14.12.2008

Politics & the Nation

• British Prime Minister Gordon Brown makes an unannounced stop over in India
• To express solidarity with India in the wake of Mumbai terror attacks.  He was one of the first to call up our PM soon after the attacks and has also spared the services of Scotland Yard to help with the investigations.
• He is scheduled to meet our PM today.
• Is this the much awaited solution for our small and fragmented farms?
• A compelling read.
• Looks like a winner.  Can the government keep its hands off, the way it did in the case of IT sector, a few years ago?

Finance & Economy

• Rurual India - cause for cheer for Auto companies
  
• With sales drying up in big cities due to unavailability of credit, auto manufacturers such as Maruti Suzuki India (MSI), Hyundai Motor India and General Motors India are now looking at cash-rich rural customers to boost sales.
  
• Almost 50% of the 220 million households in rural India are potential car buyers due to the agricultural subsidies extended by the government and also due to increase in productivity of agri-based products, according to a recent survey. 
  
• Among the people who have an opportunity to buy an automobile in the rural areas there are approximately 22 lakh Gram Panchayat members, 1.5 lakh Panchayat Samiti members and 15,000 Zila Parishad members, who according to auto companies are sitting on piles of cash.
  
• Bleak tourist arrivals spur government to think of incentives
  
• In view of the double blow of global financial meltdown and a series of terror attacks in the country, foreign tourist arrivals have fallen by 2.1% in November to 5.21 lakh. Since the recent terror attack on Mumbai’s Taj Mahal Hotel, Oberoi Trident and Chhatrapati Shivaji Terminus, room rentals at most of the hotels have crashed in the range of 40% to 60%.
  
• India has so far been offering hospitality only to foreign tour operators, industry representatives and trade journalists under the ministry of tourism’s hospitality scheme.  Under the hospitality scheme free accommodation, logistics support, food and air tickets are provided.  The government is reportedly considering extending the scope of this scheme.
• Further, reinstatement of section 80HHD of the Income-Tax Act is under consideration.  Under this, 50% of the profits attributable to the forex earnings of hospitality companies (Hotels) are exempt from tax and the other 50%, if reinvested in the hotel industry, is also exempt.
  
• How much Gold does India buy in a year?
  
• India consumes approximately 800 tonnes of gold per annum (inclusive of bars, coins, jewellery), with an estimated gold holding of close to 13,000 tonnes as on March 2007. With 95% of this holding in individual hands, this translates to a market value of Rs 15.60 lakh crore.  This market value is suspect in my view.  It should be much larger than this.  But, for want of figure work, I would just flag it for now and revisit it later.
• Explaining why India Inc is loathe to reduce prices to revive demand, Mythili Bhusnurmath lets us on to this wisdom:
  
• Part of the problem is this is the first time corporate India has really been exposed to the full impact of a business cycle; that too a particularly vicious one. 
• Secondly, they have assumed wrongly that the furious growth seen in the last couple of year is here to stay.  This has what caught them unawares.  Quick downsizing -- either of business divisions or of employees -- is not easily acceptable for them.  Hence they keep looking at government for various sops.
  
• While reading the above piece, we come across an acronym: NICE 
• Non-inflationary continuous expansion.
• Today's ET guidebook carries a good piece on deflation.
• Its definition, what causes it, its harmful effects and why it is a serious economic problem.  Read it here.

International

• Homelessness in the US on the increase!
  
• In a recent survey conducted in select cities, on average, they saw a 12% rise in homelessness. Although the results do not cover all U.S. cities, homeless advocates said they were in line with anecdotal evidence nationwide. 
• Homeless advocates say families are flooding homeless shelters across the United States in numbers not seen for years, camping out in motels or staying with friends and relatives following foreclosures on tens of thousands of homes during the worst financial crisis since the Great Depression.
• Demand for emergency food assistance rose in 20 of the 25 cities surveyed, the report added. 
  
• Can you see an upside in a recession?
• Unsupportable debts are being erased. Consumers are rebuilding their savings and lowering their living standards to match reality. Workers are exiting dying industries. And through distress sales, foreclosures and bankruptcies, assets are being taken away from weak hands and given to strong ones, creating the conditions for future growth.
  
• Hard to digest.  But true.
• What is the difference between Obama's and George Bush's revival plans for the US economy?
• Bush's programme is about tax credits and rebates that boost retail spending to create more jobs.
  
• Obama is laying emphasis on making the economy more productive by investing heavily in roads and bridges, energy efficiency, school buildings, broadband networks, and electronic medical record-keeping. The idea is to grow through investment rather than consumption. 
  
• Some economists are skeptical of the Obama team’s emphasis on infrastructure, arguing that there aren’t enough out-of-work construction workers to do all the jobs that are envisioned.  As more of the unemployed belong to the category of sales clerks, drivers and marketers, it makes lot of sense to follow the Bush plan; they say.
  
• What's your take? 
  

Culture

• Oscar host
• Hugh Jackman, the Australian actor is set to host the Oscar Award ceremony in February.  He played the lead role in the romantic epic "Australia" and the X-Men movies.

Language lessons

• Incipient
  
• Adjective: Only partly in existence; imperfectly formed
  
• eg: incipient panic
• glom
• Verb: Seize upon or latch onto something
• eg: Republicans as well as Democrats have glommed onto the idea that massive government outlays during a recession is a good thing because it props up spending for goods and services while the private sector catches its breath.