03.06.2008

• Wasn’t it just a couple of days back that we noted about the Special Market Operations undertaken by RBI with a view to tackle the oil price rise? Then we noted that the subject will be written about in the coming weeks.
• So it was done; first by ET in its editorial. In a scathing attack it said it is nothing short of the total disregard for their balance sheets shown by the foreign monetary authorities in their bid to shore up confidence in the financial markets following the subprime mess.
• Though the RBI says that it is only purely temporary and an adhoc measure, given the politics of populism that pervade our country, it is only a matter of time before people start demanding the same fix every time there is a repeat of the circumstances.
• In the meantime, we can only wait and watch the developments.
• A look at the oil subsidy regime
• Any amount of figure work reported is sure to leave us a bit dazed. But of all the figures that I came across, this made the picture a bit clear.
• The subsidy is massive — hidden by a disingenuous device called oil bonds. Here are some rock solid facts. IOC, HPCL and BPCL are currently losing $137 million a day (i.e., Rs 582 crore per day at Rs 42.50 = $1). They lose Rs 16.34 for each litre of petrol, and Rs 23.49 for each litre of diesel sold in Delhi. The subsidy on kerosene at Rs 28.72 per litre is over three times the current retail price; and the subsidy on a cylinder of cooking gas at Rs 306 per cylinder exceeds the retail price. The total under-recovery for the oil marketing companies for 2006-07 was over $19 billion. With oil prices touching $135, under-recoveries can be $50 billion this year, unless retail prices are substantially increased.
• Nearly 40% of the LPG subsidy is enjoyed by the top 7% of India’s population while only 5.6 % of rural households use LPG and less than 2% use kerosene for cooking. In other words, the benefit of subsidies on these cooking fuels is enjoyed largely by the urban middle and higher income classes! The net monthly impact of full pricing for LPG would be no more than Rs 400 — only Rs 200 of which is due to the recent crude price increases.
• A look at how much we are spending on education
• Plan expenditure
• The problem of providing for pension liabilities by Indian banks
• Banks are divided over ways to provide for pension liabilities, according to new accounting norms that mandate greater disclosure. While some of the big banks have dipped into reserves and taken a one time hit, the others have decided to stagger it over five years. For banks, the revised accounting standard for employee benefits is set to impose a huge burden. Their existing liability is estimated at a staggering Rs 26,000 crore. Because of AS 15 accounting methods, the new standard necessitates, this liability is likely to go up by another Rs 14,000 crore.
• Public sector banks employ a total of 2.55 lakh officers and 4.73 lakh clerical staff, who now come under the existing system known as the defined benefit system. Over the past three years, on an average, about 12,000-13,000 people have joined public sector banks.
• Banks had sought an amendment to the Income-Tax Act that could enable them to make a greater provision for pension liabilities. At present, banks have a cap of 27% of the employee’s salary for providing annual contribution. However, banks wanted removal of the cap so they could make greater contribution to provide for liability, to decrease the extent of unfunded liability.
• Anand goes down to Ivanchuk
• Indian Grandmaster Viswanathan Anand paid for costly blunders at crucial junctures to lose a closely fought final and relinquish the Magistral Ciudad de Leon Chess Crown to Vassily Ivanchuk.
  Ukrainian Grandmaster Ivanchuk, scored a 2.51.5 victory to deny the Indian his eighth title here.
• Fastest man in the world
• It is Usain Bolt from Jamaica. He clocked 9.72 seconds to sprint 100 metres.
• Grit and determination personified?
• It is such moments that remain etched forever in our memory. That’s why grandslam events have always been very special.
• All the best Dinara Safina.
• Obituary: Yves Saint Laurent
• French fashion legend Yves Saint Laurent, who changed the silhouette of the 20th century woman with a daring new dress code, died of a brain tumour at his Paris residence on Sunday. He was 71.
• One of a trio of great designers who dominated 20th century fashion along with Christian Dior and Coco Chanel, Yves Henri Donat Mathieu Saint Laurent was born in Oran, Algeria, on August 1, 1936, when the North African country was still French territory. A shy, lonely child born into a well-off family, he was taunted for his homosexuality and became increasingly fascinated by clothes.
• Costliest mushroom?
• Wrapped in mysticism and hailed as an aphrodisiac, Morchella esculenta, an edible mushroom also known as the Common Morel, sold for Rs 11,000 per kg at the recently held Banjar fair in Kullu. Locally known as guchhi, it was arguably the hottest attraction at the mela, its main trading centre, that saw buyers from across the region. While last year this natural wonder, demanding a premium, went for Rs 8,000 per kg, this year, due to less production and greater demand, the price simply peaked.
• Believed to sprout in dense woods when it thunders, guchhi elicited a great deal of curiosity.
• Look at its photo here.