30.11.2006

  • National protection court authority
    • The government is proposing to set up this authority with a view to deliver speedy justice to consumer grievances.
    • It is a quasi-judicial body based on the Federal Trade Commission of the US.
    • It will deliver justice within 10 days.
    • Misleading ads, e-commerce and credit card frauds, other consumer grievances will be covered under this.
    • Its ruling can be challenged only in the Supreme Court.
  • Details about new pension scheme effective from 1st January 2004
    • It envisages the employee contributing 10% of the basic salary with a matching contribution coming from the employer.
  • Understanding FDI (Foreign Direct Investment) in aviation
    • At present FDI limit allowed in domestic airlines is 49%.
    • 100% FDI is allowed in airports through automatic route.
    • The government is considering a proposal to raise the FDI limit to 74% for non-scheduled airline operations, helicopter services and regional airlines using small aircraft.
    • The key point to be noted is that there is a difference in non-scheduled airline operations and scheduled airline operations.
  • Cost of ad spends in TV media
    • A 10 second spot for popular soap would cost Rs. 1.5 lk
    • The same would cost Rs. 1.3 lk on an average cricket series
    • And Rs. 50,000 for a film on TV.
  • Volkswagen finally comes to Pune with about 410 mln Euro plant.
  • Per capita steel consumption
    • In India it is about 30 kgs per annum
    • In developed markets it is about 100 to 300 kg.
  • Foreign submarine cables to access local cable landing stations
    • The DoT (Department of Telecom) has decided to make it mandatory for the cable landing stations to be shared in a bid to restrict the monopolistic practices of the incumbents and provide a level playing field to new entrants.
    • But what is a cable landing station? See the extract below from wikipedia:
      • A cable landing point is the location where a submarine or other underwater cable makes landfall. The term is most often used for the landfall points of submarine telecommunications cables and submarine power cables.
      • Cable landing points are usually carefully chosen:
        • to be in areas that have little marine traffic to minimise the risk of cables being damaged by ship anchors and trawler operations;
        • to be in areas with gently sloping, sandy or silty sea-floors so that the cable can be buried to minimise the chance of damage;
        • to be in areas without strong currents that would uncover buried cables and potentially move cables.

Frequently, there will be a nearby cable landing station, or cable termination station, which may well be shared between multiple cable systems, but in some cases, the cable may be laid many miles inland before reaching its termination point.

A cable landing station may or may not be required, depending on whether, for example, the submarine cable requires power to power submarine repeaters or amplifiers.

A cable termination station is the point at which the submarine cable connects into the land-based infrastructure or network.

  • A country’s innovation capability is usually measured by the number of patents that are filed in the country.
    • The Indian Patent Office has received about 24,500 patent applications last year.
    • This year the figures is expected to touch about 30,000.
  • Should oil prices be left alone?
    • With the fiat coming from Mrs. Gandhi, the expected had happened. The PM has dictated that oil prices should be reduced and promptly the Union Minister of Petroleum has announced in the Parliament that the price of petrol will go down by Rs. 2 and that of diesel would go down by Rs. 1.
    • How does such price fixation by ‘diktat’ affect reform?
      • As the oil companies will keep incurring losses, they will have to resort to unscheduled borrowings.
      • This will result in tighter liquidity and dearer cost of funds for everybody.
      • The spiraling under-recoveries will necessitate the Centre issuing oil bonds to oil companies to stem the runaway losses. But these bonds would need to be redeemed from the budgetary sources, often at the expense of the other important social sector requirements.
      • Such artificially induced low prices will also jack up the cost of alternatives like bio-fuel.
  • Financial inclusion:
    • In his inimitable style, Prof. T.T. Ram Mohan of IIM, Ahmedabad today came up with a better solution for achieving financial inclusion.
    • The RBI has tried to achieve this by giving branch licences in under-served areas and re-working the priority sector lending mandates.
    • The truth is -- banks need to mobilize more deposits, given the flight of deposits to other areas.
    • A better way to achieve this financial inclusion is by prodding banks to putting in place systems for measuring risk adjusted return on capital for every borrower. This is because many of the best borrowers have already left the banking system and those that stay are getting better bargains by the day. This is evidenced by the fact that about 75% of the loans today are being made at sub-PLR (Prime Lending Rate) rates. So the best strategy for banks would be to find borrowers who are willing to pay more by way of interest. And that body of borrowers comprises of the SME and rural segments. Put simply the greater is the risk of lending money to a borrower, the higher the rate of interest chargeable.
  • Perhaps the most common definition of RAROC is simply ROC (Return on Capital) with an adjustment for expected loss:

