31.03.2008

• APDP of Kashmir
• It stands for the Association of Parents of Disappeared Persons.
• It believes that many of their wards, who went missing in custody in the last 20 years, might be buried in countless graves lacking epitaphs and identities. These graves – some of them having more than one corpse – are located in dozens of villages in Baramulla and Kupwara districts.
• The EU-US transatlantic ‘open skies’ pact
• So far there were about 21 bilateral aviation agreements between Washington and individual European nations. But this is set to change with the replacement of all these agreements by a single accord that will allow any EU carrier to fly from anywhere in the bloc to any point in the US, and then on to a third country, and vice versa. This was previously not possible.
• This is expected to boost aviation between the EU and US and also help consumers a lot.
• This interview with Martin Feldstein in today’s ET is a must read for everyone. Very interesting and insightful:
• Read it here.
• Normally we don’t get a chance to hear Harvard Professors. It is a distant dream; for many of us, still. Don’t miss this.
• Similarly, today’s ET editorial on the choices that we have for tackling inflation is a very good piece. Recommend a strong read. But some excerpts:
• It is widely believed that there are too few policy options available for the government to tackle inflation at the present juncture. How?
• With global prices of food and oil showing little sign of cooling, the pressure on the wholesale price index from both primary articles and energy prices is likely to continue.
• Add to that the recent increase in metal prices that has spilled over into higher prices for manufactured products (up 0.9% during the week ended 15 March) and the outlook on the price front is distinctly bleak.
• More so as price pressures are likely to intensify over the coming months as inflationary expectations (post the Sixth Pay Commission Report and government’s increased spending on social schemes) get more firmly entrenched.
• But then, what all did the government do so far?
• It has tried a number of fiscal steps, cutting tariffs, as well as administrative steps like banning exports of selective food items. And though the full impact is yet to be felt, it is unlikely to be significant.
• Then what is the outlook?
• Monetary tightening is unlikely to be of much help either given that monetary policy acts with a lag and has a broad-brush impact that is inadvisable at a time of slowing growth.
• In this scenario, the best bet for the government would be to reduce tariffs further (wherever possible), cut back on wasteful spending and refrain from fuelling inflationary expectations (read, pay part of the dues on account of the SPC recommendations into provident funds rather than as cash). Last, but not least, improve delivery for those priced out of the market.
• India’s petro potential
• About 10 bn tonnes of crude and a trillion cubic meters of natural gas.
• It is the Tatas’ Jaguar deal that is occupying more of the media space nowadays. What are the issues that this deal (or shall we say Tatas) have to face to be successful?
• The 9 Ps of process, patience, people, passion, pressure, policy, pride, performance and profit.
• Remember anything about the 4 P’s of marketing in this context?
• In the early 1960's, Professor Neil Borden at Harvard Business School identified a number of company performance actions that can influence the consumer decision to purchase goods or services. Borden suggested that all those actions of the company represented a “Marketing Mix”. Professor E. Jerome McCarthy, also at the Harvard Business School in the early 1960s, suggested that the Marketing Mix contained 4 elements: product, price, place and promotion.
• Now Tarun Das has come out with his 9 P’s theory for the success of the Tatas-JLR deal. Worth a read. Do so here.
• Looks like today, I am going to ask all of you not to miss the original stuff from the ET. It is very rare to have a paper with so many important articles. Today is one such rare day.
• I am referring to Jeffrey Sachs’s column on “Roots of America’s financial crisis.” Can’t help but recommend a strong read of this piece.
• I find his articles very intuitive, informative and very enlightening because they make highly complex concepts look like simple issues.
• Even if you are put off by the word ‘Economics’, my recommendation is that you should go through this at least once.

