Politics & the Nation
It's party time for flyers
  • Jet and Air India have reduced air fares steeply.  While Jet Airways slashed its basic price upto 40%, Air India was more agressive in its price reduction -- by up to 82%.  Kingfisher is expected to follow suit by cutting up to Rs. 1000/- per ticket from tomorrow.
  • The reduction by major airlines follows the about 52% reduction in the cost of ATR (Aviation Turbine Fuel) over the last few months.
Maharashtra announces probe panel on Mumbai attacks
  • The Maharashtra government has appointed a panel to find out lapses, if any, of the security apparatus. Formerly governor of Arunachal Pradesh, RD Pradhan will head the panel that will have former IPS officer V Bhalchandra as the other member. 
  • The chairman of the panel enjoys the rank of a Cabinet minister, and hence can summon officers of any rank. Mr Bhalchandra has been granted the status of minister of state.
It's Omar Abdullah at the helm in J&K
  • With Congress having decided to support National Conference, Omar Abdullah is set to become the CM.  He will the youngest CM the state gets.  He is just 38.
  • He is a handsome, highly educated and charishmatic leader who makes all right noises.  Let us hope he will be able to heal the wounds made by decades of militancy in the state.
  • One thing that surprised me was the paper reports on term of the CM.  Is it really 6 years in the state?  The paper reported so.  I was a bit skeptical.  Those of you who are in better know of things can please clarify.

A friendly Bangladesh at last?
  • With Sheikh Hasina Wajed winning the recently held elections in this eastern neighbour, it is hoped that we have at last a friendly neighbour.
  • The elections have taken place after two years of suspended democracy, when an army-backed caretaker government ruled Bangladesh. With a landslide victory of 258 seats out of 300, this is what any civilian government in the country could have asked for.  
  • But what is surprising is that reports are describing the result as 'unofficial' announcement by Bangladeshi Election Commission.  This raises doubts as to who calls the shots in Bangladesh, still.
  • How long will the party last?  It can be anybody's guess.

  • Should foreign legal services firms be allowed to operate in India?
  • It is a hotly debated issue.  I gave you some excerpts from an article by Som Mandal on the issue in today's Discover It blog.  Take a look at it here

Finance & Economics

Satyam's troubles seem far from over
  • With its aborted bid to invest in its related firms and its corporate governance image having severely taken a hit, it continues to hog the headlines for all wrong reasons.
  • Now HP is reported to be eyeing a stake acquisition in the company.  The promoters' stake in the company is reported to have fallen below 5%.

Bits and pieces of info on India's poor
  • According to Global Hunger Index of the International Food Policy Research Institute, India is home to the world’s largest food-insecure population with more than 200 million people facing hunger. It ranks 66th of 88 countries, thanks to the high levels of child malnutrition and calorie deficient diets. Even the recent benchmarks revised for poverty estimates at $1.25 and $1.35 per person per day, the World Bank and the ADB, respectively, estimated that 41.6% and 58.4% of the total population in India lived below the poverty line in 2004-05. These figures reflect poor achievements on inclusive growth despite a growth momentum of 8-10% over the past few years. 
  • A poor family in India spends 60-70% of the family income on food-related items. 

Why is the government thinking of promoting wine culture in the country?
  • The government is reportedly toying with idea of allowing departmental stores to sell wine, provided they obtain permission from the respective state governments.
  • Promotion of wine culture will lead to agricultural diversification and employment generation in rural India. With the growing popularity, wine farmers in Maharashtra are shifting from plantation of table grapes to wine grapes. 
  • India’s wine market, which is 1.2 million cases, has been growing at 40% this year compared with 2007

Editorial comment on Gaza strikes
  • I couldn't agree more with this assessment that appeared in today's ET:
  • ... the Israeli strikes again showcase the impotency of international bodies and of the Arab regimes. Israel always calculates the point when it will stop its war machine under painfully gradual international pressure. Israel is warning it will be weeks this time. By then, more Palestinians will have died, Israel will have thrown west Asia into another crisis, and there will be another event for Islamist extremists to take sustenance from.


Politics & the Nation
  • Military might of India and Pakistan; a comparison
    • In times of talk about war, it does pay to learn a bit about our might.
  • USOF:  Universal Service Obligation Fund
    • Perhaps you can recollect what we noted about this fund back in 2006, in Discover It blog.
    • Take a look at this graphic  which gives the amounts collected and disbursed over the years through this fund.
    • Isn't it time the Government utilizes the fund for the stated purposes?
  • It is not all about gloom and doom, as we pass 2008.
    • We did have some memorable moments in 2008.  A recap.
  • BIJLEE: Berkeley-India Joint Leadership on Energy and the Environment
    • Under this programme the US government will spare its top scientists and engineers to develop sustainable energy solutions for India.
    • BIJLEE will attempt to find sophisticated ways to lower energy consumption across a range of industrial processes and could potentially benefit everything under the sun from building houses and cars to consumer electronics, lighting systems and water purifiers. 
  • Government schemes fail to deliver goods
    • A PROGRESS report on 18 social welfare schemes shows that 8 of them were way off the mark in the first quarter of the current fiscal. 
    • Some of them missed the targets by 90%. 
    • Major schemes which missed the targets include Rajeev Gandhi Grameen Vidyutkarana Yojana and Prime Minister's Grameen Sadak Yojana.
    • Other programmes that have missed the targets include welfare schemes addressing poverty alleviation, employment generation in rural areas, housing, education , family welfare and health, protection of environment and many other schemes having a bearing on the quality of life, especially in the rural areas.
Finance & Economy
  • Take a look at what a downturn can do to the job markets!
    • Indian companies are increasingly resorting to temporary hiring of highly skilled professionals, such as scientists and engineers, as they try to rein in costs in a slowing economy, staffing firms and human resource management professionals say. 
    • Retailers, business process outsourcing providers and project-led organisations and industries have been among the early adopters of the temporary hiring model. 
    • Temporary employees are seen as a cost-effective solution because they are typically on the payroll of the staffing service provider and do not burden the company with benefits that permanent staff are normally provided with. Moreover, they give companies the flexibility to quickly alter the size of their workforce, depending on business needs. 
  • Even a company like RIL is looking at cost cutting measures
    • What made this company resort to cost cutting?  Reportedly, it is a possible huge loss that is staring in its face on some forward contracts on crude.
    • The company had reportedly booked at least three contracts at $120 a barrel, $100 a barrel and $80 a barrel, respectively, in the middle of 2008. But while the first contract had an exit clause at $100 a barrel, which allowed RIL to cancel the contract, the other two had no such option. The fall in crude oil prices by almost 61% in the past few months has changed the arithmetic of these contracts. 
  • What is a mid-cap stock?
    • One of today's ET op-ed pieces says that mid-cap companies won't be shining forever.  So, what basically is a mid-cap stock?
    • Based on market capitalization companies are classified as large cap, and mid-cap and small-cap stocks.  If you want a more detailed explanation of this terms look at this
  • An interesting aside about getting sacked
    • Know how did the phrase originate?
    • It dates back to a ruthless industrial revolution legacy. Back then, factory workers would literally carry their tools in a sack with them as they went out in search of work.  Work meant daily wages and when a factory owner no longer had use for a workman, he would be returned his sack of tools. 
  • Manjit Bawa
    • A renowned artist, who displayed his exceptional artistic talent through motifs of birds, animals and Indian mythology, died in the national capital on Monday after a prolonged illness. The 67-yearold painter from Punjab's Dhuri district was in coma for the past three years, shuttling between hospital and his Delhi home after suffering from a stroke. His paintings attracted both Indian as well as international buyers with one of his paintings selling recently for $360,000.


