- Key points in RBI’s credit policy
- CRR hiked by 0.5 % to 7.5 per cent from 10th November
- Bank, repo, reverse repo rates unchanged
- GDP growth outlook unchanged at 8.5% for 2007-08
- Inflation to be contained close to 5 per cent in FY'08
- Inflation expectation in range of 4-4.5 per cent
- Medium term objective on inflation is 3 per cent
- Oil companies permitted to hedge foreign exchange on overseas OTC exchange.
- Importers and exporters allowed call, put options
- Authorised dealers permitted to offer American Options
- Working group on RRB, core banking roadmap
- Financial aid to RRBs for IT implementation
- Action plan for National Electronic Clearing Service
- Hi-level committee to review lead bank scheme
- For a more detailed explanation of each measure announced in the policy and its impact it is very educative to look at this column that appeared in ET. Take a look.
- A bit about NDS – Negotiated Dealing System
- It is the official computer screen based trading system in government securities managed by RBI. All the banks and other allowed institutions (Primary Dealers) take part in trading through this system. These ‘members’ have an account (current account) with RBI. These members can in turn open what are called the SGL (Subsidiary General Ledger) accounts with their clients who are interested in taking part in this market.
- Do you know how much it costs to purchase an Airbus A-380 plane?
- The catalogue price of this plane is about $320 mn. That is Rs. 1280 crores if we assume an exchange rate of Rs. 40 per dollar!!
- What would happen if
doesn’t clear the Indo-US nuclear deal now? India
doesn’t take the agreement to its logical conclusion, then the deal with US will have to be started all over again. Under the American process, any legislation that doesn’t go through cannot be carried over to the next Congress. India
- GAP to return Indian garment shipments
- GAP is a big
fashion company and is believed to have sourced around $800 mn worth of clothes from Indian sub-continent last year. US
- There were allegations that the Indian suppliers engaged child labour in one of their factories. This has led to an international uproar and the consequence is that GAP is likely to return those shipments.
- Broadband penetration in
- According to the latest figures,
has just about 2.3 mn broadband subscribers. That translates to a penetration of just 0.2% for broadband compared to 19.6% in the India US, 20% in the UKand 32% in Denmarkand . Iceland Indiahas 39.5 mn wireline telephone subscribers compared to ’s little over 3 mn. Denmark
- Despite having over 100 mn PCs (which hardly translates to about 3% PC penetration), 40 mn Internet users and 70 mn cable and satellite homes, broadband reaches only 2.3 mn users in
- PC penetration is 8% in
China, 14% in Braziland 15% in . Russia
- Take a look at the broadband penetration figures noted by us earlier in December 2006.
- Some noteworthy suggestions for improving broadband penetration in
- NELP VII
- New Exploration and Licensing Policy (NELP) VII round is due to be announced. It appears that the government is thinking of making it mandatory for Indian companies to have some foreign joint venture partners who have experience in deep sea exploration.
- The foreign partners should be those operators producing oil and gas from deep waters beyond 400 meters bathymetry (ocean depth).
- Standby mode turns an energy sucker
- Latest estimates show that 5% of electricity used in the
goes to standby power – ‘vampire electronics’, a phenomenon energy efficiency experts find terrifying as energy prices soar and the planet warms. US
- About 40% of the electricity being used to power a home electronics is consumed while they are in the standby mode.
’s interesting name China
- In Mandarin (the Chinese language) it is called Zhongguo.
- It roughly translates to ‘Middle Kingdom’.
to host the 2014 World Cup Football? Brazil
- The South American country is the only nation bidding to host the tournament which is due to be staged on the continent under Fifa's rotation system.
- Is Mukesh Ambani the richest person on earth?
- Billionaire Mukesh Ambani on Monday became the richest person in the world, surpassing American software czar Bill Gates, Mexican business tycoon Carlos Slim Helu and famous investment guru Warren Buffett, courtesy the bull run in the Indian stock market.
- His net worth rose to $63.2 billion (Rs 2,49,108 crore).
- But Mukesh is disputing these calculations. He says he is worth about $50 bn. Let’s wait and watch what Forbes or Fortune have to say in this matter.
- It does pay to have a quick recap of some important issues appearing in current affairs from time to time, in a form/language slightly different from what we have noted already. It will reinforce our understanding.
- PNs i.e., participatory notes are derivative instruments that have as underlying a basket of Indian stocks and are issued by affiliates of foreign portfolio investors registered in India to overseas investors who are not eligible to invest directly in the Indian markets.
- The holder of such an instrument will be able to gain from the capital appreciation of the underlying shares.
- Close to 34 sub-accounts of foreign portfolio investors have issued PNs to hedge funds and other investors.
- Karnataka’s murky politics
- President’s rule was imposed on October 9 and the assembly was placed in suspended animation after a power-sharing pact between the JD(S) and the BJP collapsed.
- But now both the opportunistic parties have come together to tell the Governor that they will form the government and that they have the requisite numbers.
- Karnataka clearly sets an example in practicing Machiavellian politics.
- Even if the Governor accepts the JD(S)-BJP combine’s claim, he can only report the matter to the union cabinet. It is the cabinet which can recommend to the President to revoke the proclamation of President’s rule and suspension of the assembly.
- Karwa Chauth
- It is a traditional Indian festival in which married women fast to pray for their husbands’ long life.
- Do you see any inequality there? Can anybody from North throw some light on whether we have an equivalent fast for men? Praying for the wife’s longevity and happiness?
- PM to head committee on land reforms
- This one really had me bowled!!!
