07.01.2008

· Goodbye MRTPC?

o Remember the Monopolies and Restrictive Trade Practices Commission? It was seen more as a relic of the license permit raj. It is likely to be given a decent burial with the formation of a National Consumer Protection Authority (NCPA).

o NCPA will be a quasi-judicial body working on the lines of the US Federal Trade Commission and will address consumer grievances.

o It will set standards for products that impact health, safety and environment.

· CBDT Chairman

o Ratneshwar Prasad

· Why did cement prices rise recently?

o Due to raw material price increase and a severe squeeze on excess capacity caused by rising demand.

o Capacity utilization has risen from 83% in 2004-05 to 94% in 2006-07.

o A total capacity of 60 MT is expected to come on stream in the next two years. This is expected to dampen prices.

· Language lessons

o Leitmotif

§ When you read a sentence like “But if inclusive growth is the leitmotif of sustainable development there is no doubt...”, what is meant by leitmotif here?

§ It is referring to the dominant and recurring theme of sustainable development.

· On financial inclusion

o We have a very good article on this subject in today’s ET by Mythili Bhusnurmath. Worth a read. Do so here. Though we have been noting quite frequently on the subject, a couple of points worth our attention or re-look include:

o 40% of our population (60% in rural areas) is denied access to basic banking facilities.

o Only about 4% has any exposure to capital market and 5% has insurance cover (3% in the case of health insurance).

o Only 9.5% of the population in rural areas get any formal credit as against 14% in urban areas.

o Mandating banks to open ‘no frills’ accounts/open branches in rural areas or compelling insurance companies to increase coverage in rural areas, and so on, might ensure compliance; but only on paper. It is only when reaching out to the bottom of the pyramid becomes financially viable, nay attractive, that banks, insurance companies and pension players will reach out in any meaningful way to those presently outside the pale of these services. We’ve seen that, most graphically, in the telecom sector. But for that to happen we must first have reforms in the real sector, especially in agriculture. Financial inclusion will automatically follow.

· In spite of relentless rise in crude prices why is that it is not having any impact on the macroeconomic scene of various countries; a thing which was the case in the not too distant past?

o Jaideep Mishra gives some cogent reasons for this. I am reproducing a couple of paragraphs from his informative article from today’s ET. Read his full article here. Take a look the following for the answer to our question:

o The oil intensity in the major economies, read the one-to-one relationship between oil and output, has significantly declined. Thanks to sustained productivity gains so as to cope with and indeed thrive in the face of high oil prices, the high-income economies are now able to derive far more output from a unit of oil than before. It straightaway means that growth in the gross domestic product is not as dependent on oil as it was not too long ago.

o Also, thanks to creeping inflation, oil at $100 a barrel is not such a big deal. Besides, the old tendency to demand wage catch-up in line with rising oil prices seems far more subdued now. Weaker unions and a quantum jump in the mobility of international finance seems to have put a spanner in the works.

o Further, the increase in imports of goods and services from abroad, thanks to greater integration of China and India into the world economy, have dampened the effects of record oil prices.

o Additionally, monetary policy in the richer economies is now so much more “credible”. Economic agents can now be pretty sure that any wage-price spiral would be effectively “crushed” with a suitable interest rate response. So a wage or price demand closely linked to the traded price of oil does not really make sense any longer, it would appear.

· On death penalty

o The UN General Assembly has voted to place a moratorium on executions, with 104 member countries favouring the resolution and 54 opposing it. The result is that death penalty could be abolished de facto even in countries that retain it on their statute books.

o Data available for 2006 show that 133 countries have done away with death penalty in law or in practice. Over that year, 25 countries have carried out executions and 91% of the known executions were the work of six countries – China, Iran, Iraq, Pakistan, Saudi Arabia and the US.

o I am left to wonder, if 133 countries have done away with it as was reported, then why did the measure get only 104 votes in the UN General Assembly? Topics like these can be argued / debated either way. Use the information as you please.

· PK Sethi, the Jaipur foot inventor is no more

o Dr. Sethi died of cardiac arrest. He was 80.

o He developed the artificial limb with vulcanised rubber in 1968.

· Chennai Open

o Mikhail Youzhny defeated Rafael Nadal in the finals.