Politics & the Nation
  • “There never was a good war or a bad peace” - Benjamin Franklin
    • Isn't it time for us (India and Pakistan) to remember this saying?
  • J&K election results
    • It is a hung house.  Total seats at stake: 87.  NC won maximum seats: 28.  PDP won 21, Congress 17 and BJP 11.  Others 10.  
    • NC is set to form the government with Congress help.  But it is BJP's showing which is surprising.  Is it an indication that voting was on communal lines?
    • It is the Congress which is the clear king maker now in J&K.
  • Am I also looking more like an enthusiastic ET journo?  I don't know.  But the fact is, I can't just get enough of high profile interviews.
    • Especially the ones that are conducted by another equally tall personality.  Take a look at this interview  by Kumar Mangalam Birla with Jeffrey Immelt, the CEO of GE.
    • The most striking part of this interview is the India centric thinking that GE appears to have developed.
Finance & Economics
  • What is 'portability' in insurance parlance?  Especially in medical insurance?
    • It means that an insured is able to carry his track record with him, when he dicides to migrate from insurance company to another. In other words, if a health policy covers pre-existing ailments only after four years and a policyholder decides to shift to another company in the fourth year, he will get immediate coverage of pre-existing ailments and will not have to wait another four years. 
    • Another advantage is, if there is a no claim bonus for earlier years, it can be carried forward to the new policy. Today, some companies have a cumulative no claim bonus where the sum insured increases by 5% for every claim-free year, while some products do not have any bonus facility. 
  • What is the contribution of the services sector to our GDP?
    • 63%.  Some of the components that come under the services sector:  IT, railways, media & entertainment, education and training services, organised retail,air passenger traffic, fixed-line subscribers and insurance segments.
  • A light-hearted spoof on Ben Bernanke by Mythili Bhusnurmath.
    • Look here.  An interesting and light read.
  • All of us do look at news.  Bad news affects us badly and usually crowds out good news.  
    • Here is a call from one of my favourite authors, Jeffrey Sachs arguing how we should not let bad news overtake the good news.  The instances of good news or good work that is being carried out and cited by him, across the world are too many to be listed here.  So, strongly recommend a read of his article.
  • Can deep rate cuts revive the economy?
    • Economists rarely ever give a straight forward answer to a question that we pose them.  True to their style, two of the experts today suggest that they could; provided a prudent and judicious mix of expansionary monetary policy with a fiscal policy where public investment provides a strong complementarity to the private sector.
    • One of them sees brighter prospects of India from the second half of 2009 because the World would be looking at investing in India's infrastructure requirements.  
    • This debate is a worthy read.  Do so here.  
  • A subtle change in India's disposition towards Israel's strikes in Gaza
    • Most of you might have noted the Gaza strikes by Israel, which resulted in about 280 deaths in the last couple of days.
    • India's reaction this time to the strikes was cool.  Earlier it used to lambast the Israeli action; but now it says that it is aware of the cross-border provocations that resulted in Israeli action.
    • What could this subtle change hold for the future?  Is it paying the Arab and the Muslim world in its own coin?  Have their open support to the Islamic militancy in India and support for the secessionist cause in J&K, driven it to change its policy?
  • Wall Street licks its wounds as we enter the New Year.  
    • The market’s most-tracked benchmark, the S&P 500, is down 40.6% since last year’s close with only three trading days left in 2008. Given the market’s hair-trigger volatility this year, that’s just one bad day away from surpassing 1931’s 47.1% drop, the biggest yearly decline ever.  
    • A record $7.3 trillion (as much as half of US annual GDP) of stock market value has been obliterated this year.  
  • India's stand on reforming and restructuring the World Bank and IMF
    • Our stand is that countries having current account surpluses should have greater say in the affairs of these bodies, so that they could bring in more capital. A higher capital base would help these multilateral sovereign institutions to borrow more from the market, which could be used to help countries struggling through the global economic crisis.  
    • One other key criteria for reworking the shareholding of individual members should be individual countries’ contribution to the global economy based on their purchase power parity. By this measure, India is ranked 4th in the world, after US, Japan and China.  However, if the GDP figures are not adjusted for inflation, then India ranks 12th in the world.
    • India ’s current quota in IMF is a special drawing right (IMF’s own currency) of 4,158.20 million in its total quota of SDR 213 billion, representing a share holding of 1.91 %. The US has a voting right of 16.8% in IMF. In the International Bank for Reconstruction and Development, a World Bank group institution, India has a voting power of 2.78%, while in International Development Association, another WB group body, India has a voting power of 3.19%.
  • Remember our earlier notings on 08.12.2008 about e-waste?  
    • India generated 3.3 lakh tones e-waste in 2007. 
    • Waking up to the problem, the ministry of environment and forests came out with guidelines early this year on safe disposal of e-waste. The guidelines focus on end-producer responsibility, restriction of hazardous substances (ROHS), best practices of recycling. 
    • Now companies, especially hardware companies are waking up to this problem and are reportedly going green by launching environment friendly products.  Take a look at this article which gives the efforts being put in by industry into tackling e-waste.


