30.06.2009

Politics & the Nation

• The Yashpal Committee report and education reform in India
• Much is being heard about this because of the announcement by Kapil Sibal, the Union HRD Minister, to implementation the key recommendations of this committee within the first 100 days in office of the new UPA government.
• We suggest that you take a look at the report first. Download it from the link given above. Today's ET editorial argues that privatisation of education should not be viewed with suspicion. We are in favour of such an approach. Read today's ET editorial on the subject. Some solid reasoning.
• Leiberhan Commission submits report to PM
• Seventeen years after it was set up, the Liberhan Commission probing the 1992 demolition of Babri Masjid in Ayodhya submitted its report to Prime Minister Manmohan Singh.
• The Commission had got 48 extensions since it was set up.
• Set up within ten days of the demolition of the historic mosque on December 6, 1992, which triggered widespread communal violence leading to heavy loss of lives, the panel has become the country's longest serving Commission of Enquiry.
• The Commission was mandated to inquire into the circumstances leading to the demolition of the Babri mosque. It was to submit its report by March 16, 1993 but sought repeated extensions to complete its probe.
• On neoliberalism
• One of you have been asking about it in the shout-box for some time.
• Neoliberalism is about advocating free market prinicples and welfare economics. The central principle of neoliberal policy is a noninterventionist "free market".
• In the United States, neoliberalism can also refer to a political movement in which members of the American left and right, but especially within Republican rank-and-file endorse free market positions, such as free market economics and welfare reform.
• Neoliberalism seeks to transfer part of the control of the economy from public to the private sector, to bring a more efficient government and to improve economic indicators of the nation. The definitive statement of the concrete policies advocated by neoliberalism is often taken to be John Williamson's "Washington Consensus."
• You can read more about in wikipedia here.

Finance & Economics

• Credit Default Swaps (CDS) to appear in India?
• The RBI is reportedly toying with the idea of introducing CDS in Indian markets.
• CDS is a derivative instrument that has been blamed for the global financial crisis. Put simply, a CDS is a bilateral contract, wherein a buyer makes a payment to a seller in exchange for a payoff, if an underlying financial instrument has exposure to defaults. For instance, by buying a CDS, a bank could protect itself against losses on a security such as a bond, if the bond issuer defaults on a coupon payment.
• It’s not the first time though that CDS against Indian companies will hit the market. CDS of Indian companies such as ICICI Bank, Tata Motors, Reliance Industries are routinely traded in the US and some Asian markets. These cover the credit risk on debt issued in the international markets. The RBI is looking at CDS for debt issued in the domestic market.
• Don'g write off Ayurveda as a traditional system; it is going places now.
• The estimated size for ayurveda or herbal healthcare in India is pegged at around Rs 4,000 crore, expanding at 35-40% annually, even though services with ayurveda at its core would be just about Rs 300 crore.
• Bandra Worli sea link in Mumbai is being celebrated
• This much awaited sea link is now being thrown open to traffic. Some salient features of the bridge:
• First such sea link in India
• First Cable Stayed Bridge of 500 mtr length in India
• 5.6 km long bridge
• Four lanes on each side
• Modern toll plaza
• Separate lane for BEST buses in each direction
• Height of the main pylon is 130 mtr, which is equivalent to a 60 storied building Weight of the bridge is equivalent to 50,000 African elephants, each weighing at least 5 tones each.
• 20,00,000 cement bags were used for this bridge
• The total length of the bridge is approximately equivalent to the circumference of Earth, around 40,000 km
• 35,000 M tonnes of steel was used in the project
• It is noted as one of the miracles out of ten by American Journal Business Week The bridge will be extended from Worli to Haji Ali and then to Nariman point. Constructed by contractor M/s Hindustan Construction Co for MSRDC
• The Hercules, one of the largest water cranes in the world, was used during the final phase of this project.

Language lessons

• bespeak: Verb
• Be a signal for or a symptom of; Express the need or desire for; ask for
• eg: That a regulated society like the US allows this kind of excess bespeaks laxness in crucial quarters.
• foible: Noun
• A behavioral attribute that is distinctive and peculiar to an individual
• Synonyms: idiosyncracies; mannerisms.

29.06.2009

Politics & the Nation

• EC seeks powers to de-register political parties
• At present the Election Commission can only register political parties. But it can not de-register them. As there are more than 1200 registered political parties and half of them don't contest elections, the EC is seeking the power to de-register political parties so that non-serious candidates can be removed from the election process.

