31.01.2007

• Standard & Poor upgrades India rating
• The sovereign rating now stands at BBB- from BB+.
• What this means is that:
• Indian corporates and banks can bargain for cheaper overseas loans
• More M&A and LBO (Leveraged Buy Out) opportunities for India Inc.
• Higher inflows could partly offset a rate hike impact
• Pension and other global funds with low risk appetite can now invest in India
• India exposure limits for foreign banks can rise
• Increased FDI inflow
• Compare this with the situation in 1999, when S&P downgraded India to below investment grade following the BoP (Balance of Payment) crisis.
• Even with this upgrade, India is still not on par with other East Asian economies. Countries like China, Malaysia, South Korea, Thailand and others like South Africa and Mexico have higher ratings than India.
• The combined fiscal deficit of the centre and the states put together is likely to fall below 7% of GDP.
• FRBM (Fiscal Responsibility and Budget Management) Acts have been passed by 23 out of 29 state governments in India.
• Bank of International Settlements
• Managing Director is Malcolm Knight
• Governor of Bank of England
• Mervyn King
• Interest rates of top central banks across the world

	Fed (USA)	ECB (Europe)	BoJ (Bank of Japan)	RBI (reverse repo)
Jan 2006	4.5	2.25	0	5.50
Jan 2007	5.25	3.50	0.25	6

• New Indian Air Force Chief
• Air Marshal Fali H. Major, the present Chief of Shillong headquartered Eastern Air Command, is named the new Air Chief.
• He is the first non-combat pilot to head the Air Force. He is a helicopter pilot.
• Queen Mary 2, the queen of all luxury liners set to touch Kerala
• This 13 floor high ship of unparalleled opulence will be the largest cruise liner to hit Indian shores sometime in March at Kochi.
• TRAI may allow MVNOs
• Mobile Virtual Network Operators, who don’t own either infrastructure (switches, base stations etc.) or spectrum; but buy airtime in bulk from existing players, may be allowed by TRAI to operate in India.
• Richard Branson owned Virgin Mobile is a prominent MVNO in the UK.
• Doctrine of lapse to be adopted in mineral policy
• At present companies wanting to obtain mineral licensing have to apply to the state governments. They would in turn forward the applications to the central government. But as there is no time limit at present on their being forwarded with the state government’s recommendation, it is causing inordinate delays.
• Hence the centre is considering a policy on the following lines:
• States would have to give reconnaissance permit within 4 months from date of receipt of an application.
• Prospecting license should be given within a period of 10 months and mining lease within a period of 13 months.
• Once the time-frame for licence lapses, the applicant may approach the centre for clearance.
• The centre would then have the right to grant lease and other licenses within a period of 90 days.
• N. Rangachari committee on plantation sector
• It has submitted its recommendations recently. The main recommendations are:
• Banks should be allowed to trade in the futures segment to increase money flow in plantation sector.
• Small farmers should be allowed to utlize derivative contracts and options via NGOs
• Change in RBI guidelines that prevent deposit-taking institutions from participating in the futures market.
• Parallel insurance programme for farmers.
• Fertilizer subsidy burden
• The bill is likely to be about Rs. 28,000 crores.
• 65% of the urea produced in the country uses natural gas as feedstock.
• Something about South Africa
• Democracy heralded in 1994
• The last apartheid Prime Minister was F.W. de Klerk
• Nelson Mandela was released from jail in February 1990.
• Thabo Mbeki is the current President.
• Some excellent words from Archbishop Desmond Tutu, the South African winner of Nobel Peace Prize:
• “Rememberance and forgiveness have allowed our remembered nightmares to be consigned to the past.”
• A few minute details about PF funds and SA funds
• The Provident Funds (regulated by EPFO) are mandatory in nature. The SA (Superannuation) Funds are not compulsory. In SA funds, the maximum contribution from the employer is 15% of the basic salary.
• Gratuity is a compulsory benefit; but the formation of gratuity trust is voluntary.
• The total size of the gratuity and superannuation funds would be about 10 to 15% of the 1.5 lakh crore PF sector.
• New findings on breast cancer
• Scientists have uncovered the role played by a gene associated with the spread of breast cancer. The gene PIP1b is known for its role in diabetes and obesity.
• Economists keep talking of a virtuous cycle of growth. What is that about?
• When GDP growth accelerates, consumption rises slower than GDP. People are cautious about accelerating their consumption. Hence the savings rate rises sharply. This depresses interest rates and encourages fresh investment, which in turn facilitates fast growth, in a virtuous cycle.
• China entered such a cycle in 1980s. India did so in 2004.

