27.12.2007

• Infrastructure funding progress
• You might remember the noting we made about an SPV that would be established specifically for funding infrastructure requirements of the country using the huge forex reserves that are built up with us.
• The government and the RBI have now formally approved formation of the SPV in London. It will be a fully owned subsidiary of the IIFCL – India Infrastructure Finance Company Limited. It will access part of the forex reserves and then lend it to Indian companies for funding their capital expenditure abroad.
• RBI agreed to set aside $5 bn for this purpose. The SPV will borrow from RBI in the form of long term securities issued in foreign currency. RBI will subscribe to these securities and the SPV will then provide foreign currency funds to Indian companies engaged in the infrastructure sector.
• Take a look at what we noted on the subject on three occasions earlier: 21.02.2007, 06.03.2007 & 14.03.2007.
• Why are hotels likely to face labour problems in future?
• So far hotels have been out of the purview of the Factories Act, 1948. They are regulated through Shops and Establishments Act. The definition of a ‘factory’ in the Factories Act excluded hotels, restaurant or eating places and railway sheds.
• Once they are brought under the purview of the Factories Act, they will not be able to retrench their employees or shut down their operations without the approval of the authorities.
• Government plans exclusive streets and arcades for designers to promote special interest shopping among foreigners
• This is as part of its efforts at promoting top end retailing. It is expected to increase the per capita revenue expenditure by foreign tourists generating greater foreign revenue earnings for the government.
• Indian fashion design sector is expected to reach about Rs. 750 crores by 2012 from the present Rs. 270 crores.
• The country accounts for barely 0.2% of the international industry’s estimated size of about Rs. 1,62,900 crores.
• Picocells
• This is a technology that creates micro cellular sites called ‘picocells’ within an aircraft, without interfering with the airplane’s communication or other systems and will make cell phone calls possible for travelers.
• Japan plans world’s fastest maglev train
• Estimated to cost $45 bn and to be operational by 2025, this is expected to travel at 500 kmph.
• At present the only maglev train that is operational is in China (Shanghai).
• Maglev (magnetic levitation) trains travel above ground through an electromagnetic pull.
• 2007 was a record year for equity mop ups
• Equity mobilization in 2007 was the highest ever in the Indian capital market’s history. The market mopped up Rs. 45,137 crores compared to Rs. 24,679 crores in the previous year.
• Update on telecom density numbers
• Just recently we noted these numbers. I found that the figures noted earlier by us are a little dated. Look at the figures as of October 31,2007:
• Total number of phones in India: 256 mn
• New phones added per month: 6.65 mn
• Tele-density: 22.52 per hundred persons.
• Tele-density was barely 0.6 in March 1990. In that year, India had barely 5 mn phones in total.
• List out a couple of important steps that have ushered in a changed telecom sector in India.
• Passage of the TRAI (Amendment) Act, 2000, which split regulatory and dispute settlement roles of the original TRAI. Assignment of the latter role to the newly created TDSAT (Telecom Dispute Settlement and Appellate Tribunal).
• Transferring the service providing function of the DoT to the newly created BSNL.
• We can also add the Unified Access Service Licence regime that allows the holder to provide fixed line as well as cellular service in an area.
• Ever the optimist, TT Ram Mohan while giving his take on why we should cheer up and look up for a good 2008, explains how a banking crisis is not likely in spite of the subprime crisis:
• Banks’ losses are expected to rise in the months to come as the crisis unfolds. Many of the off-balance sheet vehicles floated by banks are now coming on to their balance sheets. As banks are expected to carry a minimum of regulatory capital against balance sheet assets, it is argued that their ability to extend credit will be impaired and we could see a credit crunch.
• This is true, of course, but a credit crunch does not imply a banking crisis. A banking crisis involves the failure of several banks, that is, the net worth of several banks gets wiped out. There is nothing so far to suggest that such a crisis threatens American banking. Large banks operate with a capital adequacy ratio of over 12% against the regulatory minimum of 8% or so. They are well placed to absorb the impact of the subprime crisis and also to boost their capital. That is because, as Citibank and UBS have shown, there are overseas investors willing to provide capital.
• Mobile Fisher Friend project
• It is a unique project launched by the MS Swaminathan Research Foundation. In a tie up with telecom and software majors, this project developed applications to provide fishermen with up-to-date information of relevance to them.
• At the press of a button, fishermen now can gain access to information on wave height, weather, potential fishing zones, news flashes, government schemes and latest market price.
• Akshardham temple complex in Delhi sets world record
• The Guinness Book of World Records has recognized this complex as the world’s largest Hindu temple complex.