02.01.2008

· SEBI cracks the whip against insider trading

o SEBI has proposed that company insiders will have to return to the company, any profits made from the purchase and sale of company stock, if both transactions occur within a six month period.

o A company insider as defined by SEBI is any officer, director or holder of more than 10% of the company’s shares.

o By virtue of their positions, these entities have greater access to price sensitive information.

· Tax collections are on the rise

o The direct tax collections are very buoyant showing a rise of 42% in the April to December period. They were Rs. 2.05 lakh crore. The budget estimate of tax to GDP ratio of 11.8% is likely to be exceeded.

o The budgeted figure for the entire financial year was Rs. 2.67 lakh crores.

· New Year party at Times Square, New York

o There is a tradition of dropping the new year’s ball here. It began a century ago with a 700 pound ball of wood and iron, lit with hundred 25 watt incandescent bulbs.

o This year’s event featured an energy-efficient sphere clad in Waterford crystals, with 9,576 light emitting diodes that generated a kaleidoscope of colours.

· A new and easy test for detecting cancer

o Called the “swish-and-spit” test, patients were asked to brush the inside of their mouths, then rinse and gargle with a salt solution.

o Scientists then filtered out cells in the rinsed saliva that might contain one or more of 21 bits of chemically altered genes associated with head and neck cancers.

· Do job losses point to unemployment?

o Not necessarily. In the US, job losses average 2.5 to 3 million per month. Yet, net employment has been rising for years, since more jobs are created than are lost. Creative destruction is how market economy works, knocking out low-productivity companies while expanding or creating new high-productivity companies. That is how national productivity rises and prosperity increases.

· Parthasarthy Shome quits as advisor to Finance Minister

o Mr. Shome is known as the tax reformer. He laid down the blueprint for future fiscal reforms. The integration of services with VAT, a comprehensive restructuring of MAT, rationalisation of tax savings instruments and removal of exemptions formed part of his recommendations in the report commissioned by the Planning Commission in 1991.

· Some differences between SEZs and PCPIRs

o SEZs enjoy more flexibility and tax breaks than a PCPIR where the investor’s major attraction is state-funded infrastructure like ports, airports, power plants and roads.

o PCPIR: Developers and co-developers get IT exemption under section 80(I)(A) for developing, operating and maintenance of power plants, airports, ports, waste management facilities and water treatment plants.

o SEZs: Get import duty exemption, full IT exemption on export income for the first five years and in smaller measure in subsequent years. They also get exemption from MAT, VAT and service tax.

· 2008 poised to be a landmark year for oil and gas

o Some significant developments slated for the year include:

o Huge expansion (47 mn tonnes) of refining capacity in India.

o Beginning of natural gas supplies from the KG basin by the middle of the year.

o Emergence of a cross-country gas pipeline grid.