in the usage of internet and mobile. Time has now come to also go digital and online with our investments. As we all know, the advantages are enormous and it is a matter of time that until the day when we all will be investing and managing our wealth online. And going by the trends, it feels like that time will be sooner than later. Many have already logged on, have you?

India had been an attractive investment destination for many years post liberalization of economy in 1990, and most of the times have remained true to the expectations as well. Though, the sentiments started turning negative by the end of second five year tenure of UPA, 2009 – 2014, due to multiple reasons including lack of reforms and policy impediments, and as you can see in figure 2, gap between the inflation and GDP growth had been very high in 2012-13 period.

This started to change with the democracy getting back on the strong governance formula and selecting a government with a clear mandate in a strong message to the polity of what the people really want.

 Result, economy started picking up the pieces and with definite measures slowly but surely coming India is once more an outperforming destination for investment.

The amount of investment a country attracts is also a factor in the growth story of that country. In case of our country more than 25 million strong NRI community forms a large investor base of foreign currency investment in the country. The rules of investments however, are much different for NRIs than those for resident individuals.

Our country has been among the world’s greatest beneficiaries of non-resident fund remittances to the country surpassing even the FDI flow.

Figure 1: BSE Sensex Performance

Figure 2: The Indian Growth Story 2007 - 2015

With such huge investments already flowing in, it becomes imperative for the investment advisors to understand the avenues available to NRI investors to safely invest their money and also what their needs could be.

Factors to Account For While Investing
For a resident individual investing in domestic market is simply a decision based on domestic factors like growth prospects and taxability, for an NRI on the other hand more than that should be accounted for:

• NRI status
• Investment Avenue
• Taxability
• Exchange Rate Factors
• Repatriation Needs

NRI Status
Knowing your NRI status is important, because of the different investment choices available to you as an NRI. While many times NRIs stay in a foreign country for many years before striking any change in their status, but if this status is supposed to change quickly, as in the case of a work visa, which may require you to stay on foreign soil at infrequent intervals.

Following conditions define your NRI status:

Figure 3: Determining Your Residential Status

INVESTMENT AVENUES FOR NRIS
NRIs may have multiple investment options to gain from Indian growth story in the way of India focused mutual funds, but many of these investments are regulated by the home country rules, and can only take a limited number of nonresident applications.

Direct investment in Indian instruments and markets are therefore, a preferable option for NRIs. For such investments RBI guidelines provide for two kinds of investment avenues for Nonresident Indians:

1. Investments with repatriation option
2. Investments without repatriation option

Investment on Repatriation Basis
Allowable investments with repatriation basis provide the NRIs avenues to invest earn and remit the earnings to their respective resident countries. List of the kind of securities is as follows:

• Government dated securities / Treasury bills
• Units of mutual funds operating in India
• Bonds issued by a public sector undertaking (PSU) in India
• Non-convertible debentures of a company incorporated in India
• Perpetual debt instruments and debt capital instruments issued by banks in India
• Shares in Public Sector Enterprises being dis-invested by the Government of India
• Shares and convertible debentures of Indian companies under the FDI scheme (including automatic route & FIPB)
• Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme.

There is no limit on the amount of money an NRI can put in these instruments, and repatriation means money invested in these instruments can be remitted to the foreign country in which the person is residing, thus making such investments attractive choice from the liquidity point of view.

Investment on Non-repatriation Basis
Money invested in these investment instruments cannot be taken back, and thus may prove to be a one shot investment and can be used only for investments in other Indian instruments. Such investments are:

• Government dated securities / Treasury bills
• Units of domestic mutual funds
• Units of Money Market Mutual Funds
• National Plan/Savings Certificates
• Non-convertible debentures of a company incorporated in India
• Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme,
• Exchange traded derivative contracts approved by the SEBI, from time to time, out of INR funds held in India on non-repatriable basis.

NRIs are not permitted to invest in small savings schemes and Provident Funds. Therefore, if one had been a resident and have invested in any such investments, after becoming NRI such investments once matured cannot be continued or repatriated.

Other Investment Avenues
Other than the instruments listed above, NRIs can also invest in immovable properties in India. By immovable property we generally mean the real estate sector. This sector has been one of the most attractive destinations for NRIs for long, mainly due to good value of returns and low volatility in prices. More than that, NRIs are allowed to repatriate the sale proceeds as well, unlike the debt instruments listed above.

TAXABILITY OF INVESTMENTS
Taxability of invested amounts is another factor which NRIs should account for while investing money. Tax issues for the top three investment choices can be explained as given below:

Debt Instruments
Investment in Debt can be made through Non Resident Ordinary (NRO), Non Resident External (NRE) accounts and Foreign Currency Non-Resident (FCNR) deposits. Taxability under these deposits and other eligible debt instruments is as follows:

 Figure 4: Taxability of Debt Investment by NRIs

Equity Instruments
Equity investments can be made in three ways by NRIs, either through FDI, through Equity Funds or through direct broking account for equity markets. These investments are routed through Portfolio Investment Schemes or Mutual Funds. Such investments will be taxed as following:

Figure 5: Taxability of Equity Investments by NRIs

Real Estate Investments
NRIs can invest without restrictions in residential, commercial or other properties with the following exceptions:

• Agricultural Land
• Farm Houses &
• Plantations

Although, investing in residential or commercial properties in the country is easy remittances and repatriation does require some attention. Some of the rules are simply explained below:

• Property Purchased by FCNR Funds: The repatriation cannot exceed the amount paid through this account.
• Property Purchased by NRE A/C Funds: The repatriation cannot exceed the foreign exchange equivalent of the amount in the NRE account.
• Property Purchased using NRO A/C Funds: The sale proceeds must be credited to your NRO account and you can repatriate to the extent of USD 1 million only.