    RAROC =(revenue – expenses – expected loss + income from capital) / capital

29.11.2006

  • Union Coal Minister Shibu Soren found guilty of murder: resigns
    • He was found guilty in the murder of his private secretary Sashinath Jha. Sashinath Jha was abducted from Dhula Kuan in New Delhi on May 22, 1994 and the police found his body in a village near Ranchi in 1998.
    • The reason for the murder appears to be that he was in the know of the ‘secret deal’ between the JMM (Jarkhand Mukti Morcha) and the Congress to bail out the Narasimha Rao government. Four of the JMM MPs were paid a bribe to vote against the no-confidence motion moved against the P.V. Narasimha Rao government in July 1993. The private secretary seems to have demanded a share in the money.
    • This is not the first time that Shibu Soren is accused of crime. He had to leave the Cabinet in July 2004 after a Jharkhand court issued a non-bailable warrant against him for his alleged involvement in the massacre of 20 people in Chirrudih 20 years ago.
    • The court is expected to award the sentence tomorrow i.e., November 30th.
  • Changes in coal mining policy
    • On 23rd October we have noted in this blog (see it here) that private companies are about to be allowed into coal mining.
    • In a further liberalization of the policy, the government has now decided to allow domestic and foreign mining companies direct access to captive coal blocks reserved for cement, power and steel sector players. The only rider for this is that they should have a set up an Indian arm or propose to do so within a specified time frame.
    • In all, 38 coal blocks with reserves of over 6 bn tonnes have been earmarked for allocation under the new dispensation.
    • Mining biggies like BHP Billiton, Rio Tinto and domestic companies like Sesa Goa, Runta Mining and Essel Mining etc., are expected to evince interest in view of this change in policy.
  • ONGC investment plans and its ‘look abroad’ policy
    • It has plans to invest about Rs. 1,60,000 cr in the next five years.
    • As it finds that no major oil finds are possible in India, it is focusing on acquiring oil assets globally. The government had given a target, initially, of getting 20 mln tpa (tonnes per annum) of oil from outside by 2020. But now the government wants it to achieve this by 2012.
    • OVL, the entity through which ONGC makes its overseas forays, has started producing 4 mln tpa of oil from 25 projects spread across 14 countries.
    • Currently ONGC’s production stands at 26 mln tpa.
  • Incometax scrutiny
    • Only 2% of the IT returns filed in a year are taken up for scrutiny by the Department.
  • Insurance penetration
    • Despite tremendous growth seen in the life insurance growth (of 164% in life premium) it is distressing to note that India remains one of the most under-insured markets globally. The total premium collected was less than 1% of the GDP in 2005.
    • In our country, we have less than 10% of our population having access to any social security and a much smaller percentage – less than 2% -- having access to pension scheme.
  • When there is rush of foreign hot money, what measures do countries typically put in place to temper the inflows?
    • Tax the profit (this is done in Latin American countries)
    • Impose a cap on the inflows.
    • Fix a minimum period during which the foreign investor has to hold the stock or investment he made. This is done in China.
  • Online shopping statistics and prospects
    • It is predicted that online shopping may eventually peak at about 10% and 15% of the total annual retail sales.
    • Online sales (globally) are predicted to cross the $100 bn mark this year.
    • Studies have shown that many shoppers go online to do research, then go to shops to see the products.

28.11.2006

  • Taj heritage corridor case: Mayawati to face probe
    • The case is about the Rs. 175 cr project to lay a corridor linking various heritage sites in Agra that was undertaken without the mandatory environmental clearance. This was in violation of the Supreme Court’s order banning construction activity around the Taj Mahal.
  • Sanjay Dutt gets sentence in the 1993 Mumbai blasts case

o The court found him guilty of charges framed under the Sections 3 and 7 read with Section 25 of the Arms Act.

o While the court found Dutt guilty under the Arms Act, it acquitted the actor of the criminal conspiracy charges under TADA.

o The minimum sentence he gets for the charges proved against him is 5 years. He has spent almost 18 months in jail as an undertrial.

o The court acquitted him of charges framed under Section 120-b of the Indian Penal Code (conspiracy) and Section 3 (3) of TADA.

o Dutt received three AK-56 rifles, its ammunition, 9 mm pistol, its cartridges and hand grenades, which were part of the consignment smuggled by Tiger Memon to set off a series of blasts in Mumbai on March 12, 1993.

  • Natural gas market. City gas distribution projects.
    • Gas is the cleanest fossil fuel; but it accounts for only 8% of our energy mix.
    • For bringing about city gas distribution networks, the investment estimate is that about Rs. 40,000 cr would be required to construct the terminals, pipelines, processing facilities and city gas networks.
    • At present as much as 70% of total gas available is earmarked for power and fertilizer sectors at subsidized and administered rates.
    • To bring about competitive market determined pricing to natural gas what needs to be done is:
      • In fertilizer sector, we need to step-up production in areas of cheap feedstock, like the Persian Gulf. (Feedstock means any material that is converted to another form or product.)
      • In power, we need to introduce time-of-day-metering so that a dearer fuel like gas can be used for peak-load supply.

27.11.2006

  • SBI and ICICI Bank’s foray into US
    • So far concerns relating to money laundering controls of Indian banks expressed by US agencies has led to an impasse. These issues have now been addressed and with India on course to further tighten its anti-money laundering legislation and rules, the approvals should come through.
    • The US authorities have often pushed the case of their banks also; but India stuck to its stance that there should be reciprocity. Allow our banks to operate in US and we will allow your banks to set up shop or increase presence here.
  • India is the second largest compact car manufacturer
    • With a projected sales of about 8,82,094 small cars for the current fiscal, India is set to occupy the second slot after Japan, which manufactures 1.7 to 1.8 mln cars annually.
  • Killing by radio-active poisoning
    • Alexander Litvinenko a former Russian spy died last week of suspected radiation poisoning.
    • He appeared to have mysteriously absorbed Polonium 210, a rare highly toxic radioactive material.
  • Divya Drishti
    • Is the DRDO’s (Defence Research and Development Organization) project for ground-based over-horizon surveillance system. It is expected to detect targets in space and close to ground.
    • Estimated to cost about Rs. 750 cr. Launched three years ago.
    • But because of slow progress, India sought the help of Israel for completing the project.
  • Top 5 cities in India per capita income wise
    • Bangalore Rs. 77,000 per annum
    • Ahmedabad Rs. 66,000
    • Pune Rs. 66,000
    • Chennai Rs. 65,000
    • Delhi Rs. 60,000
  • A Booz Allen Hamilton study, estimates that by the year 2020, the defence related R&D work will be worth about $220 bn to $240 bn. Of this India is expected to garner about $5 bn business through outsourcing.
  • About IPTV?
    • Channels are encoded in IP (Internet Protocol) format and delivered to TVs through a set-top box.
    • Three components of IPTV’s service
      • TV and content head-end
      • Delivery network
      • Set top box
    • World’s first IPTV was by ABC’s World News Now in 1994.
    • India’s first IPTV was MTNL’s Mumbai and Delhi services.
  • Unique services to fight spam
    • Definition of spam: To indiscriminately send unsolicited, unwanted, irrelevant, or inappropriate messages, especially commercial advertising in mass quantities.
    • Boxbe.com and junkbusters.com are offering unique ways of fighting spam. The first one does this by making advertisers pay for access to people’s inboxes. The second one helps mobile phone users in the US download an out-of-service tone to confuse telemarketers.
  • 8 miniratnas to lose their status for poor performance
    • ITDC – India Tourism Development Corpn.
    • REC – Rural Electrification Corporation
    • STC – State Trading Corpn.
    • Hindustan Newsprint
    • IMPL – Indian Medicines and Pharmaceuticals Ltd.
    • Mecon – Metallurgical & Engineering Consultants (India) Ltd.
    • NFDC – National Film Development Corpn.
    • RCF – Rashtriya Chemicals and Fertilizers
  • 93rd Amendment to Constitution of India
    • It allows the government to legislate in matters of education in private unaided institutions.
    • It was passed by Parliament in December 2005.
  • World Economic Forum’s prescription for India in mitigating risks facing India:
    • New exploration for offshore oil and gas
    • Flexible labour laws
    • Extension of retirement age in government jobs
    • Preventing misuse of free electricity for irrigation
    • More trade, security and knowledge transfer with the US and EU
    • More public and private sector involvement in clean development mechanism projects to reduce emissions