Politics & the Nation
  • Private pension funds to be allowed to manage public pension funds
    • Don't get confused by the heading.  It is about banks, insurance companies and mutual funds being given an opportunity to manage retirement assets of all Indian citizens, other than government employees already covered under the existing pension scheme.
  • FDI limit in tobacco sector
    • According to the World Health Organisation, tobacco kills up to half of those who use it. 
    • Estimates say that in India, a fourth of all health care spending goes to treat tobacco-related diseases. This money could be much better utilised to reduce child mortality through immunisation programmes, access to clean drinking water, proper sanitation and so on. 
    • In the light of this, the reported move of the department of industrial policy and promotion (DIPP) to reduce the foreign direct investment (FDI) ceiling for the tobacco industry from 100% to 74% is welcome.
  • States seem to be doing extremely well in containing the revenue deficit
    • Of the 28 states, about 24 of them have contained the deficit and have turned revenue surplus.
    • Only Kerala, West Bengal, Punjab and Jharkhand have remained revenue deficit states for the year 2006-07.
Finance & Economy
  • Advance tax collections nose dive
    • That the slow down is for real is now attested by a steep drop in advance tax collections from India Inc.
    • The tax mop up in the third quarter ending December was lower by over 22% to Rs 42,600 crore from Rs 54,900 crore a year ago.
    • This brings down the growth rate in direct tax collections for the first nine months to 12% and raises the distinct possibility of the government missing the budget target of a 15% increase in direct tax collections this fiscal to net Rs 3,65,000 crore.
    • BTW, a fact that is for our keeps:
      • Advance tax is paid by the corporate world and the non-corporate assessees other than salaried employees in four instalments in a year in June, September, December and March.  Salaried employees have their tax deducted at source on a monthly basis.
  • Who is controlling our monetary policy?
    • Is it the RBI?  I am left to wonder at times when I see reports like these:
      • "THE Reserve Bank of India (RBI) may further trim key rates and reserve ratios in the coming weeks as it looks to make cheap credit available to borrowers and prevent the economic slowdown from gaining momentum, government officials said."
      • Why should government officials have anything to say about this?  Isn't it for the RBI to speak its mind on this?
    • The report says that the repo, reverse repo and CRR rates are likely to be cut by about 50 basis points.
      • Repo:  the rate at which RBI infuses money into the system is at 6.5%
      • Reverse repo:  the rate at which RBI sucks out money from the system is at 5%
      • CRR: the amount of money that banks have to keep with the RBI is at 5.5%
      • SLR: the proportion of deposits that banks have to compulsorily invest in government securities is at 24%.
    • Since banks have reportedly parked about 27% of their deposits in various government securities as against the requirement of 24%, SLR may remain untouched.
  • India's tax paying millionaires
    • According to data compiled by income-tax department, the number of salaried taxpayers earning more than Rs 1 crore (Rs 10 million) crossed 5,000 in fiscal 2008 from 2,200 in fiscal 2006. 
    • The number of people earning between Rs 50 lakh and Rs 1 crore per annum has also more than doubled. It has increased from 4,400 persons in fiscal 2006 to 10,500 in fiscal 2008. The number of those earning more than Rs 10 lakh also increased to 2.24 lakh in FY08 from 87,000 in FY06. 
    • In 2007-08, more than 1.5 lakh employees were earning between Rs. 10 lakh and 20 lakh. 
  • Boxing Day
    • We all know that the day after Christmas (mostly) is celebrated as Boxing Day.  But why or how did it get its name?
      • Boxing Day dates back to past centuries when it was the custom for the wealthy to give gifts to employees or to people in a lower social class, most especially to household servants and other service personnel. The name 'Boxing Day' originates from the tradition of putting gifts in boxes for the less fortunate.
  • Basket ball
    • We all perhaps would have heard of NBA team - Los Angeles Lakers, in the US.  It is considered the best team to play for in the world.
    • Stories like these  should inspire us into giving our best to whatever we do and not be dejected in the face of difficulties.  Looking at the kind of handicaps this lad from Canada faced, how many of our handicaps are really handicaps?  Whether it is competing in Civils or in achieving something else in life?  Read on and be inspired.


