27.05.2009

Politics & the Nation
  • One more root cause theory to explain the eruption of violence in Punjab
    • AT THE root of the sudden violence in Punjab is a coalescence of the issues of basic social inequalities, the consequent attempt by the under-privileged communities to seek an alternative space and agency as well as the latter becoming embroiled in the larger political matrix. 
    • One of the critical factors behind the mushrooming and growth of these Deras is the fact of social, religious and political space being monopolised by the ‘upper caste’ sections. And with the Deras gaining in presence and power as ‘alternative’ religio-political entities, a conflict with the established ones was almost inevitable. 
    • The speed with which violence erupted shows the deep social fissures which shape this sectarian polarisation. 
  • NREGS
    • In the context of the political posturing that is seeing the possibility of NREGS being extended to all the 604 districts in the country and the fact that such an extension entails a fiscal burden of about Rs. 53,000 crores, a study conducted by a team from Harvard University came out with some startling conclusions:
    • The potential of NREGS for poverty reduction is far from fully realised 
    • What needs to be emphasised is that higher NREGS wages undermine the self-selection of the poor in it 
    • What is perhaps worse is that populist hikes in NREGS wages may further erode its potential for poverty reduction
    • Want an explanation for all the three conclusions?  Get it in this ET op-ed piece.
Finance & Economy
  • Banks are set to lower their lending rates
    • GOVERNMENT-OWNED banks plan to cut lending rates by 100-150 basis points — one basis point is one hundredth of a percentage point — within the next fortnight, after a finance ministry directive to lower interest rates in line with falling cost of funds. The rate cut is expected before June 12, when the finance minister is scheduled to meet the chiefs of public sector banks.
    • With PSBs cutting rates aggressively, private banks will come under pressure to slash rates. Fresh loan offtake is expected to see a substantial jump.
  • Government may speed up the disinvestment process in profit making PSUs
    • PSUs -- especially the power majors NTPC, NHPC & Power Grid may be permitted to tap the market at regular intervals over the next few years to mobilise resources for carrying out their ambitious expansion and modernisation plans. This will gradually bring down government holding in these companies.   However, the government may never allow its stake to fall below 51% in these entities.
    • The disinvestment exercise is expected to fetch around Rs 60,000 crore, while an equal amount will be mobilised by these public sector undertakings (PSUs) to carry out their expansion plans. The amount raised will help the companies meet part of their funding needs. The sector requires over Rs 10,00,000 crore in the next three years. 
  • Assets must back bonds
    • This is how things should be; isn't it?  But it is a norm only for you and me.  Not for the big bond issuers, so far.
    • But now SEBI appears to be changing the rules by mandating that companies raising money through ‘secured’ bonds and debentures should make sure that the papers issued are fully backed by assets. The move could change the way companies mop up debt in the local market. 
    • For years, companies sold debentures with an underlying security that was worth a fraction of the amount raised. For instance, an issuer selling Rs 200 crore of bonds to bulk investors like insurance firms, mutual funds and banks usually does it by creating security of say, Rs 1 crore or even less. The security shown could be a small property owned by the company selling the bonds. 
    • Even though such bonds were categorised as ‘secured’, technically the security cover available was only for a slice of the issue amount. Few investors questioned the practice, better known as negative-lien in the securities market. All that mattered was the rating on the debenture. It was a given that a triple-A borrower would not default. 
    • Despite the inadequate security cover, issuers preferred to call the debentures ‘secured’ because it was easier to sell and worked out cheaper. 
  • FBT to be done away with?
    • This is a view that appears to be fast gaining ground.  Introduced in the 2005-06 budget proposals, it garnered a mere Rs. 8,000 crores as revenue last year, which is just 2% of the direct tax collections.
    • This tax has come in for severe criticism right from the inception because of the huge paper work that it entails, besides being employee unfriendly, as most of the employees feels that it ultimately devolves on them.
    • Even in countries where it is introduced, it has received lot of opprobrium.  
    • Apart from India, FBT was introduced in Australia, UK, US, New Zealand and Japan.
  • India's health insurance industry
    • THE Indian health insurance industry stands at Rs 5,125 crore with only a small section of the population (around 2%) being covered so far. With a compound annual growth of around 37% (FY02-08), the health insurance industry in India is one of the fastest-growing segments among other non-life insurance segments. 
Medicine
  • Mouse genome sequenced
    • The mouse genome sequencing effort began in 1999, and a draft sequence was published in 2002.
    • Scientists have reportedly finished sequencing the mouse genome after a 10-year effort.
    • With this, the mouse (Mus musculus) is the second mammal after humans to have its complete genome laid bare. 
    • The genetic sequence of mice is about 75% similar to our own.
    • Humans and mice share a remarkable level of similarity, despite having evolved independently for the last 90 million years.
    • The cost, borne by US and UK sequencing centres, is estimated to exceed $100m (£62m).

2 comments:

Himanshu said...

hi..i think link to Punjab crisis is not given.it would be great if the link is also posted so that the viewers can have comprehensive view about the topic.

icamaven said...

Since give Himanshu. Thanks for pointing it out.