- Why do we need a committee to be headed by a PM? Can’t he go ahead and implement land reforms as felt best by his government?
- This to me is the highest form to which procrastination can be taken to.
- What are BJP’s objections to the Indo-US nuclear deal?
- In the context of BJP’s giving its view to the
ambassador on the deal, let’s take a look at two of its major stances: US
- It says that the deal should not be strategic in nature.
- It feels that the deal would deprive
Indiaof its right to conduct nuclear tests and infringe on ’s independent foreign policy. India ’s expenditure on R&D India ’s industry spends only about 0.5% of its sales turnover on R&D. This accounts for just about 20% the country’s total R&D expenditure. India
- In contrast, the share of industry’s spend in the EU, US and
is 52%, 68% and 72% respectively. Japan
- Coffee varieties – Arabica and Robusta
- Instant coffee is derived from Robusta. Non-instant coffee (the traditional home brewed variety) is derived from Arabica.
- Remember RK Narayanan’s essay on making coffee?
- BTW, Karnataka grows 70% of
’s coffee. India
- Commentary on MFI bill
- The microfinance bill is under consideration of the parliamentary standing committee on finance. In a very good essay Prabhu Ghate explains various shortcomings of the bill. Read it in full here. Then remember these points for your reference:
- Savings. The bill limits permissible savings to what it calls ‘thrift’, or small, compulsory savings of uniform size made by members organized in groups.
- Exclusion of certain entities from the definition of MFIs. It excludes MFIs registered as NBFCs and Section 25 companies. These actually account for a larger portion of the total microcredit in the country.
- The bill violates the spirit and intent of the new liberal, alternative cooperative Acts enacted in 10 states which reduce the role of government in cooperation.
- The bill does not provide the sector with a form of registration uniquely suited to microfinance.
- The proposed Microfinance Development Council will be dominated by government with a purely advisory role. The MFI industry itself is not represented on this body.
- Language lessons
- “A policy striving for more orderly flows cannot be termed dirigiste” reads a sentence in today’s ET. What does dirigiste mean?
- Dirigism is an economic term signifying direction of the economy by the state, through economic planning and other types of intervention. It is the opposite of laissez-faire.
- Argentine first lady wins Presidential poll!!!
- In a first of its kind the country’s first lady Senator Cristina Kirchner won the Presidential race. Her husband Nestor Kirchner is the current President of Argentina. What a role reversal?
South Africaclinches the ODI series against with a 3-2 lead. Pakistan
- Graeme Smith lead
. Shoab Malik lead the South Africa team. Pakistan
- Did you ever wonder what are these ‘left’ and ‘right’ or ‘centrist’ political parties?
- At times these labels do confuse even seasoned observers of political developments. Take a look at this Wikipedia article and do navigate some links found therein to get a clear picture.
- RBI calls for ban on automatic FDI in real estate
- At present upto 100% FDI is allowed in realty projects through the automatic route, with certain conditions like a three year lock in on investments and minimum capitalization of $5 mn.
- But RBI wants the real estate sector removed from the list of sectors where FDI can come in through the automatic route. This is because it is worried about the rising inflow of foreign funds into the sector.
- Investor interest in the sector has been substantial. Just look at the figures of FDI that have flown in over the years:
- 2005-06: $38 mn
- 2006-07: $467 mn
- 2007-08: $627 mn (from April to July)
- Do you know how the new cinema distribution business is conducted?
- Note this just for the sake of curiosity:
- A movie distributor charges 50% revenue share for the first week, and 30% revenue for the second and third weeks.
- More on ChangE-1, the Chinese lunar probe
successfully launched the satellite at 6.00 PM today. China
- It is named after the legendary Chinese goddess who flew to the moon.
- The lunar probe is expected to enter earth-moon transfer orbit on October 31 and arrive in the moon’s orbit on November 5. The satellite is scheduled to relay its first picture of the moon in late November and continue scientific survey for a year. The orbiter will carry out a series of projects, including acquiring three dimensional images and analyzing the distribution of elements on the moon’s surface.
- See what we noted about this earlier in our blog.
- Farmer training by retail companies may turn mandatory
- With a view to ensure inclusive growth of organized retail, the food processing sector and the Indian farmers, the food ministry is proposing this move.
- A few important areas in which the farmers will be trained by the corporate sector are third party intervention, technical input and water management. The people involved in the supply chain will be trained too.
- At present, the agricultural supply chain is the source of sustenance for about 2 crore families in rural
. It is estimated that by 2010, organized retail and food processing industries will have to directly recruit over 5 crore people. Clearly there appears to be a synergy waiting to be exploited. India
- BTW look at what we noted about what is meant by inclusive growth.
- Forex trading figures
’s share in the total geographical distribution of foreign exchange market turnover has risen from 0.3% in 2004 to 0.9% in 2007. India
- The amount traded on an average per day has risen from $7 bn in 2004 to about $34 bn in 2007.
- Look at some of the major forex trading nations in 2007:
: $1359 bn UK
- US: $664 bn
: $242 bn Switzerland
- Mevlana Jalal Ud-Din Rumi
- He was a famous sufi mystic, poet and humanist from
- Born in the City of
Balkhin Afghanistan, he lived most of his life in Konya, seat of the Seljuk Empire, located in present day . Turkey
- The 800th birth anniversary of this great sufi poet was celebrated recently in
- How large a home is
for the Asian poor? India
- Of the 1 bn poor people in the world,
accounts for 25.9%. India accounts for 16.7% and the rest of Asia-Pacific accounts for 18.3%. China
- On dryland farming
- ICRISAT’s research has shown that drylands can produce 5.1 tonnes of grain per hectare a year, supporting 21 persons as compared to 1.1 tonnes of grain per hectare per year supporting 4.8 persons in case of farmers’ practice.