For an in-depth understanding of the issues, I strongly recommend reading of the full report here. It is only a 20 page pdf file. Gives very good facts and figures and analysis.

  • Government’s trying to rope in PE (Private Equity) funds to partner with it for infrastructure funding has its pitfalls:
    • Government trying to hold a 10-15% stake in the corpus fund is risky as it can open the government to a much greater liability later.
      • Example of PE fund Ripplewood’s takeover of a troubled Japanese bank, LTCB is noteworthy in this respect.
      • While Ripplewood, which bought LTCB for 121bn yen in 2000 sold its 2/3rd stake for a cool 555 bn yen in 2004, Japanese tax payers spent 8 trillion yen for capital infusion and to make up for short recoveries on bad loans, in view of government guarantee to underwrite the loans.
    • This is why, governments should allow PEs to enter into any business based on their own risk-reward assessment rather than on any comfort level or cushion that a government’s association brings to the business enterprise.

26.11.2006

  • Perhaps the costliest vegetable/fungus in the world!!!
    • Is a type of rather ugly, odoriferous tuber of vegetable called truffle or tartufi, which is known to be harvested and eaten only for a few weeks in a year. Many people think it looks and smells aweful with a peircing odour.
    • The most prized truffles come from two places in the world:
      • White truffles – from Alba in the Peidmont region of Italy. Found between September and December.
      • Black truffles from Provence in France. Found between December and March.
    • There is an auction held in Castle Grinzane Cavour in Italy where recently a 1.51 kg white truffles fetched a whopping $1,60,406!!! At Rs. 47 a dollar, it is worth Rs. 75,39,082. Can you believe this?
  • Proposed changes in IPR regime to make scientists rich
    • The scientific community will have reasons to be happy. The Union Minsiter for Science and Technology Mr. Kapil Sibal has said that the proposed legislation would:
      • Enable a third of the value created from an intellectual property to be given to an individual/team of scientists who created the patented product.
      • Provide for ploughing back 50% of the remaining profit into the project and the rest can be kept by the institution.
    • This will be applicable to all publicly funded projects, according to him.
  • Crime and policing scene in India
    • The crime rate in India has been on the rise in the last few years.
    • The cognizable crimes in India stood at a whopping 18,32,015 cases in 2004.
    • A cognizable offence is a case where the police can arrest without a warrant. All cognizable cases involve criminal offences. Murder, robbery, theft, rioting, and counterfeiting are some examples of cognizable offences.

      Non-cognizable offences are those criminal infractions, which are relatively less serious. Examples of non-cognizable offences include public nuisance, assault and mischief. The police cannot register criminal cases or cause arrests with regard to non-cognizable offences. In all such cases, the police have to secure permission from a magistrate or judge for registration of a criminal case.
    • As against the UN recommended ratio of one police man for every 450 people, India has a poor ratio of 1:820.
    • Suggestions to improve the handling of crime scenario:
      • Better police-people ratio
      • More equipment, sophisticated gadgets for police
      • Trained scientists and forensic experts
      • Fast-track justice system
      • Steps to check laundering of crime proceeds
  • Backache in India
    • Data from AIIMS (All India Institute of Medical Sciences) shows that 15-20% of population suffers from this problem and that this is assuming alarming proportions.
  • Our less known Naga music
    • Rewben Mashangwa, a 45 year old Naga folk singer based in Manipur is perhaps the only widely known Naga folk singer.
    • He plays two local instruments other than the well known guitar:
      • Yangkahui: a bamboo flute almost three feet long
      • Tigteila: a folk fiddle with a bow made from horsetail hair
  • What is Luge?
    • It is an extreme sport played on ice. Lying flat on a two-legged machine, which has no engine or brakes and sliding on a long icy stretch, this sport is one of the games played in Winter Olympics. Typically people reach 150 kmph speeds while doing this.
    • The lonely Indian represented in this game and in Olympics is Shiva Keshavan. He represented India thrice in Winter Olympics.
    • He is ranked 25th in the Luge world.