30.01.2007

• FII taxation issue; Finance Ministry enters to clear the muddle
• The confusion over the tax treatment of the FIIs investing in Indian equities is set to end soon. FIIs needs not be treated solely as investors; they can be traders too.
• Taking a diametrically opposite view from the one adopted by the AAR (Authority for Advance Ruling), the finance ministry, has said that this determination will depend on the facts in each case.
• Traders will have to pay 33.7% tax on their business income. Investors, on the other hand, are eligible to have their income treated as capital gains and pay 10% as tax, if the income is derived from sale of shares within a year of their purchase, or not at all, if the shares were held for at a year before they are sold.
• FII traders’ tax obligations are subject to provisions of the bilateral tax treaties applicable to them. As per most tax treaties, FIIs are not obliged to pay tax on business income earned as traders, unless they have a permanent establishment in India. Most FIIs do not have a PE in India.
• Shipa Shetty wins the Celebrity Big Brother realty show contest.
• Reliance and Bharti set to enter the microfinance field
• Micro-lending to the economically active poor, both urban and rural, is pegged at around Rs. 7,000 crore, as reflected in bank outstandings.
• As against this, estimates put the demand at around Rs. 2 lakh crores.
• Women’s World Banking (WWB) is hosting a microfinance summit in Mexico in February, 2007.
• The microfinance movement in the country services barely 10% of the 80 mn (8 crores) households that have an appetite for credit. That is only 80 lakhs households are being serviced. Of this, the southern states account for 70%, with Andhra Pradesh alone holding about 60% of the southern market.
• In fact, three major MFIs in AP – SKS, Share Micro and Spandana – together reach about 14 lakh households.
• The first officially declared beggar free city in India
• Thiruvananthapuram in Kerala. Effective January, 2007.
• Cabir
• Is a form of ‘worm’ (virus attacking cell phones) that propagates through blue-tooth and runs on Symbian mobiles (phones).
• Telephone subscribers figures
• Overall subscriber base is set to touch 20 crores.
• Wireless subscribers are at 15 crores.
• Mobile subscribers are being added at 60 lakhs per month.
• In spite of these dazzling figures, rural tele-density is still a lowly 2% compared to over 50% for metros.
• Varying estimates suggest that 10% increase in tele-density would lift GDP growth by between 0.6% and 2.5% in an emerging economy like ours.
• Our two telecom policies and what they achieved
• NTP 1994: It was focused on attracting private investment into telecom and limiting competition in the early stages of the market’s development.
• NTP 1999: It sought to unfetter growth by removing artificial licensing boundaries that were rendered irrelevant by advancing technology, and reduced entry barriers permitting an unlimited number of competitors in each circle. As a result, tariffs dropped and subscriber acquisition accelerated. But only in urban centres.
• China’s Non Xin Tong (Rural Information Network)
• Launched last year (September 2006). It is an integrated SMS, voice and internet portal providing administrative information, weather forecasts, pricing information for fishery and agricultural produce, non-agricultural employment opportunities etc., to rural subscribers at a nominal fee.
• Looks like it was a grand success, going by the number of subscribers it is attracting. 9 lakh subscribers within a month of launch. 16 lakh SMS downloads daily. 40,000 visits to internet portal and over 20,000 voice dial-ins.
• ‘Safe harbour’ tax provisions
• They provide circumstances in which a taxpayer can follow a simple set of rules under which transfer prices are automatically accepted by the tax authority.
• In US almost 50% of the population is exposed to the equity markets through participation in mutual funds.
• Expenditure on pensions in India
• Total expenditure on pensions by the central government as a percentage of net tax revenue is at 10.56% in 2005-06. This is up from 7.6% in 1990-91.
• Pension expenditure of the states has gone from 7% to 14% during the same period.
• The combined expenditure (centre plus states) could reach Rs. 100,000 crores by 2010.

29.01.2007

· Tax policy on mergers and acquisitions and the forthcoming budget:

o At present, set off of the carry-forward losses and depreciation of the amalgamating company with the profits of the amalgamated entity is allowed. Section 72A of the Incometax Act. There is also a prescription that for a period of 5 years, the same line of business of the merged entity has to be pursued by the new entity.

o However, if a bank takes over another bank, it can avail the benefit under section 72A; but if it takes over a financial institution, this facility is not available at present.

o The forthcoming budget is expected to make amends to the tax laws to make mergers and acquisitions easier.

o The policy may be extended to more sectors like airlines, telecom, healthcare and finance.

o The mandatory period of continuing with the same line of business post-merger could be brought down from 5 years to 3 years.

· Tax exemptions may be under scrutiny by the finance ministry

o There are three broad categories under which exemptions are availed by the corporate sector. They include:

§ U/s 80G companies claim tax deduction on donations to charitable trusts and institutions.

§ U/s 80 GGB, donations to political parties are also exempt from tax.

§ U/s 80 IA, there is a tax holiday for 10 years, available to infrastructure service providers who develop, operate and maintain infrastructure facilities.

· The dabbawalahs of Mumbai

o They deliver nearly 2 lakh tiffin boxes to office goers in Mumbai everyday. They do it to six-sigma perfection.

o Six sigma actually means that the process of delivering these tiffin boxes must not produce more than 3.4 defects per million deliveries.

o These dabbawalahs follow a ‘warkari’ tradition, where a member wears a Tulsi mala and commits himself to austere lifestyle.

· Access Deficit Charge in telecom

o ADC is a levy paid by all telecom operators to state-owned BSNL to allow the latter to subsidize its rural operations and fulfill its social obligation. The players pay 1.5% of their AGR (Aggregate Gross Revenues) as ADC.

o TRAI is going to reduce this ADC for the forthcoming year. And from 2008 April onwards, this will be eliminated totally. The social obligations of BSNL will have to be then met out of the USO Fund only, where all the operators are contributing about 5% of the AGR as contribution.

o The reduction in ADC is likely to reduce the telecom tariffs.

· The EPFO dithers again on interest rate

o The Board of Trustees of the EPFO has again deferred a decision on announcing the interest rate. They are obviously scared of the Left parties’ opposition to any reduction in rate of interest. The present rate of interest is 8.5%. If it reduces it to 8%, it will be left with a surplus of about Rs. 10 crore; if it keeps the rate at 8.5%, it will have to seek a subsidy of Rs. 450 crore from government.