Thus, participating in the great Indian growth story is going to be a lucrative option for NRI investors but unlike resident individuals, there are more rules and regulations to follow for non-residents. Also while investing in a foreign market exchange rates can play a crucial role in maximizing or minimizing the return from country’s growth. Looking at the current scenario Dollar is still trailing at above Rs. 60 levels which in itself are the one of the lowest levels in past three years. Therefore, this can be the best time to enter the market and benefit from both Indian economy and currency Exchange rate.

The following is an excerpt from Warren Buffett's latest annual letter to shareholders where he shares his thoughts on investing by narrating his experiences related to property purchases made by him in 1986 & 1993:

This tale begins in Nebraska. From 1973 to 1981, the Midwest experienced an explosion in farm prices, caused by a widespread belief that runaway inflation was coming and fueled by the lending policies of small rural banks. Then the bubble burst, bringing price declines of 50% or more that devastated both leveraged farmers and their lenders. Five times as many Iowa and Nebraska banks failed in that bubble’s aftermath than in our recent Great Recession. In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000, considerably less than what a failed bank had lent against the farm a few years earlier. I knew nothing about operating a farm. But I have a son who loves farming and I learned from him both how many bushels of corn and soybeans the farm would produce and what the operating expenses would be. From these estimates, I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out.

I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside. There would, of course, be the occasional bad crop and prices would sometimes disappoint. But so what? There would be some unusually good years as well, and I would never be under any pressure to sell the property. Now, 28 years later, the farm has tripled its earnings and is worth five times or more what I paid. I still know nothing about farming and recently made just my second visit to the farm.

In 1993, I made another small investment. Larry Silverstein, Salomon’s landlord when I was the company’s CEO, told me about a New York retail property adjacent to NYU that the Resolution Trust Corp. was selling. Again, a bubble had popped – this one involving commercial real estate – and the RTC had been created to dispose of the assets of failed savings institutions whose optimistic lending practices had fueled the folly.

Here, too, the analysis was simple. As had been the case with the farm, the unleveraged current yield from the property was about 10%. But the property had been undermanaged by the RTC, and its income would increase when several vacant stores were leased. Even more important, the largest tenant – who occupied around 20% of the project’s space – was paying rent of about $5 per foot, whereas other tenants averaged $70. The expiration of this bargain lease in nine years was certain to provide a major boost to earnings. The property’s location was also superb: NYU wasn’t going anywhere.

I joined a small group, including Larry and my friend Fred Rose, that purchased the parcel. Fred was an experienced, high-grade real estate investor who, with his family, would manage the property. And manage it they did. As old leases expired, earnings tripled.

Annual distributions now exceed 35% of our original equity investment. Moreover, our original mortgage was refinanced in 1996 and again in 1999, moves that allowed several special distributions totaling more than 150% of what we had invested. I’ve yet to view the property. Income from both the farm and the NYU real estate will probably increase in the decades to come. Though the gains won’t be dramatic, the two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren. I tell these tales to illustrate certain fundamentals of investing:

• You don’t need to be an expert in order to achieve satisfactory investment returns. But if you aren’t, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don’t swing for the fences. When promised quick profits, respond with a quick “no.”
• Focus on the future productivity of the asset you are considering. If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn’t necessary; you only need to understand the actions you undertake.
• If you instead focus on the prospective price change of a contemplated purchase, you are speculating. There is nothing improper about that. I know, however, that I am unable to speculate successfully, and I am skeptical of those who claim sustained success at doing so. Half of all coin-flippers will win their first toss; none of those winners has an expectation of profit if he continues to play the game. And the fact that a given asset has appreciated in the recent past is never a reason to buy it.
• With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations. Games are won by players who focus on the playing field – not by those whose eyes are glued to the scoreboard. If you can enjoy Saturdays and Sundays without looking at stock prices, give it a try on weekdays.
• Forming macro opinions or listening to the macro or market predictions of others is a waste of time. Indeed, it is dangerous because it may blur your vision of the facts that are truly important. (When I hear TV commentators glibly opine on what the market will do next, I am reminded of Mickey Mantle’s scathing comment: “You don’t know how easy this game is until you get into that broadcasting booth.”)
• My two purchases were made in 1986 and 1993. What the economy, interest rates, or the stock market might do in the years immediately following – 1987 and 1994 – was of no importance to me in making those investments. I can’t remember what the headlines or pundits were saying at the time. Whatever the chatter, corn would keep growing in Nebraska and students would flock to NYU.

There is one major difference between my two small investments and an investment in stocks. Stocks provide you minute-to-minute valuations for your holdings whereas I have yet to see a quotation for either my farm or the New York real estate.”

KEY TAKEAWAYS:
Equity investors, on the whole, buy equities with a longer term perspective but tend to get influenced by the following factors resulting in them behaving irrationally:

• Irrational behavior of other equity investors in the market
• Vast amount of information available about the markets, economy, interest rates, price movement of stocks etc.
• Market 'gyan' shared by stock experts in leading newspapers and TV channels. The implied message being delivered to so-called rational investors is “don't just sit there, do something.”

A lot of times, just remaining passive and not doing something is the most sensible and beneficial (in the long run) course of action.

Warren Buffett's latest newsletter is available on the Berkshire Hathaway's website at the following link:
http://www.berkshirehathaway.com/letters/letters.html