- Its research further has shown that legumes in general and pigeon pea in particular have the ability to sequester more carbon in tropical soils.
has 66% of the 142 mn hectares of arable land as rainfed area. India
- Pakistani politics and Ms. Bhutto
- Somehow we can’t keep away from watching
from time to time. While I do admire Ms. Bhutto for whatever she stands for – she represents to me the modern face of Islam. A leader in her own right and a well educated one at that. All this may be fine; but do take a look at some criticism that comes her way from other keen Pakistani watchers. Pakistan
- “Her terms in office are marked by incompetence, extra-judicial killings and brazen looting of the treasury” says Jemima Khan. She further says “Make no mistake, Benazir may look the part, but she’s as ruthless and conniving as they come – a kleptocrat in Hermes headscarf.”
- Ahh, beautiful words from a beauty about another beauty. J
- I do agree with the assessment that she knows how to press the right buttons when it comes to being accepted by the western governments. Clichés of female empowerment, democracy, poverty eradication, human rights and war against the terror are all very endearing. I also agree that her actual record as Prime Minister twice is at odds with these clichés being mouthed by her.
- Lets keep watching, how the Pakistani politics evolve over the next few months.
- What are sub-accounts of FIIs?
- With lot of heat being generated by the recent move of SEBI to restrict PNs, one concept that we need to be clear about is the definition of a sub-account. They are vehicles floated by FIIs in tax havens to manage the funds of overseas investors who cannot or do not want to be registered with SEBI.
- Proprietary sub-accounts are used by FIIs to manage their own funds.
- SEBI’s nervousness about PNs stems from the fact that there is no audit trail of funds coming through the PN route. There is no knowing either the quality of the money or the ultimate beneficial interest. This gives goosebumps to the regulator in the context of the fact that 75% of the floating stock in the markets is reportedly now in FII hands, with as much as 52% of the assets under custody of FIIs being in the form of PNs.
- To make matters worse, a view that is gaining currency is that most PN holders in
are hedge funds. India
- So, SEBI after all seems to be just being cautious.
- Mona Lisa’s secrets revealed
- This famous 16th century painting by Leonardo Da Vinci has beguiled art buffs on its origins and meaning.
- A question which remained unanswered even after lot of research was the fate of the enigmatic subject’s famously missing eyebrows and lashes.
- Now a Parisian engineer, Pascal Cotte claims that his ultra detailed digital scans have enabled him to burrow through the layers of paint to ‘see’ into the past. The original painting he says included both eyebrows and lashes but were obliterated by restoration efforts.
- Are funds from multilateral financing agencies classified as ECBs?
- No, according to a news report that appeared in today’s ET.
- Increasing train speeds
- The Indian Railways is thinking of doubling the speed of all express trains connecting major metros. At present passenger trains are having an average speed of 50 km/hr while the freight trains are seeing 30 km/hr.
- To sustain 100 km/hr of speed, fencing of the tracks would be sufficient. But to sustain high speeds of 250 km/hr, new tracks would have to be laid.
- Should the wealthy from foreign shores come and settle in
? India has no estate duty. It scrapped it in 1985. It was originally introduced in 1953. India
- But many other big and rich countries do have it.
UK(40%), Germany(35 to 40%), US (18 to 46%), France (5 to 40%) and (10 to 50%). Japan
- Even though the marginal personal income tax rate is 30% and for the corporates it is 33.99%, the effective rate is 17 to 19% due to various exemptions.
- Is this not making a case of the rich and famous to settle in
- More about Estate Duty in India.
- Language lessons:
- We have heard about astronauts and cosmonauts; but a taikonaut?
- I came across this word for the first time. It means the same, but do look at its verbose meaning: It means a person trained by a human spaceflight program to command, pilot, or serve as a crew member of a spacecraft. While generally reserved for professional space travelers, the term is sometimes applied to anyone who travels into space, including scientists, politicians, journalists, and tourists.
- Scientists discover genes responsible for ageing
scientists have identified a gene that regulates lifespan in mammals, which could one day lead to treatments to hold off ageing and its related illnesses. UK
- The gene IRS-1 is involved in regulating the function of insulin – a harmone that controls the amount of sugar in blood.
- Experiments in mice confirmed that those without this gene lived 20% longer and had much healthier lives.
- A very quirky festival ritual
- In Andhra Pradesh, there is a place called Devaragattu in
district. A ritual by name “Bunny” is carried out every year on the eve of Dussehra. Devotees bring processional deities from their villages around midnight to the temple for Kalyanotsavam. When the deities are taken out of the temple, groups from other villages put up resistance to hijack them. The most ‘uncivilized’ part of the celebration is that they carry sticks and beat everybody and anybody in a kind of ‘free for all’. Kurnool
- This has caused AP State Human Rights Commission to issue a directive to prevent bloodshed during the ritual. The police and excise officials have heaved a sigh of relief because there was only one death this year in the aftermath of this ritual.
- Perhaps the only country to have plebiscite as a constitutional mandate?
- African leadership prize
- This prize is meant for an African leader for good governance and excellence in leadership. It was instituted by a Sudanese businessman Mo Ibrahim in 2006 to strengthen governance in African continent. It comprises of $5 mn for spread over 10 years and $200,000 annually for life thereafter. Another $200,000 will be given to pay for the winner’s public interest activities and good causes.
