12.12.2007

• In today’s Discover It, I noted for you excerpts from an interesting debate that is going on about making the higher education curricula uniform across the country. Look at it here.
• Geothermal energy
• In India the places that have geothermal potential include Ladakh, Himachal Pradesh and Andaman islands.
• Geothermal plants produce electricity by tapping heat in the steam hidden beneath the surface of the earth.
• The capital requirement for geothermal energy works out to Rs. 10 to 12 crores per MW compared to Rs. 6 to 7 crore per MW for hydro power.
• Geothermal plants typically have a high plant load factor of 80 to 85% and there is hardly any operational cost involved in running these plants.
• Human evolution is happening fast
• People today are genetically more different from people who lived 5000 years ago. They in turn were different from Neanderthals who vanished 30,000 years ago.
• The changes have been driven by colossal growth in the human population – from a few million to 6.5 bn in the past 10,000 years – with people moving into new environments to which they needed to adapt.
• Most of the evolutionary changes happened in the last 10,000 years basically corresponding to population growth after agriculture is invented.
• PSEs and bonus issue
• We have been noting about this in the last couple of days – 11.12.2007 & 08.12.2007. Some more info is coming our way today.
• Of the 83 listed PSUs, 52 companies have reported accumulated reserves and surplus that were more than three times their respective paid up capital during the financial year 2007.
• This, when viewed in the backdrop of the DPE (Department of Public Enterprises) guidelines and the government’s instructions to IOC, may hint at a possibility of bonus announcement by these PSUs.
• Supreme Court notices judicial activism with caution
• While passing a judgment in the golf club case (wherein it struck down the Punjab and Haryana High court decision directing a golf club to create a formal post to which a mali should be appointed), the Supreme Court has called for a halt to excessive judicial activism. The observations of the Supreme Court are called ‘obiter dicta’ in judicial parlance. That means that these observations will not have the strength and force of a judgment. But nevertheless they make clear to the country the ‘sense’ of the court.
• Do you remember the phrase ‘sense of the house’ being used in the context of the Indo US nuclear deal? It is something akin to that.
• On SSI de-reservation
• It is a very good article that appeared in today’s ET. Recommend a read once. Some excerpts for our record follow:
• The list of items meant for exclusive production by SSI sector has come down from 836 items in 2001 to 114 at present.
• In many categories where capacity constraints exist, there has been a pruning down of key items from the domain of restrictions.
• The result of de-reservation has been broadly positive. Experience shows that companies engaged in small-scale production, which have survived the downturn of the ’90s, have emerged stronger and even outperformed their counterparts in the large industry by a huge margin. This is confirmed by the Economic Survey which mentions that, between 2001 and 2005, average production in the SSI unit increased by 10.6% while employment actually grew by 4.4% unlike the case of medium and large industry during this period. Similarly, smaller companies have done better than larger ones in terms of growth in net sales and operating profits. In fact, companies with net turnover of Rs 1 crore to Rs 50 crore have reported a 701% profit between 2001 and 2006 as compared to 169% for large companies. And all this growth has taken place at a time when items were being taken off the reserved list.
• Yet complete de-reservation may neither be feasible nor desirable as reservation may still be meaningful for items such as agarbattis produced in the cottage industry. Hence, it would be beneficial to ascertain and evaluate the worth of each item and assess its likely impact before going in for de-reservation. And this should be completed within a certain time frame. This would help small-scale capital, labour and entrepreneurship to rearrange, amalgamate and build economies of scale as also develop the requisite strength to compete.
• The process of de-reservation should be accompanied by provision of requisite infrastructure and institutional support which will help SSIs to effect vertical integration with larger units. Its problems of technology, skills, marketing and finance deserve special consideration. After all, SSIs offers huge employment and export potential, which could be ignored only at our own peril.
• Sane advice; eh?
• The Benami Act is in for a overhaul
• Enacted by the Parliament about 19 years ago (1988), the Act has still not come into effect because the CBDT (Central Board of Direct Taxes) which was entrusted with the task of framing the rules has not yet done so.
• The government is considering changes to the Act following pressure from international quarters on India to tighten its anti-laundering Act.
• A tightened Benami Act can aid the PMLA (Prevention of Money Laundering Act) to fight terror-funding effectively.
• A ‘benami transaction’ is one in which property is transferred to a person for a consideration paid or provided by another person essentially.