30.03.2008

• India to develop 6 multi-modal airport hubs
• India will soon have multi-modal airport hubs across its landscape, similar to the one proposed at Nagpur.
• They will be developed in six metros to cater to not only commercial airlines but also to cargo airlines. They will have MRO (Maintenance, Repair and Overhaul) facilities.
• The proposed places where these will be established are: Amritsar, Ahmedabad, Hyderabad, Thiruvananthapuram, Kokata and Guwahati.
• Regional stock exchanges in limelight again. Why?
• There is a rising interest in regional stock exchanges because of new FDI norms that allow foreign investments up to 49% in stock exchanges, depositories and clearing corporations, with a cap on single investment, direct or indirect at 5%.
• One more reason is the ‘corporatisation of exchanges.’ This allows them to be run like any other company. They exist and operate to earn profit.
• The interest evinced by Nasdaq (the largest electronic equity securities trading market in the US) to partner with Ahmedabad Stock Exchange and the German multinational bank Deutsche Bank’s attempt at owning about 5% stake in the Delhi Stock Exchange are examples of this trend.
• Language lessons:
• What is meant by ‘epiphany’ in this following sentence?
• “While observing exotic animals and trainers in her acclaimed book, journalist Amy Sutherland had an epiphany: what is she uses these training techniques with the human animals in her own life – specifically dear husband, Scott?”
• Christians would, I suspect easily know it. But for others it may not be so easy. Here is what Merriam Webster’s says about it.
• An intuitive grasp of reality through something (as an event) usually simple and striking.
• On self healing materials
• It is quite sometime since we had Shelly Singh write about some new technology stuff. Today it is about self healing materials. Some excerpts:
• Materials’ properties degrade over time due to cracks on a microscopic scale that ultimately lead to failure of the material. In the biological world there are built-in mechanisms that continuously sense damage and repair it. In the field of materials science researchers are now trying to engineer this type of behaviour into man-made materials, hence called self healing materials. There are already a few such materials but new research and development has focussed on materials that repair within minutes of damage.
• Two research groups — one in the US and one in the UK — have independently tried to create composite materials that mend themselves if damaged. In a manner akin to the self healing process of an animal’s broken bone or a skin rash. The effort by the two research groups differs from other such efforts as they seek to make materials which will heal in minutes rather than days, weeks or months.
• The American initiative focuses on the problem by adding extra components to composites. Like most such materials, these composites comprise fibers, carbon fibers in this case, embedded in a plastic matrix (an epoxy resin). The main extra component added are tiny capsules containing a chemical called dicyclopentadiene. If the composite cracks, the capsules near the crack break open and release the dicyclopentadiene molecules, which link together to form another type of plastic that binds the crack together and thus heals the material.
• And in the UK, scientists have taken a different approach to achieve the goal. They used glass fibers rather than carbon fibers in their composite and, instead of adding capsules, they have put the healing molecules into the fibers themselves. A crack in the material breaks the fibers, releasing the ingredients which react, form more epoxy, and thus mend the crack. If such research succeeds commercially, we can look forward to healthier, longer lasting products.
• Tatas clinch the Jaguar deal – Jaguar Land Rover deal
• It is a $2.3 bn all-cash deal. Under the deal Ford would pay about $600 mn towards the pension liabilities of Jaguar-Land Rover employees and Tata Motors would continue to source motors from Ford.
• However, the cost of the final deal is expected to be about $3 bn because this price of $2.3 bn just covers the price of brands, assets and technology know-how. A big part of the additional cost would go for engine and component supply.
• Any amount of coverage on the US attempts at coming out of the morass that the sub prime mess landed it seems to be not enough. Let’s look at some coverage relating to it that appeared in today’s ET:
• The first one is about helping the defaulting borrowers of home loans.
• The Bush administration is finalising a plan to rescue thousands of homeowners facing foreclosure by helping them re-finance into more affordable loans, according to media reports on Saturday. The proposal is aimed at assisting borrowers who owe their banks more than their homes are worth due to declining home prices. If enacted, it would mark the first time the White House has committed federal dollars to help the most hard-pressed borrowers. Under the plan, the Federal Housing Administration would encourage lenders to forgive a portion of these loans and issue new, smaller loans in exchange for the backing of the US government. Is this any different from the farm loan waiver that we are seeing in India?
• The second is the Fed’s helping hand given to JP Morgan Chase for buying out the beleaguered Bear Stearns. I would recommend a read, for those of you with time and interest in knowing the details. It is here. But for others, the following excerpt may be enough:
• What the Fed is calling a $29 billion “loan” to help finance JPMorgan Chase’s purchase of Bear Stearns looks much more like a $29 billion investment in securities owned by Bear. Although the Fed insists that it isn’t technically buying any assets, in practical terms it’s doing exactly that.
• So far, few people have focused on what exactly the Fed is getting in exchange for supplying $29 billion to JPMorgan Chase. That’s a bit surprising because whatever the deal is, it’s far from a standard loan. The strangest twist is that even though the money goes to JPMorgan, that firm isn’t the borrower. So the Fed can’t demand repayment from JPMorgan if the Bear assets turn out to be worth less than promised.
• Here’s how it works: A Delaware-based limited liability company will be set up to receive, upon completion of the merger, $30 billion in various Bear holdings, such as mortgage-backed securities. The Fed will lend $29 billion to that company, which will pass all the money along to JPMorgan, Bear’s new owner. JPMorgan itself will lend $1 billion to the Delaware company. The company, managed by BlackRock-Financial Management, will pay back the loans by gradually liquidating the assets. As a protection for the Fed, it gets paid back fully before JPMorgan gets back anything on its loan. The other sweetener for the Fed is that if there’s money left over even after JPMorgan gets repaid, the Fed gets it all.
• From an economic perspective, this complex arrangement is functionally identical to a purchase of the Bear portfolio by the Fed—one that’s financed in small part by the subordinated $1 billion loan from JPMorgan. But the Federal Reserve Act doesn’t seem to provide for the Fed to make such equity investments. That doesn’t trouble the Fed because it argues that the $29 billion is indeed a loan—or, to use the antiquated language of the Fed’s founding legislation, a “discount” of a “note.”
• Remembering as we are about our farm loan waiver in the above discussion, is it really bad? Look at what our celebrated and noted Management Guru CK Prahlad says about the farm loan waiver package.
• The waiver will only allow the farmers to become credit worthy again. What is far more important for them is better access to markets, skills upgrade and a host of other measures. The loan waiver has not really solved the structural problem for farmers in India. He further feels that agricultural policies in India need to be sensitive to the fact that the problems in different parts of the country are very different. For instance, the farmers in Vidarbha face a completely different set of issues from those in Telangana.
• BTW, do you know what is he famous for? His “fortune at the bottom of the pyramid” concept has won him laurels and international recognition. This concept highlights that businesses, governments, and donor agencies need to stop thinking of the poor as victims and instead start seeing them as resilient and creative entrepreneurs as well as value-demanding consumers.
• Good news on the cricket front
• Now it is the turn of Dravid to join some all time greats by reaching the 10,000 run mark in test cricket. He joins as the sixth member of that elite club which reached this mark. The others before him include: Sunil Gavaskar (10122), Alan Border (11174), Brian Lara (11953), Steve Waugh (10927) and Sachin Tendulkar (11782).
• Dravid, Lara and Tendulkar are the only ones who have scored more than 10000 runs in both Test and one-day cricket.
• Who is Jayakrishna Ambati and why is he in the news?
• This Indian American questioned the Nobel price winning work of prototype gene treatment. His team discovered that the gene silencing method, rooted in a 1998 breakthrough that earned the Nobel for medicine in 2006, works not by targeting the specific culprit gene, but by having a generalised effect of blocking blood-vessel growth that could harm tissues.

26.03.2008

• Who is great? A diplomat or a barista?
• Do you know the country where the job of a barista is preferred over the job of a diplomat? It is Norway.
• A barista is a person who prepares and presents the brew to suit the individual customer’s preference in fine coffee cafes.
• Regulating higher education in India
• At present, the higher education system in our country is regulated by seven central ministries and 13 councils. As a result, there is over-regulation and under-governance.
• Hence the NKC – National Knowledge Commission is proposing to set up an Independent Regulatory Authority for Higher Education (IRAHE).
• Some more salient features of the pay award announced by the Sixth Pay Commission
• It has liberalised the conditions relating to pension payment. So far, only when a service of not less than 33 years is put up by an employee, is he eligible for full pension. Now the Commission recommended that soon after 20 years of service, the employee will be entitled for full pension.
• It has increased the limit on gratuity payment also from Rs. 3.5 lakh to Rs. 10 lakhs.
• These recommendations are expected to benefit about 38.41 lakh pensioners. The increased payment to pensioners will result in an additional expenditure of Rs. 1,365 crores per annum.
• If you are asked to mention some criteria for judging the pay panel reports, what would you state?
• Today’s ET editorial lists out three. They are good.
• One, are new salaries commensurate with the service rendered?
• Two, are government salaries comparable to salaries in the private sector? This is essential if government is to attract and retain talent.
• Three, can the taxpayers bear the burden of higher pay and allowances?
• India’s diamond business
• India’s imports of rough diamonds during 2007-08 are expected to touch $10 bn while exports are expected to be about $14 bn.
• India is the world’s largest importer of rough and exporter of cut and polished diamonds with over 90% market share.
• Botswana is the largest producer of diamonds in the world accounting for over 25% of the production followed by Russia (22%), Canada (12%), South Africa (12%), Angola (10%) and Namibia (6%).
• India’s new irradiation facility for mangoes
• BARC has opened a new facility at Vashi, Navi Mumbai. It is awaiting the approval of the US department of agriculture.
• The other irradiation facility for mangoes is at Lasalgaon in Nashik District.
• These facilities are required to overcome the phyto-sanitary issues relating to export of mangoes to the US.
• India started exporting mangoes to the US only last year, following President Bush’s green signal.
• Frantz Fanon
• Frantz Fanon (July 20, 1925 – December 6, 1961) was an author from Martinique (a Caribbean island, which was then a French colony and now a French département), essayist, psychoanalyst, and revolutionary. He was perhaps the preeminent thinker of the 20th century on the issue of decolonization and the psychopathology of colonization. His works have inspired anti-colonial liberation movements for more than four decades.
• Do you remember the phrase "The Wretched of the Earth"? It is one of his very popular works.
• Is the US recession, a solution and not a problem?
• You need people like Swaminathan Anklesaria Aiyar to pick up (or rake up) arguments like these. Some excerpts for us:
• The underlying problem is that US households have for years been spending more than their income. The macroeconomic consequence is a huge current account deficit of $700 billion/year, financed by borrowing from abroad. Burdened now with trillions of dollars of debt, even the richest and most creditworthy country in the world is now suffering a falling currency, causing pain through inflation. US overspending is not sustainable, and will at some point have to be reduced drastically, if not eliminated.
• Seen in this light, a recession is a solution to US overspending, not a problem. A recession reduces spending and borrowing, and thus helps restore economic equilibrium. The world economy will inevitably slow down along with the US. But countries like India will still be able to attain GDP growth of 7%, lower than the 8.8% of the last four years, but still extremely high by historical standards.
• In sum, Indian investors should not get euphoric about the latest actions of the US Fed and Congress to unfreeze markets and stimulate the economy. Any success on their part is likely to be partial, and short-lived. The era of mammoth US trade deficits fuelling record growth round the world — including in India is coming to an end. We need to adjust to this new reality.
• How does short selling help?
• Remember the SEBI regulations that are set to allow short selling in a month from now? How do short sales help a market?
• By empowering institutions (both foreign and domestic) to short sell, policymakers hope that the process of price discovery will be more efficient. These large institutional investors control nearly a fourth of the market capitalisation, and are increasingly becoming key constituents of the market. There are also some who feel that the data from the stock lending and borrowing window will serve as a valuable tool for traders to take technical or short-term calls on stocks. The quantum of shares, which have been borrowed, the investment behaviour of foreign portfolio investors and the level of retail participation can offer valuable clues to gauge the mood of the market.
• RBI lets Singapore banks to open branches in India
• We have covered in detail about the issue with Singapore on CECA (Comprehensive Economic Cooperation Agreement) in our blogs over the last year and a half. Now both the countries have reached some amicable settlement over the contentious issues.
• A recap of the issue is worth our attention. I consider this one of the most important (or shall I say likely?) questions in the interview.
• Read this article that appeared in today’s ET.

