22.01.2008

• India surely appears to be the flavour of the season even among OECD countries
• With France and UK showing enthusiasm about improving their relations with India, it sure appears to be the flavour of the season. Recently even China rolled out the red carpet for our Prime Minister.
• UK has even publicly said that it favours a permanent seat for India at the Security Council.
• During the currently ongoing visit of its Prime Minister Mr. Gordon Brown, both the countries pledged to pursue the UN agreement on the Comprehensive Convention against International Terrorism.
• ISRO successfully launches an Israeli satellite
• ISRO launched Israel’s Tecsar satellite using its PSLV –C10 rocket.
• This is a purely commercial launch. The satellite reportedly would track Tehran’s nuclear arms programme. It has got the capacity to take pictures with a 1 meter resolution.
• Some terminology that we should be familiar with in the context of the current retail boom
• There are three types of frauds happening in retail. The retailers are at the receiving end.
• Return fraud: In this, a consumer comes to exchange a product which actually hasn’t been purchased from the store in the first place. This is especially visible for high value merchandise such as apparel.
• Slip & Fall: In this, a consumer deliberately falls down in the shop and sues the retailer for negligence. In the Indian version, a consumer claims some valuable thing missing from the bag he kept with the security and sues the retailer.
• Sweet heartening: An employee colludes with a friend or other colleague who poses as a customer. The ‘sweet heart’ friend then purchases some high value item but is billed for a much cheaper product.
• Expert’s views on Indian economic reforms
• We have been noting extensively on the state of Indian Economy and economic reforms in our blogs from time to time. But it would do us a lot good when we read some expert’s views on various aspects of our economy or reforms. What better can it get, than knowing the views of an internationally renowned person like Dr. Raghuram Rajan? Take a look at his interview today in ET. It is here. But some excerpts for our notes:
• On government’s performance on fiscal front: While the FRBM targets are fairly under control, off balance-sheet items such as oil bonds are exploding. Sooner than later, the government must take cognisance of it. For instance, administered petrol prices are allowing PSUs to incur losses. Often other losses are buried under losses due to administered prices. As a majority shareholder in oil marketing companies, the government shouldn’t decide to repress prices to protect consumers. The government is doing so without consulting minority shareholders overruling corporate governance norms and property rights.
• On exchange rate: Exchange rate appreciation is a residual price that has to be paid. The RBI cannot hold the exchange rate for too long. Allowing one-way currency bets is not good. Eventually one is building up speculation which will contribute to inflation and liquidity in the system. Sooner than later they will run out of instruments to do so. What the RBI is essentially doing is fighting appreciation of the nominal exchange rate. Till exchange rate reaches equilibrium, there will be no clarity.
• Status quo on ADR/GDR front
• Remember this ADR/GDR route of raising capital for Indian companies?
• Government is in no hurry to lift the restrictions on companies raising funds abroad. Those that do not have domestic listing will be asked to wait for a while for going ahead with their ADR/GDR issues. This is with a view to promote home capital market.
• This follows the submission of a report by the committee headed by Saumitra Chaudhury which has gone into the issue. It appears to have recommended a status quo on the subject.
• At present companies have to go in for simultaneous listing, both on the foreign markets as well as domestic markets.
• Exim curbs on dual use chemicals may be eased
• The government appears to have agreed to subject international trade in 24 products known as the Australian Group of Chemicals and many other items in the same class to greater scrutiny. This move is aimed at preventing the proliferation of dual use materials from India.
• Though India is not a member of the Australia Group and there is no obligation on its part to impose such restrictions, it still felt it desirable to do so.
• Want to know something about the Australia Group. Follow this link.
• MCX is Asia’s first commodity exchange to allow carbon credits trading
• Two other prominent exchanges that trade carbon credits are: Chicago Climate Exchange and European Climate Exchange.
• The market for trading in carbon credits is estimated to be in the range of $60 bn to $70 bn annually. India has reportedly generated close to 30 mn carbon credits and has roughly another 140 mn in the pipeline for sale.
• The trading unit of carbon credits is going to be 200 tonne. Each tonne of carbon credit is an entitlement to emit one tonne of carbon dioxide equivalent gases.
• India-ASEAN FTA talks seem to be nearing conclusion
• With both the sides making some compromises, the stage appears set to clinch the deal.
• Let us await more info on this.