Sales of beauty products get boost from recession

Tough economic times are boosting sales of beauty products and designer jeans as women put more emphasis on looking good and attracting a partner, according to a university study.

Researchers in Texas found that a downturn in the economy has a positive impact on the beauty industry, in what has been dubbed the "lipstick effect" and that price is not an issue.

"Although both men and women downsize consumer spending in response to recession cues there is an exception to this and this is beauty products," said Sarah E. Hill, an assistant professor of social psychology at Texas Christian University in Fort Worth.

"Women have an increased desire to purchase these products in response to recession cues," she added. "Even though they are closing their purse string for other things, they are wanting to splurge on things that can make them attractive."

A downturn in the economy has been linked to an upswing in beauty sales since the Great Depression, according to Hill, whose research is published in the Journal of Personality and Social Psychology.

Figures from market research company NPD Group Inc support the phenomenon. Their numbers show that skin care, makeup and fragrance sales increased 11% in the United States in 2011 compared with the previous years.

China, Mexico and Argentina also had double digit rises in beauty product sales last year, while sales increased 9% in Britain and 3% in France.

Hill and her team examined how and why economic recessions influence women's consumer behavior in a series of experiments. They used real world spending data and asked consumers whether they would buy a series of products after giving them recession cues.

They found that men did not want to buy anything. Women also showed no interest in products that did not enhance their attractiveness.

"But we did find that there is this robust lipstick effect," she said.

Hill believes it is the first time the lipstick effect has been demonstrated in experiments and that it is driven by a desire attract a partner.

"Women consciously want to do something that makes them feel good about themselves, but ultimately we found that it is these things that make them feel good about themselves that make them more attractive to mates," she added.

BoI cuts FD rates by 0.25% on select maturities

Bank of India (BoI) today slashed interest rate on fixed deposits by 0.25% on select maturities.

Interest rate on fixed deposit for maturity between 2-3 years has been reduced by 0.25% to 9%, while 1,111-days term deposit will attract 9.10% as against 9.30%, state-run BoI informed the BSE.

With the revision, BoI's interest rate on 3-10 years fixed deposit would come down to 9% from 9.25%.

The Mumbai-based bank had last revised the interest rate on fixed deposits on March 22 this year.

The new rates are effective from July 2, it said. However, interest rates on other maturities remain unchanged.

State Bank of India on the contrary had raised interest rate on select fixed deposits by 0.25% last week. SBI's term deposits of three years but less than five years earns an interest rate of 9%, up from 8.75%. A hike in interest rate by SBI is surprising also because it followed a cut of 0.20% in base rate by private lender HDFC Bank .

Meanwhile, another public sector lender Union Bank of India also slashed interest rate on various categories of farm loans by up to 1.75%. Union Bank will offer crop loans, investment credit and loans for allied activities up to Rs 50,000 at base rate only.

The interest rate for lending to self help groups (SHGs) has also been reduced by 1.75%, Union Bank of India said in a statement today.

The revised interest rates are effective from July 1. At present, the base rate of Union Bank of India is 10.50%.

There will be no arbitrariness in tax matters: PM

Against the backdrop of the controversy over Vodafone tax issue, Prime Minister Manmohan Singh sent out clear signals to foreign investors saying there will be "no arbitrariness" in tax matters.

"We want the world to know that India treats everyone fairly and reasonably and there will be no arbitrariness in tax matters," he told Hindustan Times in an interview.

The statement assumes significance in the context of a raging controversy over the Income Tax amendment to re-open tax demands with retrospective effect from companies like Vodafone over acquisition of companies having operations in India but registered abroad to avoid taxes.

The amendment and another provision GAAR (General Anti Tax Avoidance Rules) have been blamed for the reluctance of foreign investors to invest in India.

"The India Growth Story is in tact. We will continue to work, as we have been doing for eight years, to keep the story going," he said.

Singh said he wanted to show his government would be fair and that he was keen to cut the red tape.

"We will work towards improving the response time of government to business proposals, cut down infructuous procedures and make India a more business-friendly place," he said," he said.

Singh said "it is necessary that we change the discourse from a critique of an open economy to a critique of what is needed to make an open economy work better for the welfare of the people."

The Prime Minister also called for a "political consensus" on some policies acknowledging  that there are "genuine differences in opinion".

"More important is that we need political consensus in the government on some policies. These are genuine differences in opinion. So, in a democracy, consensus building is the key to long-term economic success and we are steadily moving ahead in doing that," he said.

Virus may knock millions off the Internet on Monday

About a quarter-million computer users around the world are at risk of losing Internet access on Monday because of malicious software at the heart of a hacking scam that the US authorities shut down in November, 2011.

Some blogs and news reports hyped the risk of an outage, warning of a potential "blackout" and describing the Alureon malware as the "Internet Doomsday" virus.

Yet experts said only a tiny fraction of computer users were at risk, and Internet providers would be on call to quickly restore service. They said they considered the threat to be small compared with more-prevalent viruses such as Zeus and SpyEye, which infect millions of PCs and are used to commit financial fraud.

As of this week, about 245,000 computers worldwide were still infected by Alureon and its brethren, according to security firm Deteque. That included 45,355 computers in the United States.

The viruses were designed to redirect Internet traffic through rogue DNS servers controlled by criminals, according to the FBI. DNS servers are computer switchboards that direct Web traffic.

When authorities took down the rogue servers, a federal judge in New York ordered that temporary servers be kept in place while the victims' machines were repaired. The temporary servers will shut down at 12:01 a.m. EDT on Monday, which means the infected PCs that have not been fixed will no longer be able to connect to the Internet.

Some US Internet providers, including AT&T Inc and Time Warner Cable, have made temporary arrangements so that their customers will be able to access the Internet using the address of the rogue DNS servers.

Information on how to identify and clean up infections can be found on a website that a group of security firms and other experts set up: www.dcwg.org.

"It's a very easy one to fix," said Gunter Ollmann, vice president of research for security company Damballa. "There are plenty of tools available."

Many of the machines that remain infected are probably not in active use since most victims were notified of the problem, said security expert Johannes Ullrich, who runs the Internet Storm Center, which monitors Web threats.

The United States has charged seven people for orchestrating the worldwide Internet fraud. Six were arrested in Estonia, while the seventh, who was living in Russia, is still at large. Tallinn has so far extradited two of the men to New York where they appeared in Manhattan federal court.

Delhi wakes up to pre-monsoon showers

New Delhi: The much awaited rain has brought some relief to the national capital that has been reeling under high temperatures. Parts of Delhi woke up to pre-monsoon showers this morning and the Met department has predicted rain and thundershowers over the weekend. 

The rains could bring down the temperatures to a minimum of 29 and 28 degree Celsius.

The delayed southwest monsoon also finally reached Himachal Pradesh. Showers lashed capital Shimla, Dharamsala, Manali and other towns, leading to a sharp fall in temperature across the state. The Met department has warned of heavy rains in next 48 hours.


However down south, the past month has been traumatic for farmers in north and central Karnataka. Many parts of the state have not recorded any rainfall during the first half of the monsoon. The state and the central governments have released over Rs. 300cr rupees as relief fund towards drought affected farmers.