25.11.2006

  • Property insurance
    • It is common knowledge that property developers do not insure the property they sell to residential customers. Most of the business properties are usually insured.
    • Now the government is thinking of making it mandatory for the property developers to insure all kinds of properties.
    • They may be asked to pay the premium for five years, even after trnasferring the property to the buyer.
    • It has to be seen whether this will result in any increase in price for the buyers.
  • Mullaperiyar dam issue
    • We have noted earlier that the dispute is between Tamilnadu and Kerala. The former wants the dam height to be increased from 136 ft to 142 ft but the latter objects to it saying that it will inundate villages thereby dislocating tens of thousands of people.
    • Another point to note is that the dam is a 111 year old dam and there is a possibility of breach argues Kerala.
  • Politicking in cricket
    • Our leading lady of the Left brigade (Ms. Brinda Karant) wants Dada (Sourav Ganguly) back in the team.
    • And our Hon’ble Members of Parliament found time in Parliament to express their feelings that “the country is feeling let down.”!!!
  • SSB – Sashastra Beema Dal
    • It is the force which is dedicated for exclusively guarding the Indo-Nepal border.
  • Differences over pension reforms
    • Left’s position
      • No market dependent returns for pension
      • Government should step in to ensure guaranteed return.
      • Pensioner should get 50% of the average of last three year’s monthly payment as pension.
    • Government’s position
      • Guaranteed return would defeat the very purpose of the scheme – shifting it from statutory to voluntary contributions.
  • Differences on banking sector reforms
    • Left
      • Opposed to foreign banks taking over private Indian banks.
    • Government
      • Wants the Banking Regulation Act (BR Act) to be amended to remove the 10% cap on voting rights.
      • Feels that the RBI approval needed for acquiring more than 5% of any bank would be adequate guard.
  • India and Star-Wars?
    • During the cold war era, we heard of the star wars programme launched by Ronald Reagan.
    • In a similar vein India also for the first time will be firing two home grown missiles tomorrow (26th Nov) to validate the capability of the weapon to achieve its design parameters. The aim of the program is to test the missile’s ability to provide an air-shield to important Indian metros against hostile attacks.
    • Termed the Prithvi Air Defence Exercise (PADE), one missile will be fired from the shore-based ITR (Integrated Test Range) and the other from Inner Wheeler Island. Both these are located near Bhubaneshwar.
    • Prithvi missile milestones:
      • Prithvi I – 150 km range. 1988
      • Prithvi II – 250 km range. 1996
      • Prithvi III – 350 km range. 2004
  • Telecom subscribers addition
    • At present India is adding about 6.5 mln subscribers per month.
  • Index of Industrial Production
    • Is currently at 10.6% for the first five months of this fiscal.
    • Manufacturing sector has grown by about 11.8% during this period.
  • Gender Gap Index
    • This is a measure of inequalities between sexes. This is studied by the World Economic Forum. Out of a total of 115 countries, India is placed at a poor 98th position. This is worse than even our smaller neighbour – Sri Lanka.
    • Our maternal mortality is a shocking 540 per 100,000 live births as against 92 in Sri Lanka.
    • The Nordic countries, Sweden (1), Norway (2), Finland (3) and Iceland (4), top the latest Gender Gap Index.
  • ASEAN-India FTA talks stand-off
    • Asean stand:
      • India to reduce the negative list from 560 to 173.
      • Lower palm oil import duties from 30% - 40% within 5 years of FTA agreement.
    • India’s stand
      • India willing to prune the list if Asean countries also prune their list. It has already reduced the list from a 1500 items to the present offer of 560 items.
      • Willing to reduce palm oil import duties to 50% within 10-12 years of FTA. Presently these duties are at 75% for crude palm oil and 80% for refined palm oil.
  • London is home for global billionaires
    • There are 23 of them including our own Lakshmi Mittal topping the list with about 12.27 bn pounds.
    • New York houses 34 billionaires. Mostly American.
    • Moscow and San Francisco have 20 billionaires each. Mostly local.
    • London’s appeal lies in its accessibility, stability, low taxation and global standing of its city institutions.
  • Silver kills stink in your smelly clothes
    • It kills the odour causing bacteria.
    • It also redistributes body heat, keeping the wearer warm in cold weather and cool in hot weather.
  • Bt cotton acreage
    • Bt cotton is being grown in about 8.6 mln acres in India this year as against 3.2 mln acres last year.

24.11.2006

  • Infrastructure funding stunts
    • As you all may be aware by now (you are reading the blog don’t you?) the country is in need of $320 bn funding requirement for the infrastructure sector in the next five years.
    • In a bid to shore up the availability of funding the government is in talks with top global private equity players such as Citigroup, Blackstone and other institutional investors to team up and raise $7 bn through a special fund to finance a stream of infrastructure projects.
    • The proposal envisages the government contributing 10 to 15% of the corpus of the fund directly or through a sovereign backed entity along with international private equity funds besides banks and other institutional investors.
    • Moves are also afoot to allow infrastructure funding companies like IIFCL (Indian Infrastructure Finance Company Limited) freedom to lend to companies based on the strength of their balance sheets rather than merely restricting the lending as at present only to project financing. Companies may be allowed to raise funds to the tune of 20% of the project cost on these lines.
  • Chinese President Hu Jintao meets Dr. Kotnis’ family
    • Dr. Kotnis who? When China was fighting Japan in 1938, Dr. Dwarakanath Kotnis along with four other Indian doctors, responding to a plea from China went over to the frontlines and gave medical assistance to the fighting Chinese soldiers.
  • Status of Tibet
    • China has forcibly occupied Tibet in 1950. At that time about 1.3 mln Tibetans have been put to death, according to reports.
    • Today, though India recognizes Tibet as part of China, it gives asylum to the Dalailama, Tibet’s spiritual leader and head of state in Dharmasala.
  • Web mashups
    • Mashups are a new tool to mix and match information from various websites to make the experience of searching for anything on the web more rich.
    • Mashup blends external information and web services (like newsfeeds, weather reports, maps, traffic conditions and more) with content and services, isntantly ‘mashing’ them together to create a fast and flexible application for specific business needs.
    • Technically mashups are websties or applications that combine content from more than one source into an integrated application using open technologies like AJAX (Asynchronous Javascript and XML), PHP scripting language and syndicated feeds.
  • India’s oil potential
    • Estimates suggest that up to 10 bn tonnes of oil may be found in the sedimentary basins of the country.
  • Impact of Russia’s entry into the WTO
    • For the first time in history, there will be a single system with an effective dispute settlement mechanism monitoring most of the global trade.
    • This comprehensiveness could reduce the difference between politics of the WTO and world order as a whole.
    • Geopolitical requirements could easily influence alliances within the WTO.
  • Airline mergers
    • AirFrance KLM and Alitalia (Italian airlines) are in merger talks.
  • Autobahns
    • The term was first used in 1928 for German road network of free, multi-lane highways.
    • A typical autobahn is a two-way multi-lane road with a green median of 11.5 ft width. The lanes on either side of this can be two, three or occassionally four. Each of these lanes is usually 12.3 ft wide.

