08.04.2008

• What is your comment on inducting Mr. MS Gill into the cabinet?
• Hope you can recollect that he was a past Chief Election Commissioner of India. He was inducted into the cabinet as minister for youth affairs and sports (independent charge) in Sunday’s Cabinet reshuffle.
• Papers are writing tonnes about this issue. Read what The Hindu says about this here. A very good article by Harish Khare.
• BJP has taken strong exception to his induction. Reportedly it even objected to his nomination to Rajya Sabha by the Congress in 2004. It strongly feels that offering ministerial berths to those who had held constitutional posts could be interpreted as ‘a reward for past work.’
• Olympic torch put out twice on Paris run
• Normally Olympic torch is expected to be never put out till it reaches the Olympic stadium.
• Security officials extinguished the Olympic torch twice on Monday on the Paris leg of its journey, disrupted by protesters against China’s crackdown on Tibet. Organisers were forced to put the torch on a bus to protect it from the hundreds of protesters who swarmed the procession after it set off from the Eiffel Tower. The torch had to be extinguished first because of a technical problem.
• The Olympic torch was extinguished for a second time during Paris’ torch relay, with officials bringing it aboard a bus. Police have escorted the flame onto a bus, apparently to move it from protesters. The flame was being carried out of a Paris traffic canal by an athlete in a wheel chair when it was stopped because protesters booed and began chanting “Tibet.”
• Reliance comes out with Megaplexes
• You may know that Adlabs is a Reliance ADAG company. That is the younger brother Anil Ambani’s group company. It is coming out with megaplexes in several cities, including Hyderabad.
• How is a megaplex different from a multiplex? Reportedly, a multiplex has 5 to 6 screens. A megaplex has about 11 to 15 screens.
• Should PF and Insurance companies be allowed to invest their funds overseas?
• The Committee on Financial Sector Reforms headed by Dr. Raghuram Rajan says ‘yes.’
• It feels that by restricting the investment options of these companies to domestic government securities, they are greatly limiting future returns and possibly increasing risk. The diversification of portfolios through outward investment, it says, makes these funds more stable.
• Have any take on this subject? While diversification does make lot of sense; does it make sense at this juncture? India is growing by leaps and bounds. Foreigners are investing in the country. India needs lot of money of infrastructure funding. Should Indian funds be looking for more rewarding avenues for investments elsewhere in such a scenario?
• Now it is the turn of inflation to grab headlines, debates and media space
• Look at today’s debate in the ‘Perspectives’ column of ET here. Worth a read. But some excerpts for us follow:
• Is the WPI a wrong measure of measuring inflation?
• Yes; it captures only the prices of goods, and is an absurd measure of overall prices in a country where 55% of the GDP is accounted by services, says an expert.
• Why is hardening of global food prices likely to stay for quite some time?
• Huge growth in aggregate and per capita income in China, India and other major middle income countries has not only led to growing demand for food, but also a disproportionate increase in demand for ‘better’ food, i.e., food ‘luxuries’ vis-à-vis ‘necessities’. This is true for every major emerging market nation. India is no exception.
• Moreover, so long as crude oil prices exceed $70 per barrel — which it will for a fairly long time — expect huge subsidy-driven policy distortions in favour of bio-fuels. Thus, we should be seeing more of maize and sugarcane being diverted for producing ethanol.
• What can government do?
• The usual stuff: set import duties to zero, constrain exports, ship subsidised food for the poor, walk the thin dividing line between consumer and farmer interests, look and talk confident while praying for global prices to ease off a bit. And take comfort in two things: first, that this bout of inflation will come off after a while, however ephemeral that may be; and that Chinese inflation is way higher than ours, where the price of pork in China is up by 64%, and fresh vegetables by 46%.
• Will allowing the rupee to appreciate help?
• Yes; it will limit the damage of easy liquidity feeding into price pressures. It will help imports becoming cheaper, which in turn will enhance domestic supplies.
• How is the current inflation trend different from the one that we saw in 2004?
• The rise in inflation during 2004 was due to the seasonal shock, primarily the drought-like situation in many parts of the country and the rise in crude prices. The present inflation is regarded an imported one arising out of rise in commodity prices overseas because of short supply of food and other items of basic necessities in the global market.
• Bhutanese elections and Prime Minister elect
• As noted in our blogs earlier, Bhutan has finally a democratically elected parliament now.
• Jigmi Thinley, the leader of the Druk Phuensum Tshogpa (DPT) party won a landslide victory in the parliamentary elections held on March 24. He is endorsed by the party as the Prime Minister elect.
• Key Biscayne tennis tournament
• Nikolay Davydenko beat Rafael Nadal to win this tournament. It is the Sony Ericsson Open tournament. In the process he became the first Russian to win this championship.
• Key Biscayne is a tropical island paradise just six miles off the coast of Miami, Florida. It is a world-class resort community and premier vacation destination.