Finance & Economics

• Net telephony to become more affordable and official
• The government is reportedly proposing Rs 43 crore as entry fee for allowing internet service providers (ISPs) the right to offer domestic phone services using computers, a sharp climbdown from its earlier insistence on a Rs 1,651 crore fee.
• Full-fledged internet telephony will allow consumers to make cheaper calls from PCs or laptops to fixedline and mobile phones in India. They can also make a call to personal computers from their mobile handsets.
• At present, a call from a computer can legally be made only to another computer within the country, and not to a phone. But the existing regime allows domestic users to make international calls to a phone from their computer. ISPs claim that net telephony will allow users to make STD calls for as low as 10-40 paise per minute while local calls will be free.
• At present, ISPs that offer internet telephony are subject to a 6% revenue share. This share is likely to be hiked to 9% in the proposed regime.
• Bankers vie with each other to finance Bharti-MTN merger deal
• JP MORGAN, BNP Paribas, HSBC and Barclays are in talks with Bharti Airtel to fund part of the $4 billion needed by the Indian telco to complete its $23-billion merger with MTN, Africa’s largest mobile phone operator.
• The merger deal will see both Bharti and MTN offering equity stakes and cash to each other. Bharti will have to make a net cash payment of around $4 billion to complete the deal, which will see it acquiring a 49% stake in MTN, which, in turn, will get a 36% economic interest in the Indian firm.
• The proposed merger, if it goes through, will create a telecom powerhouse with over 200 million customers and over $20 billion in revenue. Both companies are in exclusive talks till July 31.
• What are the issues involved in extending trading hours for stock markets? Why is there a need for extending them at all?
• At present, the cash & derivatives segments are open from 9:55 am to 3:30 pm, currency derivatives market operates from 9:00 am to 5:00 pm, while the commodity futures market operates from 10:00 am till 11:30 pm.
• SEBI is reportedly thinking of increasing stock exchange trading hours so that market participants in India are better placed to react to developments in global markets. If the proposal is approved, the equity market will be open for trading from 9:00 am to 5:00 pm.
• Look at this graphic which answers the queries we raised above.
• The bourses see a decline in PN investments in India
• The Securities and Exchange Board of India’s (Sebi) efforts to get foreign institutional investors (FIIs) to directly invest in the Indian stock market by signing up with the regulator, rather than through the participatory notes (PNs) route, appear to be paying off. This is evident from the decline in portfolio investments through PNs, which now stands at 15% of the total FII investments in the country, down from 29% in October 2008, when Sebi eased various restrictions on PNs. The share of PNs was 52% in October 2007.
• Participatory notes are derivative instruments issued by Sebi-registered FIIs to other overseas investors, seeking to invest in Indian securities, who are not registered with the regulator. The securities are held by the PN-issuing FII on behalf of its clients.
• According to information on Sebi website, as of June 26, 2009, there were 1,668 registered FIIs and 5,162 registered sub-accounts against 1,524 and 4,638, respectively, on October 6, 2008, when Sebi removed the restrictions.
• PN investments have been a headache for a section of policymakers in India, as it is suspected that this route is used for money laundering and round-tripping (bringing back unaccounted money stashed away in foreign banks). RBI, in particular, has long advocated a ban on PNs. Sebi has not favoured such a drastic course of action.
• The notional value of PNs outstanding stood at Rs 31,875 crore in March 2004. By August 2007, the value of PNs was Rs 3.53 lakh crore, around 51.6% of assets under custody of all FIIs in India.
• What is the change in index computation that has been brought about recently?
• We are all aware that stock market indices are computed in a complicated way. Till the other day this computation for NSE Nifty (top 50 stocks on NSE) was based on the total number of shares issued by the company. Reportedly this made little sense from the market perspective.
• So now the index is being computed in what is called the 'free-float' methodology. Meaning, in place of the total number of shares issued by a company, the figure of available floating stock of the company would be taken to determine its market cap.
• Have you ever been rejected a loan by a bank?
• If you had been, the chances are that you have come to know of an entity called CIBIL. Know anything about it?
• Take a look at today's ET interview of Arun Thukral the head of CIBIL. It gives you a lowdown on what it is all about. Worthy read.

International

• Pakistan's place among failed states
• The top 10 failed states in the latest list are: Somalia, Zimbabwe, Sudan, Chad, Democratic Republic of Congo, Iraq, Afghanistan, Central African Republic, Guinea and Pakistan.
• This is a list which is prepared by Foreign Policy journal.
• The ranking is done on the basis of the following factors: demographic pressure, refugees/internally displaced persons (IDPs), group grievance, uneven development, economic decline, delegitimisation of the state, public service, human rights, factionalised elites and external intervention.

Obituary

• Michael Jackson
• So much is already written about, talked about and aired about Michael Jackson ever since the news of his death of cardiac arrest broke out. Any amount of our notings may just be a repetition of what is already known to you. But for those who did not have the time to catch up with this sad news, we recommend reading this story.

Language lessons

• allegory: Noun
• A short moral story (often with animal characters); A visible symbol representing an abstract idea; An expressive style that uses fictional characters and events to describe some subject by suggestive resemblances; an extended metaphor.
• eg: Fawcett’s red bathing suit became as much an allegory of that land of opportunity (USA) as Jackson’s silver glove and Moonwalk.
• laodicean: Adjective
• Lukewarm for religion or politics

26.06.2009

Politics & the Nation

• Nandan Nilekani to head UIAI
• Nandan Nilekani, the co-chairman of Infosys and one of corporate India’s proudest names, was hand-picked by the prime minister to head an ambitious project to provide every citizen with a unique national ID by 2011.
• Soon after he was named chairman of the Unique Identification Authority of India (UIAI), a post that carries the rank of cabinet minister, Mr Nilekani resigned as the co-chairman of the board of directors in Infosys.
• The spread of left wing extremism
• Left wing extremism has spread from 53 districts across nine states in 2001 to 252 districts across eighteen states in a short span of eight years.

Education

• Centre plans to do away with Class X exams
• As part of the 100 day agenda, the government is reported to be doing away with Calss X exams for students. Since there are over 40 Secondary School Boards in the country, almost all of them being in state jurisdiction, the Centre may not find its idea being easily accepted. But it nevertheless is reportedly going ahead with it in the Central Board i.e., CBSE.
• The HRD minister Kapil Sibal is reportedly in favour of scrapping even the exams at plus two stage. The idea being that exams at plus two stage prepare a student only for college education and that this objective can be equally met by conducting an all India level entrance exam for graduate studies.
• There can be quite divergent views on this. What is your take?