23.11.2006

  • Subsidy on domestic LPG
    • Due to the high level of subsidy on domestic LPG, the under recovery to oil companies on sale of each cylinder is at Rs. 153.21 per cylinder during April-September 2006.
    • Because of this the government is thinking of allowing indigenously produced LPG to be used for automobile as fuel. This is expected to enable the oil companies in reducing their under-recoveries.
    • But this is likely to pose a problem, as this may result in companies trying to divert more of LPG for automobile use. Hence it should put an adequate mechanism in place for ensuirng that cooking gas supply to households is not affected.
  • Concerns about Indo-US nuclear deal
    • The US houses of Congress viz., the House of Representatives and the Senate passed two different versions of the bill enabling cooperation in the nuclear field with India.
    • Concerns about the Senate version of the bill include:
      • Section 106 which prohibits the export of equipment, materials or technology related to enrichment of uranium, reprocessing of spent fuel or production of heavy water.
      • Section 107 which makes the case for end-use monitoring by the US of its exports or re-exports of nuclear materials, equipment and technology sold or leased to India.
    • According the the US, the technologies mentioned in Section 106 are not purely civilian in nature, and are critical to the nuclear weapons programme.
  • Jordanian Royals visit to India
    • Jordan’s King Adbullah and his Queen Rania will make their first state visit to India at the end of November.
  • IMG Bharata controversy in Andhra Pradesh
    • IMG Bharata is a company which was allotted land of about 400 acres in Gachchibowli, Hyderabad and another 450 acres in Mamidipally in 2004 for setting up a world class sports complex and training academy.
    • This land allotment was made by the previous TDP (Telugu Desam Party) government.
    • The present Congress government, citing the company’s failure to build the proposed facilities on the given land, has taken over posesssion of the land again by passing an ordinance.
    • The present government asserts that the deal signed by the previous government during its caretaker days is not valid.
  • Telecom licence fee details
    • There are three categories of telecom circles in the country. They are: A, B and C.
    • For operating in the A category circles the licensees have to pay 10%, for category B 8% and for cateogry C 6% of their adjusted gross revenue (AGR) as licence fees.
    • In addition to this they also have to pay 2-6% as spectrum charges, 12% of AGR as service tax, 1.5% access deficit charge and 5% universal service obligation.
    • All these levies make up about 30% of their total revenues.
    • The levies payable in contrast in other Asian countries vary between 0.5% to 7%.
    • The DoT (Department of Telecom) is in favour of a flat fee of 6% in lieu of this plethora of levies. If this is acceded to, this would certainly result in a reduction of telecom charges for end users.
  • Perspectives on Indo-China trade
    • Gravity model: This is a notion in international trade that suggests that ceteris paribus, countries that are larger and more proximate tend to trade more with each other. The meaning of ceteris paribus here is “other things being equal”.
    • By the same model, India and China should actually be trading more with each other. But this is not happening, with the trade merely pegged at $19 bn in 2005.
  • Baima Si, the White Horse Temple in Henan province of China
    • This is the place where there is a monument marking the arrival of Buddhism from India into China in the 3rd Century.
    • A.B. Vajpayee the then Prime Minister of India visited the temple in 2003.