25.03.2008

• Free radicals
• These are harmful molecules that cause what is called oxidative stress soon after eating, in humans.
• Anti-oxidants, the healthy compounds found in fruits and vegetables, can neutralise the free radicals.
• Now, do you understand why a fruit salad is recommended for dessert?
• God particle
• I am sure many of you would have heard about CERN, Europe’s atom-smashing laboratory on the border of France and Switzerland.
• This centre is doing research into what is called the Higgs Boson sub-atomic particle. This particle is so tantalizing for the physicists that they have named it ‘The God Particle.’
• It is named after the British Physicist Peter Higgs, who first proposed it in 1964.
• To study this particle, the centre is building what is called LHC – Large Hadron Collider. This is expected to explain dark matter and dark energy phenomena.
• Figures relating to six pay commission implementation
• The year 2008-09 is expected to take a hit of Rs. 12,561 crores. This is in addition to the Rs. 18,060 crores one-time expenditure towards paying arrears from 1^st January, 2006.
• Government revenues have been buoyant. The gross tax to GDP ratio is projected to go up to 11.8% in the current fiscal.
• But with both direct and indirect taxes targets likely to surpass the budget estimates, there is hope that the additional expenditure would be easily met. But will the burgeoning food, fertilizer and oil subsidies allow a smooth shouldering of this burden? Let’s wait and watch.
• What is Madrid protocol about?
• This protocol mandates that a trademark application has to be cleared within 18 months of filing.
• A parliamentary panel looking into this has recommended against acceding to this protocol, till the time the country builds adequate skilled manpower and requisite infrastructure.
• India is currently seeing a bad season on derivatives front. Elaborate.
• If you are asked such a question, the following paragraph from Rajrishi Singhal’s article offers the best answer. A likely question for those of you preparing for civil’s interview.
• First, came the news that ICICI Bank had incurred mark-to-market losses of over $260 million on credit default swaps in overseas markets. Next, engineering giant Larsen and Toubro made the startling disclosure that its overseas subsidiary had incurred losses of around $50 million due to wrong bets on commodity futures.
• All this comes on top of the global economic crisis that has been precipitated by complex derivative structures. What’s spooking the pro-reforms bloc is the fear that these mishaps might induce the authorities to clamp down on any further opening up of the market.
• Can global financial turmoil derail India’s growth?
• You can’t afford to miss this debate. A must read.
• All the three are real good experts in what they are saying. Didn’t find it worth condensing. May be I will do a notes sometime later. But till then, do read it in full.
• Ever heard of cat bonds & cat swaps?
• A very good definition appeared in today’s first principle column in ET.
• These are catastrophe bonds. These are a form of securitization used to transfer natural catastrophe risks to the capital market.
• More can be found here.
• How can asia help in the current financial crisis of the US economy?
• Wasn’t it just yesterday that we read a good article from Ramgopal Agarwala? A kind of sequel appeared in today’s ET.
• This is also a must read for us to comprehend the issue. Read it here.

