Indian Current Affairs: 17.01.2008

He will be arriving on Sunday to upgrade relations with India. His visit is expected to pave way for better ties in trade, investment, education and in dealing with terrorism.

Remember anything about the delimitation commission? We noted something on this in our blogs earlier. Take a look at what we noted on 7^th March, 2007.
Now our PM is confirming that the next phase of parliamentary elections will be held in the delimited constituencies.
This will happen in 24 states. The remaining states where this exercise could not be completed were: Assam, Manipur, Arunachal Pradesh, Nagaland and Jharkhand.
In Jharkhand the exercise would result in a reduction of the number of tribal seats. As this is going to be unacceptable to several political parties, this is reportedly being put on hold.
In the north eastern states the exercise could not be completed because there were court injunctions and some other problems which brought about a feeling that delimitation need not be pursued for the time being.

I have answered one of your shout-box queries on exchange rates in today’s Discover It. Take a look at it here.
In a change of tack, the RBI has chosen to intervene through the forward market instead of the spot market this time to contain the rupee. There were large inflows of dollars into the country due to the ongoing Reliance IPO. The RBI bought dollars in the spot market and sold them in the forward market. This ensures that there is no liquidity generated in the immediate future.

SocGen is a French bank. Its full name is Societe Generale. This tie up by SBI makes it the first Indian bank to enter the custodial services business.
Custodial services business includes a range of services including safekeeping and settlement, reporting, corporate actions, dividends collection and distribution, proxy voting, tax reclaim services, fund administration and providing market news and information.
Reads like gibberish? Just try Googling and you will understand most of them. For the ones that you don’t understand or need help with, shout in the shout-box.

A total of 1253 FIIs registered in our country. The number of FII sub-accounts is reportedly at 3,720.

Time and again ET has been taking a negative view of the government’s failure to pass on the realistic prices of oil to the people. Take a look at today’s editorial comment excerpted for you below:
“It was always likely that kerosene, being predominantly consumed by the poor, would receive some measure of subsidy in the post-APM era, but the UPA government’s failure to increase prices of petrol and LPG, used predominantly by the rich and the middle class, reflects political timidity of a high order. The Left’s cussedness along with opposition from the UPA chairperson Sonia Gandhi has certainly played a part. Oil prices are politically sensitive everywhere but countries such as China have allowed prices at the pump to rise more than India. Prices in this country are stuck at levels appropriate for $58 per barrel compared to current prices which are around the $100 mark. The total quantum of oil bonds to be issued in fiscal 2007-08 may be in the region of Rs 28,000 crore.”

Rising food prices hurt consumers but benefit farmers. Is there a conflict that needs to be managed here?

In a good article about the coming food crisis, which he sees as an opportunity, TK Arun answers this question very well. If you have time take a look at the full article here. But coming back to the answer to the question:
If you thought the challenge before the government is as simple as this, you don’t get it. In India, the farmer sells his produce for about one-third the price the consumer pays. In other words, only one-third of the rise in prices goes back to the farmer. To increase the benefit of rising food prices to the farmer and to minimise the cost to the consumer, this huge margin between farm and consumer prices must shrink.
How can this done? Through any of these measures:

Abolish mandi taxes.
Allow direct sourcing of farm produce by agribusinesses and organised retail — obviating several rounds of transportation and loading and unloading costs, apart from intermediary margins.
Organise farmers into bodies — companies or cooperatives — capable of leveraging the opportunities afforded by the market.
Encourage initiatives such as ITC’s e-Choupal and DCM Shriram Consolidated’s Haryali stores that offer farmers a host of inputs ranging from seed, fertiliser, tractor parts and diesel for pump sets to agronomic advice and soil testing.

Remember the first time we covered this in our blogs? Yes, it is back again. This time in to West Bengal through Bangladesh. Bangladesh reportedly has been having bird flu in 23 of its 64 districts.
Last time it was Maharashtra (Navapur in Nandurbar district) during February 2006.
This will pose a challenge to the $7.8 bn poultry industry of the country, as imports from our country will be banned by many countries.
Remember H5N1 virus? This is what causes bird flu.
What’s more important right now is this: while containment is the immediate priority, the task of identifying the strain and comparing it with samples collected from earlier outbreaks to check for any mutation is equally important.

The 9^th version will be held in Goa from January 28 to 30.
The theme is “Harmonisation – The emerging global need”
India has fixed an export target (for spices) of $10 bn by 2017. This year the spices exports are expected to touch $1 bn.
India accounts for 44% of the total quantity of spices traded in the world. This is in spite of the fact that only 9% of our production is exported.

Various opinions on the desirability or otherwise of a tax rate cut are appearing in papers of late. Let’s take a look at the Prime Minister’s EAC (Economic Advisory Council) Chairman Dr. Rangarajan’s view on this.
His advice is to moderate the indirect taxes on consumer goods to boost the economy. The moderation in tax rates would also augur well for the manufacturing sector which has shown early signs of a slowdown. This feeling arises out of the fact that the latest IIP figures fell to 5.4% from 17.2% a year ago.
Does his reasoning debunk the theory that the slowdown in IIP figures is due to the ‘Diwali effect’ that we noted in our blog earlier? Let’s keep watching. He may have more info with him than what meets our eye!!!

Because they will be long term investments that will add to the maturity of the stock markets of our country. They will bring in stability and credibility and will in turn inspire further confidence for other long term investments. Thus spake SEBI Chairman M. Damodaran.
He is looking at the experience of Chile in this regard. Its capital markets were far less mature than the Indian stock market. Yet it is often cited as the market for most professionally managed pension funds investing in their stock markets.
About 152 global pension funds from 18 countries are now invested in our country’s capital markets. Pension funds almost make up for about 13% of the 1250 odd FIIs in the country.

The fossil of a rodent the size of a bull is reportedly discovered in the forests of South America – Rio de la Plata in Uruguay. The fossil dates to about 4 mn years.

Indian Current Affairs