22.11.2006

  • India-China signed about 13 agreements for cooperation in various fields
    • Agreed to increase the bilateral trade to $40 bn by the year 2010.
    • More consulates to be setup in Kokata and Guangzhou.
    • India refrains from seeking Chinese backing on the Indo-US nuclear deal for the moment.
    • No concessions on the east, India tells China
      • While India claims that China has illegally occupied 43,180 sqkm of J&K, including 5,180 sqkm illegally ceded to Beijing by Pakistan, China accuses India of possessing some 90,000 sqkm of its territory, mostly in Arunachal Pradesh.
  • China’s lead in retail
    • While we have our Left comrades crying foul at every attempt at liberalization and reform, China coolly is making rapid strides in some of the very key sectors for which our Left has strong opposition.
    • While in India the FDI (Foreign Direct Investment) limit for retail is 51% for single brand retail from January this year, in China foreigners are allowed hold up to 65% in their local retail ventures. This was the position from December 2004.
    • Organized retail now accounts for about 20% of the total retail trade in China while in India it is only about 2 to 3%. Our Left raises the bogey of the loss of employment and business for the so called mom and pop (local neighbourhood) stores.
    • China continues its liberalization with Direct selling permitted and removal of restrictions on franchising.
  • SEBI passes the first disgorgement order in the annals of Indian stock market regulatory history
    • The SEBI (Securities & Exchange Board of India) has directed the major depositories and 8 other depository participants to pay up around Rs. 116 cr as compensation to retail investors who sufferred an opportunity loss in the IPO (Initial Public Offering) share allotment scam that came to light last year.
    • This is the first time that a regulatory body in India passed a ‘disgorgement’ oder. Disgorgement entails recovering money from perpetrators of a financial fraud to compensate investors who have lost out.
  • Attorney General (AG) interprets Supreme Court’s judgement on creamy Dalits
    • The AG of India Mr. Milon Banerjee has said that the Supreme Court’s ruling in Nagraj case with regard to creamy layer for Dalits is only in the nature of ‘obiter dicta’ and hence not binding on the government for implementation.
    • What exactly is ‘obiter dicta’? It means literally other sayings. Obiter dictum is a remark or observation made by a judge while issuing a ruling. Obiter dicta are wholly off the subject of the case currently being decided, and therefore are neither binding nor persuasive upon lower courts.
  • Bangladesh terrorist organization suspected behind train blast in West Bengal
    • The train blasts in which 7 people lost their lives and several others injured are suspected to be the handiwork of Bangladesh based JMB (Jamaat-ul-Mujahideen Bangladesh).
    • This orgnization was floated in 1998. It was proscribed by Bagladesh in 2005.
  • Remarriage is no factor for child’s custody says Supreme Court
    • In a landmark judgement, the court held that remarriage of the woman cannot rob her of the parental right to custody of the child. The paramount consideration should be given to the welfare of the child, said the court.
  • Sanyo Electric Co
    • The Chairman and Executive Director of this company is a remarkable lady – Tomoyo Nonaka. She was appointed to the board in 2005.
    • She believes in the Japanese philosophy of Gaia. It treats earth as a living planet where all life and nature are interwoven with each other and are in sync with the needs of our life and earth. She believes that revenues and environmental responsibility go hand in hand.
    • A very remarkable, off-beat philosophy to take a company forward in the present times when companies virtually live from one quarter’s result to the next quarter.
  • The prediction of future web browsing experience (Web 3.0), according to Philip Evans, the author of the famous book “Blown to Bits” is going to be virtual world in 3D. Web 1.0 and 2.0 are characterised as below:

Web 1.0

Web 2.0

Britannica Online

Wikipedia

PC games

Second Life

CD Now

iTunes, LaLa

Pointcast

YouTube, BitTorrent

Personal websites

Blogs, MySpace


    • There are 50 mln bloggers, Wiki has over 1 mln articles, there are 35 mln players in virtual world globally, 70 mln teenagers in MySpace.
    • Second Life is a game played by over 1.2 mln people and is run by San Francisco based Linden Lab.
  • Nanotechnology initiatives by India
    • Department of Science and Tehnology has supported close to $70 mln (Rs. 300 cr) of nanotechnology related initiatives in the past four years.
    • What exactly is nanotechnology? The word which was first coined by K. Eric Drexler in 1986, in the book “Engines of Creation”, refers to the manipulation of matter on the scale of the nano-meter (one billionth of a meter). The goal of nanotechnology is to control individual atoms and molecules to create computer chips and other devices that are thousands of times smaller than current technologies permit.
  • Infrastructure funding solutions
    • It is clear that private sector has to step in through the PPP route.
    • For this to happen one measure that is going to help is an active corporate bond market.
    • As this market is not yet well developed, the government has appointed a committee under Dr. R.H. Patil to recommend ways of developing this market. The committee has submitted its report last December. Action is not yet initiated on it in view of SEBI’s reluctance.
    • Acting on this committee’s recommendations calls for a two-pronged approach – both on the macro front and the micro front.
      • On the macro front we need pension reform and the insurance sector must be opened more fully. This would enable large players to enter and park their funds in long-terms assets.
      • On the micro front, stamp duties, TDS (tax deduction at source) rationalization and trading and settlement systems etc., need attention.
  • Brian Lara equals Sunil Gavaskar’s record of centuries. He hit his 34th test century at Multan in Pakistan. This is just one century short of Sachin Tendulkar’s 35 century record.
  • What are nostro accounts?
    • These are bank balances maintained by Indian Banks, which do not have any branches abroad. They maintain these balances with their correspondent banks abroad.
    • These balances also include capital supplied to foreign branches and arms of Indian banks and profits receivable from them.
  • Edible cotton seed
    • Scientists have genetically altered the cotton plant to reduce the levels of the toxic chemical gossypol in cotton seed, making it fit for human consumption.
    • The interesting point to note is that the level of this chemical is reduced only in cotton seed while maintaining its level in the rest of the plant.
    • This chemical is important for the plant as it gaurds it against disease and insects.
    • For each pound of cotton fiber, the plant produces about 1.6 pounds of seed.
    • Estimates say that if all the cotton seed produced in the world today is made fit for human consumption, it can meet the protein requirements of 500 mln people on an annual basis.
    • This genetic alteration was done by a team of scientists led by Keerti Rathod at Texas A&M University.

