31.03.2009

Politics & the Nation

• Pakistan bleeds in Lahore
• Terror struck Lahore for the second time in a month on Monday when heavily-armed gunmen stormed a police academy, killing at least 27 policemen in an eight-hour siege that ended with four terrorists being shot dead and six captured alive by security forces. The audacious attack comes barely a month after a similar assault on Sri Lankan cricketers in the city.
  
• As usual voices can be heard that Pakistan is getting a taste of its own medicine. But that I think would be scoring brownie points. Terrorism is terrorism; wherever it happens, whoever does it. It should be condemned in no uncertain terms. This is not the time to exhibit schadenfreude.
• Let us hope Pakistan will be able to pull itself out of this quagmire.
• CPSE top brass may get to see tremendous hike in their take home pays
• With the cabinet approval for CPSE pay revision on Monday, chiefs of profit making CPSEs may end up getting as much as Rs. 6.74 lakh as monthly pay.
• This has been made possible by not just allowing the inclusion of 50% dearness allowance (DA) in the basic salary for the purpose of fitment and pay fixation in the new scales; but also by the proviso that they can earn up to 200% as performance related pay. Now this may hold out reasonably well in comparison with private sector pays.

Finance & Economics

• Banks, the CVC and the CBI
• Should cases of companies' diversion of funds for purposes other than what are stated before their drawl, be referred to CBI and the CVC?
• This is one suggestion that appears to have come about in the banking circles of late, in view of the bad experience bankers had with the Satyam episode. An ET editorial today argues that this is at best an overreaction and that such probabilities should be left to be monitored by regulators like the RBI, the SEBI and the ministry of corporate affairs. Take a look at the editorial. Worth our attention.
• RIL's KG basin gas to improve the fortunes of power producers?
  
• As of February-end 2009, the country had an installed gas-based power generation capacity of 15,149 mw. While the gas requirement of this capacity is about 75 mmscmd — at 90% capacity utilisation, or plant load factor (PLF) — the actual gas supply is just half of the requirement. This has resulted in all gas based capacities in the country functioning at around 50% PLF.
  
• The empowered group of ministers on KG gas has decided that while power plants in Andhra Pradesh would be given gas at 70% PLF, others would get it at 60% PLF.
• Not just for power producers, let's take a look at the expert speak on how it affects the fortunes of the country:
• What does KG basin gas mean for the country in economic terms?
  
• In oil and gas equivalence terms, India’s import dependence is likely to fall from 60% to 45% (after also factoring in new crude from D-6 and Cairn Energy’s Barmer fields), and most important of all, India will be able to move from an oil economy to a gas one. In the year 2007, while the oilgas consumption ratio in the energy basket of the world was 60:40, in India it was 78:22. For India, the ratio is likely to shift towards gas (65:35) in the next 2 years.
  
• What does this gas production mean as far as import substitution is concerned?
  
• India is an energy deficit economy and needs energy for growth. The country is significantly dependent on import of energy in the form of crude oil, coal and LNG to meet its requirement. It is estimated that the transfer of wealth from India to the oil exporting nations amounted to $56 billion in 2007-08. In addition to this, the government incurred a subsidy of $18 billion on petroleum fuels, and another $1.8 billion on LPG usage in 2007-08. The subsidy bill on fertilisers, which was around $7 billion in 2007-08, is expected to touch $20 billion in FY 2009. Peak production of oil and gas from KG-D6 is expected to be 5,50,000 barrels of oil equivalent per day. At this level, the D6 oil and gas production will account for about 40% of India’s total oil and gas production. The peak 80 MMSCMD of gas production will eliminate a major portion of the current shortfall in gas availability in India. And the production of 5,50,000 boepd will save wealth transfer of $10 billion. The usage of gas as CNG will cut subsidy bill on transportation fuels. D6 gas usage in fertiliser production can reduce fertiliser subsidy.
  
• What does KG gas mean to India’s gas market? How much will it cover the demandsupply gap?
  
• There is a shortfall of over 100 mmscmd. The KG-D6 field is expected to have a peak production of 80 mmscmd, which means that a major portion of the current shortfall in gas availability can be met once KG-D6 production reaches its peak. Going by the current shortfall faced by the power and fertiliser projects and their connectivity to gas pipelines, it is estimated that around 30-35 mmscmd of KGD6 gas would go to the power sector and around 15-20 mmscmd would go the fertiliser sector. Supply of 35 mmscmd gas to the power sector would result in increase in generation by around 8,000 MW of power. Similarly, supply of 20 mmscmd gas to the fertiliser sector would deliver in increase in urea production of nearly 10 million tones per annum, which will result in total elimination of imports of urea in India. Supply of gas to the power and fertiliser sector will also result in lower dependence on imported LNG for these plants. For example, 1 MMSCMD of gas can save Rs 550 crore per annum in transportation fuel subsidies for diesel alone. The benefits for petrol would obviously be higher. Similarly, the efficiency of distributed power is more than 70% and usage of 1 MMSCMD for distributed power generation can save Rs 500 crore per annum.
• Do you find any discrepancies in the figures stated in any of the three answers above? Blame it on the experts. It all depends on how one looks at the broader picture.

• ATF prices set for an upward revision in April?
  
• Papers seem to have sensed this. Take look at these snippets:
  
• Move follows rise in crude prices, which touched $51/barrel on Monday
  
• Domestic airlines are likely to incur a combined loss of $1.5 billion this fiscal
  
• Indian Oil, HPCL and BPCL revise ATF rates twice a month based on the average international jet fuel rates in the preceding fortnight
  
• Prices had peaked to Rs 71,028.26 per kl in Delhi in August

Music

• Know what is balalaika?
• It is a three stringed Russian musical instrument. Take a look at it here.

Language lessons

• skittish: adjective
  
• Unpredictably excitable (especially of horses)
  
• effigy: noun
• A representation of a person (especially in the form of sculpture)
  

Obituary

• Maurice Jarre
• The musician who composed music for some all time great movies like Dr. Zhivago, Lawrence of Arabia and A Passage to India has passed away at the age of 84 on this past Sunday.
• His use of the balalaika for composing the theme in Dr. Zhivago is very well known. He won Oscars for his composition in all these three movies.