02.05.2008

02.05.2008

• India among the world’s most terror hit
• The US has ranked India as the “world’s most terror afflicted countries”, where about 2,300 people were killed by terrorists in 2007 and with terror activities spread all over the country from the conflict in Jammu and Kashmir to the Naxal insurgency in the centre, east and south and the ULFA activities in the Northeast to Islamists terror groups targeting all parts of India.
• The Indian government’s counter-terrorism efforts remained hampered by outdated and overburdened law enforcement and legal systems. The US state department also concluded that most of India’s state police forces were “poorly staffed, lacked training, and were ill-equipped to combat terrorism effectively.”
• Sonia Gandhi among the Time’s power list again
• Congress president Sonia Gandhi has once again made it to Time Magazine’s list of 100 most influential people in the world. She is the only Indian politician on the list but has Tata Group chairman Ratan Tata and PepsiCo CEO Indra Nooyi for company.
• Along with figuring on the Time list in 2007, Ms. Gandhi was also on the Forbes list of 100 most powerful women last year.
• With rising inflation, the Business Confidence of India Inc nose dives
• The latest round of ET-NCAER Business Confidence Survey shows that inflation has begun to worry India Inc. Companies across sectors expect to take a hit on their bottom-line due to rising input prices.
• The spark that showed up in the past two surveys seems to have blown out. The March ’08 round showed deteriorating macro-economic fundamentals in terms of rising inflation, low political confidence and a gloomy picture at the micro-level, have increased the severity of the decline in business confidence.
• Power Grid gets navratna status
• Power Grid Corporation of India (PGCIL) has become the 15th public sector company to get the Navratna status. This status will give the power transmission major greater financial and administrative autonomy. A Navratna company can take investments decisions of up to Rs 1,000 crore without the government’s prior approval.
• Rural Electrification Corporation is also likely to get the same status within a few days.
• With this the power sector will match the oil sector in terms of the number of navratna companies. Presently, five navratna companies are from the oil sector.
• Some top level changes in bureaucracy
• RS Mathoda has taken over as CBDT Chairman.
• RS Sharma is the new Chairman and Managing Director of NTPC.
• CST reduction still mired in compensation row
• Uncertainty looms large over the reduction of central sales tax (CST) from 3% to 2% from May 1, with the Centre and states yet to agree on the compensation package.
• CST phase out has already missed the April 1 deadline. It was expected the empowered committee of state finance ministers and the Centre will be able to sort out differences that had arisen on the compensation package, and reduction to 2% can be carried out from May 1.
• States, who stand to lose close to Rs 13,000 crore if the CST is cut from 3% to 2%, are demanding that Centre compensate them in full. The Centre has agreed to full compensation but differences persist over the mechanism of compensation.
• The compensation package for the phase out of CST — which began on April 1 last year — includes transfer of power to levy service tax on some services, removal of additional excise duty on tobacco products and textiles, VAT on imports, abolition of Form D, budgetary support and hike in floor rate of VAT.
• Implications of Iran’s move away from the dollar
• It is a very good editorial in today’s ET. A must read for everyone.
• Do so here.
• Some facts and figures worth our noting from the above piece and a few other articles that appeared in today’s paper on the subject:
• Foreign holdings of US securities as of June, 2007 are at $9.772 trillion.
• This year they are expected to cross $10 trillion; making up almost about 75% of the US GDP.
• Exposures of some countries to US securities: Japan ($586 bn), India ($14 bn)
• The US accounts for about 30% of the world’s GDP.
• Definitions of the US fed funds rate and discount rate
• Though we have noted about these sometime back in our blog, a recap is worth our attention.
• Federal funds rate is the overnight rate at which banks lend to each other.
• Discount rate is the rate at which the US Federal Reserve lends directly to banks.
• Substance abuse filtering from developed to developing countries
• It is yet another good article that appeared in today’s ET. A good one from the point of view of General Essay paper.
• The link is here.
• Surveys indicate that India is heading for a crisis with regard to alcohol consumption, smoking and drug abuse. Consumption of tobacco is likely to be the cause for 1 in 5 deaths of men and 1 in 20 women in the country.
• Suggested solutions:
• There is an urgent need for greater awareness not only about the risks of tobacco but also alcohol and drug consumption among the overall population, at large and particularly among the younger age-groups.
• This should be followed by more stringent regulations to curb the use of substances.
• Also, there are gender differentials as well as inter-state differentials, which need to be studied in detail. In the case of children, parents and teachers play a significant role and could help in checking the problem of substance abuse.