Politics & the Nation
  • Let's take a look at some expenditure and budget figures relating to VIP security that were reported in the press
    • The NSG (National Security Guards), was set up in 1984 for anti-hijack and anti-terror operations.  It has two wings - the Special Action Group (SAG) the Special Rangers Group (SRG), comprising select men from the Indo-Tibetan Border Police, Central Industrial Security Force, Central Reserve Police Force and other paramilitary forces. More than half of SRG personnel are deployed for VIP security. NSG was given a budget of Rs. 158 cr.
    • SPG (Special Protection Group) is exclusively meant for providing security to the prime minister, former prime ministers and members of the Gandhi family.  Its budget is about Rs. 180 cr.
    • There are around 400 guarded VIPs in the national capital alone. Around 15,000 Delhi Police personnel out of its strength of 60,000 guard the VIPs, who include ministers, politicians, bureaucrats, judges, religious leaders, lawyers and a few journalists.  An estimate puts the expenditure involved in giving such protection at about Rs. 600 crore.
    • In the light of stellar role played by the NSG in fighting the terrorists responsible for the recent Mumbai carnage, the views expressed by JK Dutt, the NSG Chief about having a separate force meant exclusively for the protection VIPs, are getting lot of press coverage.  Whether his advice will be heeded to by the powers that be, remains to be seen.
  • Himachal Pradesh advocates premarital HIV test
    • Its Chief Minister, PK Dhumal has mooted this idea, taking a cue perhaps from Maharashtra and Andhra Pradesh.
    • What's your take on this?  Shoot it away in the shoutbox.
    • Though some may dislike the idea, I would strongly advocate it.
  • PWD Engineer MK Gupta's murder in UP by BSP MLA evokes revulsion
    • A reading of the reports about the way he was tortured and killed, for his refusal to pay donations to Mayawati's birthday celebrations, is evoking revulsion all across the country.  
  • Maharashtra appears to be the first state to come out with a law that will fine the building owners if they fail to maintain the exteriors of their building well
Finance & Economics
  • Consumer durables seem to be doing extremely well from mid December
    • It brings lot of cheer to the economy in general also.  A look at this graphic  gives us the picture.
  • RPL refinery commences production
    • Reliance's petro refinery at Jamnagar commenced production from yesterday.  It has a capacity to refine about 5,80,000 barrels per day.  The existing facility there already refines about 6,60,000 barrels per day.
    • Remember what we noted about this way back on 20.09.2008?  Now this site has become the largest petro refinery in the world.
    • With a Nelson Complexity Index (NCI) of 14, refining margin per barrel is expected to be around $10.  
    • What is this NCI?
      • This is the index through which the level of complexity of a refinery is measured worldwide. Higher the index, higher is the complexity. The complexity signifies the ability of a particular refinery to alter its product-mix in response to the availability of the type of feedstock and also the change in the demand pattern of the finished products. 
      • Want a comprehensive explanation of this term?  Look here.
  • Coffee economics
    • India produces about 2,80,000 tonnes of coffee per annum.
    • Processing one tonne of coffee beans, reportedly generates about 10 semi-skilled jobs.
  • India Maldives sign cooperation treaties
    • India and the Maldives on Wednesday signed two agreements for strengthening bilateral cooperation in aviation sector and extending a 100 million US Dollar standby Credit Facility to the island nation.
    • The agreements were signed in New Delhi after talks between Prime Minister Manmohan Singh and visiting Maldivian President Mohammed Nasheed.
  • Allegations of sexual abuse against Indian peace keepers in Congo
    • You are all aware that there is an ongoing civil war in Democratic Republic of Congo.  We noted about this in our blogs also.
    • There is MONUC (established in 1999 and that largest peacekeeping mission of the UN), which is part of the UN peacekeepers operating in that country.  It appears that there are allegations against Indian personal serving in that peace mission about sexual abuse of civilians there.
    • Under the UN procedures, it is the countributing country that has to initiate action against them.  The UN on its part, seeks immediate withdrawal of the persons from the mission.  After taking action against the errant people, India will have to inform the UN of the action taken against them.
Science & Technology
  • Heard of Richard Stallman?
    • He is widely regarded as the father of free software.  He advocates the use of license free Linux versions.
    • He was in India a couple of days ago promoting E-Swecha, an Indian version of Linux which was in development by some engineering colleges in Hyderabad for the last one year.
    • BTW Kerala is the state which has been a strong votary of free software.
  • Tennis
    • Remember Rod Laver's achievement?  What is it about?  BTW, he is an Australian.
    • He won the Grand Slam of the French, Wimbledon, US and Australian crowns in one calendar year, twice.  Once in 1962 and then again in 1969.  This is a record that remains unmatched in men's tennis.
  • Ghajni is the top grosser of the year
    • Amir Khan is a happy man.  His film reportedly grossed about Rs. 32 crore on the very first day; thus beating Shah Rukh Khan's RNBDJ and Akshay's Singh is Kinng.
    • One experiment that Amir tried this time is the concept of paid preview.
      • A paid preview is a movie screening at select places before its formal opening at premium charges. Ghajini had over 660 paid previews on Wednesday, pocketing Rs 7 crore in the process. Usually, paid previews only have 100 shows.



Politics & the Nation
  • Mayawati to go alone in the upcoming Lok Sabha elections
    • Though many of the third front constituents are trying to woo her with making known their acceptance for her Prime Ministerial ambitions, she is reported to be unmoved and prefers to go alone on the Dalit-Brahman card.
    • Will she succeed in capturing the imagination of India?  Let's wait and see.
  • Traffic congestion tax for metros on the cards?
    • The government is reportedly considering imposing a special fee on vehicles entering the central business districts of metropolitan cities as part of steps to cut carbon emissions and reduce traffic congestion. 
    • The recommendations could include an increase in vehicle registration charges and higher fuel taxes as well as licence renewal fees. The money from the additional charges and levies may be used for a separate fund to finance public transport infrastructure in States. 
    • Cities such as Singapore and London have strict vehicle ownership rules and levy a congestion charge in some of their busiest zones and use the money to finance investment in public transportation. 
  • How should India tackle the cross border terrorist threats that it faces from Pakistan?  What are the options it has before it?  What should it and should not do?
    • We have deliberated, debated and poured our hearts over this issue ever since the Mumbai carnage happened.  But have you been able to solidify your viewpoint to something like what Arvind Panagariya has been able to put in today's piece?  It is well worth a read.  Here it is.
Finance & Economy
  • Mid year review of the Indian Economy 
    • Ever read such a review?  This was tabled in Parliament on Tuesday.  Try your hand at reading it.  After reading it, see whether you conclusions match those of the ET editorial.  Some excerpts:
    • One of the main reasons why growth is holding up this year is that the full impact of the global slowdown hit us with a lag. Precisely for this reason, recovery too is likely to follow with a lag; after global demand recovers. What this means is that the slowdown will, in all probability, continue into the next year and will worsen before it gets better. 
  • India is slowly becoming a favoured destination for medical tourism
    • A recent Deloitte study said healthcare is a $60-billion opportunity globally. In India, the market was clocking a healthy growth with medical tourism expected to touch $1.5-2-billion by 2010. Last year, India received 4.5-lakh international patients, a tad higher than Singapore at 4.2-lakh in the same period. 
  • When did the RBI introduce the system of Banking Ombudsman in India?
    • In 1995.  The idea is to provide an ‘expeditious’ and ‘inexpensive’ forum to bank customers for resolution of their complaints relating to banking services. 
  • A different kind of a coup
    • Guinea witnessed a different sort of coup.  Its President Lansana Conte, 74, died on Monday night.  Soon after, renegade soldiers moved to seize power, taking control of state radio and television.
    • Capt Moussa Dadis Camara, a junior military officer led the coup and announced himself as the President.
    • Thousands of Guineans have gone on to the streets of the capital to welcome the leader of a coup that followed the death of the country's president.
    • But the country's prime minister, Ahmed Tidiane Souare, has insisted the government, protected by loyal troops, is still the legitimate authority.
    • The US, EU and the African Union have all condemned the coup.
Science & Technology
  • A look at ISRO's strengths
    • It has established credentials as a provider of low-cost access to space and is in a unique position to get into the business of launching satellites for other countries, apart from developing an array of rocket components and satellite sub-systems for global customers, a $10-billion opportunity globally. 
    • The W2M satellite, at 3.46 tonnes, is the heaviest built by ISRO so far and the space agency made a profit of $40 million on it. 


