Indian Current Affairs: 08.12.2007

Government is the biggest shareholder in IOC with over 80% stock.
Its reserves and surplus have mounted to Rs. 33,689 crores – almost 29 times over its paid up capital of Rs. 1168 crores.
Bonus shares are additional shares issued to the existing shareholders free of cost. They are issued by cashing in on the company’s free reserves. A company accumulates reserves by retaining part of its profit (not paying as a dividend) over a period. When free reserves increase beyond a certain level, the company issues bonus shares by converting part of its reserves into capital. Issuance of bonus shares would mean more number of IOC shares would be traded in the market.
But with the national oil companies losing about Rs. 240 crores a day on retail fuel sales, does this make sense?

A committee chaired by Planning Commission member Anwarul Hoda is proposing the setting up of a regulatory transport body, which would have the power to enforce physical restrictions on the use of personal vehicles and limit the availability of road space for them. The regulator would set a cap on the number of cars per household by restricting ownership of vehicles and also wield powers to suspend and cancel licenses in case of traffic violations and accidents.
Are you game?

The US government is proposing a rate freeze that will be available only to people who have not missed any mortgage payments. It will also apply only to loans taken out between 2005 and July 31, 2007, and are scheduled for rate boosts between January 1, 2008 and July 31, 2010.
According to estimates only about 145,000 households will qualify for this rate freeze. The plan is aimed at stemming foreclosures that have shot up to record highs. The idea behind the plan is that the 5-year rate freeze will buy time for housing sales and prices to start rising again. Such a rebound would enable home-owners to refinance their current ARMs (Adjustable Rate Mortgages) into fixed rate loans with more affordable monthly payments. But some people who want to buy homes and have been priced out of the market are upset there is no help in sight for them.

The rush of foreign capital into the country has slowed down. The reserves accretion is now less than $1 bn dollars in a single week. After SEBI tightened the norms for foreign investments through P-notes in October end, FIIs have gone slow in their investments. Also inflows through the ECB route have slowed down after government imposed end-use restrictions.
The reserves are currently at $273 bn.

We have noted something about the issue on 06.12.2007. Let’s look at some more meaningful excerpts from today’s ET editorial on the issue:
That a 15% appreciation of the rupee against the dollar has severely dented the industry’s competitiveness speaks volumes about the poor fundamentals of the textiles sector. This is largely why despite having an abundant raw material base, broad range of fabric production, cheap labour and large domestic demand, the industry has not benefited from the opening up of the global textile trade to the extent expected.
A recent CII-Ernst & Young study shows that while China’s share in apparel imports into the EU has risen 11 percentage points in the post-quota regime, India’s is up only three percentage points to 9%. In the case of the US, the gulf is even wider, against 16% earlier, China now has 50% market share.
The lack of competitiveness of the Indian textile sectors is largely due to lack of scale. This increases production costs and makes technology-adoption difficult. The result: the sector is stuck at the low end of the value chain, making it difficult for it to weather even small shocks.

Why is the government’s reported decision to enforce “uniformity in curriculum” bad?

It would inhibit innovation and obstruct democratization of knowledge as well.
The government would do well to learn a few things from the Bologna Process that envisages a common European educational area. The process seeks to preserve the specific nature of every higher education system in the Continent while standardising the system of awarding degrees.
But such an open education system would, in the long run, be sustainable only if the economy has the capacity to diversify in tandem with the ever-increasing variety of knowledge.

At present the sales tax on ATF averages 23% for domestic flights.
There is a demand from the airlines that ATF should be given a ‘declared goods’ status, thereby attracting a uniform 4% tax across the country.
ATF price in the country includes customs duty of 10%, excise duty of 8% and sales tax on an average at 23% across the country.
ATF rates for domestic operations in India are priced 70% more than international benchmarks. The aviation fuel contributes 40% of the operational cost of the airlines.
The Centre is floating the idea that those states that bring it down will benefit from increased sales happening within its borders. But, will the states bite the bait?
Look at what we noted on the subject earlier on the issue: 28.12.2006 and 11.07.2007.

It was set up to consider the takeover of closed tea gardens in Kerala, West Bengal and Assam. The takeover is not nationalization of the tea estates; but is expected to find new owners for the estates, as the estates have been lying closed for a long period.

This meet is being attended by 190 nations to launch negotiations that will eventually lead to an international accord to succeed the Kyoto Protocol, which expires in 2012.
The 175-nation Kyoto Protocol requires 36 industrial nations to reduce GHG emissions, by an average 5% below 1990 levels by 2012.
Saudi Arabia and the US are worst ‘climate sinners’ according to an annual index ranking 56 nations which together account for more than 90% of global CO2 emissions.

Indian Current Affairs