· UCC (Unsolicited Commercial Calls) and DNCR (Do Not Call Registry)

o Recently, the Delhi State Consumer Disputes Redressal Commission had imposed a total fine of Rs. 75 lakhs on Airtel, the COAI (Cellular Operators Association of India), ICICI Bank and American Express Bank for UCC made to a person.

o Our Constitution provides protection of citizens’ privacy rights. This is implied under the fundamental rights guaranteed under Articles 19 and 21 of the Constitution.

o Section 427 of the Indian Telegraph Rules, 1951 provides that telephone should not be used to disturb or irritate any persons or to transmit any message for communication which may annoy a person.

o TRAI has come up with a consultation paper on UCC in November, 2006.

o Countries such as US, UK and Australia have introduced adequate legislative measures to prevent UCC and also set up DNCRs.

o India also should adopt serious measures to prevent UCC. A specific law dealing with UCC, with adequate enforcement mechanism, exemplary damages and fines, provisions for termination of business licences in case of violation, and penalties for trading consumers’ personal information should be introduced.

28.01.2007

• EPFO investment pattern
• EPFO invests 25% of its funds in central government securities, another 25% in PSUs and 15% in state government bonds.
• European Central Bank
• President is: Jean-Claude Trichet
• VI Winter Asian Games
• They will be held in Changchun, in Jilin Province of Chinese northeast from January 28^th to February 4^th 2007.
• The mascot for the games is a sika (a kind of famous deer found in China) named ‘Lulu’.
• Emblem is ‘soaring Changchun’.
• To know more about the games follow this link.
• II Asian Indoor games
• They will be held in Macao from 26^th October to 3^rd November, 2007.
• Emblem is ‘sun shining above a covered gymnasium’.
• Mascot is Mei Mei, the wild migratory black faced spoonbill.
• To know more these games follow this link.
• Belgium
• Prime Minister is Guy Verhofstadt
• Indian animation industry
• Estimated to be about $354 mn in 2006.
• Expected to touch $869 mn by 2010.
• VFX stands for visual effects.
• An Indian animation company, which gets to do just the production part of an animation TV series, would typically earn about 2% of the revenues that the company with the rights for the film would make. Hence the industry is actively looking at registering the IPR (Intellectual Property Rights) for the works turned out by them, as a way of securing more future revenue source.
• Diamond industry
• De Beers, the South Africa based company is well known for its slogan – “A Diamond is Forever”.
• The company has invested in diamond exploration in India and has a joint venture with the government – Hindustan Diamond Company.
• PCOS
• It stands for Polycystic Ovarian Syndrome, an hormonal disorder affecting women in reproductive age, affecting fertility and pregnancy. Today, some 2 in 10 women suffer from this syndrome in India.
• A little about cement industry
• Typically, housing construction requires 40 to 45 bags of cement per 100 sq ft.
• The construction industry provides employment to over 3.2 crore people in India, the largest employer after agriculture. It contributes about 5.1% of the GDP.
• The total turnover of the cement industry is about Rs. 2,47,000 crores.
• Amitabh Bachchan conferred France’s highest civilian award
• Legion d’Honneur was conferred on the star, at its embassy in India last evening.
• OP Vaish Committee
• Has looked into the issues relating to defunct companies.
• Institute of Corporate Affairs
• It is being set up in Manesar, near Delhi.
• It will impart training, capacity building and aims to develop synergy with international bodies.
• About SEZs
• The land required for SEZ development in India is about 0.1% of the total agrarian landmass.
• Already 318 SEZ proposals hang in balance, which include 237 formally approved ones pending final notification and 81 fresh proposals awaiting approval.
• Estimates put it that in the next two years an investment of Rs. 60,000 crores will be made, generating an employment of about 9 lakh.
• The SEZ policy was introduced for the first time on March 31, 2000.
• We can say that the first ever SEZ type investment was made in Kandla Free Trade Zone in 1965 – 14 years before China established its first SEZ in Shenzhen.
• Worldwide about 300 SEZs are functioning, employing about 50 mn people, with 30 mn of them in China alone.
• Countries had varying necessities for coming up with SEZs:
• Job creation – Mauritius and Bangladesh
• Move away its people from manufacturing units to services – South Korea
• Bring in equality by facilitating SEZs in relatively poor urban areas – USA
• Experiment with economic reforms – Japan
• Reassure big ticket investors that mere change of government would not immediately change the rules – India
• Rugby in India
• The earliest trace of rugby in India dates back to a scratch match played between Calcutta and Madras during the visit of HMS Galatea in 1871.
• The first recorded match was played in 1872 at Calcutta Football Club.

