Indian Current Affairs: 03.12.2007

The subprime crisis is having its impact finally on our exporters. Let’s take a look at how.
Indian banks draw foreign currency credit lines from international banks to lend to local exporters. These credit lines have now dried up with the subprime fiasco severely impacting the global money market.
With high-street banks in the US and Europe even reluctant to lend to each other in the term-money market, they are in no mood to extend credit lines to Indian banks. And even if they do, it will be at a price that the local banks can’t afford.
So what gets affected badly is the PCFC – Packing Credit Foreign Currency -- loans that are badly required by our exporters. Exporters use these loans to process goods and also to import raw materials. As interest on such loans usually was lower than the rupee loans it helps them to lower cost.
This is an example of systemic impact. Now perhaps you may appreciate well what I meant by systemic impact sometime back while noting on this issue?

So says CRL Narasimhan in The Hindu today.
As the crisis rolls on engulfing the broader credit market, there are definite indications that it has acquired all the characteristics of a systemic risk calling for coordinated action by the policy makers. Banks with lesser capital would obviously lend less to the more productive sectors. It is not just the housing sector but the whole economy that may suffer for want of bank loans.

Tokyo is hosting the 12^th Robo-One Grand Championship match.
To win the tournament and the title of the strongest two-legged fighting robot, contestants need to able to keep their balance while punching and dodging blows, and get up when pushed down.

Want to know more about it? Then you must read today’s interview with Hussein Hamid Hassan, who is considered as the father of Islamic finance. You will find it here.
We have noted some basics about it sometime back in our blogs. Look at them here. Some additional points worth our noting are:
Conventional banks are not permitted to invest deposits at all, but can only lend them to investors. Islamic bank doesn’t receive deposits with fixed interest rates. Rather, the deposits are in the form of equity from depositors to be invested, along with shareholder’s equity in one common pool.
The first Islamic bank was set up in 1975.

He said that the financial sector reform is one area of disappointment in an otherwise praiseworthy reform track record of the ruling coalition. The failures as noted by him are:
Raising of FDI investment limits in insurance from the present 26%.
The banking reforms bill.
The bill to give statutory powers to the pension regulator PFRDA.
The gap between the outlays and outcomes. Here he was referring to the fact that outlays have increased four times in education and two times in health between 2004-05 and 2007-08. But he says he has some reservations on their outcomes.

OPC: One Person Companies.
Today’s ET editorial makes a strong case for them.
The world over, OPC structure is favoured by top executives striking out on their own after exiting full-time employment with a company. This enables an entrepreneur to take more risks, given that the shareholder’s liability is limited to his equity investment in the venture.
It allows tremendous flexibility to the entrepreneur as he need not find another shareholder or director. The existing Companies Act mandates that a private limited company needs at least two shareholders.
It allows for easier and faster decision making.
It also enables lower tax liability.
As the JJ Irani committee on overhauling the Companies Act has recommended this new structure in its 2005 report, it needs to be given a leg up. Countries such as China and Qatar have allowed the creation of such companies over the past couple of years.

The practice of patenting properties of products like neem and turmeric which have been used for centuries.
India has been a victim of biopiracy as there have been several attempts, especially in the US, to patent such uses.
So developing countries actively aided by the LDCs (Least Developed Countries) are seeking incorporation of disclosure norms in the TRIPS agreement to counter biopiracy.

It is facing some trouble as a substantial number of employees are leaving it enmasse, protesting against some management decisions.
Its Chairman is Capt. JC Anand.
It is India’s one and only ship registry. It has been undertaking certain flag state control functions such as surveys and certification and some other statutory obligations on behalf of the DGS – Directorate General of Shipping.
It was set up in 1975. It has become one of the top 10 classification societies in the world. Over 1100 ships are classed with IRS, including some from Greece, Thailand and Sri Lanka.

Helen Mirren won the best actress award for her performance in “The Queen”. She won the Oscar and also at the Venice Film Festival earlier in the year.
The uniqueness of EFA awards is that they are held in their home city – Berlin in odd years and in different European cities in even years.

The Portuguese colonized Goa in the early 16^th century after Vasco da Gama discovered a sea route to India in 1498. Their rule ended in 1961.

The party backed by President Putin – United Russia – is tipped to win a majority of the seats in the 450 member State Duma (Lower House).
Vladimir Putin’s second and last term as President is due to expire next year and Russians will be choosing their next President in March.
But President Putin is largely expected to retain some control over his successor.

She is a British school teacher who is sentenced to 15 days’ imprisonment in Sudan for allegedly “insulting” the Prophet by allowing her pupils to name a teddy bear Muhammad.
This incident has received lot of condemnation from many muslims from across the world.

It is a very good article that appeared in today’s Hindu. A must read for students of Political Science and International Affairs.

It is yet another important article that appeared in today’s Hindu. Explains the reasons behind the unrest.
The main problem appears to lie with the rules which say that a person’s tribal identity is irrevocably and forever linked to her or his place of origin. So when a person migrates to another area, she stands to lose her tribal identity. For a non-tribal, such migration doesn’t result in her losing her socio-cultural coordinates of her identity. This appears to be at the root of the disenchantment of the Adivasis.
For a full appreciation of the issue, recommend reading the article fully.

Muthaiah Murlitharan (Sri Lanka) has equaled the record of Shane Warne in taking 708 test wickets. In the test match against England at Kandy.

Indian Current Affairs