21.11.2006

  • FDI expectations
    • FDI (Foreign Direct Investment) is expected to touch about $12 bn this fiscal as against $7.7 bn last year.
  • Ram Vilas Paswan’s PPP mantra
    • In a curious twist to the PPP (Private Public Partnership) model the Union Minister for Chemicals and Fertilizers is asking the pharmaceutical companies to contribute a share of their turnover to provide free medicines to the people through drug banks and medical camps for the poor.
    • If the companies fail to meet their commitment, they would not be allowed an annual upward revision of prices.
  • PURA (Providing Urban Amenities in Rural Areas)
    • It is a vision of our President Abdul Kalam to create PURAs in the country. About 7000 such PURAs can ensure faster development of our society. Each PURA calls for providing connectivity fo 15 to 20 villages with 50,000 population.
    • The GoI is planning to launch two PURA clusters in each of the districts during the 11th plan period.
    • 700 mln people are living in 6 lk villages equivalent to 2 lk panchayats.
  • Medical parks proposed
    • 90% of our country’s medical equipment requirement is met through imports.
    • Hence the Union Minister of Health Mr. Anbumani Ramdoss is proposing to estabilsh Medical Parks to reverse the trend of high imports of health-related equipment.
  • Credit flow to infrastructure sector to get a boost
    • At present there is a sectoral limit on exposure by banks to infrastructure. No bank can lend more than 25% of its total net lendable resources to a particular sector like Power, Telecom or Roads. Within this sectoral limit, no project can be lent more than 10% of the available funds. In addition banks also cannot lend more than Rs. 1000 cr for a single project.
    • The government is thinking of relaxing these limits in view of the increased infrastructure funding requirements.
    • We have noted earlier that the country is targeting about $320 bn investment in infrastructure during the next 5 year plan.
    • As of March, 2006 out of the total bank credit of Rs. 5,49,057 cr the infrastructure sector could be lent only 19.8% by the banking system.
  • Gross Budgetary Support for 11th Plan
    • It is likely to be scaled down from 2.5% proposed initially to about 2.1% of the GDP due to apprehensions about resource constraints expressed by the Finance Ministry.
  • Reasons in favour of open skies policy with ASEAN (Association of South East Asian Nations)
    • The benefits of open skies policy with ASEAN are likely to far outweigh the costs of repercussions for the airline industry.
    • Competition induced drop in cost of air travel following liberalization of air services usually results in a spurt in trade and tourism-related traffic, which in turn has significant externalities.
  • How fast do our trains run?
    • Passenger trains run an average of 55 kmph and goods trains run 24 kmph (kilometers per hour).
    • The plan is to increase the former to 100 kmph and the goods trains to 60 kmph.
  • What are contact less cards?
    • We have only heard of credit cards, debit cards, smart cards etc. Contact less cards are meant for paying small change; say for purchasing newspapers, bus tickets, cigarrettes etc. Master Card and VISA have introduced these cards for payments of less than $25. There are estimated to be about 21 mln such cards issued in US.
    • There is no need to put the cards into a terminal to make payments. Just wave them in air and the money gets transferred from the card to the terminal.
  • Reforming Tiger census with DNA fingerprinting
    • We seem to be not in a position to count the number of Tigers in our country. Hence CCMB (Centre for Cellular and Molecular Biology) a Hyderabad based scientific research organization has come out with a plan to undertake the Tiger census with the help of DNA fingerprinting.
    • What exactly is DNA fingerprinting? And who invented it?
      • Its various names include: genetic fingerprinting, DNA testing and DNA profiling. It distinguishes between individuals of the same species using only samples of their DNA. Its invention by Sir Alec Jeffreys at the University of Leicester was announced in 1985.

20.11.2006

  • Indo-China relations
    • 2006 is declared as the year of China-India Friendship year by both the countries.
    • Sun Yuxi: Chinese Ambassador to India
    • Though a lot of negative publicity is received for the denial of FDI by Chinese companies in Vizinzham port, the fact remains that about 50 Chinese companies have established their presence in India in the recent times.
    • Bilateral trade between the two countries was at $17.5 bn in 2005-06.
    • China produces the superior bivoltine silk varieties that are more durable. India has been trying to produce this variety without much scuccess.
  • The Effies
    • The awards instituted by the American Marketing Associaton (AMA) which are given in recognition of the success of an advertising agency in growing the client’s business are awarded at a function in Mumbai.
    • Effie Agency of the year: Lowe
    • Cleint of the year: HLL (Hindustan Lever Limited)
  • Internet users acorss the globe
    • There are about 1.08 bn internet users worldwide representing about 16.7% of the world’s population.
    • US tops the list with 207 mln users i.e., a penetration of 69.3% of its population. Its population is 299 mln.
    • India with about 60 mln internet users for a population of 1.11 bn is having a penetration of only 5.4%.
    • In absolute numbers India stands 4th at present worldwide. The first three places are occupied by US, China and Japan.
    • You can find the latest and more detailed statistics on this at http://www.internetworldstats.com
  • Wirefree power chargers
    • They are being tried for laptops, cell phones etc. The concept works with a base station plugged in to the socket while the laptop or cell phone having an embedded receiver in it operating at 4 to 10 MHz range. At this frequency, when the gadget comes near the plugged in socket, it gets charged. This is yet to be commercially launched.
  • Export promotion schemes currently operating in India
    • Duty entitlement passbook (DEPB) scheme
    • Export promotion capital goods scheme (EPCGS)
    • Duty free import authorization
    • Advance licence
    • Export oriented units (EOU)
    • STPI (Software Technology Parks of India) Scheme
    • Focus market
    • Focus country
    • Vishesh Krishi Upaj Yojana
    • SEZ scheme (Special Economic Zone)
  • O.J. Simpson
    • The famous footballer who was acquitted of the charges of murdering (in 1994) his ex-wife, Nicole Brown Simpson and her friend Ronald Goldman is again in the news.
    • This time for his controversial book ‘If I Did It, Here’s How It Happened’.
    • Reports say that in a separate civil court judgment, he was held liable for the victims’ wrongful deaths and ordered to pay $33.5 mln to their families.
  • Russia-US sign the bilateral deal for Moscow’s entry into the WTO at Hanoi, Vietnam on the sidelines of the APEC (Asia Pacific Economic Cooperation) summit.