Finance & Economy

• Oil price reform?
• The government is reportedly toying with the idea of giving some modicum of freedom to oil companies in retail petro pricing, as part of the budget proposals.
• What is being suggested is that oil companies — IOC, HPCL and BPCL — that now sell fuel at government-controlled prices, will have the freedom to price the fuel within a certain band. But if crude oil moves up beyond a level (recommended level of $75 a barrel), the government would step in with controlled prices at the pump level to protect consumers from the impact of high global prices.
• The government had to issue over Rs 71,000 crore oil bonds in 2008-09, a jump of over 100% from the previous financial year, to compensate the revenue loss state-owned OMCs for selling fuel below the cost. Total revenue loss of these companies also jumped by about 34% at around Rs 103,000 crore in FY09 and the upstream companies had to fill the gap of about Rs 32,000 crore to save these oil companies.
• Railways can afford to be ethical
• Though we have all been pleasantly surprised by the superb performance put up by Indian Railways under Lalu Yadav, there remained some nagging doubts about how he pulled it off. For mortals like us, it would almost be impossible to have our doubts clarified. But this piece that appeared in today's ET gives a very good peek into how the superlative performance was achieved. Take a look. Worth a read.
• Food Security Act
• The Centre is likely to clear the Food Security Act, statutorily guaranteeing 25 kgs of foodgrain to the neediest consumers at a price of Rs 3 per kg, by early next year. The Bill is slated to come up in the winter session of Parliament.
• One Person Companies (OPC)
• A bill allowing for incorporation of OPCs is likely to be tabled in the budget session of Parliament.
• By definition the OPC is a one-shareholder separate corporate entity that recognises a promoter and is expected to ease start-up formalities for prospective entrepreneurs and professionals with the benefit of limited liability and minimal compliances.
• The OPC would make the management and corporate structure a lot easier for an entrepreneur to work in. Further, the existing sole proprietor firms can convert themselves to OPCs with the benefits of limited liability and minimal compliance.
• The concept of the OPC is prevalent in most foreign countries, such as the US, the UK, Australia, Singapore and China. In India, the concept was proposed to provide for a simpler legal and operational framework for single entrepreneurs by the Expert Committee on Company Law under the chairmanship of Dr JJ Irani. The committee recommended allowing OPCs to provide a simpler compliance regime for small companies. In the UK, Australia, Singapore and Pakistan, a single person is capable of forming a private limited company, which may be limited by shares or guarantee. Such single-member companies need to have only one director, who may also be the company secretary. In the US, several states permit the formation and operation of a single-member limited liability company. The amended law in China prescribes that the owner should pay the capital of 1,00,000 yuan at one time and bars him from opening a second company of the same kind.

Language lessons

• infatuation: Noun
• A foolish and usually extravagant passion or love or admiration; Temporary love of an adolescent; An object of extravagant short-lived passion
• eg: There is, for a region boasting some of the biggest democracies in the world, this peculiar infatuation with looking around for something or someone to impose a ban on.
• wondrous
• Adjective: Extraordinarily good or great; used especially as an intensifier;
• Adverb: (used as an intensifier) extremely well
• penitent: Adjective
• Feeling or expressing remorse for misdeeds
• mea culpa: Adjective
• An acknowledgment of your error or guilt

25.06.2009

Politics & the Nation

• Take a look at this excerpt from a news report from today's ET
• QUOTE: Air India is estimated to have lost about Rs 5,000 crore in 2008-09 and has a working capital overdraft of Rs 15,000 crore. As per a ministry official, fuel and manpower cost of Air India is about 60% of its total cost as against 45% in case of private airlines.
• The company last week deferred the June salary of its 31,000 staff and asked its top managers to forego July salary. The airline employee unions have threatened to not cooperate with the management if salaries are not paid on time.
• “If the employees go on strike they would hasten their own demise,” Mr Patel warned. UNQUOTE.
• What a sea-change in attitudes! Things which were unthinkable or unimaginable are being uttered! The global financial crisis, the Satyam episode etc., appear to have tilted the mood in favour of government holding its firm ground when threatened with strikes and pen-downs.

Finance & Economy

• IDRs to be put on par with listed securities?
• The government is likely to spell out that Indian Depository Receipts (IDR) would be treated on par with listed securities in the country, a move that will clear the air on the taxation of this instrument which is yet to takeoff since its launch in 2004.
• This would mean that IDRs would be subject to the securities transaction tax (STT) but would be exempt from long-term capital gains tax.
• IDRs are derivative instruments like global depository receipts (GDRs) and American depository receipts (ADRs) that have shares as the underlying asset. Indian companies raise capital overseas through ADRs and GDRs. The IDRs would allow foreign companies to raise capital in India. Like any other depository receipts, IDRs are negotiable financial instruments, issued by a local depository against the shares of the foreign company’s publiclytraded securities held by it.
• Which way will the market behave in FY 2009-10?
• Before you go proffering for your take on this question, it is important you realize that one should have a special ability to look at the big picture before drawing any conclusions.
• Today's article from one of our favourite columnists is one such piece that displays that ability of looking at the big picture. A must read. Do so here.

