Indian Current Affairs: 13.11.2008

Finance & Economy

What is the import of a jump seen in IIP figures? Is the jump for real? What should be done by the government to sustain the pace?

When we are being washed away in turbulent waters, even a small branch or piece of wood (which is equally floating like us) will appear eligible enough to cling on to for life support. Such is the current state of bad news pouring in from all fronts that a rebound in IIP figures appears like a manna from heaven.
You are all aware that Index of Industrial Production measures the general level of industrial activity in the economy. It has presented a surprise by rebounding in the month of September by 4.8%, after a dismal 1.3% in August. Remember what we have noted about the August figures on 25.10.2008? We noted then that such a low figure is not a blip or an aberration or an outright miscalculation and that macroeconomic indicators do point that the slowdown is for real. While many other pointers are still suggesting so, the rebound in IIP figures in September surprised everyone.
So, macroeconomic pundits are explaining this time that the rebound seen in September is a blip and cannot be taken as trend reversal. The rebound is seen as largely due to the festival demand which has resulted in sharp rise in output of consumer durables (13.1%) and automobiles (16.8%) during the month.
Look at the suggestions coming from this editorial comment in today's ET regarding what the government should do in the present context.

Appropriate government intervention with fiscal measures can help revive domestic demand. While India may not have the room to announce a fiscal stimulus package like China, targeting government spending into activities that creates physical and social infrastructure can yield dividends both in the short term and long term. In particular, the government must keep up spending on projects under the Bharat Nirman and National Rural Employment Guarantee Scheme, and it must ensure that resources are spent efficiently. Keeping up construction activity is important to ensure growth of the core sectors. But for the private sector to speed up project implementation the government and the RBI will have to take more measures to ease credit flow.

A representative sample of the 'bad news' that I am referring in the above note:

THE Aditya Birla group is exploring options of closing down a Canadian unit. Tata group chairman Ratan Tata has asked his business heads to go slow on future plans. Auto major Mahindra & Mahindra (M&M) is rethinking its business plans for the current fiscal. Wipro, the software leader, has instructed its business heads to brace for tough times and some hard decisions. JSW Steel has deferred its multi-billion dollar expansion plans.
India Inc seems to be in an exceedingly cautious frame of mind. The ongoing credit crunch and slowing demand are forcing large companies to cut down on expenses, roll back acquisition plans and generally scale back hitherto exuberant corporate activity. The trend is in stark contrast to the situation six months ago, when companies were busy planning cross-border buyouts and huge expansion plans. Money was easily available and the economy was still expanding at 8%.

So, in these bad times we do need some sane counselling and perhaps take a hard look at the politico-economic systems that we have so far been following. Arun Maira takes an insightful and critical look and suggests seven wonderful concepts in this regard. Worth a read. After reading it, some of you may feel the need to keep a note of the ideas in brief. For them, an excerpt:

The first is the purpose of government in society.
The second is the idea of 'free' markets.
The third is the assumption underlying economic theories that human beings are purely rational and selfish actors.
The fourth is the conflict between efficiency and equity.
THE fifth is the concept that development is an exercise in economics to be guided by economists.
The sixth is the concept of fairness.
The seventh is the belief that competition is the best and perhaps only way to progress.

NTT DoCoMo of Japan makes an India foray through a stake acquisition in TTSL -- Tata Tele Services Limited

US light crude for December delivery fell $2.51 to $56.82 a barrel, the lowest since March 20, 2007. London Brent crude traded down $2.50 to $53.21 a barrel.

Politics

What has brought to a sudden end the political career of such a staunch Congress loyalist and leader? She is reported to have accused the party high-command (read: the Gandhi family) of being a party to issuing tickets to candidates in the Karnataka Assembly polls in lieu of cash.
Reaction was swift and no time was wasted by the party high-command. The Congress on Wednesday accepted Ms Alva's resignation from party posts, holding her guilty of violating discipline. The action was taken a day after the 66-yearold leader sent her resignation to party chief Sonia Gandhi.
It has also dropped her from the top decision making bodies of the party viz., the working committee (CWC) and the central election committee (CEC). It also accepted her resignation as AICC general secretary in charge of six states and gave the responsibility to other leaders.

Defence

Look at this graphic and the caption which says just enough that we should know.

Computing & IT

The number of total web searches per month in India is estimated to be about 1 billion, and 20-30% of these are local in nature, i.e., 200-300 million searches per month.
In comparison, local search as a percentage of web search is about 60% in the US, as per Comscore.

Why do I find this innovative? Because this effort is bringing the ease of computer based homing in on a required service through the use of a mobile phone. And the best part is, it is the advertiser who is paying for the originating call and cost of acquisition of the customer.

Space Research

THE CHANDRAYAAN-1 spacecraft on Wednesday settled in its lunar orbit, 100 km above the moon’s surface and almost 4 lakh km away from earth, three weeks after it took off from Sriharikota on October 22.
See how quickly we tend to lose glare on a very important scientific development for India. The next phase of excitement from this experiment will come in the next couple of days with the ejection of the Moon Impact Probe onto the lunar surface.

Indian Current Affairs