19.02.2007

• Insurance business
• Lloyds of London is the world’s largest insurance company.
• India is considered as the 23^rd largest insurance market in the world with tremendous growth potential.
• Insurance penetration in India is 3.14% (premium as percentage of GDP) compared to over 10% in South Korea and Japan.
• There are 14 life and 8 non-life insurance companies in private sector in the country since the opening of the sector in 2000.
• Retail sector and industry status
• The retail sector has been demanding recognition as an industry for over two years now. An industry status would not only make it eligible for fiscal benefits and concessions but also get it easier organized financing.
• India’s airline pilot shortage
• Currently over 550 expat pilots work in various domestic airlines in the country.
• Industry estimates put the requirement of pilots at more than 3000 over the next three to five years.
• Airlines pay anywhere beween $8000 to $10000 per month to e pilots, which is around 10 to 15% more than what Indian pilots earn.
• The country produces only around 200 pilots annually against a demand for around 500.
• IPBCC – India Pakistan Bangladesh Ceylon Conference
• It is an 18 member grouping of shipping lines from these countries. They collectively move around 12 lakh (1.2 mn) containers annually between India and Europe. Its notified rates are the norm of the tarde in the route.
• It has announced winding up of its operations as on October 1, 2008.
• This means that member lines will fix their own rates from then onwards.
• Hottest chilly of the world
• India’s (naturally occurring hybrid native to the Assam region) Bhut Jolokia chilli has been confirmed as the world’s hottest pepper by Guinness Book of Records.
• It has a 1,001,304 scoville heat units. Scoville heat unit is a measure of hotness for a chilli.
• Berlin Film Festival awards
• Golden Bear award for best film: Won by Chinese director Wang Quan’s Tuya’s Marriage (Tu ya de hun shi)
• Best first feature film: Vanaja by Rajnesh Domalpalli from India.
• India’s overseas oil assets
• India’s oil consumption is pegged at 25 lakh (2.5 mn) barrels of crude oil per day. Of this 73% is imported.
• Last year’s oil import bill swelled to $4300 crore ($43 bn).
• OVL (ONGC Videsh Limited) has a target of acquiring 60 MMPTA (Million Metric Tonnes Per Annum) of equity oil and gas overseas by 2025. OVL is currently working towards a goal of 20 MMTPA of oil and oil equivalent gas from its overseas assets.
• Fund for backward regions
• Rashtriya Sam Vikas Yojana (RSVY) programme, for improving the infrastructure in backward areas, is being revamped by the government with a new name – Mahatma Gandhi Backward Regions Development Fund.
• Cess on private cars
• A 5% cess proposed is to be levied on cars and 2% on two-wheelers to fund bus-based rapid transit system in many cities.
• The surplus fund would be channeled into an SPV dedicated to development and maintenance of sustainable urban transport.
• Production of pulses in India
• Production has remained stagnant for the past 40 years i.e., since 1965-66. It has remained range bound between 1.20 crore to 1.40 crore tonnes (12 mn to 14 mn tonnes).
• Imports have ensured that the prices did not rise steeply and remained stable.
• Per capita availability of pulses has decreased from 13.9 kg in 1985 to less than 9 kg in recent years.
• Should India lower its customs duties to ASEAN levels at one go?
• There should be a three tier structure:
• Lowest duties on raw materials at 5%
• Higher on intermediates at 7.5%
• Highest duty of 10% on finished goods.
• Capital goods should always have 5% duty to incentivise capital investment in key infrastructure sectors.
• We must also start the process of rationalizing the 14 customs duty rates, currently above the peak rate.
• In a detailed article recommending staying the course and delivering on FRBM targets, Sri. C. Rangarajan, Chairman of the PM’s Economic Advisory Council explains why fiscal deficits are a concern. Read the full article here.
• 1. They dis-empower the government’s fiscal stance by preempting a larger share of public resources for debt servicing thereby leaving that much less for desirable expenditures such as physical infrastructure and social infrastructure. This leads to a declining ratio of capital expenditure to total expenditure as seen over the period 1990-91 to 2002-03.
• 2. Together with revenue deficits, they push up borrowed resources for current consumption which may raise growth in the short term, but of the spurious variety. Ideally borrowed funds should be used only for investment.
• 3. It results in government crowding out the private sector. A balance needs to be struck in apportioning the investible resources between the government and the private sector.
• 4. Continued fiscal deficits impact on interest and inflation rates depending on how the deficits are financed. Raising finance from domestic debt leads to higher interest rates. Raising finance by printing money leads to inflation.
• 5. Fiscal deficits, especially in the face of revenue deficits, exacerbate inter-temporal equity concerns as they give the pleasure of spending to the current generation while passing on the pain of servicing to the later generations.