• Monsoons to be below normal
• Finally, the meteorological department has changed its mind on the rains and it says that this year’s south-west monsoon would be below normal for the country as a whole — the first time in four years — and not normal as forecast earlier. The silver lining is that there is little chance of a drought, with rains in July-August expected to make up for the initial deficit in the North West, the main grain-growing regions of Punjab and Haryana.
• But the delay in monsoons has reportedly taken a toll on pepper and cardamom production already.
• An interesting titbit about our Railways
• In many ways, Indian Railways, with an exclusive budget of over Rs 37,000 crore, is an economy in itself. Every day, its 18,000 trains carry 18 million people — nearly the entire population of Sri Lanka — across the length and breadth of the world’s seventh largest country by geographical area.
• Central prop for inter-bank forex deals
• Don't write this off as one more complicated financial news item that is beyond our comprehension. It is a very significant move being made by the RBI.
• In all forex forward contracts the CCIL (Clearing Corporation of India Limited) acts as guarantor for two days before the expiry of a contract. But now the RBI is reportedly toying with the idea of mandating the CCIL to act as guarantor for any deal for the entire period of the deal.
• How is this significant?
• Banks currently have to set aside a slice of their capital on account of the gross exposure to currency forwards. The capital that has to be earmarked for the purpose depends on the tenor of the forward contract and possible mark-to-market gains or losses, a figure that could vary from bank to bank.
• Once CCIL stands as gurantor to a deal, there is virtually no default risk. Hence the market participants need not set aside huge capital. That frees up capital for other lending purposes.
• As per RBI data, 72 banks are members for forex settlement operations and the outstanding amount for forex forwards is more than $500 billion. The market has a daily turnover of $15-20 billion.

Astronomy

• What is special about July 22 this year?
• That's the day when we will be experiencing the longest solar eclipse of the 21st century. It will be a total eclipse of the Sun with a magnitude of 1.080 and will not be surpassed in duration until June 13, 2132.
• It will last for up to 6 minutes and 39 seconds, with the maximum eclipse occurring in the ocean at 02:35:21 UTC about 100 km south of the Bonin Islands, southeast of Japan.

Archaeology

• Stone Age water well in Cyprus
• Archaeologists in Cyprus have found what they believe are some of the world’s oldest water wells, dating from the Stone Age 10,500 years ago and containing the skeleton of a young woman. The wells, unearthed by an excavator at a building site close to the western coastal town of Paphos, adds to another five previously excavated in the region by a team from the University of Edin-burgh.

24.06.2009

Politics & the Nation

• Uttarkhand CM Khanduri quits his post
• Uttarakhand chief minister BC Khanduri resigned from his post, ending weeks of speculation, following the drubbing that the BJP received in his state in the recent elections.
• Indications are that the race for the post is between Ramesh Pokhriyal Nishank, health and family welfare minister in the state, and Prakash Pant, who holds the charge of tourism and parliamentary affairs ministry.

Finance & Economy

• SBI on the prowl to acquire foreign banks
• The country’s largest bank, State Bank of India (SBI), is looking at expanding its international footprint. SBI is looking at buying a mid-sized overseas bank and the deal size could be between $1.5 billion and $2 billion, according to a senior bank official. The deal will be in line with the bank’s strategy to expand its global operations.
• But what is less known is the fact that SBI went on a significant overseas acquisition spree in 2005, picking up stakes in three overseas banks. It picked up 51% in Mauritius-based Indian Ocean Bank for $8 million, 76% in Kenya-based Giro Commercial Bank for $7 million and 76% in Indonesia’s PT Bank IndoMonex.
• State Bank of India is currently in the consolidation mode with its domestic operations as well. It has already merged State Bank of Saurashtra with itself and approved the merger of State Bank of Indore. The bank is expected to carry out mergers of the other associate bankers as well.
• Air India's cup of owes
• The airline is currently sitting on over Rs. 5000 cr accumulated losses. It employs over 31,000 workers. At current fleet strength of nearly 147, the airline has 210 employees per aircraft, way outside the norm for most airlines. So, given a mandate how would you turn it around? Take a look at this following excerpt from today's ET editorial for a decent answer.
• If the government wants Air India to turn the corner, it must allow the airline to work on commercial principles. However, such commercial independence is not possible as long as the airline has to look to the government for direct funding or guarantees for raising debt. The government must, therefore, infuse the necessary capital in the airline while allowing it to raise more equity through an IPO. It could then ride on the IPO to divest some of its holding and recoup the amount it infuses. The market listing would also bring the airline’s performance in sharper focus and subject it to greater public scrutiny. The public sector steel maker Sail, which was at one time grappling with sharp losses and huge manpower, has scripted a remarkable turnaround story by adopting similar practices. There is no reason why Air India cannot do the same, if given a free hand.
• Runaway fiscal deficit
• The fiscal deficit for the first month of the current financial year has shot up to Rs 54,100 crore or 16.3% of the projected deficit for the entire year due to accelerated public spending and a sharp drop in revenue collection.
• Fiscal deficit—excess of government expenditure over receipts less borrowings—is a measure of amount the government needs to borrow to meet its expenditure.
• Some interesting information about government paper
• Banks have investments in government paper of around Rs 13 lakh crore.
• Of this about 25% can be kept under the held-to-maturity bucket (HTM). The rest of the paper would be under available-for-sale (AFS) or held-for-trading (HFT) categories.
• This means that roughly Rs 10 lakh crore of government paper runs the risk of mark-to market (MTM) depreciation.

