16.02.2009

Politics & the Nation

• Israel is now the largest defence supplier for India
• In spite of the stiff opposition from the Left parties for over four years and a half, Israel has emerged as the largest defence equipment supplier, overtaking Russia.
• Israel is reported to have signed about $9 bn worth of defence deals during the past decade.

Finance & Economics

• LLPs set to be allowed w.e.f 01.04.2009
• Limited Liability Partnerships, is the format that will allow professionals, traders and even producers of goods to conduct their business without worrying about losing their personal assets due to lapses of other partners. 
  
• An LLP would be taxed for its income while the income of individual partners would be tax free; a benefit that is not available to companies. Companies pay tax on their profits and again pay dividend distribution tax when they distribute profits among shareholders. The LLP format protects partners from double taxation. 
  
• Modus operandi adopted by Satyam's promoters to divert funds from Satyam
  
• There are many methods in which a company's promoters can divert money from the company to their front companies.  Investigations have now reportedly revealed one method employed by Satyam's promoters which violated the Companies Act provisions in this regard.  It made intercorporate loans and investments much beyond the limits prescribed or in violation of the provisions of the Companies Act.
  
• Under the Companies Act, a firm needs shareholders’ approval to make any loan or investment, give a guarantee or provide security beyond 60% of its paidup capital and free reserves, or 100% of its free reserves, whichever is higher. 
  
• Change of rules regarding computing foreign investment in Indian companies makes compliant companies violators of FDI norms 
  
• The government announced new rules for calculating the FDI in a corporate entity.
• Now, FII holdings, ADRs/GDRs, NRI investment and foreign investment through foreign currency convertible bonds would all be included while calculating FDI levels of Indian companies. These instruments were not part of the FDI calculation till now. An announcement specifying the compliance period is expected within a week. The current proposal is to fix August 31 as the last date for compliance with the new FDI norms, and the final deadline would be finalised after inter-ministerial consultations. 
• This move by the government is attracting lot of criticism.  You can expect some heated debates on this in the weeks to come.
• "The problem is when policy becomes hostage to sectional interests, it produces sub-optimal results. Consequently, what appears rational at a micro level becomes irrational at the macro level.  Elaborate."  If you are asked to answer such a question, you can't have a better answer than this editorial comment coupled with this news report.
  
• A look at the NPA figures of our PSBs
• Though the NPA of all the PSU banks (as a group) have come down in percentage terms, there has been a marginal increase in absolute figures. Total gross NPA of public sector banks, in absolute terms, increased to Rs 42,962 crore as on December 31, 2008 against Rs 40,611 crore at the end of March 2008. Total net NPA of PSBs, in absolute terms, stood at Rs 18,486 crore as on December 31, 2008 against Rs 17,724 crore as on March 31 the same year. 
  
• Some more figures: this time on our consumer market and savings
• The country’s consumer market is projected to become the fifth largest by 2025, worth more than $1,500 billion. A McKinsey Global Institute study released in 2008 projected that the urban market in India is expected to grow by more than 60% and the rural by about 32%, which in my view could grow faster. Many other studies make equally optimistic forecasts. India’s total commerce, which was estimated at $2.3 trillion in 2007, is expected to triple by 2025, which would make the Indian market larger, in terms of purchasing power parity, than the current size of the UK market. 
  
• The domestic savings rate grew from an average of 21.5% between 1991 and 1994 to about 34.5% between 2005 and 2007, with the household sector contributing the bulk of the growth. The Centre for Monitoring the India Economy has estimated that the savings rate touched 36% in 2008-09 and will fall to 34% in 2009-10, a rate that is still among the highest, worldwide. 
  

Sport

• Tennis: Sania Mirza loses in Pattaya final
• She was beaten 7-5, 6-1 by Vera Zvonareva of Russia in the Pattaya Open on Sunday. 

Language lesson

• bandy: verb
• Discuss lightly; Toss or strike a ball back and forth; Exchange blows
  
• eg: These days the favourite cricket question being bandied around in the Indian media is...
  
• imprimatur: noun
• Formal and explicit approval