24.03.2008

• Political developments in our neighbourhood
• While Tibet is razing with anti-Chinese demonstrations, Bhutan and Pakistan are experimenting with democracy in their own characteristic ways.
• Remember the GNH concept? It stands for Gross National Happiness. It is championed by the King of Bhutan and has received accolades from the World Bank also. Bhutan is going to its first ever polls with two parties contesting the polls. Though the country was reluctant, the reform for democracy was taken up by the King. He abdicated power in December 2006.
• In Pakistan, a family loyalist of the PPP party Makhdoom Yousuf Raza Gillani is set to take over as Prime Minister when the Parliament is convened by the President. Incidentally he is the person who was arrested by President Musharraf on corruption charges and incarcerated in jail for about 5 years. We should see how the two get together during the short period the former is expected to stay keeping the seat warm for Mr. Zardari who is widely expected to take over as PM in course of time. It appears there is a constitutional hitch for him to take over as PM at the moment because he is not even an MP. Looks like one should be an MP before he can be called in as PM in Pakistan.
• Sixth pay commission report
• Papers are agog with hefty pay increases recommended by the Commission for Central government employees. Let’s look at an excerpt from the editorial comment in ET that tells something about what happened last time when the pay commission award was announced.
• The September 1997 decisions resulted in pay and pension increases of 40% and more to central government employees. And since state governments followed the Centre’s lead, the combined effect was to undo much of the progress made post reform in reducing the fiscal deficit.
• At the macro level, the combined fiscal deficit of the Centre and states rose from 6.4 % of GDP in 1996-97 to 9.9 % in 2001-02, while the revenue deficit doubled from 3.6% of GDP in 1996-97 to 7 % in 2001-02. About half this deterioration was the result of the Pay Commission hikes.
• Language lessons:
• “In the seminal ‘Shadowlines’, a book almost certain to survive the melange called Indian English writing…” reads a sentence in today’s paper. What is meant by ‘melange’ here?
• A motley assortment of things.
• Titbits about Bear Stearns
• Its stock took a free fall from $180 barely a year ago to $85.3 in January this year. On March 11 it touched $62.97. By March 17, it was trading at $3.30. It was finally acquired by JP Morgan for a mere $2 per share.
• Want some expert speak on oil economics? Who else can be a better bet than Mr. RS Sharma, the Chairman of ONGC to do that for us?
• I recommend a strong read of his piece in today’s ET. It is here. But some snippets from it for our record:
• International crude price doubled from $54 per barrel in January 2007 to $110 per barrel in March 2008.
• The fundamentals behind that spectacular rise are -- the booming energy demand, shrinking conventional resources and consequent shift in demand-supply axis. Associated dynamics like a weakening dollar, speculative activities and fear of supply disruptions from unstable resource centres have played a significant role.
• India’s demand for primary energy in 2030 is projected to be four times what we are consuming today (423 mn tonnes of oil equivalent).
• OPEC has around 73% of world’s proven reserves. One third of oil production comes from just three countries – Saudi Arabia, Russia and the US.
• Half of the world’s production comes from 100 largest fields. Most of them are more than 25 years old now.
• Out of the 85 mn barrels per day of oil that is produced, 15 mn bpd come from new finds. Incremental demand is outstripping incremental supply.
• On restructuring the US economy
• It is time for other world experts (read non US experts) to keep preferring advice on how to cure the US of its economic malady. Gives us lot of vicarious pleasure; isn’t it?
• Keeping the pleasure part of it apart, I find that the suggestions given are worth a consideration. Look at what Ramgopal Agarwala says on restructuring the world demand away from the US consumption.
• A must read for economics and finance people. The link is here.
• Why is the Rajasthan government’s bill on Freedom of Religion bad?
• Today’s Hindu editorial gives three solid reasons on this score. Look at them:
• One is that a similar bill enacted by it sometime back is awaiting President’s assent.
• Secondly, the real purpose of such bills is to pander to Hindutva sentiment and place restrictions on personal religious freedom.
• Lastly, laws that require notice and registration of conversions or otherwise intimidate and pull against the fabric of secularism and constitutionally guaranteed freedoms have no place in progressive 21^st century India.
• I know many of you may have your own reasons for agreeing or disagreeing with the above assessment. But one important point that we should know is that the Supreme Court also has ruled on the subject in its case Stanislaus vs. Madhya Pradesh, in 1977. Reportedly there are 7 states where there are anti-conversion laws. All are enabled by the SC ruling stated above.
• Justice KG Shah is dead
• He is one of the members of the Nanavati-Shah Commission probing into the post-Godhra communal riots.
• Agni III to be test fired in April 2008
• Having successfully test fired Agni I yesterday, the DRDO is planning to test fire Agni III in April. It has a range of 3500 km.
• Yesterday’s launch of Agni I was notable because it was all carried out by the user of the missile viz., the Indian Army.
• What is precision farming?
• A very good and detailed article on this appeared in today’s Hindu. Recommend a strong read of the article.
• Follow this link.

22.03.2008

• India to vote against OXML of Microsoft
• You might remember this debate about document formats and India’s vote at the ISO meet Geneva. This is the latest development on that issue.
• India will vote against Microsoft’s OXML being adopted as a standard, along with existing ODF, by the Geneva-based international standards body, ISO, where representatives of member countries are slated to decide on the matter by March 29. The decision was taken at a standards committee of the Bureau of Indian Standards. Ironically, all major representatives of Indian IT industry - Infosys, Wipro, TCS and Nasscomm - voted, at Thursday’s meeting of the standards committee, to adopt OXML as a standard. However, they were overruled in the 22 member committee, dominated by academia, government bodies and Microsoft’s global rivals, Red Hat, Sun and IBM.
• Tatas to come out with the car that runs on air by end 2008?
• Though it is not officially announced as yet, Tata Motors may soon be in a position to roll out cars that run on compressed air instead of fuel. This is because of an agreement the company inked in early 2007 with France’s MDI to deploy the latter’s pathbreaking air-powered auto-engine technology for the Indian market. The technology was at the development stage when the deal was signed.
• If this happens, this will be a much bigger event than the launch of Nano.
• Even if the car were to have some limitations, I guess it will be adopted very widely in India. And it will herald a revolution of different kind.
• Will an engine running on air and delivering driving power, be not put to use different uses? Will automobile the only application that will harness it? For me it looks like it will spread into different areas.
• Fiscal deficit under control
• The fiscal deficit in the third quarter ending December 31, was down to Rs 77,578 crore compared to Rs 94,854 crore a year ago.
• Higher revenue collections were the prime reason for this excellent performance. The revenue collections during the first nine months of this fiscal went up to Rs 3,89,345 crore compared to Rs 3,06,528 crore a year-ago.
• The revenue receipts of the Central Government for 2008-09 are projected at Rs 602,935 crore and the revenue expenditure at Rs 658,119 crore.
• On Bhagat Singh
• There is a good article on Bhagat Singh in The Hindu today. Read it here.
• Bhagat Singh became a national hero immediately after the Assembly Bomb Explosion on April 9, 1929. He was the ideologue of Hindustan Socialist Republican Association (HSRA)
• He was hanged on March 23, 1931.
• He stood for rationalism and spoke against caste oppression. Bhagat Singh’s principle represented socialism and communism. He was an atheist.
• Germany’s parliament is the greenest building in the world?
• The German Reichstag is expected to become the greenest parliament building in the world, thanks to a decision to rely solely on renewable energy.
• From late summer the building is due to swap to green power sources such as water, wind and solar energy, replacing the conventional power that it has largely relied upon until now.
• Its extensive refurbishment in the late 1990s, including Norman Foster’s glass cupola, had already won it plaudits. Ecologists praised the building’s energy efficiency, which has led to a 94 per cent cut in its carbon emissions. Its roof makes passive use of solar power and natural light and its thick, well-insulated 19th-century walls help retain warmth in winter and reduce the need for air conditioning in summer. Biofuel generators in the basement produce 40 per cent of the building’s energy, for lighting, heating, the flow of air conditioning and water, while the rest comes mainly from coal and nuclear supplies.