International

• Look at how educating Indians brings in big moolah for UK and Australia
• The 29,000 students who preferred to study in the UK last year contributed £750 million, according to industry estimates. Similarly, the 90,000 Indian students who have landed on Australian shores have already supported its economy with a generous helping of A$10 billion.

Language lessons

• arcane: Adjective
• Requiring secret or mysterious knowledge
• eg: "the arcane science of dowsing"
• dowsing: Noun
• Searching for underground water or minerals by using a dowsing rod

23.06.2009

Politics & the Nation

• The CPI(Maoist) formally declared a 'terrorist' outfit.
• The Centre on Monday formally listed CPI (Maoist) as a separate terrorist outfit under the Unlawful Activities (Prevention) Act - UAPA.
• The Criminal Law Amendment Act, 1908, empowers the state government to declare an association as “unlawful”.
• Under UAPA, last amended in December 2008, the Centre is also empowered to declare an association as unlawful.
• The CPI (Maoist) was formed by the merger of CPI (ML)-People’s War and MCC in September 2004.

Finance & Economy

• ONGC strikes gold!!
• ONGC has struck oil and gas in three new blocks.
• The gas find at Krishna Godavari (KG) basin off the Andhra coast is estimated to be of the order of 10 TCF (trillion cubic feet) . The other two discoveries included an oil find in Charada-3 offshore block in Cambay basin and oil and gas find in Matar in Vadodara district, both in Gujarat.
• The gas find in KG basin is significant. Reliance's D6 block is reportedly having 11.5 TCF.
• Currently the country is producing about 89 MMSCMD of gas. With Reliance's gas production coming on stream, it is expected to almost double at its peak. If we add ONGC's gas production some three or four years down the line, the country's dependence on imports (at about 80% currently) will come down significantly.
• Worries on inflation front
• Even as we have been noting about the historic lows seen by WPI based inflation (it turned negative for the first time in 35 years in June!), the CPI — Consumer Price Index (CPI) — rose to 10.2% in May, the same month the wholesale price inflation remained less than half-apercentage point.
• The surge in inflation based on rural and agricultural workers’ CPI, after a steady four-month decline, is likely to crimp any enthusiasm in policymaking circles for sharp monetary or fiscal expansion.
• Retail inflation is measured by three different sets of CPI — one each for rural labourers, agricultural labourers and industrial workers.
• The labour bureau under the ministry of labour and employment, which compiles these three consumer price indices, will release the index for industrial workers, the one used for computing dearness allowance, on June 30. Inflation as per this index is also expected to move up.
• The difference between WPI and CPI is in the different items taken into account and the weights assigned to them. While food items have a weight of 15.2% in the WPI, their weightage in all the three consumer price indices is above 50%.
• The politically-sensitive food price inflation is hovering close to 9%. Economists say that with retail inflation refusing to move below the 10-year high of 10.5% it hit in January, even when WPI has dropped to negative territory, chances are RBI will reverse the expansionary monetary policy while the Centre may curb spending plans.
• Banking sector reform -- some recommendations based on lessons learnt from the recent global financial crisis.
• If you are asked to write something on the above, will your writing be comparable with the following excerpt? It is taken from today's excellent op-ed piece on the subject.
• One, the size of the banks should be restricted, so that some of them do not become so big as to endanger the entire financial system. Their activities should be restricted too. They should not be allowed in the investment banking or securities business.
• Two, banks all over the world should become a utility to serve the national economy under supervision of the local regulator. Their global expansion should be curbed. In order to support international trade and capital flows, international banks should be allowed to invest overseas, but only as minority investors. The local regulators should keep a close watch so that troubles in the home country of an international bank does not result in contagion.
• Three, the central banks must act to prevent bubbles. They should expand their focus to control asset price inflation in addition to consumer price inflation. They should take corrective steps if there is excessive credit growth overall and in any particular sector of the economy.
• Four, the capital adequacy requirements of banks and other financial institutions should be further increased. Banks should adopt dynamic provisioning policy, (as in Spain) to provide higher credit provisions and reserves during strong economy, which will act as cushion during recession.
• Five, banks should not be allowed to accumulate any risk through off balance sheet structures. All risks must be included in ascertaining capital adequacy. Innovation in banking should be encouraged, but in areas such as use of technology and other means to serve its customers better. In India and in most developing countries innovations should target to include the unserved or under-served population into financial system.
• Six, the whole system of creation and distribution of structured products needs overhaul. Banks should be asked to keep at least half of the assets created by them on their books so that the bank managements are well aware of the risks they are accumulating and distributing. Similarly the rating agency system needs major correction. Perhaps they should have their skin in the game and not only earn fees and then wash their hands off. Let them also keep 10% of the paper they rate on their books until it matures. It will concentrate their minds to understand and evaluate long-term risks appropriately.
• Seven, and perhaps the most important, the compensation of bankers and the risk management in banks require a thorough revision. Bankers’ compensation must come down and be in line with what other professionals earn. The bonuses should be downsized and linked to various performance parameters.