- It was announced to Joaquim Chissano, the ex-President of
- Formula One racing
- Beating the favourite
Hamilton, it was Kimi Raikkonen of (Ferrari team) who clinched the Brazilian Grand Prix and the Formula One championship title for the year with a top score of 110. Finland
- Lewis Hamilton of McLaren team stood second with 109 points.
- HAPPY DUSSEHRA to all of you.
- Policy for satellite towns
- The government is thinking of coming out with a policy for satellite towns. The policy may be implemented from next year in each of the 35 citites having more than a million population.
- Participating cities have to undertake certain reform measures. Once they do so, they will get central assistance.
- Emergency numbers don’t work everywhere!!!
- If you are in an emergency ever and dial 100 for police, don’t be surprised if you get a message that the number is not in use. Suppose you are having a mobile registered in say
Delhiand are visiting . If you dial 040-100 to reach the local police in an emergency, chances are that you will not be connected to the police. Hyderabad
- This is because
does not have a country-wide helpline number through which help can reach you anywhere. In many areas, mobile operators have not entered into interconnect agreements with BSNL to route emergency helpline calls. India
- Global aviation hit by credit card fraud
- Airline ticketing fraud through credit cards is costing the global aviation industry about $600 mn a year.
the fraud rate hovers around 2% but with tickets being booked online, it is likely that these losses will go up. India
- Intelligent web content
- This allows advertisers and companies to host sites that change their contents on the basis of geographical location of viewers. It also enables companies to offer specific products on the basis of browsing pattern and location of individuals.
- Watching today’s Formula One racing?
- While the results sure hold our interest from the point of view of exams, there is one more that holds our interest. The controversy surrounding industrial espionage involving the McLaren team.
- More murky details of the scandal: On knowing that McLaren has bribed the rival’s technical manager to part with confidential information, its senior driver Alonso reportedly threatened to spill the beans unless it gave him the preferential treatment he expected as the number-one driver!! McLaren did not budge and anyway paid the heavy price of being banned from the Constructor’s race. Can Alonso’s behaviour said to be sportsmanly?
- Nobel for philanthropy?
- Since 2001, the Carnegie family of the
announces its awards once in two years for those who have dedicated their private wealth to the public good and who have sustained impressive careers as philanthropists. These awards are considered the Nobel for philanthropy. US
- This year Ratan Tata from
was given this award. Three other recipients of the award this year are: India
- Heinz family of
, makers of ketchup. Germany
- Mellon family
- Eli Broad
- Wow, you guys are really tech-savvy it appears!
- Usually our blogs see a dip in traffic during week ends. But I was surprised to see that 36 of you have tested receiving the blog on your mobiles!! Being a Saturday, I was not expecting this response at all. Should I say “happy mob-reading.”?
- Sanakara Nethralaya founder and Chairman emeritus
- Dr. SS Badrinath. He was awarded the ET’s Corporate Citizen of the Year award.
- If you read about him, I am sure you will agree that he is one of a kind and deserves no less than a Magsaysay or a Nobel.
- Language lessons:
- “His admirers gave Mr. Singh extra points for his chutzpah and …” reads a sentence. What is chutzpah?
- “The regimes managers were of the view that he was just flying off the handle.” What is meant by ‘flying off the handle’?
- Now the Left makes the non-banning of PNs an issue
- It is for a full ban on PNs. It says that the government is not allowing the RBI to do so by not accepting the Tarapore committee’s recommendation in this regard.
forms panel to draft constitution Myanmar
- In a bid to tell the world that it is for constitutional reform, the military junta of
has announced the formation of a panel to draft the country’s long-delayed constitution. Myanmar
- But it did not say when the committee would be drafting the constitution. It says that it will make democratic reforms only according to its own seven-step plan.
- Last month the junta brutally stamped out pro-democracy demonstrations, detaining thousands of protestors and leaving about 200 dead.
- The UN’s interlocutor for this issue Mr. Ibrahim Gambari is on a six nation visit to find a solution.
- No formal pact with Star Alliance says Air
- The CMD of Air
, V. Tulasidas said that no formal agreement was entered into with Star Alliance as of now and that discussions were going on. India
- New registration system for selling non-prescription drugs
- Presently, only stores in villages where the population is less than 1000 can sell non-prescription drugs – otherwise known as OTC (Over The Counter) medicines. These medicines can be sold by a shop even without a retail chemist’s license. Such medicines usually are antacids, laxatives, calcium tablets and other household remedies.
- The government is now finalizing a new one-time registration system for these vendors. The idea is to prevent spurious drugs from entering the retail chain.
- In many countries there are lists of OTC medicines. But in
, all drugs outside a list of prescription drugs are deemed to be OTC. India
- New improved test to detect cervical cancer
- Canadian scientists have developed a new HPV (Human Papilloma Virus) screening test which is reportedly more effective than the present pap smear test.
- World Osteoporosis Day
- Today is being observed as World Osteoporosis Day.
- 1 in 3 women and 1 in 5 men over the age of 50 years experience osteoporotic fractures.
- Osteoporosis is the thinning and weakening of bones that leads to their breaking even with minimum force.
- Inflation at a five year low of 3.07%!!
- But the consumer price index is ruling at 7% as of August. And in spite of the international crude prices ruling well above the $90 per barrel mark, we have not yet accounted for this rise in our inflation calculus.
