Indian Current Affairs: 12.11.2008

Economy and Banking

Macro indicators show signs of industrial slowdown

Macro numbers of the economy have started showing early signs of an industrial slump. Customs and excise collections for October 2008 have moved into negative territory for the first time in financial year 2008-09, declining by 5% from October 2007
Excise duty collections — a central tax levied on manufactured goods at the factory-gate level — dropped by 8.7%
Customs duties — taxes levied on imported goods — fell by 0.9% in the month under review
However, service tax — a tax levied on services rendered —bucked the trend, growing at 18% in September
Dip in customs and excise collections indicates a slowdown in industrial activity and trade. While excise tax exemptions in some states and sectors have contributed to the fall, withdrawal of import duties on some of the bulk products like crude oil has also led to the decline
The total indirect tax collections — excluding service tax — stood at Rs 18,664 crore against Rs 19,646 crore in October 2007. Excise duty collections were down to Rs 9,399 crore in October 2008 compared with Rs 10,293 crore in October 2007
The fall in tax collections could impact the government’s fiscal health

Following the finance ministry’s moral suasion, public sector banks (PSBs) have taken an unanimous decision that henceforth, no bank will offer fancy rates on bulk deposits
As a result, corporates placing bulk deposits with PSBs may only get card rates, which are offered to retail depositors
What are Bulk Deposits: Bulk deposits are typically those deposits where the minimum amount is Rs 1 crore.
Banks were offering 11.5-12% on one year bulk deposits. The interest rates had peaked to 12.7% in October during the height of the liquidity crunch
Offering high deposit rates — on bulk as well as retail deposits — was one of the reasons why banks did not reduce their lending rates
It will be interesting to see how PSB are going to exhibit such mutual understanding in a competitive market like India
Suasion means The act of persuading or communication intended to induce belief or action

During the course of investigations of Malegaon blast of September 29, the Anti-Terrorism Squad (ATS) is said to have found that two high profile though non-political leaders, both of whom owe their allegiance to pro-Hindu organisations, are directly or indirectly involved in the case
During the probe, the police found that the two non-political leaders, who are not from Maharashtra, had played a vital role in assisting a section of the accused in the Malegaon bomb blast
Speculation mounted on who that leader could be. It is speculated they are Gorakhpur BJP MP Yogi Adityanath and of Mahant Kaushalendra, BJP MLA from the Tulsipur assembly constituency in UP

In dramatic action on the high seas, an Indian warship with its armed helicopter and elite marine commandos repulsed in quick succession attempts made by different bands of gun-toting pirates to hijack a Saudi and a Mumbai-based merchant vessel in the Gulf of Aden off Somalia on Tuesday morning
INS Tabar, a Talwar-class guided-missile stealth frigate, was cruising in the Gulf of Aden when it got a frantic distress call from Saudi Arabian chemical and oil carrier NCC Tihama
An armed Chetak helicopter, with four marine commandos, was immediately launched from INS Tabar
The marine commandos opened fire with their automatic weapons at the pirates trying to board the Saudi tankship after surrounding it. Deterred by the fire, the pirates promptly turned tail and fled in their speedboats into Somali water
Around the same time, INS Tabar received another SOS call fromIndian merchant vessel Jag Arnav—which is owned by the Mumbai-based Great Eastern Company
It was eastward bound after transiting through the Suez Canal a few days earlier—was being ambushed by another band of pirates in two boats about 60 nautical miles east of Aden. The Chetak was then diverted towards Jag Arnav’s position
In the end, INS Tabar has rescued 2 ships within an hour

As you know both Mumbai and Navi Mumbai were reclaimed from the sea
Now Mukesh Ambani’s Reliance has offered to cart away the construction debris to fill low-lying land and abandoned quarries in its SEZ which is to come up in Navi Mumbai
Reliance will set up an SEZ on 2,180 hectares spread across places like Dronagiri (Uran), Ulwe (near the proposed new international airport) and Kalamboli
At the height of the construction boom last year, Mumbai accounted for nearly 10,000 metric tonnes of debris a day. Household garbage alone accounts for 6,000 metric tonnes a day
It comes as a big relief for civic officials as they were struggling to find a dumping ground for the debris
Isn’t this a great example of a Win-Win situation