Politics & the Nation
  • The collective outrage at the political class that pored over its usage of NSG for its protection, seems to have had a sobering effect on the government 
    • The four regional NSG hubs that are being established to respond to terror strikes anywhere in the country appear to be spared of the VIP duties.
    • The hubs are coming up at Mumbai, Chennai, Hyderabad and Kolkata.
    • And there will be a plane in standby mode, stationed at Delhi to take them anywhere in the country with least administrative delays.
  • Did you ever do a mock parliament in your school or college days?
    • I was reminded of the one session that we had during my college days.
    • We had a gala time, a la our political class today, and had lot of fun.  We were all thrilled and tried our best to be as inventive as possible in creating shock and awe to the Speaker and the visitors in the gallery.
    • What we are seeing in today's real Parliament is a re-enactment of our mock Parliament.  Only ours was for fun; but this one's for real.  It's a free-for-all.  BJP shouts against Antulay.  Left shouts against BJP and Congress.  And the government goes about its legislative business unperturbed by any of this noise and passes 8 bills!
  • Want to get a picture of how oil money is used for financing terrorism?
    • This piece from Brahman Chellany offers a very valid point.  Quite plausible.   Take a look.
Finance & Economy
  • What is our fiscal deficit (the money spent beyond the state’s revenue and other receipts)?
    • If you go by Arvind Virmani's speak, it is likely to go up to 5% this year.
    • But do you know where the Economist magazine keeps our fiscal deficit figure?  It is 8%.  That includes the off-budget subsidies like oil bonds.
  • Thanks to Yusuf, we lay our hands on an excellent slide that explains the current global recession
    • Take a look.  It is here.  It is from Jeff Frankel's weblog.
  • There appears to be no end to the Satyam saga
    • World Bank has reportedly banned Satyam from doing business with it for its questionable business practices.  The details of the practices have not yet tumbled out in full measure.
    • Some are saying it is about corruption, allotment of preferential shares to World Bank officials responsible for allotting work to Satyam etc., but full details are yet to be known.
  • In defence of FDI in insurance sector
    • We have somehow missed noting about this.
    • The government on Monday introduced a Bill to hike foreign direct investment in the insurance sector to 49% from 26% at present. By going ahead with the Bill that was pending for the past four years due to opposition from Left parties, the government has made its intention clear on its reform agenda.  An excerpt from today's ET editorial on why this measure is not a bailout of the foreign insurance companies:
      • Many Indian partners in private insurance companies have been unable to bring their share of capital in insurance joint ventures. Therefore, it made eminent sense to raise the FDI limit to 49% in an Indian venture. How does that amount to a bailout of the foreign company? 
    • Those opposed to liberalisation of the insurance sector must realise that insurance coverage is very poor in India.  Insurance penetration — a ratio of premium underwritten to GDP — rose to 4.8 in 2006 from 2.3 in 2000. But as much as 90% of the population — people who are not part of the organised sector — do not have any kind of insurance cover. To reach out to the millions who desperately need some kind of life and non-life insurance, we need more players in the market; companies with resources, innovative product and distribution ideas, and experience in penetrating markets. 
  • A look at petro-dollars
    • Even if the price of crude were to stay at $50 a barrel, the oil sheikhdoms of the Gulf will still receive more than $350 billion a year at their current rate of production. And if the price spirals to $150, their oil revenue will surpass $1 trillion a year. 
  • Want a good round-up of India's sports achievement in the current year?
    • You can't get a better piece than this one that appeared in today's ET.  Take a look.
    • An excerpt worth our noting:
      • Recently, the media was abuzz with the news of two young lads from rural India — Rinku Singh and Dinesh Patel — who became the first baseball players from India to sign a professional baseball contract in the US. 
Language lesson
  • munificence
    • Noun: Liberality in bestowing gifts; extremely liberal and generous of spirit


