Finance & Economics

  • Big boost for infrastructure
    • THE government is planning to set up a special dedicated fund to provide loans to infrastructure projects — roads, airports, power plants and ports — being developed by private companies as well as by government-private joint ventures. The proposed fund is expected to have a corpus of around Rs 50,000 crore.
    • The proposed fund may be operated through either of the two infrastructure funding agencies — IDFC or the India Infrastructure Finance Company (IIFCL).
    • The country needs more than $500 billion over the next four years to widen existing roads and highways, to modernise 35 non-metro airports, to lay new rails and to provide electricity to all rural households.
    • The government's ambitious target is to step up investments in infrastructure to 9-11% of the country's gross domestic product from 5% in 2006-07.
    • Take a look at this graphic. It gives a bird's eye view of the funding needs.
  • FDI in investment companies to be allowed?
    • The government is likely to allow foreign direct investment (FDI) in 'investment companies'. The finance ministry and the Reserve Bank of India (RBI) feel that foreign investment should be allowed in investment companies, since they are similar to holding companies.
    • What are investment companies? Companies wherein the investment would be used for investment in businesses other than its own.
    • At present investment companies do not figure in the list of 18 NBFC (Non Banking Finance Companies) activities in which foreign investment is allowed. Hence the need for policy.
  • The low P/E ratios of many a stock in the market today should make it worthwhile for making invetments; isn't it?
    • NO; if you look at how the havoc caused by the wealth destruction in the stock markets is going to roll out in the near to mid term.
    • This is one ET editorial that explains the phenomenon very brilliantly and cautions us that lower valuations need not necessarily mean good investment opportunity in the current situation.
    • Read it in full here.
  • An innovative idea from Jagdish Khattar for voluntary phasing out of old cars
    • We all know that exchanging old cars for new is there in our markets and has been operational for quite some time. Any number of statutory measures kept in place have not ensured that old vehicles are scrapped. Old vehicles, as we all can imagine cause more pollution, run on out-dated technologies and are less fuel efficient. So what is his 'innovative' idea?
    • The idea is that the manufacturer and the government work together by the former offering to cut prices and the government agreeing to forgo the excise for old cars to be scrapped and are exchanged for new ones. The package would be restricted only to the exchange of near-scrap vehicles that are at least 15 years old. This would be improving the quality of vehicles on the road on a voluntary basis and not through legal measures as is done in the developed world.
    • Any takers for it in the government?
  • Why is the India story intact?
    • In a very good op-ed article Samir Arora raises some pertinent questions and lampoons the bearish outlook on India growth story. I found it really good and made some excerpts for you in Discover It. Read it here.
  • Gandhian Engineering (aka frugal engineering)
    • This phrase has gained currency ever since Tatas have come up with the Nano. It is used to describe the engineering feat that combines irreverence for conventional ways of thinking with a frugality born of scarcity.
    • Some of the characteristics of Nano that made this phrase appear include:
      • No power steering, no power windows, no air-conditioning and one windshield wiper instead of two.
      • The car lacks even a tachometer and uses an analog rather than digital speedometer.
      • It has no actuators in the headlights. They are the levelers that adjust the angle of the beam depending on how the car is loaded.
      • The steering wheel of the car is a hollow tube instead of the usual solid wheel.
    • People are expecting that just as Kanban and Kaizen were contributed by the Japanese to the manufacturing sector, Gandhian engineering would be India's contribution.
  • APEC summit at Lima, Peru
    • In a joint statement issued at the end of the summit, the leader pledged to take the stalled WTO talks forward.
    • Will intent be translated into action? This what will be watched keenly.
  • India wins the Hero Honda cup
    • India won the fourth one-dayer against England by 19 runs in Bangalore under the Duckworth-Lewis method on Sunday to take an unbeatable 4-0 lead in the seven-match series.
Language lesson
  • gravy train
    • Noun: Income obtained with a minimum of effort
    • eg: The gravy train will then move on to sundry departmental undertakings and autonomous institutions, colleges, schools and so on.