- ONGC comes out with new technology and leverages it to get oil blocks abroad
- Its in-situ combustion technology, which it has developed in Mehsana research centre, enables heavy crude recovery. In this technology crude can be combusted well below 900 meters. This enhances the potential oil recovery to over 40% from around 30%.
- Development of
’s North-East India
- In spite of the new North East industrial policy announcement and there being a dedicated ministry for the development of the North East of the country, we all know that there is some deficiency in the country’s efforts at making the people of the North East feel at home.
- Today’s ET editorial comes out with a radically different idea. It says that the linguistic division of states has accentuated conventional ethnic rivalries by abetting competitive identity politics, while undermining traditional socio-economic linkages. It suggests that the North Eastern ethnicities should be allowed to be integrated across the borders (of
India, Chinaand ) to enable them to build trust among themselves and share prosperity. Myanmar
- Any takers for this idea?
- Coping with stress
- Brain has two reward centres – the ventral tegmental area and the nucleus accumbens. These areas are part of the reward circuit of the brain and are known to be involved in fear conditioning.
- When the neurons in these areas fire rapidly and release a nerve growth factor called BDNF (brain derived neurotrophic factor) the individual will have poor stress coping skills.
- Commission on
relations Centre State
- Headed by MM Punchhi, this is the successor commission for the Sarkaria Commission.
- It has now issued a public notice calling for suggestions and comments on various terms of reference. Do you think you have any to contribute? Please do so.
- What is making the Islamic jehadi groups turn against
, the very creator of these groups? Pakistan
- Three reasons are being advanced for this scenario:
- Powerful elements within the ISI are opposed to General Musharaff’s war against terrorism.
- General Musharraf is seen as a master of half measures, doing just enough to avoid international opprobrium without alienating the military’s traditional allies among Islamists.
- With his troops engaged in a fight with Taliban, the General does not have the resources for a confrontation with the tens of thousands of cadre organizations such as the Lashkar.
- International Year of the Potato
- The UN declared 2008 as the year of the potato.
- “The celebration of the International Year of the Potato will raise awareness of the importance of the potato - and of agriculture in general - in addressing issues of global concern, including hunger, poverty and threats to the environment.” Says its official site.
- While preparing your quiz for today, I came across this very good link about
’s mathematicians. Worth a look. Look at it here. India
- I am trying a new feature. This is about making our blogs’ content available through mobile phones. Look at the image titled “Get Mobile Version” on the top in the right side bar of our blogs. On clicking this image:
- It shows you the URL of the mobile blog. For eg., in the case of Indian Current Affairs it is: http://feedm8.com/indiancurrentaffairs. Either you can enter this URL directly in your phone browser or you can enter your phone number to get the URL through SMS.
- For this to work your mobile should be internet enabled and you should have subscribed to the internet service through your mobile phone service provider. Test it and do let me know.
- Reliance (RIL) comes out with top performance in corporate history of
- It became the first ever company in
to come out with a quarterly profit of close to a billion dollars. It posted a net profit of Rs. 3837 crores which is just short of Rs. 110 crores to the $1 bn figure. India
- Its GRMs have shown about 50% improvement. These super GRMs are reportedly on account of a superior refinery configuration. RIL’s configuration has allowed flexibility to focus on the production of middle distillate products (gasoil and jet kerosene) where margins remained firm with strong global demand.
- About derivatives market in
and the world India
- At present the duration of the derivatives products – both index and stocks – is three months. But SEBI is thinking of allowing long term derivative products in the country’s capital markets.
- This is mainly to capture a substantial portion of the derivatives transactions relating to Indian securities happening outside the country. Such a capture will benefit Indian players and will also improve tax revenues.
- Do you know that the premier derivatives market of the world is in US? It is the CME Group, which was formed with the merger of Chicago Mercantile Exchange (CME) with the Chicago Board of Trade (CBOT). It has a daily turnover of $4.4 trillion. In contrast the Indian derivatives market on NSE sees trades of about $220 bn a day, which is just about 5% of the CME Group’s trades!!
- It stands for Civil Aviation Requirements. These are mandatory guidelines for airports to enhance safety procedures on runways. These are issued by DGCA.
- Mashelkar Report thrown in dust-bin?
- Remember the ill-fated Mashelkar Report? Despite the heat and dust having been settled about the plagiarism charges, one of its core recommendations now seems to be getting confined to dust bin.
- The report has said that detailed guidelines should be formulated for examining patent applications in the pharmaceutical sector. The report felt that such guidelines could help a patent examiner distinguish between incremental innovation and frivolous changes. But a view seems to gaining currency in the government circles that such guidelines may only confuse the issue further rather than help the examiners.
- The issue is one of interpreting Section 3(d) of the Indian Patent Act, 2005. This section says that “mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant” would not be considered for patent. The current view is that the law is clear as it wants innovation to enhance the known efficacy of a substance. The patent examiners should be left free to exercise their wisdom in granting or rejecting a patent.
- Petrochemical sector in
- It is one of the most diversified of all industrial sectors covering more than 75,000 commercial products. It employs about 3.4 lakh persons. Has a share of 13-14% in exports and 9% in imports. Contributes to about 3% of the GDP.
- Comprises of everything from synthetic fibres and polymers to synthetic detergents and performance plastics.
- Language lessons:
- “The Left … continues to hold tautological meetings with the UPA…” reads a sentence in today’s ET editorial. What are these tautological meetings?
- Should corporate boards have quota for women?
- Some arguments in favour of this question are:
- Diversity in composition of the board makes a tremendous difference.
- Without women on them, the corporates will lose a chance to use the intellectually imaginative and rationally perspicacious skills that women possess in full quantities.
