Indian Current Affairs: 21.03.2008

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.

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.

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?

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.

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.

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.

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.

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.

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.

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.

Indian Current Affairs