21.03.2008

• Inflation worries for government
• Inflation has touched an 11-month high of 5.92%; much beyond the comfort zone of 5% tolerated by the RBI. This is the third consecutive week that the WPI based inflation has breached the 5% mark.
• This has prompted the government to immediately announce some fiscal measures, as the scope on monetary front appears to be limited.
• It has announced a slew of duty cuts – customs duty cuts on edible oils and rice. While the customs duty on rice has been slashed to nil from 70%, duties on all crude and edible oil imports have been reduced from the present level of 75% - 52% to 20% and 27.5% respectively.
• The government appears to be thinking about introducing export duty on steel.
• Nancy Pelosi on a visit to India
• Speaker of the House of Representatives of the US, is on a visit to India. She is scheduled to visit the Dalai Lama at Dharamsala, much to the chagrin of the Chinese government.
• India gets most remittances
• In the year 2007, India is the top recipient of foreign money according to the World Bank.
• It received a total of $27 bn. It is followed by China ($25.7 bn), Mexico ($25 bn), the Philippines ($17 bn) and France ($12.5 bn).
• Some respectable figures at last; aren’t they?
• IRDA plans curbs on MBS exposure
• What is MBS? It stands for mortgage backed securities. MBS are structured instruments where cash flows from home loans are pooled together and converted into marketable securities. These are said to be ideal instruments for insurance companies as they have a long tenure and provide marginally higher returns than papers with similar rating. Investments in MBS are set to be designated as ‘approved’ investments, subject to exposure norms.
• Currently life insurance companies and general insurance companies are subject to some restrictions on how they invest their premium amounts. While the life companies are allowed to invest 50% of their investable assets in government and other approved securities, they can invest 15% in infrastructure instruments and the balance 35% according to their discretion. General insurers are mandated to invest 30% in government and other approved securities, 10% in infrastructure and 5% in housing. Balance 55% is their discretionary quota.
• Why is there free fall in world commodity prices?
• Noticed the free fall in crude, gold and silver? That too when not much of an action is seen on the stock front? Usually the commodity markets and stock markets have an inverse relation.
• An explanation offered by the experts is that traders go long on commodities as a bet against inflation. But now inflation (globally) is seen to be within the desirable limits. Hence the traders are unwinding their positions, pulling the prices down.
• The US recession is expected to keep prices globally low for some time to come.
• But that did not explain why the commodities hit the roof in the recent weeks. Just last week crude touched an all time high of $111 per barrel. Gold and silver also tested new highs.
• I feel there is much more than what meets the eye in this commodity price fluctuation globally. It is perhaps too early to explain anything. Sometimes, some things should better remain unexplained. Perhaps this is one of such times. What all it takes is a surge in commodity prices for another set of experts to come up with another explanation.
• How many uranium mining sites are there in India?
• Over 1 lakh tonnes of uranium reserves have been found across 10 states in the country.
• At present the country is operating 5 uranium mining sites in the country. These are Jaduguda, Bhatin, Narwapahar, Turamdih and Banduhurang in Jharkhand.
• Some very good editorial comment on the malaise of intolerance against artistic endeavours:
• The continued harassment and exile of MF Hussain, the banning of Jodha Akbar and the Taslima Nusreen episode betray our inability to limit extremist reactions. It also shows the extent to which communal and ethnic identities have solidified. The rise of competing fundamentalisms has not least been abetted by the failure of the secular parties to construct a genuinely inclusive democratic process.
• Efficient Market Hypothesis
• It was first propounded by French mathematician Louis Bachelier in his dissertation “The Theory of Speculation” in 1900.
• But it attained prominence after the mid 1960’s based on the doctoral thesis of Eugene Fama.
• According to this theory, the price of traded assets reflects all known information and is a collective belief of all investors about future prospects. Thus, it is not possible to have guaranteed profit as a result of pure trading process.
• Look at some of the suggestions made by The Hindu in its editorial on education reform
• There has been a gradual shift from content-based to problem-solving and competence-based testing in the examinations. But this has to be speeded up and the focus turned away entirely from rote learning. School education’s goals of preparing students for life outside the classroom, laying the foundation for higher studies, and equipping them for the job market must not be lost sight of. Apart from looking at the system and the curriculum, the authorities must review the teaching methods and facilitate the teachers to adapt themselves to the changing environment. Parental and societal pressures must also give way to the shaping of talent based on the interests and aptitudes of the students. The reforms must cover not just continual internal assessment, but also guidance, aptitude tests, and counselling to help students chart out their course.
• Why is subprime crisis so complex to comprehend?
• Many of you who have been following our coverage of the subprime crisis for the last year or so would have found some of the notings to be going over head. Right? That is understandable for the simple reason that it is complexity which has heralded the crisis in the first place.
• I recommend reading today’s Hindu editorial. It perhaps offers one of the best chances of enhancing our understanding of the crisis. Do so here.
• For some of us this may the best piece, because a Paul Krugman, or a Mythili Bhusnurmath or a Joseph Stiglitz might appear too complicated for us to comprehend at times.
• Islam and terrorism
• Much is being written about the Deoband school’s recent conference.
• If you want to understand more about Deoband school, Hanafism and Salafism, today’s op-ed article in The Hindu is an excellent source.
• Strongly recommend reading it at least once. Do so here.
• Belgium has a new Prime Minister
• Yves Leterme took over as PM to end nine of months of deadlock.
• Belgium has tension between French and Dutch speaking population.
• King Albert had appointed him PM after the interim Prime Minister Guy Verhofstadt resigned the post.

