11.03.2008

• Policy decision is executive’s prerogative
• The Supreme Court ruled that policy decision must be left to the government as it alone can decide which policy should be adopted. The scope of judicial interference is extremely limited in matters of policy decisions or exercise of discretion by the government so long as infringement of Fundamental Right is not shown.
• The Court was ruling in a case rejecting the direction to the state of UP to reconsider its decision of carving out a new district of Baghpat in 1997.
• New inflation index being constructed
• A panel of experts headed by the Planning Commission Member Abhijit Sen is preparing the new index.
• The key change the committee is working on pertains to revising the weights assigned to various commodities and commodity groups. It has decided to update the base to 2004-05 from 1993-94 and almost double the number of commodities in the index from 435 at present.
• In the current index, the weight of the fuel group, which includes power, light and lubricants, is 14.22%. The weight of primary articles and manufactured products is 22.02% and 63.74%, respectively.
• Inflation is rising
• Inflation as measured by the wholesale price index (WPI) rose last week to 5.02%, above the comfort zone of the RBI (and of politicians). The consumer price index, which is available only with a long lag, is almost certainly up by 6% or more.
• Prices could shoot up further in coming months. World food prices skyrocketed over the last two years, thanks to twin droughts in Australia and the diversion of a fifth of US maize acreage to ethanol production.
• A global recession looks probable and should tame many commodity prices, including agricultural ones.
• Know the name of Brazil’s sensex equivalent?
• It is Bovespa.
• On our poor performance in Hockey
• The UK knocked out India’s hopes of qualifying for the Beijing Olympics hockey event by defeating it 2-0 in Chile.
• And so, for the first time in 80 years, India has failed to qualify for the Olympic hockey event.
• Two years ago, the Indian hockey team failed for the first time to reach the semi-finals of the Asian Games, being knocked out by China!
• India’s sports minister is quoted as saying that less than 6.5% of the country’s 77 crore youth has access to organised sports and that the priority should be on developing a sports culture.
• Should exchange rates be brought under the purview of WTO?
• It is a good article by Suparna Karmakar. Raises some wonderful thoughts. Read it in full here. But some excerpts for us follow:
• A recent working paper by trade experts at the Peterson Institute recommends that “India could work toward multilateralising the exchange rate issue.”
• Why this issue gains currency is that the WTO experts are unanimous in their conclusion that the single most substantive contribution of the WTO regime (compared to GATT, as well as the World Bank and IMF) is the legal enshrinement of the Dispute Settlement Board (DSB) into the multilateral trade regime. It is, therefore, easier to bring an offender to book under the WTO than in any other UN system.
• Even a country like the US is not able to retaliate against China given the existing deep integration in trade and investment between the two countries. Hence there is a strong case for multilateralism feel the experts.
• So the US strongly behind the idea. But does it make sense for India to support the move? Agreeing to proposals as these with bindings at the WTO will have a stiff future penalty, and to barter future economic pains for the proposed India-US cooperation agreement on trade and investment or even the nuclear deal is certainly not in India’s long-term interests.
• On effective tax rates in our country
• The effective tax rate for corporates has increased marginally to 20.6% in 2006-07 against 19.26% for 2005-06.
• Many tax concessions bring the tax rate down from the statutory 33.66% (inclusive of surcharge and education cess).
• The effective rate for public sector was 23.35% to 19.5% for private sector. The difference in effective rates could be because of the inability of the public sector to exploit tax incentive. Their complex and politicised decision-making often yields sub-optimal investment decisions. Of course, public sector is also more transparent and would not always be thinking up schemes to save taxes.
• Murree Declaration
• It is the declaration made jointly by PPP and PML(Nawaz) marking a decisive step in Pakistan’s march towards a new political order.
• Elections in Spain
• Prime Minister Jose Luis Rodriguez Zapatero’s party won the maximum number of seats by a single party (169 in the 350 member parliament).
• It is short of simple absolute majority of 176 seats.
• Know the Chinese Supreme Court Chief Justice?
• He is Xiao Yang and their court is called China’s Supreme People’s Court.
• In his annual report to the Chinese Parliament (the National People’s Congress) he told bluntly that China’s judiciary needs reform.
• In China, judges with professional training or academic backgrounds remain scarce. Only about a fifth of all judges in the country have law degrees. The first time a lawyer was appointed as Chief Justice of China was in 2000.