23.07.2008

• Government wins trust vote
• It was a day of high drama, backstage deals and frayed nerves; but the government carried the day with it.
• For the first time ever in my life, I took a kind of political time-out and watched the proceedings of the Lok Sabha live for a major part of the day. I was really impressed with the performances put up by Lalu Prasad Yadav, Rahul Gandhi and Omar Abdullah. Even Asaduddin Owaisi from Hyderabad, didn’t do bad.
• Now that the Government has proved its majority, it should in right earnest go ahead with the nuclear deal. At the same time it should also carry forward the reform agenda that it has kept on the backburner because of staunch opposition from the Left during the last four years and a half.
• One of the important pending reform measures is insurance sector reform. The insurance Bill was stuck due to the Left’s opposition on liberalising norms for entry of more private and foreign players and raising the FDI limit in the sector to 49% from the existing 26%.
• Let us hope the Government gets into fast track mode now.
• An editorial comment in today’s ET on the Left’s denouement is worth an excerpt here:
• … the trust vote outcome should awaken it to the fact that its blinkered anti-US intransigence cannot yield any political dividend. Its anti-Congress politics, driven by its traditional compulsions on the ground in West Bengal, Kerala and Tripura, is completely meaningless. That has, unfortunately enough, compelled it to stand together with the BJP on an issue that could have toppled a secular formation. Such anti-Congressism, unlike, say, 1989 when both the LF and the BJP came together to lend outside support to the V P Singh-led government, has no resonance today. It has only served to render the Left’s position more tenuous even for the so-called political representatives of the Muslim community. Such anti-Congress politics is, clearly, at the root of its current isolation.
• Ballpark estimates of training expenditure in India Inc
• Typically, Indian companies spend anywhere between 0.5% and 2% of their turnover on training. People-oriented businesses like IT and ITeS spend about 3-5% of their revenue on upgrading employee skills.
• Dolly and crude prices – are we getting a breather from high crude prices?
• Tropical storm Dolly in the Gulf of Mexico bore down on oil and gas installations on Monday. In spite of that the oil prices continued their downward slide, as forecasters pronounced that it may not become a major hurricane.
• Oil prices tumbled $4 a barrel on Tuesday. The decline offered further evidence that investors, who drove prices to a new high above $147 a barrel, are now quickly pulling money out of the market.
• There are indications that the price of oil is killing demand, especially in the US.
• The dollar’s decline has been a major factor in oil’s ascent, as investors bought dollar-denominated crude contracts as a hedge against a weakening greenback.
• Making green power mandatory
• Government is toying with the idea of a new mandate that forces all future conventional power generation firms to also use renewable sources for producing energy. Companies may have to ensure minimum 5% of their future generation projects to come from green sources.
• Right now, under the tariff-based bidding process initiated for thermal power projects, there is no pre-condition on generation from renewable energy sources. This would change under the proposed law.
• Indian Renewable Energy Development Agency chairman & managing director: Debashish Majumdar
• WTO talks: the US offer of cuts in its OTDS (Overall Trade Distorting Subsidies) in agriculture
• The US has announced that it will be willing to slash these subsidies to $15 bn provided it was given significant market access in Nama and agriculture.
• But the G20 and G33 countries are not enthused by the offer. They said, as against the current $7 bn figure, this represents more than 100% hike in US farm subsidies. They are expecting the figure to be around $12 to13 bn.
• Bound rates: These are caps beyond which countries cannot increase their subsidies or tariffs.
• Green room: The room (in WTO headquarters) where the participating trade ministers meet every evening to discuss offers.
• Two of the principles that we need to understand in the context of WTO talks:
• The principle of less than full reciprocity. In terms of this, developed countries are required to commit themselves to proportionately higher duty reductions relative to developing countries. This was meant to give developing countries flexibility in tariff reduction. But its effect has been largely negated, thanks to a new ‘anti-concentration’ clause.
• Anti-concentration clause: It stipulates that sensitive tariff lines subjected to full tariff cuts cannot be concentrated in one particular sector or sub-sector.