14.02.2008

• New SEBI chief
• The tenure of the present Chairman Sri. M. Damodaran is ending tomorrow.
• Government appears to have finalised the name of Chadrasekhar Bhaskar Bhave as the new SEBI chief.
• Election Commission issues notice to Sonia Gandhi
• There is a petition against Sonia Gandhi challenging her status as Member of Parliament on the ground that she had declared allegiance to the Belgian monarch by accepting the “Order of Leopold”, the second highest civilian honour of that country, during a visit there in November 2006.
• Enquiring into this petition, the EC gave a split verdict, perhaps for the first time. The CEC Mr. Gopalaswami and Commissioner Navin Chawla ordered that a notice be issued to Sonia Gandhi. The third Commissioner SY Quraishi dissented saying that there was no prima facie case to proceed against Mrs. Sonia Gandhi.
• Power ministry wants the power sector to be put on par with the fertiliser sector
• This is in relation to allocation of gas in the country.
• The gas utilization policy being framed has given primacy to the fertilizer sector in allocation of natural gas. But a strong case is made for parity by the power ministry on the following grounds:
• An increase in power tariff (due to reduced availability of the economically viable natural gas) would increase the cost of other products and make industrial production uncompetitive.
• In case there is any shortfall in fertiliser availability due to natural gas shortage, there is an easily available import route. But power cannot be imported from other countries. Moreover, fertilizer production abroad can be acquired or established nearer to the natural gas sources. But power plants cannot be established abroad to meet our requirements.
• Against a requirement of 60 MMSCMD of gas to 13,334 MW of existing gas-based projects at 90% plant load factor (PLF), only 30 MMSCMD of gas was supplied in November 2007. This resulted in these plants having a PLF of just 54%.
• Excellent commentary on the goings on in Mumbai
• Today’s ET editorial gives a very good commentary about the chauvinistic goings on in Mumbai.
• Worth a read. Do so here.
• What is important for us is to learn making such sensible and analytical comments while writing about important issues.
• Battle for talent; what exactly is the problem?
• India currently, especially the IT sector, is exhibiting some classic symptoms of under supply, such as year-on-year wage increases of 15%, unrealistic career expectations from many young employees, and attrition rates approaching 50% in some sub-sectors. What are the reasons behind this?
• We find answers in a very good article in today’s ET centre page. Look at it here. But for our answer, the following excerpt is enough:
• The answer, as most industry experts will admit (some publicly, many more privately) is that most Indian graduates are unemployable by the standards of these industries. The actual size of the available talent pool is relatively small, only about a quarter of the total by some estimates. No wonder, many companies are coming to the conclusion that the Indian labour market has “maxed out”, and that it is time to move on to. One might argue that companies are doing what is best for their shareholders by moving to other locations with low cost and (as yet) untapped labour pools.
• However, this reflects a tragedy for India — we may be watching the chances of millions of young graduates to find white collar employment evaporate before our eyes as companies decide it is cheaper to relocate rather than deal with the education sector’s failure to do what it should have done — create employable graduates. Paradoxically, the situation will only worsen as these companies become more competent and sophisticated at what they do — their hiring standards will only increase, as will their confidence in replicating their business processes in new locations with new (kinds of) employees. Throw in an occasional shock such as the recent exchange rate woes or a populist move to scale up quotas in employment, and it is all too easy to see where this leads.
• Tussle over iron ore exports
• Remember the debate about whether or not we should be allowing export of iron ore fines? Today’s ET has a good article on that. Worth a recap for us.
• But what is noteworthy about today’s piece in ET is that a study debunked the notion that the Indian steel industry is using basically lump ore and therefore iron ore fines inevitably generated in the process of mining have to exported. As per this study, in 2005-06 consumption of fines in India was 41.2 mn tonnes out of a total of iron ore consumption of 78.95 mn tonnes. All our existing and upcoming integrated steel plants need iron ore fines as raw material. Hence there is no point in exporting these fines liberally.
• Is this the last that is about this story? I doubt it. Wait for some time. We may hear of another story or study which will dispute this.
• Know anything about the US budget?
• Its budget is $3.1 trillion in size. In contrast, remember our economy’s size? It is about $750 bn. And do you know the deficit size of the American budget? It is $407 bn. How does its deficit compare with our economy’s size? It is a little more than 50% of our economy’s size. Mind boggling; isn’t it?
• The American federal budget seems to have had surplus budgets only in 5 years since 1961. Those years are 1969 and 1998 to 2001. The surplus of 1961 was the result of the 10% income tax surcharge passed in 1968. The surplus of 1998-2000 was due to the demise of cold war. This has resulted in defence expenditure going down by leaps and bounds – 40% or so.
• Speaking of sizes, let’s look at Arcelor Mittal’s profit
• It is $19.4 bn for the full year 2007. Where do most of our state government’s budgets stand in comparison with this figure? Just make a guess.
• One billion is about Rs. 4000 crores. This means that Arcelor Mittal’s profit is about Rs. 80,000 crores. How many of our states have a budget which is larger than this?
• Youngest ever galaxy discovered
• Named A1689-ZD1, this was discovered by the astronomers using the Hubble Space Telescope. This galaxy was seen undergoing a firestorm of star birth as it comes out of the ‘dark ages’, a time shortly after the big bang but before the first stars completed reheating the universe.
• Duck billed dinosaur found
• One of the world’s oldest and probably the most primitive dinosaurs, that possessed a built-in horn to woo females, has been found in Mexico.
• This is about 72 mn years old. It is named Velafrons Coahuilensis. It is discovered at a site known as Cerro Del Pueblo Formation in Coahuila on the coast of north Mexico.