Indian Current Affairs: 26.12.2006

At present there is a 26% composite cap for FDI and FII in insurance sector. With the government considering a separate cap for FIIs and hiking the FDI cap to 49%, the total foreign equity cap could go up to 74%.
Insurance companies are mandated to list within 10 years of inception.

Real estate brokers may be mandated to register with the realty regulator and their brokerage charges are set to be capped at 2% of the property value.
At present, most of the time, brokers charge indiscriminately and multiple brokers exist for the same transaction costing money both for the seller and the buyer.
Broker may also be given area-wise licences.

is the study of flag history and symbolism. The name comes from the Latin word vexillum, which means flag. The word was coined by Dr. Whitney Smith of the Flag Research Center.
Flags owe their origin to the need to communicate identities over distances, mainly in battles or at sea. Ships, in particular, have long been required to fly flags to identify themselves at sea.

Is an email fraud method in which the perpetrator sends out legitimate-looking email in an attempt to gather personal and financial information from recipients. To the recipient, the email appears to come from well known and trustworthy websites.

ARPU: Average Revenue Per User for cellular operators is a keenly watched figure in the market for the company as well as for the markets. The ARPU for the industry as a whole has fallen from Rs. 375 in September last year to Rs. 335 this year.
The ARPUs of the top four operators in the country are reportedly at:

Despite the fall in the ARPUs the adjusted gross revenues of the companies have been registering a growth. They are currently at Rs. 6,330 cr for the quarter ending September, as against Rs. 5,621 cr last year for the same period.

Estimates put the market size of this at about $1 bn (i.e., ~Rs. 4,500 cr)
Indian mutual fund industry’s assets under management are put at Rs. 3 lakh cr.
Insurance penetration is pegged at a mere 3% of India’s GDP. In developed economies this percentage is about 5.

While the Centre’s budget estimates were Rs. 4,35,000 cr, the collections for the year are projected at about Rs. 4,70,000 cr.
Thus the gross revenue collections are expected to increase by Rs. 35,000 cr which is 1% of the GDP.
The estimated deficits – both fiscal (3.8% of GDP) and revenue (2.1% of GDP) are expected to be exceeded marginally.
The Centre and the States together are sitting over a cash balance of Rs. 60,000 cr.
The AIR (Annual Information Return) of the Central Government seems to have helped in keeping (or at least infusing a fear) a tab on evasion in a big way.
Under the AIR, the incometax department collects information about credit card spends of more than Rs. 2 lks, mutual fund investments of more than Rs. 1 lk and sale of houses for more than Rs. 30 lks.

Currently import duties on petrol and diesel are at 7.5%. The proposal is to reduce this to 5%. This may not result in any significant loss as the import of these products is negligible. What we import mostly is crude. We refine it and use it.
Import duty on crude is at 5%. Ideally duty on crude be lower than on products like petrol and diesel. The higher duty at present serves as a margin of protection for the domestic refineries.

Just as the IMF has been a set of remedies to third world economies in financial crises, as the developing economies look far more cost efficient than the developed ones, it may turn to giving some advice to them.
Sheer military prowess is accompanied by economic and political strength only for a certain period of time. A point of inflexion comes when the complementarity between the two breaks. Perhaps the US is reaching such an inflexion point.
Look at the take of leading financial wizards like George Soros. He feels that the US is progressively losing sight of reality.

In both politics and economics, it is safe to be nearer the equilibrium. Humans can become collectively irrational and move completely away from the equilibrium, towards what they perceive as reality. This happens both in financial markets and politics as a result of bias rather than real knowledge.

Soros feels that this is precisely what happened to the Bush administration in its Iraqi policy.

According to Parliament papers, over 50% of farmer households had no access to credit from formal or informal sources. Of the remaining 48.6% that had taken some sort of debt, only about 50% had access to credit from institutional sources such as government, cooperative societies and banks.
This means that over 72% of farmer households had either no access to credit or were dependent on moneylenders for their needs.
Agricultural NPAs (Non Performing Assets) were at 3.5% of the total lending to the sector as against 3.3% of the gross NPAs to gross advances. This is not bad.
Nearly 45% of bank branches, including regional rural banks are located in rural areas. As over 75% of commercial credit is concentrated in about 100 centres, it is clear that this branch network is underutilized.
MFIs, SHGs and NBFCs who are more closer to the borrowers than banks appear to be more suited for delivering rural credit. This closeness appears to be coming from their ability to take a more realistic call on the ability of the farmer to repay the loan than what rule and procedure bound entities like banks can do. Therefore, instead of forcing banks to open rural branches or lend more to priority sector, it would make sense to enable NBFCs, SHGs or MFIs access bank funds for onward lending to the farmers.

Orthodox tea is the top two leafs of each plant. These two leaves produce the best quality tea leaf. Since tea plucking is still done by hand, it is possible to select these two leaves.

Indian Current Affairs