Politics & the Nation
  • How can we say that transparency is found wanting in the existing PPP (Public Private Partnership) model of infrastructure building?
    • The government is reported to be considering barring the participation of sector regulators from taking up equity in infrastructure projects being built on PPP basis.  The fact that this practice is allowed thus far, itself points to the lack of transparency.  How can a regulator be a party in a project, which he is supposed to regulate?
    • The proposal to bar regulators, was mooted by the Planning Commission last month.  If accepted, regulators and government entities such as port trusts and AAI would stop being a part of any infrastructure project.  A gist of some other proposals in the scheme:
      • Existing road projects would be the basic model for future ventures.  
      • The changes would be applicable on future projects & existing projects won’t be affected.  
      • JVs between private and public sector entities may be allowed.
Finance & Economy
  • Terrorism pool
    • This is a fund which was created by our insurance industry to offer insurance cover for losses arising out of terrorist activity.  Consequent to the 9/11 attacks in US, the global reinsurance companies made terror attacks an 'excluded risk'; meaning that they won't be covered under the reinsurance.  Following the creation of the pool, terrorism cover began to be sold as an add-on risk on property insurance (residential and non-residential) and on group covers. 
  • We have heard corporate head honchos reel off volumes about innovation being very crucial for results and / or survival.  But if it comes from a Chess player, it is worth a re-look; isn't it?
    • Do read this interview  with Vishwanathan Anand, our celebrated Chess champion sharing his thoughts on how to navigate these troubled times.  Interesting read. 
  • Explaining dollar's strength
    • In spite of the US being in recession and facing humungous financial troubles, how is that its currency is appreciating against major currencies of the world?  Conventional wisdom tells us that a currency's strength is determined by the fundamentals of its economy.  When the fundamentals are weak, how is it that it is still appreciating?
    • Take a look at Neeraj Kaushal's explanation:
      • Clearly, the dollar has benefited from the fact that it continues to be the international currency of exchange, trade and reserve. 
      • The strengthening of the dollar is also helped by the fact that Japan and the economies of the euro zone are as deeply sunk in recession as is the American economy and growth in China and India is projected to be lower than it had been in the previous few years. 
      • Most of all, fright in world financial markets has sent investors running away from risky assets towards the US dollar and US treasury bonds. 
    • Having said that he argues that Asian economies have to creatively invest their resources in productive activities instead of parking them in US treasuries, to bring the world economy out of recession.
    • With calls like these, it is a matter of time before some flight of capital happens away from the dollar.
    • Those of you, who are as enamoured as I am with this subject, can read this story.
  • With reports of Japan facing a severe recession than what was expected, it looks like as if the world should be prepared for a long haul
    • Japan, which slashed interest rates to 0.1% last week, reported the biggest drop in exports in November.
    • The People’s Bank of China announced its fifth cut in lending rates since mid-Sept 
    • British central bankers feel interest rate cuts alone could not be the remedy
    • Does it mean that the central bankers are searching something beyond quantitative easing?  What could it be?
  • Union for the Mediterranean
    • Launched in July by Mr Sarkozy the current President of the EU, it brings together leaders of 43 countries from the EU and the sea’s rim. It is headquartered in Barcelona, Spain.
    • BTW Presidency of the EU is a rotating one.  Currently, it is France which holds the post.  From January 1, 2009 it will be going to Czechoslovakia.
  • Schengen visa
    • It should be something related to China; isn't it?  
    • Wrong.  It is European visa that allows the holder to visit any of the 24 countries that allows tourists a visit without a further visa.
    • The latest country that has joined this Schengen visa system is Switzerland.
  • A new way of preserving lungs for transplantation
    • It is very difficult to preserve lungs out of a human body for long hours.  Just two hours is what is considered possible.  But a new system which is tried raises hopes of preserving them for about 12 hours.
    • The Toronto XVIVO Lung Perfusion System technique involves pumping a bloodless solution containing oxygen, proteins and nutrients into the damaged donor lungs, which are protected in a special chamber.
    • This allows the surgeons the opportunity to assess and treat injured donor lungs, while they are outside the body.
Language lessons
  • insouciance
    • Noun: The cheerful feeling you have when nothing is troubling you
  • schadenfreude 
    • Noun: Delight in another person's misfortune
    • eg:  Under her larger-than-life predecessors, N Vaghul and K V Kamath, ICICI Bank earned a reputation for professionalism but also an insouciance that inspired both awe as well as a certain amount of schadenfreude among its rivals when it ran into trouble. 
  • spinmeister
    • Noun: A public relations person who tries to forestall negative publicity by publicizing a favourable interpretation of the words or actions of a company or political party or famous person


Politics & the Nation
  • Why are we seeing a drop in the number of job seekers in India?
    • We are talking of job seekers in government employment exchanges.
    • As per data compiled by 958 district and town level employment exchanges, there were 3.99 crore registered job seekers in India at the end of last year compared to 4.14 crore at the end of 2006. This marks a decline of 3.6% as against 2.7% in 2005, representing 1.1 million people, the previous best. 
    • The decline in job seekers could be attributed to the high economic growth of 9% in 2007-08. Many people were either approached directly by private companies, or registered with private  recruitment agencies last year. Campus placements and migration to big cities also gained ground. Thus, lesser people registered at these employment exchanges which provide government jobs, goes one explanation.
  • Even in the non-government sector the job scene has a lot to cheer about
    • Look at these headlines:
    • MBAs from Universities look for opportunities here.
    • PEs and VCs are looking for professionals
    • Tech companies go slow on hiring; but TCS and Infosys buck the trend
    • Students see merit in slow down; but invest time in B-schools
    • All this is not at all depressing; isn't it?
  • Belgian PM loses job due to credit crunch
    • Prime Minister Yves Leterme tendered his government’s resignation on Friday after a report by the Supreme Court found signs of political meddling to sway a court ruling on the future of Fortis, a Benelux bank which is a victim of the credit crunch. 
    • Benelux: Belgium, Netherlands and Luxembourg.
Finance & Economics
  • Remember our notings about Corporates going to court against banks for selling them currency derivative products which they least understood and incurred huge losses?
    • Now it is reported that many of those corporates which have gone to court are setlling the dispute with their bankers directly.  The two strong reasons that are advanced for this change of heart are:
    • The fall in the Swiss franc against the dollar has cut the mark-to-market losses in these cross-currency derivatives, making the positions less risky and therefore easier to settle.
    • Secondly, some of the corporates were left with little choice as their bankers have frozen their working capital limits.  Some banks have even obtained court orders against the coporates and their promoters' disposing off their assets.
  • Though repetitive, let's look at double taxation treaties and treaty shopping once again
    • Double taxation treaties are essentially agreements between two countries that seek to eliminate the double taxation of income or gains arising in one country and paid to residents or companies of the other country. The idea is to ensure that the same income is not taxed twice. In many instance, however, these agreements are misused to evade taxes. This is called ‘treaty shopping,’ where usually residents of a third country take advantage of a tax treaty between two countries. 
    • For example, many companies in other countries route their investments into India through Mauritius or Cyprus to take advantage of the tax treaty that these countries have with New Delhi. Both, India-Mauritius and India-Cyprus tax treaties provide that capital gains arising in India from the sale of securities can only be taxed in Mauritius and Cyprus. This means no capital gains tax on investments in securities routed through Mauritius and Cyprus, as these countries do not levy tax on capital gains. 
Language lessons:
  • Scudding
    • Noun: The act of moving along swiftly (as before a gale)
    • Verb: Run or move very quickly or hastily
    • Run before a gale
  • deli
    • Noun: A shop selling ready-to-eat food products