WTO talks

• Can you explain the reasons behind the stalled Doha round of WTO talks?
• Take a look at this excerpt; it explains it very well.
• It is the differing perceptions of the developing and the developed countries on the outcomes of the negotiations on most of the critical areas included in its negotiating mandate that have resulted in the impasse in the Doha Round. While developing countries have argued for the mainstreaming of development objectives in the multilateral trading system, the developed countries have pushed for market access in areas that suited their interests. This hiatus between the two groups of countries was clearly evident in agriculture and services. Thus, in agriculture, developing countries have argued that the WTO Agreement on Agriculture must take into consideration the interests of the low income and resource-poor producers by providing them higher level of protection, while developed countries have sought larger market access to promote the interests of the large conglomerates, in particular. But in services, where several developing countries have argued for higher degree of market opening, especially under Mode 4, which allows job-seekers better access to international markets, developed countries’ response has been rather lukewarm.

• What is meant by 'single undertaking' in the context of WTO talks?
• It is the WTO-speak for saying "nothing was agreed until everything was agreed."
• In practical terms this approach to the negotiations was significant since it sought to curb the tendencies of the more dominant countries to conclude agreements in areas that suited their interests best and to go slow (or even ignore) in areas in which they had to make concessions. Thus, countries could engage in inter-sectoral trade-offs and this was seen as a big step towards ensuring a balanced outcome.

Language lessons

• smirk
• Verb: Smile affectedly or derisively
• Noun: A smile expressing smugness or scorn instead of pleasure
• eg: While the public will shift to private airlines, AI employees smirk that the sarkari types who travel in style will be forced to travel without their Maharajah privileges in the government-owned airline!
• quaint: Adjective
• Strange in an interesting or pleasing way; Very strange or unusual; odd or even incongruous in character or appearance; Attractively old-fashioned (but not necessarily authentic)
• eg: "quaint dialect words"; "a quaint sense of humour"; "houses with quaint thatched roofs"

19.06.2009

Politics & the Nation

• Government's plans on environmentally responsive coal mining
• The Government is reportedly toying with the idea of classifying forest mining areas as 'go' and 'no go' areas. The 'go' areas comprise the degraded forest area, while the “no go” would include forest areas of medium and high density.
• Environmentally sound as the proposal might be, the ministry will need to amend the Forest Conservation Act and the Environment Protection Act if it is to enforce this plan. The existing legislations do not classify forest areas as “go” and “no go”. In the absence of legislative backing, the plans to restrict mining to areas of degraded forests could well be challenged.
• At an all India level, 55 to 60 per cent of forest area is classified as degraded.

Finance & Economy

• SEBI brings in significant changes
• Entry load for Mutual Fund investors to go; Anchor Investors
• Investors will now have the freedom to directly negotiate on the fee that they pay for the services of distributors, or brokers, during the purchase of mutual fund schemes. Till now, if an investor had put in Rs 100 in a mutual fund, only Rs 97.75 was invested by the fund while the balance Rs 2.25 was paid by the fund house to distributors. From now on, investors will directly pay the distributors a fraction of the 2.25%.
• But there are concerns that doing away with an upfront commission to distributors could impact the penetration of MFs in smaller towns.
• Sebi has introduced the concept of an anchor investor, whereby a company planning a public issue can allocate on a discretionary basis up to 30% of the QIB portion of the issue to any one of the institutional investors.
• Curiously, however, the lockin period for such an investor is just 30 days. While the presence of a large investor could help an IPO sail through, it could be misleading for smaller investors, feel some market watchers.
• Inflation at sub-zero levels!!
• The wholesale price index (WPI)- based inflation went sub-zero for the first time in 35 years for the first week of June, but top policy makers and economists dismissed it as a short-term statistical phenomenon, with no real implications for either the country’s growth or its monetary policy.
• The inflation index fell by 1.61% for the week ended June 6 over the year-ago period, after gaining 0.13% in the previous week, according to data released on Thursday.
• What could this mean for you and me?
• Deflation, an indicator of falling prices, would normally signal economic contraction. Hence, instead of rejoicing that each rupee of their income will now be worth more than a year ago, consumers may start worrying about the loss of jobs and incomes. This, plus their expectation that prices could fall further, would make them postpone purchases, depressing demand further and deepening the economic stagnation.
• Falling prices also mean bad news for borrowers. The real rate of interest is the nominal rate less than the rate of inflation, and deflation means a real rate of interest that is higher than the nominal rate. Hence, each rupee that you use to repay a loan would be worth more than the rupee you borrowed.
• India's Chief Statistician Mr. Pronab Sen feels that manufacturers will benefit with input prices coming down at a faster pace than a fall in the prices of finished goods.
• Retail inflation in India, as measured by various consumer price indices, still hovers around 8% while in economies such as the US, it has dipped into negative territory, currently at-1.3%.
• Some interesting snippets taken out from an article discussing NPS:
• The PPF, which was launched in 1969 to solve India’s informal sector pension problem, has managed to attract barely 40 lakh subscribers over 40 years.
• In 2003, the prospect of a largely destitute elderly population of 200 million looming around the corner and the growing social cost of an unwieldy tax financed civil service pension, forced the government to adopt the Old Age Social and Income Security (OASIS) Committee recommendations. Thus was born the New Pension System (NPS).
• The 2007 pan-India incomes and savings survey by IIMS Dataworks estimates NPS latent demand at 80 million subscribers who can produce aggregate pension savings of $300 billion by 2019.
• India's telecom story
• Continuing its growth trajectory, the Indian telecom sector is expected to generate revenues of over $30 billion by 2013, according to global analyst firm Gartner. The country’s telecom subscriber base is expected to cross the 770-million mark by 2013. India has over 450 million telecom users at present.
• But it will still remain number two by 2013. China will remain number one.
• The mobile penetration is expected to reach 63.5% by 2013 from 38.7% at present.

