02.07.2007

• Some of you asked me to explain something about the 610 GO issue that is raging in Andhra Pradesh. After a bit of study, I have done that in today's Discover It blog. Take a look at it here.
  
• Quote of the day:
• “Socialistic alternatives are not practical alternatives”
• Buddhadeb Bhattacharjee, CM, West Bengal
• I have surely not come across a better quote than this in my entire life. I am not making fun of him. I admire him. It takes lot of guts to admit a mistake. It takes ‘n’ times that to admit a policy reversal. The question is do we have the guts a la Buddhadeb?
• Read the article that appeared about his interview in today’s ‘Viewpoint’.
• Some of you asked me to explain something about the dispute between Kuwait and India in the civil aviation sector.
• Kuwait threatened to stop all flights from India from July 1, 2007. It looks like it wanted to send a strong signal to India as its plans to expand the operations between the two countries through Dubai did not fructify.
• With this threat, India sent a delegation to Kuwait to sort out the issue. Now the countries have reached an amicable understanding and the civil aviation pact between them is being revised to hike the capacity entitlements of each side from 8,320 to 12,000 seats per week.
• India attracts more PE investments than China
• In the first half of 2007 (Jan to June), India attracted $3.7 bn of PE investments against China’s $2.6 bn.
• You know Japan attracted close to $4.91 bn during the same period.
• US mulls open access for biotech generics
• We heard about Open Access in electricity and gas distribution; but in biotech? Let’s see what this means.
• The US is moving closer to opening up for generic versions of block buster MNC biotech drugs. With the 20 year patent protection on the first wave of biotech drugs of the late 80’s set to expire soon, the US market is expected to provide a new revenue stream for the Indian pharma industry.
• Unlike chemical drugs, biotech drugs cannot be exact copies of the original drug. They can only be ‘bio-similars.’
• Biologic medicines are derived from living beings and are much tougher to produce than traditional, chemical based medicines. Small changes can make them ineffective or potentially harmful.
• Tractor sales hit the roof in AP
• The south seems to be seeing robust growth in tractor sales. Can you name the tractor majors in India?
• Mahindra & Mahindra
• TAFE
• Punjab Tractor
• Trans Sahara Gas Pipeline
• It is a $13 bn project promoted by Algeria and Nigeria.
• The 4,300 km long pipeline will supply gas to African and European market by 2015.
• GAIL is also expected to participate in this project.
• How much does government control in the SBI?
• 59.7%.
• SBI needs to raise about Rs. 50,000 crore over the next three years, to be Basel II compliant.
• Why is RBI in a weak position to fight inflation?
• In an interesting article (any article written by the senior columnists seems to be interesting to me; hope it interests you too!) written today Mythili Bhusnurmath explains the reasons. Let’s take a look:
• The traditional reasons for this are: lack of independence, multiplicity of goals, dodgy statistics etc. One more cause is the poor transmission mechanism.
• What this ‘transmission mechanism’ means is, the RBI’s policy rates should translate into to interest rates and exchanges rates and ultimately into real interest rates. In other words, it should have a grater ability to influence interest rate levels (in the market) for it to manage demand in the economy. As long as this does not happen, there is a transmission failure and the bank remains in a weak position to fight inflation.
• At present the lag that is there between the RBI’s policy announcements and the effect of the policy measures demonstrates the ‘transmission mechanism’ failure. Because of this lag, inflation gets affected only after some time of the RBI’s announcement of policy rates.
• The solution for RBI therefore, is to work on smoothening the monetary transmission channels by integrating and developing financial markets. In the interim, knowing its limitations, it must go in for pre-emptive action. The pre-emptive action refers to taking the policy initiatives well ahead of time by gauzing where the economy is headed, rather than reacting to the events after they have happened.
• How much are Indians cheated in the gold trade?
• An estimate by BIS (Bureau of Indian Standards) says that unscrupulous jewelers on an average sell 15% less pure gold to their customers. This comes to around Rs. 6,000 crores per annum.
• A couple of years back, RBI Governor, Y. V. Reddy expressed that consumers lost Rs. 80 bn annually due to poor quality of the gold jewellery.
• So my prescription: don’t buy gold.
• F1 racing: French Grand Prix
• Kimi Raikkonen won the French Grand Prix.