27.01.2007

• More to Corus than steel
• In a Dutch hamlet called ‘Wijk aan Zee’, Corus Chess Tournament is played every year.
• Originally called Hoogovens Tournament, named after Hoogovens steel plant in the Netherlands, it was started in 1938.
• In 2000, it was renamed Corus Chess Tournament to reflect the new corporate identity.
• With Tatas and CSN now vying for acquiring Corus, there is lot of interest generated on the fate of this tournament.
• DNC registry to be in place from April, 2007
• The Do Not Call registry will come into effect from April 2007.
• This means that telemarketers cannot make calls to people who list out their phone numbers in this registry.
• About Republic Day Parade
• The first foreigner to take part in the Republic Day Parade of India
• Captain Tunku Ismail Ibrahim, the Malaysian Prince who led the mounted columns of the 61^st Cavalry in the parade.
• Military world games will be hosted in India later this year. The mascot for this games is ‘Bravo’, the great India bison.
• 2007 Civilian awards
• Padma Vibhushan
• Raja Chellaiah, noted economist
• Kushwant Singh, noted journalist for literature and education
• Padma Bushan
• Indra Nooyi, India born CEO of Pepsico
• Sunil Mittal, Chairman of Bharti Telecom
• JJ Irani
• Padmashri
• Vikram Seth
• Amitav Ghosh
• Foreign awardees
• O Suzuki, chief of Suzuki Motor Corporation
• Jeffry D Sachs, American economist
• Sri Lanka’s Prime Minister
• Ratnasiri Wickremanayake
• Indian retail scene
• There are about 15 mn mom and pop stores giving employment to about 22 mn people.
• Phishing
• Worldwide, phishing induced resulted in losses of about $2.8 bn in 2006.
• Indian Social Science Congress
• The 31^st session is to be held in Mumbai during December 2007
• The theme of this year’s event is ‘Peoples Struggles and Movements for Equitable Global Society’.
• The Indian Academy of Social Sciences organizes the event every year with a view to discovering, developing and disseminating newer science of nature-man-society.
• Total deposits mobilized by banking system as at the end of March 31, 2006
• Rs. 21,94,900 crores
• Recorded yields on various types of investment during the last year
• Gold 18.8%
• Fixed deposits 8 to 8.5%
• Equities 33%
• Viability gap funding
• This refers to the gap arising out of the difference in projected expenditure and revenues of a proposed project, rendering the project commercially unviable. In infrastructure projects especially, the capital expenditure is enormous as a result of which private players find it unviable to invest in the sector. The scheme was launched after the government decided to step in by giving upfront grant to fill the ‘viability gap’ and encourage private participation in the sector.
• Budgetary allocation for infrastructure projects under the viability gap funding scheme was first made in 2005-06 budget, when an SPV (special purpose vehicle) was established for providing long-term debt to infrastructure projects undertaken on a PPP (Public Private Partnership) basis.
• Indo-Lankan CEPA set to go live soon
• India and Sri Lanka are entering into a CEPA (Comprehensive Economic Partnership Agreement). This provides for liberalization of services and investment. This will also enlarge the scope of the existing free trade agreement between the two countries by including more commodities within the purview of the agreement.
• Balmer Lawrie is given category I miniratna status
• The company which is already a category II miniratna and is into various businesses including logistics, leather chemicals and tourism, is given the category I status now.
• A category II miniratna can make a capital expenditure of Rs. 250 crore or 50% of its networth, whichever is less, without seeking permission from the government.
• A category I miniratna can make a capital expenditure of Rs. 500 crore or 100% of its networth, whichever is less, on its own.
• India takes to GM crops in a big way
• During 2006, the total area under GM (Genetically Modified) crops has reached 3.8 mn hectares.
• India grew more Bt cotton than China and is the 5^th largest Bt cotton grower worldwide.
• Cotton yield has increased from 308 kg per hectare in 2001 to 450 kg per hectare in 2005-06.
• India has 9 mn hectares of area under cotton cultivation; the largest by any country in the world.
• Cooperative banks
• There are three types of memberships in cooperative banks
• Approved member
• Nominal member
• Sympathiser member
• There are 1,08,746 cooperative banks and banking institutions in the country.
• Third party insurance
• If you are hit by a speeding car for no fault of the driver, the vehicle’s insurer pays you compensation under the third-party motor insurance.
• The Motor Accident Claims Tribunal hears all the third-party related insurance claims.
• Third-party cover is a loss-making portfolio for every general insurance company.
• There are about 1.2 mn cases pending at different courts and the total amount involved is roughly Rs. 20,000 crore.
• Predatory pricing
• Is the practice in which a firm first lowers its price till it is below the average cost of its competitors to drive them out and later entrenching itself in the market in a dominant/monopolistic position.
• India’s PC penetration levels
• Currently at about 18 per thousand.
• The government plans to increase it to about 60 per thousand by 2011-12.
• Indian trade
• The growth of trade in the GDP – it went up from 11.9% in 1993-94 to about 14.5% in 2004-05.
• Tariff jumping
• It is the practice of establishing a production facility within a foreign country, through FDI or licensing, in order to avoid a tariff.
• Our distorted tariff regime in petroleum products is causing foreign firms to establish presence in India to take advantage of this convoluted tariff regime.
• To avoid this, the tariff differential between crude and finished products needs to be removed. Crude suffers duty at 5%, products suffer duty between 7.5% to 10%.