Environment

• On GHG emissions in India and the types of emissions allocation schemes
• India’s per capita carbon dioxide emission is very low — only 1.21 tonnes per annum, roughly one-fourth of the world average per capita emission of 4.50 tonnes per annum.
• However, in aggregate terms, India is the fifth-largest emitter of fossil fuel-derived carbon dioxide, and its total emissions are growing rapidly.
• If India were to participate in a global regime of tradable emission permits, how would the consequences be affected by the different modes of emission entitlements? The two main types of emissions allocation schemes are:
• Grandfathered Emissions Allocation (GEA) scheme in which permits are allocated on the basis of the aggregate emissions level of a predetermined year, say, 2010.
• Equal Per Capita Emissions Allocation (EPCEA) scheme in which the aggregate emissions entitlements for India in different years are arrived at by multiplying the average global per capita emission (4.58 tonne per capita as estimated to be in 2010) with India’s population for the corresponding years.
• The developed countries favour the grandfathered emissions allocation scheme, while the developing countries — particularly, China and India — advocate the EPCEA scheme.

Defence

• Some notable defence spending stats
• THE US spent more than $607 billion on defence in 2008 according to SIPRI statistics and this constitutes 41% of global expenditure on defence. This far exceeds what the next nine countries spent during the same year.
• The Chinese spent $85 billion, the Russians $59 billion and the Indians $30 billion.
• America maintains about 750 military and intelligence bases world-wide and its intelligence budget exceeds India’s defence expenditure.

International

• Can BRIC change the world order?
• It's a debate that will keep demanding the world's attention at least for some time to come. Look at the take by two policy analysts.
• A couple of observations worthy of our noting:
• BRIC has long-term potential at a time of tectonic power shifts in the world. The qualitative reordering of power underway, symbolises the birth-pangs of a new world order. The world clearly is at a defining moment in its history. In that light, new forums like BRIC could evolve as important instruments to bring about change in the global architecture.
• BRIC, by acting as a pressure group, can be a catalyst to international reform, including an overhaul of the Bretton Woods system and a supranational currency as the world’s reserve currency.

Language lessons

• piggyback: Verb
• Ride on someone's shoulders or back
• eg: BRIC's fleeting first summit was piggybacked on the Shanghai Cooperation Organisation (SCO) meeting.

18.06.2009

Politics & the Nation

• Government's plans to shore up the capital in state owned banks faces World Bank hurdles
• The government plans to infuse around Rs 16,000 crore in 16 banks by 2011. It is keen on World Bank funds because of the relatively low 3-4% interest; a loan from other sources could take the borrowing cost up to 9%.
• But the World Bank is reportedly putting forth unacceptable conditionalities. They include: reduction of government's stake in the banks and doing away with concessional lending rates for priority sector. Besides, the World Bank is reportedly in favour of disbursing this $3.2 bn in four tranches while the Government wants it in two tranches at the most.
• Negotiations are on. It may be a while before the two sides reach a mutually acceptable settlement.

Finance & Economy

• Royalty payments from RIL may take a dip
• The government is concerned that the Mumbai High Court order in the Reliance brothers dispute is going to result in loss of revenue on account of lower royalty payments from RIL.
• RIL has to pay 5% of its revenues from the KG basin as royalty to the government for seven years.
• The exchequer stands to lose up to Rs 4,000 crore if Reliance Industries (RIL) sells KG gas to Reliance Natural Resources (RNRL) at $2.34 per unit, as directed by the Bombay High Court.
• An insider view of bulk deals on stock exchanges
• Many of our stock market friends are perhaps not only aware of this modus operandi, but may as well be indulging in them from time to time and making a killing. But for many of us this will be new.
• We have noted about front running -- the act of taking a position in an equity, based on advance information of an impending trade. We have also noted about bulk deals and block deal while noting about the Ranbaxy deal.
• But do you know that even block deals can be managed? Look at this report. It explains it very well.
• Some excellent observations on rising crude prices
• This is one article that you can't afford to miss. We have been witnessing a firming up of oil prices globally over the last few quarters. The rally in oil reflects a range of factors: a weakening dollar, fears of inflation, increased investor risk appetite and the appearance of ‘green shoots’ i.e., economic recovery. So, we should be welcoming an upsurge in oil prices; shouldn't we?
• But the article points out that it is not so. The firming up of prices seen is not because of growing demand but because speculation is at work.
• Recommend a read of the article at least once to see how.
• A very good article listing out the hurdles on the GST commencement
• Read it here.
• Interest rate futures on second innings
• The Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) jointly unveiled norms enabling exchange-traded interest rate futures (IRF) on Wednesday.
• Interest rate futures are derivative contracts which have an interest bearing security as the underlying instrument. The introduction of this instrument will help banks, insurance companies, bond houses and provident funds manage risks arising from interest rate fluctuations in their fixed income portfolios.
• This is the second attempt to introduce IRFs. IRFs were launched over five years ago by the National Stock Exchange, but did not take off due to deficiencies in product design and banks not being allowed to trade in these products.
• Online trading of gold bars to start by June end
• So reads a news item. How is this going to help? What has prevented its trading so far? Why is there a disconnect between gold price in Indian markets and the international markets?
• To know answers for such questions, read this report. But a snippet worthy of our attention:
• According to an estimate, millions of households in the country have in their possession 25,000 tonnes of gold in the form of jewellery.