- Women have a different way of thinking and working: tend to trust their intuitions, be more courageous in taking a stand and often consider alternative decisions with a wider perspective.
- Yeah, yeah agreed; I hear counter arguments on all of them. Point well taken. They are as good as men and men are as good as women. Period. It is not quotas which have taken an Indra Nooyi or a Kalpana Morparia to where they are today.
- Supreme Court’s guidelines on NBWs
- They should be resorted to:
- when summons or bailable warrants do not produce the desired result of bringing a person to court;
- in cases where the police are unable to trace someone in order to serve him or her with a summons; and
- when there are grounds for believing that a person could harm someone if not placed in immediate custody.
- The SC was coming down heavily on the issuance of NBWs even at the slightest provocation by lower courts. It set aside an Uttaranchal High Court’s order.
- The SC ruling that shaped the law on arrests was: DK Basu vs. State of
. Bengal ’s carpet industry and child labour India accounts for 35% of the world trade in handmade carpets. In the last fiscal it exported around $800 mn worth carpets. India
- There are about 20 lakh artisans directly employed in carpet making. It is concentrated in
, Mirzapur, Bhadohi and Shahjahanpur (all in UP), J&K, Jaipur (Rajasthan) and Panipat in Haryana. Varanasi
- “Kaleen certificate” is given by the sellers to the buyers to confirm that child labour was not used in any way in the production of carpets.
- Today’s women
- All of you by now are familiar with my tilt towards women achievers, performers and leaders. We look at two public personalities today.
- Cecilia (Sarkozy): She divorced Nikolas Sarkozy, the French President. Their marriage has been on the rocks for some time. What surprised me is her attitude towards the ‘first lady’ title. She feels it is a very conventional idea to be a President’s wife!! Anyone amongst you thinking similarly?
- Benazir Bhutto: After an 8 year long self-imposed exile, she returned to
. Just as I am writing these notes, BBC on the web tells that two blasts on her convoy killed about 130 people and that she is unhurt. Long live Ms. Bhutto. She is one last hope that Pakistanis have of seeing democracy restored in that country. Pakistan
- Dalai Lama
- He was conferred the Congressional Gold Medal by the
USduring his recent visit to the . USA
- Madonna is on top of music industry
- Pop diva Madonna has entered into a historic record deal worth a reported $120 mn deal for over 10 years.
- This deal is set to revolutionize the music industry, the mavens say.
- With this deal she has become the world’s highest paid female singer ever.
- The XI Plan finalization process
- The Eleventh Plan in the final stages of being finalized. The Planning Commission headed by the Prime Minister will be meeting on November 9 to approve the new plan. After this approval it would have to be cleared by the Cabinet before it is placed for approval by the NDC.
- The India Portal
- While wandering around the web (or should I say wilfing?) I came across The India Portal. It is a must see for all of you. You can’t get a better source of government related info anywhere. It is authentic.
- Man Booker Prize announced
- Anne Enright has won this prize for her novel, an Irish family saga “The Gatherning”. She is an Irish novelist.
’s major turmeric trading hubs India
- Nizamabad (AP) and Erode (TN) are the two major turmeric trading hubs in the country.
- Why is non-reflection of market prices for crude bad?
- Take a look at three solid reasons given by today’s ET editorial:
- Huge fuel subsidies divert monies that could be allotted to the developmental programs meant for the common man.
- Under-recoveries in fuel prices lead to unscheduled borrowings for the oil marketing companies. This could mean dearer cost of funds and hardening interest rates across the board.
- The price freeze would leave relative prices of petro-goods artificially frozen, putting paid to economizing on pricey oil.
- Good times last longer
- In his essay today, TT Ram Mohan argues that the world economy is undoubtedly in an upswing and that the fears of recession or the spread of the subprime contagion are unfounded. Three of the strong reasons he attributes for the upswing are:
- Volatility in global output has declined progressively since the 1970’s. The rise of
has made a solid contribution to this. China
- Emerging markets today account for 40% of world GDP and two thirds of the world GDP growth. This means that there is a diminished dependence on the
as the engine of growth. US
- Terrorism, though has not receded, has had little impact on globalization or economic stability.
- The IMF’s World Economic Outlook identifies three factors for this improvement:
- They are better institutional quality, financial deepening and better economic management.
- Institutional quality is “constraints on the political executive”.
- By better economic management what is recognized is that the central banks have become more adept at tackling inflation. They have also learnt to co-ordinate their responses in dealing with financial crises.
- What did SEBI do that had so much impact on the stock markets? The sensex lost 336 points in a single day and had seen lot of volatility.
- It has issued a consultation paper to discuss the imposition of some restrictions on the PNs in order to moderate capital inflows into the country. It had sought to restrict PNs issued by FIIs to 40% of assets under custody in
. The regulator is justified in asking FIIs not to issue fresh overseas derivative instruments (largely PNs) where the underlying instrument is also a derivative. That is pure speculation and serves no broader purpose. India
- The notional value of the total outstanding PNs is about rs. 3,53,484 crores as of August 2007. This is 51.6% of the assets under the custody of FIIs.
- In this context it would be very educative to read “All about ODIs and PNs” that appeared in today’s ET in the classroom column.
- Crude touches $90 per barrel and still no worries!!!
- I am really surprised that there is not much noise being made about the crude price touching the $90 mark.
- One idea that is put across is that when you look at the 1980 price for crude, the current price is still below what it could have been, if it had accounted for inflation during this period. In 1980 it was $38 a barrel. Adjusting for inflation it should have been trading around $96 to $101 per barrel. But it is still at $90, which is very comfortable; according to this view.
