Indian Current Affairs: 02.02.2007

Government is thinking of allowing short selling in stock markets by banks and mutual funds. The benefits expected out of this move include:

Manipulation of stock prices on the upside would become very difficult to bulls.
It is seen as a tool to improve price discovery by providing additional trading opportunities and liquidity to the market.
It may also give a boost to the futures and options segment.

This is being done in tune with the recommendations of the Narasimham Committee, which felt that it would be appropriate for the RBI not to own the institutions it regulates.

He was close to both Nehru and Kennedy. It is widely believed that his Keynesian influence had a role in the ‘commanding heights’ approach finally adopted by India in its planning efforts.

The 5 year plans grossly underinvested in both physical infrastructure and human capital, depressing productivity, that kept India stuck at the ‘Hindu Rate’ of growth of 3% for three decades despite increases in savings and investment. Monetary and fiscal profligacy elevated real interest rates, leading to financial repression and a huge public debt overhang. The combination of coddling and deadening network of direct controls destroyed the competitiveness of Indian manufacturing that had once given Manchester a run for its money.

Sections 10A was initially enacted by the Finance Act of 1981 to give tax sops to FTZs. Free Trade Zones. To attract investments and industrial growth.
10B was providing such benefits to EOUs (Export Oriented Units). It was also having the sunset clause.
From 1994, it was extended to IT sector. It was substituted by a new section with the same number and it was laid down that the benefits would end by 2009-10.
Bodies like Chelliah committee and Kelkar panel have recommended that the benefits under 10A and 10B be discontinued from 2009-10.
One argument that is made out for continuing them runs like this:

Almost 40% of the service exports today are from mid-sized companies having turnover of less than Rs. 100 crore. These companies are yet to attain a global stature. Handholding is still required for these SMEs.
In spite of the so called exemption regime being in place, there is a substantial amount of tax contribution by these entities in the name of FBT, DDT, tax on notional income because of transfer pricing issues etc. Moreover, the threat of service tax is looming large on these entities.
Hence, removing the tax holiday or exemption regime is only going to aggravate the sector’s problems and act as a dampener for its continued growth.

Will be held in September, 2007 in Singapore.
This is a sister even of the Leipzig Games Convention held in Germany every August.
This is an annual videogame event in Leipzig, Germany, first held in 2002. Besides videogames, the event also covers Infotainment, Hardware and Edutainment.

The agriculture sector in countries like India may soon be adversely affected owing to fast melting of glaciers.
In 2005, the thickness of 80 main glaciers worldwide reduced further, with the average melt amounting to 0.6 meter water equivalent (we). On an average, one meter water equivalent corresponds to 1.1 meter ice thickness.
The glaciers feeding the Ganga, Yamuna and Indus and the Brahmaputra rivers may be wiped out in about 40 years, say experts.
For the 466 glaciers studied in three major river basins, glacial extent has declined from 2,077 sq km in 1962 to 1,628 sq km at present, amounting to 21% depletion.

The AP government had approached the MRTPC in January against the Mahyco Monsanto on the high royalty being collected by it for Bt cotton. Following this, in March, the company reduced the technology fee to seed companies to Rs. 900 for a 450 gm packet of Bt cotton seeds from Rs. 1,250.
Currently Bt cotton seeds are sold at Rs. 750 per packet in the country.

Indian Current Affairs