26.01.2007

• Today is our Republic Day. Happy celebrations to all of you. Today is also the International Customs Day.
• India’s GDP currently stands at $729 bn. This translates to about Rs. 34,26,300 crores.
• About 33^rd National Games at Guwahati
• The Assam Olympic Association’s General Secretary Mr. Mukut Medhi, who raised doubt over Assam’s security situation in the wake of the Ulfa offensive, has been divested of his powers in organizing the National Games.
• Lebanon
• PM is Fuad Siniora
• Israel’s President gets suspended
• President Moshe Katsav, who has been facing charges of rape, molestation and sexual harassment from several of his former employees, has requested the Israeli Parliament, Knesset to permit him to avail leave of absence, after prosecutors drafted criminal charges against him for alleged rape and sexual misconduct.
• Ms. Dalia Itzik will look after the President’s functions during this suspension.
• AP government enters into an MOU with Odyssey consortium
• The MOU is for setting up of a Science City in Ananthapur District.
• Estimated to be having a initial investment of $3 bn in the first three years, the project is slated to see investments of up to $25 bn eventually.
• Money transfer through mobiles
• Under an initiative called ‘banking for the unbanked’, Bharti Telesoft has developed platform, through which a person is supposed to have two cards – a prepaid SIM card and a stored wallet cash card. Any person wishing to remit money can go to a retail outlet and deposit the amount. The amount will be sent via SMS to an authorized outlet, from where it can be collected by the recipient.
• Indo-Russian agreements
• The Russian President Vladmir Putin is currently on a visit to India as the Chief Guest for our Republic Day parade.
• India and Russia have entered into a number of agreements. Russia has agreed to build more nuclear reactors for India, in addition to giving 4 more reactors for the Kudankulam plant.
• Both the countries have also agreed to jointly launch a satellite called the ‘YouthSat’.
• FDI figures
• Overseas FDI has bested FDI inflows in growth rates during the period March 2005 to June 2006.
• Total overseas FDI was $13.63 bn (30%) and the inbound FDI was at $51.46 bn (16%).
• This is according to the data on International Investment Position (IIP), which was released by the RBI in conformance with the IMF’s standards on data dissemination.
• Commodity price volatility and futures markets
• The solution to price volatility in the futures markets is to pre-empt speculation by deepening the market and not to ban trading altogether. Futures markets only tell us what is in store. They are needed for more informed agricultural production and hedging.
• The high inflation witnessed recently is a combination of supply side constraints and the rapid growth in the money supply. Blaming futures markets for this is not correct.
• Indian agriculture
• As per the National Sample Survey, a majority of our kisans own less than four acres of land each, but virtually no other asset.
• Our country gets an average rainfall of 1,000 mm but most of it literally goes down the drain.
• Indian TV homes
• There are about 110 mn households owning a TV in India.
• Of these about 65 to 70 mn are cable connected.
• Pay channels do not go beyond 30 to 40 mn households.
• Ultra-thin models in fashion industry
• Spain barred models below a certain body mass from Madrid fashion shows in September 2006. This was done as such models are encouraging eating disorders among girls and young women.
• New York issued guidelines to tackle the problem; though it did not ban them.
• Italy’s government and its fashion chiefs have signed a pact aimed at keeping models appearing sickly thin, off the catwalk by requiring them to prove that they are in good health.
• About trans-fats
• Artificial trans-fats are formed when food manufacturers add hydrogen to vegetable oil to make it solidify, in a process called hydrogenation.
• Partially hydrogenated oil boosts the stability of a food’s flavour, as well as its shelf life, and the oil has long been a key ingredient in baked and fried foods.
• Cholesterol is two types – bad LDL and good HDL types.
• India’s first private sector managed airports.
• Cochin is the first.
• Now Delhi and Mumbai also are being run by private players.
• Global employment scene
• Global working population is pegged at 2.9 bn people.
• Global unemployed are at 195.2 mn and the global unemployment rate was at 6.3% in 2006.
• In 2007, the global economy is expected to grow by 4.9%.

25.01.2007

• TRAI slashes roaming charges for mobile telephony
• Effective February 15, the roaming charges for mobile telephone users will be lower by as much as 55%.
• Only about 10% of the service providers’ revenue comes from roaming.
• Treaty of re-admission
• Is one which is entered into between countries which want to have an easier visa regime between them.
• It makes it obligatory on the part of the signatories to re-admit their citizens found staying illegally in the other country.
• India’s English speaking population
• Only about 5% of the country’s population speaks English.
• DISC profiling
• It is an HR (Human Resources) testing tool.
• In this psychometric test four primary dimensions – dominance, influence, steadiness and conscientiousness – of the people are measured.
• The results of this test can be used as an input for hiring employees.
• It was invented by William Moulton Marston in 1928.
• Gross Budgetary Support
• The government is likely to peg the overall GBS for the next fiscal at Rs. 2,10,000 crores.
• Government cuts import duty on edible oils by up to 12.5% in an effort to further tackle inflation.
• Portland cement
• Portland cement is the most common type of cement in general usage, as it is a basic ingredient of concrete and mortar. It consists of a mixture of oxides of calcium, silicon and aluminum. Portland cement and similar materials are made by heating limestone (as source of calcium) with clay or sand (as source of silicon) and grinding the product. The resulting powder, when mixed with water, will become a hydrated solid over time.
• India currently has the capacity to produce about 155 mn tones of cement and the actual output is at about 140 mn tones.
• CMD of NALCO, National Aluminium Company
• Mr. C.R. Pradhan
• Data growth rate in industry
• It is estimated that data is growing at the rate of 60% to 80% per year.
• You can imagine the implications for IT managers!!!
• The gambling capital of the world
• Macau, the Chinese city has dethroned Las Vegas as the world’s biggest casino centre.
• It appears to have clocked a gambling revenue of about $6.95 bn last calendar year.
• State Bank of Pakistan, the Central Bank of that country is headed by a woman
• Shamshad Akhtar
• China likely to surpass US in net usage in a couple of years
• China has 137 mn internet users as against US’s 210 mn.
• China is clocking growth rates of about 25% in net users.
• Thai Prime Minister
• Surayud Chulanont
• What are derivatives?
• These are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates.
• The face value of the derivative contracts jumped to $370 trillion in the first half of 2006 (calendar year), according to the Bank for International Settlements.

