Indian Current Affairs: 03.09.2007

GSLV-F04’s launch was successful and it placed the satellite successfully in the orbit.
In the process, the satellite became the first one to be lifted off the Indian shores after sunset.
This is also the first time that India launched an INSAT series satellite using its own launch vehicle.
2007 also proved to be a year with maximum satellite launches (three of them) and all successful.
Now we have notched up more successes than failures in our space program. Let’s take a look at the failures, as successes are many:

First stage is fired by solid propellants.
Second stage is fired by liquid propellants. Liquid propellants are in the strap on motors strung around the core first stage.
Third stage uses cryogenic fluids – liquid hydrogen as fuel and liquid oxygen as oxidizer.

Though optional ethanol blending was permitted by government from November 2006, it has not taken off due to difference in levies imposed by state government for inter-state movement.
But now the government is seriously considering making the blending mandatory to bail out the sugar industry.
But a former petroleum secretary has pointed out many forward and backward linkages that have to be kept in place before the blending can be made mandatory. Take a look:

BIS (Bureau of Indian Standards) specification for the petrol has to be revised.
Manufacturers of vehicles have to study the startability / driveability, emissions and engine durability.
Concerns about material compatibility and ECU calibration (i.e., fine tuning the electronic control units in the vehicles) are to be addressed.
Refinery process adjustments.
Lack of severity in the distillation process needs to be addressed to ensure 100% water free ethanol.

Frequent changes in use of petrol of blended and non-blended varieties affect the engines.
Sugar cane being an agricultural crop is subject to vagaries of nature, it could well mean high price fluctuations.

Reliance Industries Limited has bid for supplying NTPC about 12 MMSCMD (Million Metric Standard Cubic Meters) of natural gas from its KG Basin at $3.18 per mmbtu (Million Metric British Thermal Units).
But it has not supplied the gas to NTPC saying that NTPC has not signed the contract. In the mean time, its market discovered price of gas is around $4.3 per mmbtu.

As the recently introduced bill, enlarging the role of the Competition Commission of India, results in even very small banks’ mergers and acquisitions coming under the CCI’s scanner and results in delays of up to 210 days, the ministry of company affairs has agreed to raise the bar in so far as mergers and acquisitions in banking are concerned.
Dena Bank and Canara Bank are in merger talks. Dena Bank, a small bank by all standards has an asset base of Rs. 26,545 crores.

It costs about Rs. 1 lakh per annum to educate a student in IITs. But only about Rs. 32,000 is charged as fees from the students.
So the government is thinking of coming out with an exit tax on them, if they choose to leave the country. One more proposal that is being aired is that students who seek work outside the national priority areas have to pay back the subsidy, as the nation is not benefited from the investment made in educating them. Such a system is followed in Australia.

Only yesterday we noted that the economy is doing pretty well. Can the subprime crisis threaten the Indian economy? Take a look at an expert’s view (Chetan Ahya of Morgan Stanely):

If the current global risk aversion trend continues for 9 to 12 months, India could face a significant deceleration in growth.
A positive global risk appetite environment and the consequent rise in capital inflows into emerging markets has been a key pillar of stronger growth in India. The risk-appetite growth linkage is as follows:

Rise in risk appetite – rise in non-FDI capital inflows – lower real rates – strong credit-driven growth.

Indeed, India has increased its outstanding bank credit stock to $480 bn from $162 bn in April 2003. However, the trigger for reversal – just like the rise of this growth cycle – will be the global risk appetite trend and not domestic fundamentals per se.

If you are asked “India’s growth story is built not on its domestic fundamentals, but on the free float of credit available in international markets. Comment.”, the above can be a very good answer.
While I agree with the above analysis, the fact is that global investors are re-entering the emerging markets. According to data collected by Emerging Markets Portfolio Funds Research (EPFR), money market funds and US equity funds witnessed net outflows (from developed world) of $6 n and $8.6 bn respectively during last week of August. But, this can quickly change once the fully played out consequences of the subprime crisis prove to be detrimental to the US economy. That in turn can have some damage to the global economy.

How China has scored over India in agriculture, while both were more or less at the same stage about 25 years ago?

Communist party; isn’t it?
I thought so. But was surprisingly educated by today’s Hindu that it is the United Russia party that is ruling the country. Communist Party is the second largest party in Russia now. KGB, which was used so effectively by the Communists has yielded so many effective operatives that they are now running the country in the garb of politicians!! What a curious twist of fate for the Communists?

Indian Current Affairs