Politics & the Nation
  • Change of guard at ICICI Bank
    • Ms. Chanda Kochhar is a familiar face to corporate India.  She is slated to take over from KV Kamath, the outgoing CEO & MD in May 2009.
    • At 46, she is one of the youngest CEOs our banking sector had ever had.
  • An excellent graphic depicting Pakistan's position as the epicentre of terror
    • Here it is.
    • It is interesting to note that Nawaz Sharif, the former PM of Pakistan has blown the lid of Pakistan claims that Kasab is not from Pakistan, by confirming that he is from Faridkot.
  • Unorganised Sector Workers’ Social Security Bill 
    • India's unorganized sector is reportedly 94% of the labour force of about 400 million.
    • The bill which has been passed by the Parliament seeks to constitute a National Social Security Advisory Board to recommend suitable welfare schemes for unorganised sector workers. 
    • The Centre may notify suitable welfare schemes relating to life and disability cover, health and maternity benefits, old age protection or any other benefits.
    • One criticism about the bill is that it did not provide a permanent funding mechanism for making its lofty intent workable.  Instead, it was left to the whims and fancies of the individual governments.
  • Crude at record lows since 2004
    • It touched $33 per barrel; a price seen about 14 years ago.
    • Opec president Chakib Khelil, says that this could be new the floor price for oil for now.
  • US automakers get a breather from the US government
    • The US announced a $17.4 bn rescue plan for its troubled automakers - GM and Chrysler, amidst calls from the President for elimination of a ‘jobs bank’ program — negotiated by the United Auto Workers and the companies — under which laid-off workers can receive about 95% of their pay and benefits for years. Early this month, the UAW agreed to suspend the program.
    • Whether or not this results in some fab shedding by the companies needs to be seen.
  • We need not be ashamed of Bofors!
    • If you look at what Seimens is caught doing, surely we need not be ashamed of Bofors or any other corruption scandal for that matter.
    • It devised novel ways to funnel huge sums to corrupt officials and politicians across the globe. On Monday December 15th it pleaded guilty to charges of bribery and corruption and agreed to pay fines of $800m in America and €395m ($555m) in Germany, in addition to an earlier fine of €201m.
    • Should we praise it for its admission of guilt?  Or should we draw comfort that we have illustrious company to keep?
  • Watergate scandal
    • Many of you might not have been born when this scandal happened.
    • It was about the abuse of US Presidential powers in the White House during Richard Nixon's presidency.
    • Following some remarkable investigative journalism from the Washington Post, the President had to resign in disgrace in 1974.
    • Why do we need a recap of this now?
      • Because one Mr. Mark Felt, famously known as Deep Throat, the mysterious FBI source behind the exposure of the scandal had died at the age of 95.
Finance & Economics
  • Existing rules regarding share buybacks by corporates
    • Relevant for us in the context of Satyam's aborted attempts at investing in related firms.
    • The buyback norms in the Companies Act, 1956 allow a company to purchase a maximum of 25% of its paid up equity capital in a financial year once a special resolution is passed at a general meeting. The shares bought back have to be compulsorily extinguished within seven days of the buyback. 
  • India's PSUs sitting pretty on a cash pile of Rs. 100,000 lakh crore
    • India’s top 30 non-financial PSUs were sitting on a cash pile of nearly Rs 1,00,000 crore at the end of FY08, a 100% growth over FY06. What is interesting is that PSUs were able to accumulate this cash despite the poor profitability of oil majors, which account for a bulk of PSUs’ revenues. 
  • On why 'quantitative easing' is called as such:
    • We have noted about quantitative easing on a couple of occasions earlier.  As central banks run out of their ammunition by fiddling with interest rates, they are resorting to buying up treasuries and securities from the banking system to keep more money in banks' vaults.
    • This is called “quantitative easing” because the effect of these measures is to control the quantity rather than the cost of credit. 
  • IPL trading window set to open on Monday
    • This enables each IPL franchise to purchase a maximum of four players through a trading window, which will remain open for a month from Monday, December 22. 
    • There will be no limit on the number of players that a franchise can sell and a cap on the fees payable to players is also absent. 
    • IPL has also laid down guidelines for the second player auction that will take place on February 6, 2009. This auction will be open for players who did not participate in the first season. Each franchise can spend a up to $2 million in the auction. As was the case with the first auction, all overseas players require a no-objection certificate from their respective cricket boards to play in the league.


