28.08.2008

• LIC’s investments in blue chip companies beyond the limits permitted by the IRDA may be allowed to stay
• The finance ministry is reportedly considering a move to this effect.
• Under the norms issued by IRDA, no insurance company can invest more than 10% of its total fund size, or 10% of the outstanding shares of the investee company — whichever is less — in any company. The regulator had given more freedom to private insurers in terms of investment, while aligning LIC’s privilege also with the industry, allowing the public sector life insurer to invest only 10% of its portfolio in a single company against 30% earlier.
• However, LIC, the country’s largest insurer, has invested more than the prescribed limit in many companies.
• Take a look at LIC’s investments in various companies in this graphic.
• What are the pros and cons of this move by the finance ministry?
• In times like these when the companies are seen as blue chip companies (meaning their share prices are giving tremendous market returns) LIC will be too happy. But during hard times when the share prices of these companies take a dive, there will be name-calling and a clamour for the heads, who allowed such relaxation, to roll.
• Why is Orissa on the boil?
• Orissa has been on the boil since the killing of Swami Laxmananand Saraswati, a member of the central advisory committee of the VHP, and four others on Saturday evening by suspected Maoist guerrillas at his Jalespata ashram in the district.
• On Monday, the VHP called for a state-wide shutdown. Since then, 11 people have been killed in the state, 10 in Kandhamal alone.
• Saraswati was leading a campaign against cow slaughter and religious conversion in the communally sensitive district — which with a population of around 600,000, including 150,000 Christians, has witnessed numerous clashes between Hindus and Christians in the past. Radical Hindu groups in the state blamed the Church for the crime and alleged that Christians killed Saraswati because he was opposing religious conversion.
• Language lessons: compos sui — master of himself
• Usage: A sportsman must be compos sui in order to become number one.
• Tata’s Nano project at Singur: how do you characterize the conflict of interests involved?
• In an excellent piece TK Arun writes about this. In the process we learn very good lessons on the industrial revolution. That portion of the article is so good, I thought it deserves an excerpt:
• Transition from agrarian to industrial life around the world has entailed disruption, dislocation, loss and violence. Britain’s Enclosure movement, in which rich landowners took away land to rear sheep to feed a growing woollen industry, forced destitution on poor peasants who used to graze their cattle on the land enclosed and taken away. Those whose land or access to land was taken away became “doubly free” in Karl Marx’s language: they were freed from land, their means of production, and from all traditional obligations and bondage to the landlord. These ex-peasants had no choice but to exercise their freedom to sell their labour, in a completely novel form of earning a livelihood, as factory hands.
  In Europe, the industrial revolution took place when formal, leave alone functional, democracy did not exist. In land-extensive economies such as in north or south America or Australia, displacement of peasants was not a necessary condition for industrialisation. In thickly populated Asia, it’s just the opposite. In east and south-east Asia, including in China, such displacement of people from their traditional occupations could take place easily, the political climate being too authoritarian to permit effective protest. Things are different in India.
  Displaced Indian peasants have an additional degree of freedom: the right to organise protest and bring pressure on the state by any and every means available to a competitive polity. Both Mamata Banerjee and the Singur farmers are currently exercising this third degree of freedom. But it also administers the third degree to Bengal’s plans for industrialisation.
• Hadn’t seen a better analysis lately.
• On financial inclusion
• Today’s articles that appeared on page 18 & 19 of the ET, Mumbai edition give adequate material on the subject of financial inclusion, for any first time reader also. Worth a read.
• I found Naina Lal Kidwai’s ideas highly acceptable in this regard. Take a look at them here.
• E-waste
• About 50 mn tonnes of electronic waste or e-waste is generated every year, globally.
• India produces about 3 lakh tonnes of e-waste every year. Of this, only about 5% of previous metal can be extracted.
• Thorat committee
• It made recommendations regarding structural and human resources changes in the RRBs to the National Bank for Agriculture and Rural Development (Nabard).
• Performance evaluation of PSUs
• Currently, the performance evaluation of PSUs is calculated on the Balanced Score Card that includes both financial and non-financial parameters having equal weight. The non-financial parameters are further divided into dynamic parameters (30%), enterprise-specific parameters (10%) and sector-specific parameters (10%).
• Based on the composite scores, the government decides whether a company can be upgraded as a navratna, miniratna or schedule A or B company.
• But what is the culture shift required for a PSU? Look at McKinsey’s prescription here.
• Cricket
• At last some good news. India wins the ODI series against Sri Lanka, after winning the fourth one dayer. Some saving grace, having lost the test series.
• Bradman remembered: Australians marked the centenary of their greatest sporting hero, cricketer Don Bradman, by celebrating the fact his unbeaten record is still untouchable 60 years after he quit the sport. Bradman, who died in 2001 aged 92, played his last match in England in 1948 and retired with a yet-to-be topped Test batting average of 99.94.