20.03.2008

• Short selling to be allowed from 21^st April
• It is very rare to see news reports to be very packed and comprehensive in saying about an issue. Normally that is the preserve of op-ed articles and editorials. But today’s headline in ET is an exception. I excerpt below the first few sentences on short selling:
• ALL classes of investors — retail as well as institutional players like FIIs and mutual funds — will be allowed to short-sell shares in the spot market from April 21.
• Short-selling refers to the practice of selling a stock which the seller does not own at the time of trade with the hope of buying it back at a lower price. At present, individual traders shortsell shares during the day and square off their positions before the closing bell. This is what is popularly called ‘day trading.’ However, institutions are not allowed to indulge in such intra-day speculations.
• Now, SEBI is putting in place a mechanism where the short-seller can borrow the shares to meet the delivery commitment. Just as an investor borrows money to buy shares, it will now be possible to borrow shares to sell. Under this, all categories of investors can now lend the stocks they own and borrow the ones they don’t.
• However, SEBI clarified that ‘naked short-selling’ will not be permitted and all investors will be mandatorily required to honour their obligation of delivering the securities at the time of settlement. What this means is that day traders would no longer be in a position to sell and then buy back during the day. The new guideline will not only force these active investors to change the way they play the market, but also impact liquidity in the short term.
• We have heard about BPO, KPO, LPO etc. But it is time we also know something about APO.
• Actuarial Process Outsourcing. Know anything about actuaries? We noted about this sometime back in our blogs.
• Actuaries are professionals who calculate insurance risks and premiums and assess the financial impact of a future event.
• Acute talent shortage and high costs involved are driving insurance giants in the US and the UK to outsource their actuarial work to India.
• Mathematics and statistics graduates are now the most sought-after people for this work.
• How do you get energy from estuaries?
• Do you know that at estuaries, when fresh water and salt water mix, they are warmed by 0.1 degree Celsius? Remember anything about osmosis that we learnt as high school children?
• This is at the heart of harnessing power from estuaries. It is estimated that world’s estuaries hold a potential of about 20% of the world’s electricity demand. Scientists are working to make the technology overcome hurdles of poor cost-effectiveness of the membranes used in the process.
• Two small projects – one in Norway and another in Netherlands – are expected to come into operation this year that produce power through this technology.
• Arthur C Clarke
• He is no more. He is 90. He breathed his last in Sri Lanka, his adopted home. He is British.
• He is best known for his work on the movie “2001: A Space Odyssey.”
• He was one of the first to suggest the use of satellites orbiting the earth for communications purposes. In the 1940’s he forecast that man would reach the Moon by the year 2000, an idea that experts at first dismissed. But barely 29 years later Neil Armstrong set foot on Moon.
• V Krishnamurthy committee
• It was set up by the Prime Minister to suggest measures to help exporters tide over the rupee crisis.
• India is guzzling diesel
• I am surprised to know that internationally petrol prices are lower than diesel’s. Diesel costs on an average about $120 per barrel while petrol costs about $105 per barrel.
• Diesel accounts for 40% of the liquid petroleum products consumed in the country. The country is expected to consume about 120 mn tonnes of liquid fuel this year and 8 mn tonnes of LPG.
• Diesel consumption has gone up by about 20% in the past three months against the average of 2-4% over the years.
• Experts are searching for answers for this huge surge in demand for diesel.
• Subprime crisis can fuel commodity bubble
• When we started noting about the subprime crisis, I was wracking my brain to look at what other possible consequences this crisis could have.
• Kemal Dervis the Administrator of UNDP says that ever since the 1990’s the strong US macro policy responses to the existing crises have led to one asset bubble being replaced by another.
• After the East Asian currency meltdown in mid-90s, dotcom bust came at the turn of the century, which was followed by mortgage-backed securities crisis from 2004 to 2007.
• He feels that it may now be the commodities, which are now rising in price at an unreasonable and unsustainable rate.
• He opines that asset bubbles have had the root in real economic changes and market friendly reforms in emerging markets making them attractive destinations for investment.
• So, is it time to find fault with globalization?
• Discussing as we are about the subprime crisis, is the Fed reacting too overzealously to tackle the financial fall-out of the recession?
• Some experts, (Bush included, though he is no expert on these matters) are saying that the Fed may be acting overjealously in reducing interest rates. With the latest interest rate cut to 2.25%, it has brought the cost of funds to almost zero. This is because when you take the inflation into account, the cost of funds almost becomes zero, if not negative.
• An unnecessary spat but a seasoned response from the sporting greats
• Media reports quoted Anju Bobby George, one of our Olympic hopefuls, as saying that she doesn’t consider Milkha Singh and PT Usha as Asian class, but not world class.
• Both Milkha and Usha have missed bronze medal in 400 meters (the latter in hurdles) by a whisker. That was in Rome and Los Angeles Olympics respectively.
• The comment by Anju, if true, was unsportsmanlike; no doubt. But the other two greats have reacted very graciously saying that Anju should concentrate on 2008 Olympics and make us proud.
• The new face of global hunger
• I like reading the writings of Secretaries General of the UN writing from time to time. This is because, while various countries’ leaders keep grappling with their national issues, it is the UN Secretary General that is usually bothered about the world problems. Look at what our present UNSG is offering as solutions to the problem of world hunger.
• First, we must meet urgent humanitarian needs. This year, WFP plans to feed 73 million people globally, including as many as 3 million people each day in Darfur. But to do so, the WFP requires an additional US$500 million simply to cover the rise in food costs. (Note: 80% of the agency’s purchases are made in the developing world.)
• Second, we must strengthen UN programmes to help developing countries deal with hunger. This must include support for safety net programmes to provide social protection, in the face of urgent need, while working on longer-term solutions. We also need to develop early warning systems to reduce the impact of disasters. School feeding—at a cost of less than 25 cents a day—can be a particularly powerful tool.
• Third, we must deal with the increasing consequences of weather-related shocks to local agriculture, as well as the long-term consequences of climate change — for example, by building drought and flood defence systems that can help food-insecure communities to cope and adapt.
• Lastly, we must boost agricultural production and market efficiency. Roughly, a third of food shortages could, to a significant degree, be alleviated by improving local agricultural distribution networks and helping to better connect small farmers to markets. UN agencies, such as the Food and Agriculture Organisation and the International Fund for Agricultural Development, meanwhile, are working with the African Union and others to promote a “green revolution” in Africa by introducing vital science and technologies that offer permanent solutions for hunger.

18.03.2008

• Mayhem in markets!!!
• With a 951 point pounding, the sensex crashed below the 15000 mark!!
• Know some of the reasons for this beating? Both global and local reasons. ET’s leader gives them and it is an interesting read.
• Wall Street’s fifth-biggest securities house, Bear Stearns, was sold to JP Morgan for just $240 mn (less than Rs. 1000 crores). This is the kind of money that is being exchanged for some land deals in Mumbai.
• Singapore bank DBS reportedly told traders not to deal with Lehman Brothers, fanning speculation that it is the next casualty.
• The world’s second biggest economy, Japan, is not able to decide who will head its central bank at a time when its spiralling currency is unsettling global markets. If Japan slows down, it would be big bad news.
• Our trade deficit is hovering around $10 bn a month, causing an outflow that’s making the rupee less attractive.
• Can you imagine the level of leakages in our public distribution system?
• It is 36% as stated by our own Finance Minister.
• That means, this much of what is put in the system never reaches the intended people.
• Taslima quits India?
• In a move that is certain to dent India’s image as a ‘secular’ society, and, at the same time, marks a big victory for Muslim fundamentalist outfits which had launched a campaign for her ouster, controversial Bangladeshi writer Taslima Nasreen has told Indian officials that she was planning to leave India for good.
• Indian wards pay $13 bn to study abroad
• While a typical IIT student in India pays $120 as fee per month on an average, our students who go to the foreign shores end up paying anywhere between $1500 to 5000.
• While we have about 27,000 foreign students studying in our country, a country like Australia has about 4 lakh foreign students.
• Isn’t there a case for liberalising the opening up of foreign universities in India? If they can be made to charge far less than the amounts that are paid for by our students, will it not make sense?
• A bit about ground handling operations in air ports
• Do you know that the reason for the delay in the commencement of operations at the recently opened Hyderabad International airport at Shamshabad, is about charges / agreements for ground handling operations? But what exactly are these operations?
• They involve every process from the time a plane lands. ‘Turning the plane around’ in aviation parlance refers to handling it from landing to take off. This includes attaching the aerobridges to the doors, or if the plane is parked in a remote bay, providing steps and buses for disembarking passengers, cleaning the plane, refuelling and boarding passengers, providing power when the aircraft is on the ground and so on.
• How did Indian companies burn their fingers in currency derivatives?
• As many currencies, including the rupee, were rising against the dollar, Indian companies took a contrarian call and bought cross-currency products which bet on a marginal dollar recovery. As the dollar recovery has not happened, (against most of the world currencies) the exposure of these companies to these transactions crossed the $3 bn mark. These contracts are in the process of expiring and by March 31, these companies have to provide for losses arising out of these exotic derivatives.
• Do you see any systemic failure in the above scenario?
• Some people argue that lack of a proper currency exchange is one that gives rise to such a feeling.
• Some others argue that banks have sold complex derivative products to companies which did not understand them fully. There is a conflict of interest in this as banks were acting both as advisors and sellers of these cross-currency options. In developed markets both functions are clearly defined and remain separate.
• Still another argument is that the products were sold in violation of an RBI circular which prohibits sale of derivatives without a real underlying transaction. But would the companies involved have complained about this, had they made a profit on these transactions?
• So the RBI seems to have written to the Finance Ministry for thinking about the establishment of an independent currency derivatives exchange.
• Is transactions tax on commodity futures justified?
• Though we covered something about this in our blog previously, soon after the budget, the issue deserves a further detailed look. Look at the excellent comments in today’s debate. It is a must read. Do so here.
• Israel-Palestine conflict: some details which need our noting
• Shin Bet is the Israeli counterintelligence and internal security agency.
• Do you know Mossad? We can say it is the counterintelligence and external security agency for Israel.
• Gush Emunim movement
• This movement arose in 1973 in response to Yom Kippur war, which resulted in the handover of the Sinai Peninsula to Egypt.
• The movement’s ideology is that the arrival of a messiah for the liberation of the Jews could be hastened by establishing settlements on the land over which Jews have had a divine right, as revealed in the Hebrew Bible.