24.01.2007

• With Vijay Mallya trying to bring in F1 racing to India let us learn a bit about this sport:
• It is the highest class of auto racing defined by the FIA – Federation Internationale de l’Automobile, the France based world governing body for the sport.
• The ‘formula’ in the name refers to the set of rules which all participants and cars must meet. The F1 world championship season consists of a series of races, known as Grand Prix. The results of each race are combined to determine two annual world championships – one for the drivers and one for the constructors.
• The present world champions are: Fernando Alonso (Driver) and Renault F1 (Constructors)
• Though the commercial interests of the Formula One are vested in the Formula One Group, the minority shareholder, Bernie Ecclestone who promotes and controls the sport is considered as the boss of F1.
• Carbon labeling
• TESCO, UK’s biggest retailer has become the world’s first supermarket to assign carbon labels to its products in an attempt to attract more environmentally conscious consumers. The labels would record the amount of carbon dioxide emitted (aka ‘carbon footprint’), during the production, transport and consumption of all the products it sells.
• NHPC: National Hydroelectric Power Corporation
• Its CMD is S.K. Garg
• About sexual harassment
• It is a criminal offence, with a seven year non-bailable imprisonment attached as punishment.
• About petroleum products
• India imports 73% of its crude oil needs.
• The current excise duty on diesel is 8.16% plus Rs. 3.32 a litre – the two together translate to a total levy of Rs. 4.98 per litre.
• Do you see any disconnect between the demand on Nimbus (the owners of commercial rights of BCCI cricket matches for 4 years from March 1, 2006) to share its telecast feed with the public broadcaster Doordarshan and the era of liberalization and globalization? The premise of the disconnect being that there is no level playing field!
• It appears there need be no such feeling. Even in an advanced country like the UK, which is recognized as having more developed systems, the law itself lays down that a broadcaster of one category (categories being pay channels and free-to-air channels including public broadcasters) needs the consent of the regulator, to broadcast a listed event, unless it shares the feed with a broadcaster in the other category.
• In an excellent article written today, PR Ramesh chides the Indian political class to stop pandering to hardliners of the minority community. Read the full article here. A couple of observation made in this regard are worthy of note:
• Why are the members of the Muslim community getting agitated over every incident that happens internationally?
• Ruling politicians have become partners in the cynical game of playing the victim card on behalf of extra-territorial causes.
• Hardline elements are backing causes that are inimical to the nation’s interests.
• The community cannot be blamed as the concept of global Islamic brotherhood is quite strong among its members. And global issues are sure to have its reasonable resonance among the members of the community. But the overzealousness that’s being displayed by the community will only reinforce the perception of the hold of hardline elements over its members. And that could further strain inter-faith equations.
• P2P banking
• Ever heard of Zopa and Prosper? These are online P2P (Peer to Peer) banking outfits.
• How this operates is – after the registration at the P2P sites, users can lend money to or borrow money from other people on the site at better interest rates than those available through traditional banks. The basic premise of the system is, to do away with the disintermediary role of the banks. The site attempts to create a more efficient marketplace by matching small lenders with borrowers directly – finding the point at which, the rate at which someone might pay for a loan matches the interest rate another person is willing to lend the money at.
• Usually the P2P integrator will charge a small sum of 0.5% from each side.
• The default rate is stated to be very less – below 0.05%.
• Backdating of stock options scandal in the US
• Stock options represent the right to buy company shares at a set price. Some companies are accused of backdating grant dates to days when the share price was lower, giving the recipient the opportunity to collect extra profit. Backdating is not in itself illegal, but needs to be property accounted for and disclosed.
• The US authorities are investigating into about 160 companies that are suspected of having not accounted for this type of transactions properly over the years.

23.01.2007

• Look how the government is trying to tackle inflation:
• The government has slashed customs duty on a host of items, including cement, capital goods, steel, copper, aluminium and inorganic chemicals. This is an attempt at reducing cost of manufacturing in basic industries while providing a shot in the arm for infrastructure development.
• Duty on Portland cement made 0% from 12.5%
• Duty on project imports brought down to 7.5% from 12.5%
• Some movement on pension funds management
• The central government with the support of 19 other state governments has decided that 5% of the funds collected under the New Pension Scheme will be allowed to be invested in stock markets.
• Under the NPS, states collected an amount of Rs. 1500 crores till date.
• The NPS corpus earns an interest of 8% at present.
• The Supreme Court ordained police reforms in brief:
• Constitution of the state security commission, separation of investigation and law and order duties, setting up of a police complaints authority and formation of a national security commission.
• Future bureaucrats take note:
• The Administrative Reforms Commission headed by Veerappa Moily, has proposed in its forthcoming report on “Ethics in Governance”, simplification of procedures adopted for the initiation of disciplinary proceedings against errant officers.
• So far, articles 310 and 311 of the constitution of India have been the corner stones on which the security of tenure and security of job of the bureaucrats were based.
• Space Recover Experiment SRE-1
• The SRE-1 satellite sent out into the space through PSLV-C7, has successfully landed back on earth. It splashed into the Bay of Bengal, from where it had been recovered.
• The SRE demonstrates the technology of an orbiting platform for doing experiments in micro-gravity conditions.
• The SRE has an aero-thermal protection system. ISRO is testing basic technology for protective outer jackets for satellites and vehicles through this experiment.
• ET-NCAER Business Confidence survey
• India Inc’s confidence has touched a new high according to the survey. The index has peaked to 157.3, up 3% since the October quarter.
• TUFS likely for the steel sector
• You would have read about the TUFS scheme for the textile sector. The same scheme is also being proposed for the steel sector.
• TUFS for textile sector has been functioning from 1999. Under this scheme, lenders give an interest subsidy of up to 5% for modernization and technological upgradation of certain segments of the textile sector that is reimbursed by the government.
• Capetown Convention
• India is likely to join this convention, taking the convention’s strength to about 14.
• The convention is about establishing an international legal regime for high-value and mobile equipment, such as aircraft, railway rolling stock and space equipment.
• The principal objective of the convention is to ensure efficient financing of expensive equipment.
• Once India joins this, the risk attached to asset-based financing and leasing transactions of airline companies is expected to go down.
• This is significant in view of the fact that India is likely to procure about 480 aircraft in the next five years at an estimated investment of $30 bn, which will increase the total number of aircraft in the country to about 775.
• Millennium Development Goals
• UN member states have these goals (eight of them in all) with 2015 as the target date by which they should be achieved.
• The goals include eradication of hunger and poverty, education, gender equality, and aim at combating child mortality, AIDS and other diseases.
• At the time these goals were adopted, India’s population below poverty line was about 26.1%. The goal is to reduce this 18.75% by 2015.
• Look east policy and multilateralism
• In the face of lurking fear of collapse of the WTO talks, Pascal Lamy the Director General of WTO has noted that the WTO members would have entered into about 400 bilateral and regional trade agreements by 2010.
• Already 55% of Asia’s trade is happening within its boundaries. This is bound to go up substantially in due course.
• This is how we are witnessing a progressive evolution of a pan-Asian FTA in goods and services with ASEAN acting as a sort of glue.
• Japan, the major OECD country of the Asian region, has lobbied hard for a wider EAS (East Asian Summit) process which includes India.
• The West may have seen enough cause for worry in this evolving process and may possibly feel that is going to be left out of the robust Asian interaction.
• On financial inclusion
• I recommend reading today’s debate on this subject in ‘Perspectives’.
• A very good definition of financial inclusion coming from Nachiket Mor, the Dy. MD of ICICI Bank runs like this: We understand financial inclusion to mean the ability of every individual to access basic financial services which include savings, loans and insurance in a manner that is reasonably convenient and flexible in terms of access and design and reliable in the sense that the savings are safe and that insurance claims will be paid with certainty.
• Banking Corresondent Act permits partnerships between banks and non-banking entities.
• The first district in the country to achieve 100% financial inclusion is Palakkad in Kerala. This is followed by Gulbarga in Karnataka.
• About currency making
• While Indian currency notes are made of paper entirely, euros and Australian dollars are composed of polyester like synthetic mix, making them more durable
• There are about 25000 ATMs in the country. The country is stated to be adding about 5000 to 7000 ATMs per year.