19.11.2006

  • Sieger cup
    • It is awarded in the famed contest for German Shepherds (a breed of dog) usually held in Germany.
  • Wine imports outgrow domestic market
    • India’s wine imports are expected to touch 250,000 cases (each containing 12 bottles) of wine. This is larger than the domestic production of 200,000 cases.
  • Oil refineries stop discounts to OMCs (Oil Marketing Companies)
    • On Kerosene and LPG the refiners offer discounts to the OMCs.
    • The oil refiners were forced to offer discounts to the OMCs by the government as the prices were ruling high and it did not want to pass the increase in prices to the consumers.
    • As OMCs were taking a huge hit, they were offered these discounts and also the oil bonds.
    • The discounts offered were at Rs. 240/tonne by the refiners to the OMCs.
    • The discounts will be stopped effective April 1st, 2006. This will shore up profits of the stand alone refiners CPCL (Chennai Petroleum Corporation Ltd) and MRPL (Mangalore Refinery & Petrolchemicals Ltd).
    • When the crude prices were riding high beyond the $70 mark, as the government was not able to pass on the costs to the consumers, it devised a mechanism whereby the upstream companies, the refineries, OMCs and the government would share the burden of increased costs.
  • New housing policy to have more inclusive approach
    • The government is about to reserve 10 to 15% of the land in all new public and private housing projects to weaker sections of the society. The move is aimed at preventing further proliferation of slums.
  • Daniel Wroughton Craig is the new James Bond. He is a Briton.
    • He is introduced through the movie “Casino Royale”. It was released on November 16, 2006.
    • The character James Bond is a creation of Ian Fleming.
    • The first Bond film – Dr. No. Sean Connery acted in this film as the first James Bond. The first lead Bond girl was Ursula Andress. This was released in the year 1962.
    • The Bond movies are produced by EON Productions.

18.11.2006

  • RBI restricts funds flows from the banking system to the primary markets
    • At present individuals can borrow up to Rs. 10 lks each from up to 5 banks and invest up to Rs. 50 lk in an IPO (Initial Public Offer) by pledging their shares or bonds, mutual fund units etc.
    • RBI issued guidelines now which bar an individual from raising more than Rs. 10 lk from the banking system for investing in IPOs.
    • The new guidelines also say that investors cannot borrow more than Rs. 20 lk on the strength of stocks, bonds, MF units for playing the market.
    • RBI is also proposing to cap the aggregate exposure of a bank to capital markets at 40% of its net worth of the last fiscal.
  • Indian billionaires
    • There are 36 of them at present in dollar terms.
    • LN Mittal ($25 bn), Mukesh Ambani, Anil Ambani and Azim Premji top the list.
    • The combined net worth of these 36 people is $166 bn which is about one-fifth of India’s national income.
  • Indian and Chinese millionaires
    • China has about 300,000 dollar millionaires. In contrast India has about 83,500 of them.
  • Rajinder Sachar Committee submitted its report to the Government
    • Yesterday (17.11.06), the committee which looked into the issues relating to the backwardness of the Muslims in India submitted its report.
    • It suggested that:
      • Muslims be given more opportunities for higher participation in governance
      • Madrasas be brought into the mainstream to facilitate their alignment with other educational institutions and
      • Muslims be given more access to bank credit.
  • Interesting fact about Champagne
    • Champagne is neither the name of a product nor is it a category of wines.
    • Champagne is the name of the region in northern France where a combination of grapes, usually chardonnay, pinot noir and pinot meunier are blended.
  • Chartered Accountants in India are headed for more training to take on MBAs
    • The ICAI (Institute of Chartered Accountants of India) is setting up 11 centres of excellence across the country at an investment of Rs. 100 cr. to train the CAs in management tricks including communication and presentation skills.
    • There are about 1,32,000 CAs in the country. 50% of them are employed in the corporate world while the rest are practicing in India and abroad.
  • Indo-Iran LNG deal
    • India and Iran signed an agreement two years ago for supply of 5 mln tonnes of LNG at a price of $2.90 per mBtu (million British thermal units) for a period of 25 years beginning 2009. The original deal was for importing 7.5 mln tonnes per annum. Of this the price was negotiated only for 5 mln tonnes.
    • But Iran wanted to renegotiate the deal saying that the price contracted is very low.
    • Thereupon India offered to better the price, but not what Iran wanted. Iran wants a price of $5.10 per mBtu.
  • Obituary: Mr. Milton Friedman
    • Credit as having shaped much of the 20th century economic thinking along with John Maynard Keynes, he passed away on 15.11.06 in the US.
    • He was responsible for challenging the Keynesian worldview of omnipotent governments that could steer and stimulate economic growth.
    • His philosophy came to be known as monetarism and became the abiding principle of the Chicago School of Monetary Economics where he taught for many years.
  • Interesting calculations about child labour
    • In a very interesting article G.S. Vijay Kumar shows that if only Rs. 500 is spent for child towards cost of education and an equal amount given to the parents of the child for foregoing the loss of income from his labour, for educating all the 12 mln child workers in India, the amount needed would be approximately Rs. 15,000 cr.
    • This he feels is not a daunting figure to shy away from taking up the challenge of educating every child in India. He feels that governments are better off doing such a thing than splurging on schemes like free distribution of TVs etc., as is being done in Tamilnadu.
    • Child labour is intricately linked with poverty and unless conditions improve at the domestic front, child labour will not completely vanish – whatever the law may say. Remember we passed a law recently banning child labour.
    • The ban on child labour should therefore be interwoven with poverty alleviation programmes.
  • Progress in transgenic crops made by University of Agricultural Sciences, Bangalore
    • Isolating genes from microorganisms for use in transgenic seeds. Reportedly this will help in reducing or eliminating pest attacks.
    • Work on genetically modified groundnut as an effective cure for diabetes.
  • Revision in coal royalties
    • It is the union government which lays down the policy with regard to payment of royalties to state governments from various mines.
    • The royalties on coal and lignite mining are kept at specific rates at present.
    • There is a proposal for moving to a combination of specific and ad-valorem levies to guard against distorting fuel pricing while satisfying states’ demand for high revenues.
  • First mobile novel
    • World’s first novel on mobile phones was published in Japan. It was titled “Deep Love” by Yoshi.
    • India’s first such mobile novel is “Neelakannukal” by Malayalam writer PR Harikumar. The book was given away free for about 600 users.
    • India has 96 mln mobile subscribers.