17.03.2008

• How should the 21^st century business be?
• As has been the practice with ET for the last so many years, today it invited a corporate honcho to lead its editorial team. That honcho is Neville Isdell, the CEO of Coca-Cola Company. Look at how he outlines three characteristics of a 21^st century company. I would recommend a read of his editorial piece. It is here.
• First, a business should help support the sustainability of the communities it serves.
• Second, businesses must collaborate in new ways with governments and civil society, as they in turn must work with business.
• Third, a successful business must be – in both perception and reality – a functioning part of every community in which it operates.
• Contrast this thinking with Milton Friedman’s quote: “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase is profits…”
• Barriers to electricity efficiency
• This is a good article written in today’s ET by a Civil Servant. He classifies the barriers as internal and external.
• External are those where efforts by us as a society or country is not sufficient to produce satisfactory results since vital support from outside is required.
• One such barrier is technology, which is costlier than the one presently being used.
• Another is the large investment required upfront.
• Internal barriers:
• Lack of knowledge and awareness among the stakeholders
• High initial costs
• Manufacturers or consumers not paying the economic price of electricity
• Lack of incentive to adopt efficient technology
• Costs of inefficiency not being borne by the producer or the service provider
• Extravagant use of electricity by the relatively well off class.
• How much is the Iraq war costing the US?
• According to Joseph Stiglitz, the famed Nobel Laureate it has so far cost about $3 trillion and is costing about $50 bn every three months.
• He says that for one-sixth of the cost of the war, the US could have put its social security system in a sound footing for more than fifty years, without cutting benefits or raising contributions.
• A bit about AEZs
• Agri-exort zones. These do not comprise a physically defined area as in the case of SEZs. An AEZ is an amalgamation of various schemes of the central and state governments for a particular commodity.
• What is green potash?
• Normally potash which is manufactured is a little harmful for the chloride-sensitive crops like tobacco, tomato, mustard and citrus fruits.
• So a Chennai based firm is coming up with green potash, whereby it will be directly harnessing SoP (sulphate of potash) from the sea bittern found in abundance in the Rann of Kutch.
• About organic farming
• The global retail market for organic food is estimated to be about $100 bn.
• Presently only around 5% of the farmers in our country are engaged in organic farming.
• Organic farming is a form of agriculture which excludes the use of synthetic fertilizers and pesticides, plant growth regulators, livestock feed additives, and genetically modified organisms. As far as possible, organic farmers rely on crop rotation, green manure, compost, biological pest control, and mechanical cultivation to maintain soil productivity and control pests. Organic farming is often contrasted with conventional, or mainstream, farming.
• What is the “Enclosure Movement”?
• It is widely considered as the event that signalled transition from pre-capitalist communities to capitalism. It occurred between 14^th and 17^th centuries in England.
• The movement is about fencing off common grazing and agricultural land into privately-owned pastures and farms.
• India reacts to OIC’s statement on J&K
• When the Secretary General of the OIC (Organisation of Islamic Countries) currently meeting in Dakar, Senegal commented that Kashmir is a pressing and burning political dispute, India retorted saying that the forum has no locus standi in matters concerning its internal affairs.
• Energy dreams
• In a very good article Brahma Chellany argues that India’s zeal for nuclear power needs to be tempered by the fact that more than half a century after the US Atomic Energy Agency claimed that nuclear energy would become ‘too cheap to meter,’ the nuclear-power industry everywhere subsists on generous state support and shows the slowest rate of advancement among all energy technologies.
• This does sow in us a doubt; doesn’t it?
• Australian Grand Prix
• It is won by Lewis Hamilton.
• The race is remarkable as it had seen only 7 cars finish the race.
• The Indian challenge from Force India team was not even present.