22.01.2007

• The value of natural gas discovered by Reliance in KG basin
• Goldman Sachs has estimated that the 20 tcf (trillion cubic feet) of natural gas discovered by RIL in the KG basin is between $36 bn to $40 bn
• Corporate tax – some facts
• A detailed study conducted by the Finance Ministry during the run up to the budget, has revealed that though the corporate tax rate is 30% plus surcharge and education cess, the effective rate being paid by the corporate world is varying between 11.7% for IT firms to 32.5% in case of paints firms.
• There are around 3.5 lakh corporate tax assesses in India.
• Iran
• It is the world’s fourth largest oil exporter.
• Its President Mahmoud Ahmadinejad has been adopting a confrontationist posture with the west on its nuclear ambitions.
• Domestic textile market size
• It is estimated that the whole of Indian textile market is pegged at Rs. 100,000 crores.
• The book titled “Google Story”
• Is authored by David Vise. It is getting rave reviews across the world. He won the Pulitzer Prize in 1990 for his work “Eagle on the street.”
• Indian wedding markets
• The cyber matrimony space is estimated to be about Rs. 67.5 crores.
• The whole of the marriage market in India is pegged at Rs. 1,000 crores annually.
• What is SAR?
• Specific absorption rate. It is the unit of measurement for the amount of radio frequency energy absorbed by the body when using a mobile phone.
• EPFO may propose a 0.5% cut in interest rate
• The present rate of interest of 8.5% on EPF is set to be slashed to 8% by the EPFO.
• Cashew Export Promotion Council
• Chairman is Walter D’Souza
• Third party insurance for motor vehicles
• It provides compensation to accident victims and is a mandatory cover.
• The cover for the vehicle itself is called ‘own damage’ cover.
• It is the only insurance business where the rates are dictated by the IRDA.
• The motor transporters are up in arms against the enhancement of insurance premium by 126 to 150%. They are threatening to on a pan India strike.
• In view of the concerns about rising inflation as evidenced by the increase in WPI to 6.12% what options are better pursued by India?
• While monetary tightening is likely to be unveiled by the RBI, it should also be accompanied by supply side measures like lowering of import duties.
• What is peak oil?
• It is a notion that global oil production will peak at one time and then it will start falling. This is a concept called Hubbert’s peak. There are various arguments about whether the world has witnessed peak oil.
• But the fact is today, the daily production of oil is around 86 mbpd i.e., million barrels per day.
• Why we are seeing a decline in oil prices now worldwide is not because it has reached peak oil, but because for almost a year, the output has far exceeded the demand. This has resulted in accumulation of inventories to record levels. This is the most likely reason why we are seeing a fall in prices at the current time.
• C.K. Prahalad, the world renowned Professor of Management and father of concepts like ‘core competence’, fortune at the bottom of the pyramid’ etc., works as
• The Harvey C Fruehauf Professor of Business Administration at the University of Michigan Business School, in Ann Arbor.

