Politics & the Nation
  • Read the statements attributed to Mr. Karunanidhi and draw your own conclusions.
    • Read this story in full and digest what you can.
    • When newspapers are full of stories like this, what is there for us to take note of, and stay informed?  That's why we keep groping for notings which are worth our attention from the "Politics" columns.
  • The "Order of Leopold" issue
    • Sonia Gandhi has reportedly "declared her allegiance" to the Belgian monarch by accepting the title of "Order of Leopold" in 2006.  There is a petition on this pending before the Election Commission of India seeking her election to the Parliament to be declared null and void.  
    • The Election Commission has reportedly decided on this issue recently.  It is reported that this issue was decided by a 2:1 majority that the petition be dismissed.  What is noteworthy is that it is only the retiring CEC Mr. Gopalaswami who appears to have been on a minority on this issue too.
    • You might remember that his earlier recommendation to oust Mr. Navin Chawla the incoming CEC, was negatived by the Government.
Finance & Economy
  • Why do Indian companies put up with inspections by US FDA?
    • "After Ranbaxy,FDA finds gaps at Cipla"  so reads a headline today.
    • Why should Indian companies put up with inspections by US Food and Drug Administration?
    • Because these companies' manufacturing facilities in India manufacture drugs which are meant for sale in the US also.  Does India have such a counter-inspection mechanism?  No.
    • US FDA inspection team is reported to have found 9 deviations -- stated to be minor - in Cipla's manufacturing plant at Bangalore.
    • In September last year, FDA had banned 30 Ranbaxy drugs, which are manufactured at two of its plants in India. 
    • A month later, the regulator issued a warning letter to Caraco Pharmaceutical, Sun Pharma’s American subsidiary, and has also halted approval of new drug applications from its Detroit facility. 
    • In November, the agency found 15 manufacturing deficiencies at Lupin’s plant in Madhya Pradesh. 
    • Indian drug manufacturers see that this is one of the efforts of the US drug business lobby to use their FDA to beat the increasing exports of low-cost quality drugs from India.
  • What is the issue abut banks' demanding collaterals for OTC derivative contracts?
    • Banks sold billions of dollars worth currency and interest rate derivatives to corporates like unsecured personal loans. When the bets backfired and hostile corporates refused to pay up, all banks could do was move court.  Currently, India Inc’s markto-market losses are estimated at a few billion dollars.  Stamp duties held back corporates from providing collaterals, causing banks to remain unsecured creditors on derivative exposures. 
    • Therefore now, Banks are insisting on collaterals such as stocks, properties and even personal guarantees from corporates for derivative deals with them.  This could help banks lower the risk on their derivative books.  There is also a possibility that RBI may grant banks some capital relief.  Corporates would also think about the downsides before signing on a derivative contract.  Banks are asking for 100% collateral from medium- and small-sized firms and even from bigger ones that have suffered a decline in profitability.  In the long run, enabling clearing houses to play a bigger role in OTC derivatives can help further streamline the market. 
  • Who is the Chairman of the Board for Reconstruction of Public Sector Enterprises (BRPSE)
    • Nitish Sengupta
Language lessons
  • germane: Adjective
    • Relevant and appropriate
  • gobbledygook: Noun
    • Incomprehensible or pompous jargon of specialists
  • mealy-mouthed: Adjective
    • Hesitant to state facts or opinions simply and directly as from e.g. timidity or hypocrisy
    • eg: ...the bank is notoriously mealy-mouthed in explaining what it does in simple language intelligible to both financial markets and the public.