- Annual Trade Policy announced
- You know foreign trade policy is announced for a period of 5 years. The current such policy is for the period 1st September 2004 to 31st March, 2009. Take a look at the whole policy document if you are interested here.
- For this policy annual supplements will be released every year. It is this that is announced yesterday for the current year. Take a look at the full document here.
- Major policy announcements made in this are:
- Refund of service tax on export goods.
- New incentives for hi-tech products and agri-products.
- Expansion of the Vishesh Krishi Yojana and the Gram Udyog Yojana.
- Extension of the ECGS (Export Promotion of Capital Goods Scheme) to spares and parts.
- Introduction of flexibility in meeting export obligations under the EPCG scheme.
- Expansion of the focus market and focus product schemes
- Extension of DEPB scheme for a year
- Change in categorization of status holders.
- The country’s share in world trade has just crossed the 1% mark from 0.76% in the previous fiscal.
- Indian exports have touched $125 bn mark in 2006-07. Imports are pegged at $181 bn.
- Stock lending by small investors to be allowed
- Small investors holding some select scrips (about 150 are identified to start with) will be able to lend them to the market and get higher returns than the dividends that are being generated by them.
- This is expected to deepen the market for short-sales and will give added depth and width to the market.
- Differences in the arriving at the 123 Agreement between
Indiaand the US wants access to reprocessing technology and material and a right to reprocess spent fuel. India USlaws ban export of reprocessing technology as it can be used for military purposes but the UShas made exemptions for Japan, EURATOM and . The Switzerland side is maintaining that it will be difficult to give Indian such an exemption. US New Delhidoesn’t want a voluntary moratorium on nuclear testing to be included in the 123 agreement but the USwants to include a clause that all USmaterial will be returned in case tests a nuclear weapon. India
- Mobile communities
- A mobile or wireless community is a group of people who are linked together via their mobiles.
- Popular international mobile community sites include sms.ac and QQ from
- Pagalguy.com from
is one such site which connects a large pool of MBAs and MBA aspirants. They have launched a service wherein if you send an SMS to a single number, it will reach all those people who have subscribed to that service. India
- You know my idea is to launch some such service enabling you all to practice taking your prelim exam.
- Whistleblower policy for banks kicked off
- The RBI has introduced a whistleblower policy for private and foreign banks that allows customers, shareholders, NGOs and other members of the public to complain in confidence. The complaints could relate to corruption, misuse of office, criminal offences, suspected/actual frauds and failure to comply with rules.
- However, the complainants’ identity would be revealed if complaint turns out to be frivolous and action will be initiated against the complainant. The complainant has to ensure that the issue raised by him involves dishonest intention/moral angle.
- Basel II norms about capital adequacy
- Banks are required to set aside Rs. 9 as capital for every Rs. 100 they advance as loan.
- More than a dozen state-owned banks have head-room to dilute government equity upto 51% and raise capital. However, to sustain a GDP growth at current levels more credit growth is needed. The credit to GDP ratio in
is at 30% and is much lower than in the developed countries where it is more than 150%. India
- Some good observations about
’s polity Pakistan
- The emergence of radical Islam in
has been the outcome of a grossly inequitable socio-economic and political order. But Islamists are still a marginal electoral force in the country. Even as ideological loudness has, in large measure, been due to the patronage it has received from the army ever since the days of Zia-ul-Haq, who used the Islamists in his cynical power struggle against mainstream parties. Musharraf has learnt that Zia’s legacy cannot be undone through force alone. A popular consensus for secular democracy is needed before all else. Only a political agency capable of articulating disaffection in a modern idiom of development, could take Pakistan beyond radical Islam, military dictatorship and corrupt parties. Pakistan
- I can’t agree more with this assessment.
- Has the RBI been over jealous in its response to rein in inflation? Have its measures contributed to slowing the economy at a much faster pace than what is required?
- Let us look an excellent article written today by Chetan Ahya. Look at the full article here. It echoes 5 criticisms on RBI’s measures and analyses each one of them.
- A large part of the inflation pressure is due to food prices rising and monetary policy tightening will not help.
- Analysis of price trends in various WPI components revels that the recent acceleration in overall inflation is due to manufacturing products.
- RBI has been very slow in the first place in heralding monetary tightening.
- To be fair, the RBI did not want to be aggressive before being sure that supply side response would not match the accelerating demand growth.
- The recent aggressive tightening will slow (demand) growth.
- The key objective of ensuring that inflationary trends do not become self-reinforcing and elevate inflationary expectations justifies this tightening.
- Aggressive tightening will choke off the very supply side response that the RBI was hoping would come through.
- The key challenge for the RBI in determining monetary policy response to the concerns on potential overheating is the extent of lag in supply side changes. Considering this lag, the RBI is forced to tighten right at the time when capex is picking up.
- Inflation is a transient problem and the country should absorb the cost of high inflation in the intermittent period instead of tightening aggressively.
- The democratic political structure does not permit politicians to accept higher inflation for 1 to 2 years.
’s supply side response tends to be particularly slow in areas where government influence is high. The central bank has not control over these two factors. India
- It refers to the persistence of below trend growth (high unemployment) and stubbornly high inflation.
- The term was first used by a British Member of Parliament, Ian MacLeod, in a 1965 speech.
- Global Business
for the Environment. It is co-organized by UN Global Compact, a 7 year old initiative that works with businesses to enhance environmental and social ideals. GBSE at its recent conclave in Summit discussed ways in which corporations can fight climate change. Singapore
- Champions of Earth awards
- Awarded by UNEP to 7 people. Know the full details here.
- Former Vice President of the
, Al Gore and Jacques Rogge the president of the International Olympic Committee are among the awardees. USA