Indian Current Affairs: 03.03.2007

Fringe Benefit Tax on Employee Stock Options
This year’s budget provided for levy of FBT on the discount price of ESOPS. The discount price is the difference between the fair market value on the date on which the employee exercises his stock option and the amount actually paid or recovered from the employee.
After the option is exercised by the employee, if he holds the stock for more than a year and then disposes of the stock, the profit he makes on the sale of shares will not be liable to long-term capital gains tax. But if he sells the stock before one year, the profit on such sale attracts short-term capital gains tax at 10%. There is a catch here is that this concessional short term capital gains tax is available only for listed shares. That is, companies whose stock is not listed will not be entitled for this concenssional tax.

For the week ended February 17, the inflation figure is at 6.05% compared with 6.63% for the previous week.

PMT (Panna-Mukta-Tapti) exploration fields, 95 km off the north-west coast of Mumbai have yielded oil and gas find.
BG (British Gas)-ONGC-RIL consortium has reported the oil find, which sources are placing at about 3 crore (30 million) barrels of oil and about 12 MMSCMD of natural gas. The reserves are yet to be proven and certified by the DGH (Directorate General of Hydrocarbons).

Over the next five year, the sector is stated to be having the potential to give employment to about 90 lakh people.

With amendments to the APMC Acts (Agricultural Produce Marketing Act) of states having been carried out, it would be possible for private players to have transactions outside the government owned mandis.
India has about 7,500 mandis with about 10-12 per district. Typically mandis are the platforms where growers sell their produce through intermediaries to buyers. Mandis charge a fee on transaction that could go up to 4% of the volume traded. Some of the big mandis conduct business worth about Rs. 20 crore per day.
Allowing private mandis would enable them to save on costs/fees of intermediation and also bring in disintermediation. This is expected to ensure better price realization for the producers.

The Bofors controversy started with the Swedish National Radio broadcasting that Bofors, the Swedish gun manufacturer, had paid $25 crores ($250 mn or Rs. 64 crores at the then prevailing exchange rate) into three coded Swiss accounts. The accounts were: Svenska that belonged to Win Chadha, Pitco that belonged to the Hinduja brothers, and AE Swervices, a shell company operated by Panama registered Colbar Investments, which is controlled by Ottavio Quattrocchi and his wife Maria.
The Bofors Scandal was a major corruption scandal in India in the 1980s; the then Prime Minister Rajiv Gandhi and several others were accused of receiving kickbacks from Bofors AB for winning a bid to supply India's 155 mm field howitzer. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of Gandhi's ruling Indian National Congress party in the November 1989 general elections.
Sten Lindstorm: he is the Swedish police officer who was the principal investigator in the Bofors case. He says that pressure from India led to the Swedish National Audit Bureau sending a blanked-out version of its inquiry report to India.

M1: a measure of the money supply; includes currency in circulation plus demand deposits or checking account balances. This is referred to as ‘narrow money’.
M2: a measure of the money supply; M1 plus net time deposits (other than large certificates of deposit)
M3: a measure of the money supply; M2 plus deposits at institutions that are not banks (such as savings and loan associations). This is referred to as ‘Broad Money’.
India’s budgeted defence expenditure in 2007-08 is about Rs. 96,000 crores, which is about 2.14% of the GDP.

Indian Current Affairs