You go out on a Saturday morning for a game of cricket. Your team wins the toss and you start batting. It is 10 overs a side and your side scores 55. You consider this a good score, and are happy with that. You are a little disappointed with the 4 LBW decisions which went against you, but you have no choice now.

Just as the other team is supposed to start batting you are told…’we have considered ..and decided that for the other team there will be no LBW’ – now go and bowl.

Would you feel somebody hit you in your solar plexus?

You do not think that the Rules of the Game should be changed HALFWAY through the game.

However, please be sure that there is only ONE opponent who can do this. The Ruling Government.

They give you products with many terms and conditions. YOU have to anticipate that this will change. YOU cannot assume that the rules will remain permanent. THEY tell you that the rules can change. That is the risk.

Now what do you believe about PPF?

it is tax free

you will always get around 8% interest or higher (but Subra sir it has never gone below that you know?)

it can be extended permanently

you can withdraw some %age after 7 years of being invested

Let me tell you what changes you should expect from a government which is perennially short of funds:

1. Each installment is locked in for 15 years (like elss)
2. Interest will be 8% till the balance reaches Rs. 20L but after that it will be 5%
3. Cap of Rs. 50 Lakhs. Beyond that there will be no interest.
4. For people with more than Rs. 50L income PPF interest will be taxable
5. There will be a 1% TDS on withdrawal – you can claim it as a refund.

Outlandish? No. Governments have done things far far worse than this.

Your heart will bleed if you see what the government has done to small farmers. I am stunned that they have not just gone beserk and done something like the October revolution of 1917. This is very small.

You want proof? If you are below 50 years of age go and ask your parents about a scheme called CDS – Compulsory Deposit Scheme started by Ra Ga’s grandmother. It worked as follows – 10% of your income would be deposited in a bank account called ‘cds’ and will be returned to you after one year. So next year you would pay again, but you will also get your previous year’s contribution.

IG just said ‘we will not pay now’…then the scheme itself got abolished.

IG again – this time with National Savings Certificate. When the paper was issued we were told it will double in 5 years. One day in June IG woke up and said ‘all nsc issued from Jan..will double in 5.5 years’ – she REDUCED THE INTEREST rate AFTER you had contracted and invested. Of course you could do NOTHING.

So what is legislative risk?

Legislative risk is the risk of some future PM or FM changing the law to suit them without worrying what impact it has.

I have NOTHING against such changes. Stop pretending that you are prepared for it. YOU ARE NOT. Sorry for holding the mirror to your face….