21.01.2007

• EC removes Punjab Police Chief
• The Election Commission has directed the Punjab government to remove the DGP, Mr. S.S. Virk from all election-related duties and appointed R.S. Gill from a panel of three names sent to it by the State.
• This follows complaints about the concessions that were given to a family business venture of his brother.
• India, China and Russia trilateral talks
• These talks are set to enter into more substantive phase than earlier. The first ever summit of the three took place in July 2006 at St. Petersburg on the sidelines of the G-8 summit.
• PoK Prime Minister
• Attique Khan
• IICT (Indian Institute of Chemical Technology)
• Director: J. S. Yadav
• NIN (National Institute of Nutrition)
• Director: B. Sesikeran
• Snippets about Lord Ayyappa temple
• It is customary for the temple to be closed after holy darshan by the royal representative of the Pandalam Palace.
• Uranium mines of India
• Jaduguda Mines of Jharkhand. The first uranium mines of the country, which started production in 1967.
• Bhatin Mine. This is just 5 km away from Jaduguda Mines.
• Narwapahar Mine. This was commissioned in 1995.
• Turamdih Mine: Located 5 KM away from the Tatanagar Railway station, this was commissioned in 2002.
• ‘Holocaust Day’
• Kashmiri Pandits observe January 20^th as ‘Holocaust Day’. They have been doing so for the past 17 years to mark the exodus of Pandits on the night of January 19, 1990.
• Myanmar’s capital
• Naypyitaw, meaning royal palace, is the new capital of Myanmar. This was declared the capital on March 27, 2006.
• The capital was shifted from Yangon to Naypyitaw.
• Turkey’s history
• Hrant Dink, an Armenian community leader and journalist was shot dead recently. This killing is believed to have resulted from his describing the mass killings of Armenians at the beginning of the 20^th century as genocide.
• Turkey’s relationship with its minority Armenian community has long been fraught with tension, controversy and painful memories of a brutal past. Much of Turkey’s once sizeable Armenian population was killed or driven out beginning around 1915 in what is recognized as the first genocide of the 20^th century.
• The Prime Minister of Turkey Racep Tayyip Erdogan has promised a speedy investigation into the murder.
• Personalities related to Palestinian issue
• Mahmoud Abbas: President of Palestine
• Bashar al-Assad: Syrian President
• Khaled Meshaal: Chief of Hamas, a key Palestinian militant group
• Something about LTTE
• 2002: Norway brokers a ceasefire agreement between Sri Lankan government and the LTTE.
• 2004: ‘Colonel’ Karuna breaks ties with the LTTE.
• Jungle woman
• A woman who was found naked, grunting, and walking like a wild animal near the Combodian village of Oyadao.
• World’s oldest woman dies and passes on her legacy
• 115 year old Canadian Julie Winnifred Bertrand was the oldest woman. She died on Thursday.
• Emma Faust Tillman, became the oldest woman now. She is was born on 22.11.1892. She is 114 years old now.

20.01.2007

• Foreign takeovers set to get easier for India Inc
• RBI is considering a new proposal which aims to allow firms to lend 200% of their net worth to overseas’ ‘step-down subsidiaries’ to fund acquisitions.
• Step-down subsidiaries are ventures promoted by the holding company of the Indian corporate group.
• At present Indian firms are allowed to remit funds for overseas acquisitions to a direct subsidiary but not to a group subsidiary where it holds no shares. The proposed changes will enable the step-down subsidiaries to leverage the balance sheet of both the Indian corporates as well as the parent holding company that has floated the step-down arm.
• Inflation rises to 6.12% for the first week of January 2007, driven largely by supply side constraints.
• Fire arm found in Nusli Wadia’s bag at Dubai airport
• He was found carrying a licensed firearm; reportedly by oversight, as his domestic help packed it in his baggage without his knowledge. Nusli Wadia is the Chairman of Bombay Dyeing.
• As per rules, a person cannot carry a licensed firearm out of India. The purview of the arms license stops within the boundaries of the country. Even on domestic flights, if a weapon has to be carried by a passenger, he has to pack it in his registered baggage. He is also required to fill up a form declaring the firearm and satisfy the airline regarding the validity of the license.
• WiMAX may topple India’s 3G spectrum cart
• Takers for 3G cellular technology may be few with WiMAX being a more cost effective alternative.
• Telecom towers being set up across all over India
• Using the USOF (Universal Service Obligation Fund), the DoT (Department of Telecom) is setting up about 8000 telecom towers across the country at an estimated cost of Rs. 4,000 crores.
• This project will cover about 212,000 villages where both fixed line and mobile services are not provided currently.
• Indian air lines – Indian and Air India – entering freight services
• Air India is launching its first freighter service with two A310 aircraft in June-July this year.
• Indian is also looking at entering this segment during this year.
• SEZ Policy
• The government will consider imposition of sectoral caps on SEZs once 100 SEZs are notified. As of now government has notified 63 SEZs.
• Why should developing or least developed countries prefer multilateral trading pacts over bilateral or regional trading pacts?
• In bilateral and regional trading agreements, the bargaining powers of these countries is often less than the other party. Hence the outcomes are bound to be skewed.
• In a multilateral trading pact, where the principle of one-country one-vote is followed, like in the WTO, the strengths of all parties is going to be equal. Hence the outcomes cannot be as disastrous as in the other type of agreements.
• Irrigated land statistics of some states
• Punjab and Haryana have 90% and 71% of their arable land irrigated. Maharashtra has 85% irrigated.
• What is meant by non-recourse debt?
• In the current frenzy of cross-border M&A activity seen in the Indian business scene, increasingly international bankers are found willing to lend to Indian business houses non-recourse debt.
• What this means is the borrower is not personally liable.
• Sir Edmund Hillary’s rare feat
• At the ripe age of 87, he has gone to the Antarctic for ‘one last time’, as he put it.
• He accompanied New Zealand Prime Minister Helen Clark and other dignitaries who flew to Antarctica to mark the 50^th anniversary of the Scott Base, which the adventurer helped build in 1957.
• International Whaling Commission
• It has banned the commercial hunting of whales in 1986.
• Japan and a few other countries are seeking a lifting of this ban. But unless 75% of the Commission members agree, the lifting of the ban is not possible.
• Legal hurdles in issuing an ordinance
• The government is thinking of coming out with an ordinance empowering the RBI to fix SLR at even below the 25% floor that is currently existing.
• Before convening a session of Parliament, the President issues summons at least 21 days before the session is expected to commence. After summoning the Parliament session, President cannot sign an ordinance. The government has to introduce a bill rather than choose the ordinance route.