15.03.2008

• Know anything about the Sarbanes-Oxley Act?
• It is popularly called SOX.
• The authors of this Act of the US are here touring in India. Michael Oxley and Paul Sarbanes say that the subprime mess is due to lack of transparency in the secondary market where it is hard to assess risks.
• India is one and every Indian has a right to settle and work anywhere in India says the Supreme Court
• During a hearing of the petitions against Raj Thackeray on his controversial remarks regarding North Indians, the Court said that it will not allow Balkanization of the country and would also not accept the ‘son of the soil’ theory.
• Incidentally how precisely can you define Balkanization? This is what Encyclopaedia Britannica says about this term:
• It is division of a multinational state into smaller ethnically homogeneous entities. The term also is used to refer to ethnic conflict within multiethnic states. It was coined at the end of World War I to describe the ethnic and political fragmentation that followed the breakup of the Ottoman Empire, particularly in the Balkans.
• The term Balkanization is today invoked to explain the disintegration of some multiethnic states and their devolution into dictatorship, ethnic cleansing, and civil war.
• When was the first farm loan waiver made?
• It was during the Prime Ministership of VP Singh in 1989-90.
• Do you know that in Cuba computer and DVD sales are restricted?
• I was really surprised to know about it.
• But now the government has lifted the ban on computer and DVD sales.
• However, air conditioners are still taboo, because of limited power supply position in the country.
• At present only foreigners and companies can buy computers.
• A recap of repo and reverse repo rates
• Reverse repo rate is 6% and repo rate is 7.75%.
• Reverse repo is the rate at which RBI borrows from banks and repo is the rate at which it lends to the banks.
• On world commodity prices
• Commodity prices (read inflation) have been rising for three years and are up by 30% in 2008. Normally a global slowdown reduces commodity demand and causes a price crash. But things are different now. What are the reasons?
• First, China and India now account for a big chunk of world GDP. Even in a recession, China will grow at maybe 9% and India at 7-8%, so demand for commodities will keep rising.
• Second, faulty government policies have dampened supply response to rising demand.
• Thirdly, stiff environmental rules have delayed the opening of new mines the world over, and most US states still ban offshore drilling.
• Lastly, as for agro-goods, government norms for mixing ethanol with petrol in the US and edible oils with diesel in Europe have diverted substantial acreage from foods to fuel, reducing food availability. This has been exacerbated by two droughts in Australia.
• While these factors caused most of the price rise in 2007, the US Fed is spurring inflation in 2008.
• A very good definition of celebrity.
• He is a person who works hard all his life to become known, then wears dark glasses to avoid being recognized. This was given by Fred Allen in his “Treadmill to Oblivion.”
• LCA is India’s finest achievement
• From time to time we need to know some details about our defence hardware. LCA is one such project which requires our attention because an equal measure of national pride and our defence preparedness are combined in this project.
• It is a very interesting piece that appeared in today’s ET. Recommend reading it at least once. Do so here.
• Noting about defence, we can’t miss any controversy that surrounds huge acquisitions; can we?
• USS Trenton, the US warship that is being acquired by India for $50 mn is coming with some strings attached – curbs on offensive deployment and intrusive end-use clauses. This was reported by CAG (Comptroller and Auditor General of India) in his report. The ship is of 1971 vintage. After some refurbishing it was expected to work for another 12 to 15 years. This CAG report has put paid to the enthusiasm of the Indian Navy in the US offer of selling another ship of the same class.
• In the mean time talks on the purchase of Admiral Gorshkov, the aircraft carrier from Russia are expected to be concluded in the next few months. Re-christened INS Vikramaditya, this will be handed over to Indian Navy in 2012.
• Finally water on mars?
• Scientists’ quest for finding water or traces of water on Mars has finally been fruitful, it appears.
• Using data and images captured by the shallow subsurface radar (SHARAD) on NASA’s Mars Reconnaissance Orbiter (MRO) spacecraft, scientists have discovered frozen water in the red planet’s mid-northern latitudes, far from its polar ice caps.
• Parliamentary vs. Presidential form of government
• This debate is very old and keeps cropping up once in a while in newspaper columns. The latest provocation for the re-appearance of the debate is the Indo-US nuclear deal.
• Though classical political science text books will have detailed discussions, Ramesh Thakur’s discussion in today’s Hindu is worth a read. Recommend a read once for everyone of you. Do so here.
• Darjeeling Gorkha Hill Council
• All of you, I know, might remember Subash Ghising well. He led the GNLF (Gorkha National Liberation Front) to victory and ensured the formation of the DGHC. But of late he found his nemesis in one of his own followers Bimal Gurung, who came up with GJM (Gorkha Janamukti Morcha). If we need to see history as it is unfolding, the article that appeared in today’s Hindu offers an excellent glimpse. Read it here.
• Long jump record
• Bob Beamon’s record of 8.90 meters set in 1968 Mexico Olympics lasted 23 years and still inspires the new generation.
• India’s formula one racing team makes its debut
• In Australian Grand Prix that is.
• It took the 17^th place.
• India is represented by Force India of Vijay Mallya. Its drivers are Giancarlo Fisichella and Adrian Sutil.
• China tops Internet users
• With 210 mn users at the end of 2007 and increasing by about 2 lakh users a day, it is leading the pack.

12.03.2008

• Frozen demat accounts to lose shares on PAN (Permanent Account Number) default
• Government’s tightening of the PAN requirement for investors has resulted in 20 lakhs of demat accounts remaining inoperative out of a total of 77.25 lakh accounts.
• Aggregate value of securities in frozen demat accounts: Over Rs 1 lakh cr
• After the IPO price manipulation scam of 2006, SEBI made it mandatory for depository participants, and later investors, to quote PAN for operating demat accounts
• Failure to comply with this directive could be because some accounts were benami or illegal
• The securities in frozen accounts are mainly shares bought by investors from the primary or secondary market
• Meghalaya government formation
• The Governor of the state has asked the Congress party led by DD Lapang to form the government even though the MPA (Meghalaya Progressive Alliance) led by the NCP has paraded 31 of the 59 MLAs before the Governor.
• Today’s development is that the Supreme Court has refused to intervene in the matter as the Governor has announced 20^th March as the date for floor test.
• Eliot Spitzer’s downfall
• Remember this famous personality?
• Spitzer, a 48-year-old father of three teenage girls, was elected with a historic margin of victory, and took office as Governor of New York state on January 1, 2007. He shot into prominence for his success in stamping out corruption in high places as New York's Attorney General.
• He is now facing a prostitution scandal. Spitzer was the initial target of the investigation and was tracked using court-ordered wiretaps that appear to have recorded him arranging for a prostitute to meet him at a Washington hotel in mid-February. Spitzer allegedly paid for the call girl to take a train from New York to Washington — a move that opened the transaction up to federal prosecution because she crossed state lines.
• Spitzer apologised to his family and the public, but did not directly acknowledge any involvement with the prostitute.
• Spitzer’s cases as attorney general included a few criminal prosecutions of prostitution rings and tourism involving prostitutes. He also uncovered crooked practices and self-dealing in the stock brokerage and insurance industries and in corporate board rooms; he went after former New York Stock Exchange chairman Richard Grasso over his $187.5 million compensation package.
• Our Parliamentary panel wants FBI like powers to the CBI
• It recommended that the CBI be made into an ‘enforcement agency’ and be granted power to investigate and prosecute through a separate statute called the CBI Investigation Act.
• Export targets may not be met
• Our country may not be able to achieve the export target of $160 bn this fiscal. It is widely expected that our exports figure may touch a level of $152 bn to $155 bn.
• New MSS ceilings
• Remember the Market Stabilization Scheme?
• The MSS scheme, which was launched in April 2004, entails the issue of treasury bills and dated securities to absorb excess liquidity arising from significant foreign exchange inflows. The issuance of MSS bonds drain out liquidity from the system and stems Rupee appreciation.
• The cap for market stabilisation bonds for 2008-09 at Rs 2.5 lakh crore is significantly higher than the originally budgeted amount of less than Rs 1 lakh crore for 2007-08.
• The provision for interest payments on account of these bonds has gone up to Rs 13,958 crore as against Rs 8,351 crore in the revised estimates (RE) for the current fiscal. The originally budgeted amount for such interest payments in 2007-08 was Rs 3,700 crore. The interest payments have been calculated with an estimated 8% rate for such bonds.
• The receipts from borrowings under MSS are being held as cash balance in a separate and identifiable account with RBI. These receipts are not available to meet any expenditure of the government, other than repayment of treasury bills or dated securities issued under MSS.
• While MSS is a part of the total public debt, the interest payment is accounted for in the budget. The outstandings under the MSS amounted to Rs 1,61,058 crore as on January 18, 2008. There has been a steady increase in MSS outstandings as reflected in the significant build up of liquidity overhang since August 2007.
• India-ASEAN FTA talks in the last lap
• The long drawn negotiations on this seem to have reached a decisive stage. Senior officials from both the sides are meeting in Cambodia later this week to give finishing touches to the deal.
• Know anything about nihilism?
• A definition from Wikipedia:
• Nihilism (from the Latin nihil, nothing) is a philosophical position which argues that Being, especially past and current human existence, is without objective meaning, purpose, comprehensible truth, or essential value. Nihilists generally assert some or all of the following:

• there is no reasonable proof of the existence of a higher ruler or creator,
• a "true morality" does not exist, and
• objective secular ethics are impossible; therefore, life has, in a sense, no truth, and no action is objectively preferable to any other.