06.06.2008

• Why is the RBI so nervous about NBFCs?
• Yesterday we noted that RBI acted against SFCIL, the NBFC of Sahara group. It is reported today that SFCIL promptly brought a stay on RBI orders from the Allahabad High Court.
• But why is the RBI so nervous? To put it simply, it is too shy of a repeat of the CRB scam of the 1990s.
• In this context, today’s ET editorial gives us a lowdown on the number of NBFCs operating in India and the issues connected with regulating NBFCs. Worth a read. Take a look.
• How the youth will shape India?
• This one is an excellent piece that appeared today. Especially from the point of view of General Essay. Can’t miss it.
• Those of you who have a penchant for greater detail can even read the full report that prompted the author to write the above piece here.
• India is 66th out of 71 developing countries in the Mothers’ Index ranking — a composite of healthcare, education, and economic status of mothers in these countries.
• And with over 53% of children in India under five years without basic healthcare facilities, the country also ranks very low, alongside Ghana and Eritrea, in childcare.
• Look at the hole that the author burns into our demographic dividend theory!
• India has 20% of the world’s children: but it also has 40% of the world’s malnourished children. Since 45% of Indian children (a number higher than most African countries) are malnourished and likely to grow up with health issues later in life, and since over 50% of Indian children do not have an adequate education, a large proportion of Indian children are unlikely to be the productive assets they are presumed to be in those estimates.
• The concluding paragraphs in the piece are simply superb. Great thoughts.
• Remember anything about the FIU?
• It stands for the Financial Intelligence Unit that operates within the Finance Ministry. It is armed with the mandate to prevent money laundering in India.
• The government has decided to bring casinos, credit cards and money changers under the ambit of money laundering law. The Union Cabinet gave its approval for introduction of Prevention of Money-Laundering (Amendment) Bill, 2008, in Parliament.
• According to this amendment, it will be mandatory for financial intermediaries to report all suspected transactions involving international transfers to the financial intelligence unit (FIU). At present, only the banks and other financial institutions have to report suspicious transactions on a regular basis to the FIU set up under the finance ministry.
• This bill will arm the government with more powers to prevent the flow of foreign currency coming into the country via illegitimate channels and making its way to terror organisations. It will enable the Centre to meet certain domestic needs and international obligations.
• The case for lowering sales tax on petro products
• The impact of the recent fuel price hike decision of the central government is softened by lowering central duties viz., excise and customs on petro products.
• Now the centre suggested that states also should pitch in by lowering sales tax rates on petro products. This idea is highly sensible.
• The sales tax floor rate stands at 20% for petrol and diesel and 4% for LPG.
• Sales tax rate on diesel and petrol varies across states and most states have pegged it above the floor rate of 20%. In the case of diesel, the sales tax rate is above 15%. VAT on petrol is highest in Andhra Pradesh at 33%. Since, the rate is not specific, state government’s revenues go up each time the prices of these products go up.
• State governments’ one third revenue, about Rs 60,000 crore comes from petroleum products. Besides, some states also collect octroi on the movement of fuel.
• Soon after the announcement of Rs 5 hike in petrol prices and Rs 3 in diesel, West Bengal and Bihar cut sales tax rate while some others are expected to follow suit. AP announced that it will absorb the hike in LPG.
• SBI forays into custodial space with SocGen tie-up
• So reads a headline today. State Bank of India (SBI) announced a tie-up with an arm of French bank Societe Generale Group (SocGen) to enter the custodial space. This would make it the first Indian bank to enter this space.
• But what is meant by custodial business?
• The custodial business provides a range of security services, including safe-keeping and settlement, reporting, corporate actions, dividends collection and distribution, proxy voting, tax reclaim services, fund administration and providing market news and information.
• Currently, the bigger players in this market are HSBC, Deutsche Bank and Citi. Others like StanChart also offer the service.
• According to a senior SBI official, the total market for custody business in India, including FIIs, mutual funds, insurance companies and others is over $700 billion.
• ‘Caterpillar fungus’ could be India’s answer to Viagra
• Foreign drugs like Viagra and Cialis used for treating erectile dysfunction may soon get their Indian counterparts from a ‘caterpillar fungus’ found in the high altitudes of Uttarakhand. The caterpillar fungus locally called as ‘Keera ghas’ or ‘Yarchagumba’ is said to have aphrodisiac properties, which will be used to manufacture drugs in a project undertaken by the Uttarakhand government, say the officials of the Herbal Research and Development Institute (HRDI) in Gopeshwar district.
• Tennis at Roland Garros
• Look at the men’s semi-final line up here.
• The women’s final is between Ana Ivanovich of Serbia and Dinara Safina of Russia.
• SAFF cup
• India beat Pakistan to secure a semi-final berth.