10.03.2009

Finance & Economics

• Cell phone bills and some telecom gyan
  
• From April 1, STD and local calls from mobiles will become up to 20% cheaper. This is after mobile service providers follow a directive from telecom regulator (TRAI) to slash the fee they pay each other to move calls between networks by a third. 
  
• The lower tariff will also apply to third-generation telecom services when they are launched. 
  
• At present, if a Bharti Airtel subscriber calls a Vodafone user, Airtel is liable to pay 30 paise per minute to Vodafone as termination charges. Reducing it to 20 paise/minute — as directed by Trai — will lead to a direct reduction in mobile tariff. 
  
• However, calls made to India from overseas will cost a bit more (less than a cent/minute) from April, as Trai has allowed Indian telecom companies (telcos) to charge foreign operators up to 33% more for terminating overseas calls in India.
  
• India is divided into 22 telecom circles and calls within a circle are carried only by stateowned BSNL, which charges 20 paise per minute. The regulator has slashed this to 15 paise per minute. This would benefit private operators, but will mean a loss of revenue for BSNL. 
  
• Trai has also decided not to alter the current ceiling of 65 paise per minute for carrying long-distance calls within the country. For instance, if a BPL customer in Mumbai makes a call to a mobile user in Chennai, and if BPL does not have the requisite infrastructure to carry this call, it pays up to 65 paise per minute to a third operator such as Bharti or Reliance Communications to carry this call to Chennai.  
  
• From April onwards India would send out 9 billion minutes, which would mean paying up Rs 2,700 crore to foreign telcos, at an average rate of Rs 3 per minute. But India would receive 25 billion minutes but receive only Rs 1,000 crore (at 40 paisa per minute). This means India will end up paying Rs 1,700 crore more to international carriers even though the country will receive 16 billion minutes more than it sends out.
  
• India's R&D spend on drug discovery
  
• Just the other day (07.03.2009) we were noting about the initiatives for making drugs cheaply available to our general public.  In that context, the following information is very important.
  
• The government is planning to issue tax-free bonds worth up to Rs 10,000 crore ($2 billion) to the general public every year until 2020 as part of an ambitious plan to fund a massive drug discovery plan aimed at making India a global leader in new drugs. 
  
• Tax-free bonds will give retail investors an opportunity to take part in the fortunes of the scheme, especially if it leads to the discovery of blockbuster drugs. Even in cases where the project fails, the government would guarantee a minimum return on investments. It is estimated that only one in six experimental drugs makes it to the market. 
  

• India accounts for less than 1% of the $130 billion spent world wide on drug discovery, despite having the fourth-largest drug industry in the world by volume. Much of India’s strengths in this sector are in making copycat versions of popular drugs discovered abroad and making medicines whose patents have expired. The government now aims to have one out of every five new drugs discovered by 2020 to be from India. 
  
• In times like these we do need a break or two at times.
  
• Take a look at this ET editorial which is written in a lighter vein.  Lampooning the government's announcement for a contest to come up with a new symbol for the Indian currency, it gives a decent background into a few other big currencies of the present times.  Worth a read.
  

International

• Global markets lost $50 trillion says an ADB study
  
• Financial markets across the world lost a whopping $50 trillion, including $9.6 trillion in the developing Asian market.
  
• This is what was stated by ADB president Haruhiko Kuroda while briefing about the report prepared by ADB: 'Global Financial Turmoil and Emerging Market Economies: Major Contagion and a Shocking Loss of Wealth’. 
  
• Developing Asian countries, which include countries such as China and India, have suffered more than any other emerging market in the world due to the recent global economic downturn because the region’s markets have expanded much more rapidly.
  
• The value of financial assets to GDP rose to 370% of GDP in developing Asia in 2007 from 250% of GDP in 2003. In Latin America, the ratio only rose 30%, with the result that estimated losses on financial assets were a much lower $2.1 trillion, or 57% of GDP.
  
• What should you know about AIG?
• AIG is the largest insurance firm in America.  American International Group.
• It suffered from a liquidity crisis after its credit ratings were downgraded below "AA" levels.  The Federal Reserve Bank on September 16, 2008, created an $85 billion credit facility to enable the company to meet collateral and other cash obligations.  This was in return for the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. 
  
• In November 2008 the U.S. government revised its loan package to the company, increasing the total amount to $150 billion. 
  
• AIG is attempting to sell assets to repay the loans.  Unsuccessfully so far.
  
• It has, just a couple of days ago, announced a record quarterly loss of $61.7 bn.  This is the largest ever quarterly loss declared ever by an American company.  
  
• It has got a fourth round of bail out (about $30 bn) from the US government.
  
• This is one of those firms that is considered too big to fail by the US government.  Reportedly, if it is allowed to fail, the impact would be felt worldwide on insurance firms and financial institutions operating across continents.  That's why the US government is keeping on pouring money into this firm.

Health

• What are smoking cessation clinics?
  
• These are the clinics where you can be treated for kicking the smoking habit.
  
• The clinics will use nicotine replacement therapies (NRT) like chewing gum and patches, along with counselling, to help people quit smoking.  This is a method that doctors say has far less success rate than medication which blocks the receptors in the brain absorbing nicotine. 
  
• If you are a smoker, this is my attempt to scare you with figures:
  
• Reports estimate that there are at least 120-million tobacco users in India and by 2010 one million people will die each year from tobacco related illnesses. According to World Health Organisation (WHO) reports, 80% of the eight million people who will die every year from smoking related diseases will be from developing countries by 2030. The ‘New England Journal of Medicine’ in 2008 said smoking could soon account for 20% of all male deaths and 5% of female deaths between the age of 30 and 69. It also said men who smoke cigarettes in India shorten their lives by 10 years. 
  
• I know I have miserably failed in scaring you.  I have seen that smokers don't get scared even after being told the ill effects of smoking.