- But I have my own doubts. How long can an economy sustain huge subsidies on account of fuel? And how long can a government sustain off-budget subsidies? It is time the government seriously considers raising the fuel prices. The Indian crude basket is reportedly testing the $80 per barrel mark.
- Indian employment scenario
- Reportedly there are about 998 employment exchanges in the country. Together they have been able to place about 1.10 lakh employees in various government jobs.
’s achievements in space China also is joining the lunar probe bandwagon. It is going to launch a space craft called ChangE-1 this month. China
- In 2003
became the first Asian country to have put its own astronauts in space. China
- This year, it has blasted an old satellite into oblivion with a land-based anti-satellite missile. It is the first such test conducted by any nation including the
USand . Russia
- Citizen Kane
- This is a 1941 film by Orson Welles. It won an Oscar. The movie was about a power-hungry newspaper baron with political aspirations. It was one of the most critically acclaimed films of all time.
- The Oscar Award won by this film is now being put on auction.
- Most sought after FDI destination
has emerged as the second most sought after destination for FDI. India is the first. China
- Scrutiny of Income tax returns
- At present only about 2% of the returns filed are taken up for scrutiny. But the government is thinking of increasing this number to 2.5% from this year onwards.
- Innovative banking and financial inclusion
- Indian Bank is coming out with a new format to reach out the unbanked population. Under this plan, there will be a network of kiosks, each with a single person armed with a laptop connected to net and a safety locker to handle cash.
- The bank seems to be following management guru CK Prahlad’s idea that low income markets present a prodigious opportunity for business and that these are best served with what he terms ‘single-serve’ packages i.e., a radically different and cost effective way of designing and delivering products and services.
- Language lesson
- What is Vexillology?
- It is the study of flags.
- Avasari Khurd
- This is a small village in Ambegaon taluka, in Pune district. Under the leadership of one Sopanrao Bhor the villagers decided to float their own company and develop an area into an SEZ. A resolution has been passed to that effect by the village panchayat. There are about 1500 farmers in the village. Each farmer is expected to contribute about Rs. 100,000 as capital. The company will raise more capital against the landholdings and the farmers themselves will develop the SEZ.
- The unique features and challenges that this idea is posing:
- Will the farmers be able to pull it off? Where will they get the business management expertise from?
- The land in the village being apportioned for farming and SEZ is 2,695 acres and 2,507 acres respectively. So, in spite of the SEZ, the farmers will still be cultivating land.
slowdown could derail Indian GDP US
- A Lehman Brothers study says that a 1 percentage point decline in the US GDP has the potential to impact
’s GDP growth by 0.2 percent. India
- US is the destination of 15% of
’s goods exports and about 70% of its services exports. A sharp downturn in India ’s exports is likely to have spillover effects on its domestic economy. India
- Russian President Putin’s visit to
- In over 60 years, this is the first ever visit by a Russian President to
. Mr. Putin gave a call against the presence of foreign military bases in Iran Iran’s northern neighbourhood and warned against attack on . Iran
- Sub-sectors in biotechnology
- Bio-pharmaceuticals: Includes vaccines, therapeutics and diagnostics.
- Bio-services: Clinical trials, contract research and manufacturing.
- Bio-agriculture: Hybrid seeds, bio-pesticides and bio-fertilizers.
- Bio-industrials: Enzyme manufacturing used in detergents, textiles, food, leather and paper.
- Bio-informatics: It involves the use of techniques including applied mathematics, informatics, statistics, computer science, artificial intelligence, to solve biological problems usually on the molecular level.
- RIL-RNRL directed to renegotiate the gas deal
- We have noted earlier that Reliance Industries Limited (Mukesh Ambani company) and RNRL (Anil Ambani company) have developed differences over their agreement relating to supply of natural gas by RIL to RNRL. Look at the differences here.
- The Bombay High court has now asked them to renegotiate the gas supply deal as it has run counter to the Ambani family settlement. They are given 4 months time to renegotiate the deal.
- In this connection you may also be interested in looking at the gas pricing issue.
- Nobel Prize for Economics
- The prize for 2007 was announced to three American economists: Roger Myerson, Eric Maskin and Leonid Hurwicz.
- Their work is called Mechanism Design theory and it explains how markets allocate resources and why they might be the best way of doing so. Their work has provided foundation for bilateral trade negotiations and design of auction systems for mobile communications.
- Gulf flying rights for Jet and
- Some Gulf countries like
Saudi Arabiaand Kuwaithave not been providing flying rights to multiple carriers, resulting in Air and Indian becoming the only entities to figure in the bilaterals. India Saudi Arabiahas been insisting on one-nation one-carrier principle with . The government is making efforts to make way for Jet and India Deccanalso.
- With EU it is trying to have a horizontal air service agreement. This will obviate the need for entering into bilaterals with various countries of the EU and will treat EU as a single entity.
- QIP norms
- SEBI has come up with these Qualified Institutional Placement norms in May 2006 in response to the companies’ requirement of raising capital locally rather than from overseas. These norms provide for raising capital through private offering for 49 people. As per Company Law a company cannot make a private offer to more than 49 people.
- SEBI is now working on investor eligibility and floor price issues in these offerings.
- Power trading business losing steam
- Of the 21 companies with licences to trade power, only 9 are operating. Two main reasons for this:
- The price ceiling put by CERC at 4 paise per unit.