Politics & the Nation
  • Russia says that Dawood Ibrahim is involved directly in the recent Mumbai terrorist attack
    • Reportedly his network of drug peddlers provided logistic support for the terrorists.
    • One snippet that we came across while reading this report is about CCIT: Comprehensive Convention on International Terrorism
      • India reportedly sought Russia’s help in pushing the CCIT, which India had sponsored at the UN General Assembly. Russia is reportedly willing to work with India to “inject new dynamism” in the convention that has been held up over the definition of terrorism. 
  • Celebrities to get a taste of the rough and tumble of legal consequences for the endorsements they make
    • If the ad is smart but the product turns out to be a dud, who is responsible? A law-in-themaking says the hot celebrity in the ad is as much to blame for duping consumers as the company which owns the brand. The new Companies Bill 2008 proposes sending celebrities to jail for up to three years if they induce consumers to buy a product with misleading claims. The Bill also wants the company to pay Rs 50 lakh as penalty for cheating consumers. Currently, such companies face a Rs 1-lakh fine. The Bill was tabled in Parliament in October. 
    • What's your take on this issue?  Shoot your opinions in the shoutbox.
    • In 2002, top celebs like Shah Rukh Khan, Hrithik Roshan and Sachin Tendulkar endorsed the Mumbai-based brokerage firm Home Trade. Later, it was exposed as a company that swindled more than 25 co-operative banks of Rs 600 crore. 
  • A very good article on NREGA
    • Recommend a read.
    • While I keep reading about NREGA's success story from these experts, I also keep hearing from ryots in my village complaining about how NREGA has a couple of negative side effects:
      • They say that it has promoted laziness amongst rural farm workers.  Working not even for a half day, the workers are given Rs. 100/- as wage.  So, these people are happy the way the system works and prefer to have a peg or two and go home for the day.
      • Secondly, this is negatively impacting the availability of farm labour in times of need.  The labour are not at all interested in working on the farm as they can avoid the hard farm work.  So, in spite of the ryots willing to pay and hire more workers, in some villages labour is simply not available.  
    • My suspicion is that if things continue in this fashion for a few more years, at least in these areas we will witness a gradual shift in agricultural practices; whether we like it or not.
Finance & Economy
  • Stimulus package; Round II to be finalized by the coming Sunday?
    • Look at the ideas being considered!
      • Increase limit for low-interest housing loans from Rs 20 lakh to Rs 30 lakh 
      • Raise tax rebate on home loans from Rs 1.5 lakh to Rs 2.5 lakh per annum 
      • Reduce car and two-wheeler loan rates by 2% 
      • Increase depreciation and hasten disbursal of Cenvat credit for steel sector 
      • Safeguards for chemical, aluminium and tyre manufacturers against cheap imports 
  • TK Arun identifies three grounds for staying optimistic about Indian economy
    • Number one: the Indian economy depends far less on exports than other fast growing economies do. If the export market dries up, an export-dependent economy would face crisis. While India’s exports of goods and services together add up to a little under a quarter of the total output, the direct export contribution to gross profits and wages and salaries is less than 10% — substantial, but not huge. The indirect contribution would be significant, particularly in the case of high value exports like software and IT-enabled services. But these segments are likely to grow, rather than decelerate, as companies in the recession-hit large economies seek to cut costs through outsourcing. The bulk of the demand for India’s output comes from India itself. Consumption demand is about two-thirds of the output. 
    • Ground No. two: In aggregate terms, the bulk of Indian investment is financed out of domestic savings. The current account deficit is the measure of dependence on external savings for local investment, and this is about 2% of GDP. 
    • The third ground for optimism: All costs are coming down (save, strangely, of newsprint!). Oil prices are less than one-third their peak. Globally, food prices are down a fifth, metals are down by half and the Economist’s index for all commodities is down by a third. Freight costs are a fraction of what they used to be. 
    • So, why are we so despondent?  He attributes this to the general mood.  Then he says that the mere availability of the pieces of the jigsaw puzzle is not enough; somebody has to bring the pieces together and solve the puzzle.  That somebody should be the political class and the bureaucracy working in tandem.
  • Satyam backtracks on its deal to acquire stakes in Ramalinga Raju's son's firms
    • But the damage control exercise did not pacify stakeholders and there are now fears that the firm may be a target for hostile take over bids.
    • Let's just wait and see.
  • Caution about Barack Obama's plans
    • You might have by now noticed in various papers that Barack Obama is going to announce a huge fiscal stimulus package the moment he assumes office.  The plan emphasizes spending on infrastructure.
    • One interesting stat that appeared in the Economist, cautioning about his plan is that the 100 biggest metropolitan areas account for 65% of America’s population and 75% of its output. That is where the infrastructure is needed. But if “bridges to nowhere” start springing up in the boondocks, it will probably be money wasted.
  • Some interesting facts about China's agricultural communes and its SOEs (State Owned Enterprises) 
    • Rural reforms began in late 1978 in the central province of Anhui even as the party was holding its meetings in Beijing. Peasants in one commune there secretly started parcelling out land, expecting death for it, but soon gained backing from a provincial leader and Deng ally, Wan Li. Others gradually followed suit. By the time communes were formally dismantled in 1984, most had long disappeared in all but name.
    • In spite of this, land remains collectively owned, even though it is leased out to individual households to farm. This system has shut farmers out from the boom that cities have enjoyed as a result of the rapid emergence in the past few years of a free market in property.
    • In the late 1990s around 30 million workers were laid off as a result of SOE reform.  Between 2001 and 2006 the number of SOEs fell from 370,000 to 120,000, but this still left assets worth $1.3 trillion in state control.
Sporting and Branding
  • TATA announces branding strategy through Formula One races
    • Tatas and the Formula One organizers reportedly signed a branding sponsorship deal that will put the Tatas name on Formula One.
    • Can you imagine how much money the Formula One participating teams spend per annum on their technological innovations on the Formula One cars?
      • About $200 mn!!
Language lessons
  • boondocks
    • Noun: A remote and undeveloped area
  • bohemian
    • Adjective: Unconventional in especially appearance and behaviour
    • Noun: A nonconformist writer or artist who lives an unconventional life
    • Noun: A member of a people with dark skin and hair who speak Romany and who traditionally live by seasonal work and fortunetelling; they are believed to have originated in northern India but now are living on all continents (but mostly in Europe, North Africa, and North America)