- Restrictions on sale of power from one trader to another trader. For eg., state corporations like APTRANSCO or Gridco in Orissa are categorized as traders and are not allowed to supply power to traders. This has dried up surplus and has affected trading volumes.
- About denotified tribes
- These are tribes that are the creatures of the Colonial period. They arose out of the theory that some Indian communities were hereditary criminals by caste. This belief led to the passage of the Criminal Tribes Act of 1871.
- The major provisions of the Act were:
- All members of these tribes had to report at regular intervals and had to inform the authorities about their whereabouts/absence from their residences for a day or more.
- They were all given passes by the administration which had to be carried by them when they make trips outside their settlement.
- Tribes were declared ‘criminal’ and had to answer a roll call, which could take place at any unscheduled hour. If a member failed to respond, the onus of proving that he had no evil intentions during his absence from his residence was on him.
- There were 201 tribes that were identified in this enactment. This Act was repealed in 1952.
- The case for a transshipment hub in
- In a very good article making out a case for a transshipment hub at Vizhinjam, IIMB students throw some light into its economics. Take a look at the full article here.
- A transshipment port typically handles high ratios of transit cargo compared to the locally bound cargo. Hence they need to be adjacent to international shipping lines and possess deep draft to accommodate large vessels.
- Typically a vessel greater than 6000 TEU in size requires water depth greater than 16 meters. Indian ports like Mumbai, Chennai, Mangalore and Tuticorin have natural depths of 10-14 meters. Vizhinjam in Kerala has a depth of 20 meters.
- A single container transshipped from
Colomboto incurs an expenditure of $1,200. If it was directly landed at Cochin it would cost only $400. Cochin
- 80% of Indian containers are transshipped at
Colombo, Singaporeand . Indian ships account for 80% of Dubai ’s traffic. Colombo
- Fiscal cost of maintaining foreign exchange rate
- In view of the surging inflows of dollars the RBI resorts to what is called sterilization. Do you know that the weighted average cost of undertaking such sterilization operations is about 3%? This translates to about Rs. 6,500 crores when the full quota of MSS (Rs. 200,000 crores) is utilized. Experts feel that this is a cost that is much bearable than letting the rupee strengthen to about Rs. 37 per dollar. The economic costs unleashed by a strengthening rupee would be much more than this, economists feel.
- In today’s Discover It, we take a look at the subprime crisis again. What prompted this are two developments – the formation of a $80 bn fund by Citigroup and others to tackle the fallout and Joseph Stiglitz’s comments on the crisis. Take a look at it here.
- Independent directors in companies’ boards
- SEBI rules state that if the chairman of the board is a non-executive director, at least a third of the board of directors should be independent directors. If the board is headed by an executive chairman, then half of the board should be made up of independent directors. This is for companies with a paid up capital of Rs. 3 crores.
- Now SEBI’s Chairman Damodaran has aired the view that the independent directors should meet at least an hour or so before the scheduled board meetings to give reasonable inputs to the decision making process.
- Airlines and alliances
- Remember our noting on various alliances in the airline industry? Recap here.
- Airline alliances are formed to offer their passengers connecting flights to their destinations and also to enable them to avail of frequent flier programmes seamlessly across the alliance members.
- No airline can fly to every airport in the world. So airlines flying to various destinations come together to offer their passengers seamless ticketing, transit, baggage handling, frequent flier miles etc.
- Sugar scenario in the country
- Just a while ago we looked at the wheat scenario in the country. Today we look at sugar as reported in ET:
- Sugar season year is October to September. The sugar industry has about 10 mn tonnes of leftover stocks from the previous year. An estimated 30 mn tonnes will be added during 2007-08 year. Consumption is expected to be about 19.5 mn tonnes. Exports are pegged at 3.5 to 4 mn tonnes. That would leave about 16 mn tonnes of closing stocks for 2007-08.
- The recent government decision on ethanol doping is expected to come to the sugar industry’s rescue. Ethanol can be produced either from molasses or from sugar directly. But still there are concerns being expressed because petrol, with which ethanol is proposed to be blended accounts for only 20% of the fuel consumption basket. And as mixing of ethanol with diesel requires an emulsifier, the country is not yet geared for this. Work is still going on.
- New wine policy?
- Government seems to be coming out with a comprehensive policy on wine making and its consumption.
- It would be interesting to know that in 1975 the Cabinet has decided to ban the creation of additional capacity for distillation and brewing alcoholic drinks, except in 100% export oriented units. In 1997 the Supreme Court ruled that industries engaged in manufacturing alcohol for potable purposes will be under the executive control of state governments.
- In the above context, how far will the government’s efforts be viable?
- Airbus A380 set for take off
- After about 2 years of embarrassing delays the first ever A380 is being delivered to Singapore Airlines. It is a double decker jet and the world’s largest passenger plane with a carrying capacity of 471 seats in three classes: first, business and economy.
- Stock markets and dollar correlation
- An expert’s view is that the rupee-dollar exchange rate and the stock market indices are having a strong negative correlation. When the rupee is low against the dollar (eg., in 2003 it was trading at Rs. 48 per dollar) the Nifty was around 1100. Now when the rupee is operating at sub-40 levels the equity markets are at all time high. Nifty is more than 5000 now.
- Heavy weight boxing
- Russian Sultan Ibragimov defeated Evander Holyfield to retain the WBO World Champion title in
- Jyoti Randhawa won the Hero Honda Indian Open Golf at
- As expected the Aussies walked away with the ODI series with a 4-1 lead over
- Elena Dementieva of
beat Serena Williams to win the Kremlin Cup. Russia