Health

• Why is malnutrition so important an issue to be tackled?
• Malnutrition causes economic loss to the nation, due to reduced physical/cognitive growth and learning capability, and lower physical work output. Calculations indicate that India loses around $29 billion annually or 4% of GDP due to calorie/energy deficit.
• Do you know that we have a National Nutrition Policy formulated in 1993?
• But the crucial prescriptions of the Policy were not translated into programmes, viz., popularisation of low-cost nutritious foods, reaching adolescent girls, fortification of essential foods and control of micronutrient deficiencies.
• Want a deeper understanding of the issue? Read this piece.

Language lessons

• dewy-eyed: Adjective
• childlike, wide-eyed, round-eyed, simple (exhibiting childlike simplicity and credulity)
• "childlike trust"; "dewy-eyed innocence"; "listened in round-eyed wonder"
• humdrum
• Adjective: Not challenging; dull and lacking excitement; Tediously repetitious or lacking in variety
• Noun: The quality of wearisome constancy, routine, and lack of variety
• eg: For all the hype that accompanied the first formal meeting of the BRIC heads of state at Yekaterinburg, Russia, the meet itself ended as might have been expected — on a pretty humdrum note.
• piquant: Adjective
• Having an agreeably pungent taste; Engagingly stimulating or provocative; Attracting or delighting
• eg: "a piquant wit"; "a piquant face with large appealing eyes"

17.06.2009

Politics & the Nation

• Govt may join battle on KG gas to defend policy
• Remember our noting about the subject yesterday?
• With its natural gas policy having been thrown out of gear by the Mumbai High Court, the Government is likely to step in and do something about it. What could this 'do something' be?
• It can possibly implead itself in an appeal before the Supreme Court. Or it can step in and bring the two brothers to the negotiating table. If everything fails, it can even do a nationalization act though that would be viewed very negatively by the world.
• In view of the huge stakes involved for the Government -- reportedly about $9 bn as profit petroleum is at stake -- the Government naturally can't be expected to remain a mute spectator.
• Look at this graphic which gives details of the proposed gas utilization policy for the KG basin.

Finance & Economy

• CFC regulations to be brought in this year's budget?
• If news reports are anything to go by, this is about to happen.
• You might remember that the US and a few other advanced countries have brought in legislations to tax income earned by their corporates abroad in tax free jurisdictions. This is a problem which India has been facing for long; but had to keep quiet for various reasons. Now that there are global moves against such tax avoidance practices, it is time India also joins the bandwagon.
• CFC stands for 'controlled foreign company' here.
• Cross-border M&A deals were brought under the capital gains tax net last year, after the government woke up to the possibility of a tax revenue goldmine when British mobile giant Vodafone bought a controlling stake in India’s Hutchison Essar for nearly $11 billion.
• The present move, if it materializes, will be a logical follow up on the above move.
• Is there a case for de-nationalizing coal mining?
• We say 'de-nationalizing' because coal mining in India is largely in the hands of Coal India Limited, tbe public sector behemoth. Barring the provision for captive mining for cement, steel and power producers all the mining is done under the aegis of CIL. What's wrong with it? What constraints is the country facing because of this? What possible alternatives can you offer for overcoming these constraints?
• To know answers for questions like these, today's ET editorial piece is a must read. Recommend a read.
• Why is extending NREGA to urban areas a bad idea?
• Writing about what the FM should be concentrating on the ensuing budget, SSA Aiyar gives a very good analysis that answers the above question:
• Congress analysts think the National Rural Employment Guarantee Act (NREGA) helped win them the election, and so want to extend employment guarantees to urban areas. The analogy is mistaken. Rural areas have labour shortage at sowing and harvest time, but slack employment in between. So supplementary employment schemes in the lean season make sense. Many rural assets can be built mainly with labour — land levelling, bunding, water harvesting, even rural homes. So, labour-intensive works in rural areas can produce durable assets.
• But not in urban areas.
• First, city wages are frequently higher than the minimum wage, so urban projects can get stranded by fragmented or zero labour demand.
• Second, urban work is not seasonal, and it is neither desirable nor feasible for government programmes to provide roundthe-year work.
• Finally, urban assets cannot be created through labour-intensive means — even a simple wall entails only 35-40% labour cost, the rest being material cost.
• So, for the urban poor, Mukherjee should focus on expanding infrastructure, and removing hindrances faced by self-employed folk like hawkers and cycle-rickshaw operators.

Global warming

• Let's stop being scared silly of global warming; writes Bjorn Lomborg
• He is one good writer on global warming whose writings we excerpt quite often. Writing about the captioned subject, he says that exaggeration on the warning front wears out public willingness to tackle global warming. An excerpt:
• If the planet is doomed, people wonder, why do anything? A record 54% of US voters now believe the news media make global warming appear worse than it really is. A majority of people now believes — incorrectly — that global warming is not even caused by humans. In the UK, 40% believe that global warming is exaggerated and 60% doubt that it is man-made.

Language lessons

• gird (up) your loins: idiomatic expression
• to prepare yourself mentally to do something difficult
• This phrase comes from the Bible, where girding up your loins meant to tie up long, loose clothes so that they were more practical when you were working or travelling.

16.06.2009

Politics & the Nation

• Happy to help the world; says PM
• Our PM said India would play its part in coordinating international efforts to overcome the economic slowdown.
• It is important to note that Brazil, Russia, India and China — which form the BRIC group — together accounted for 40% of the world’s population and 40% of the global GDP.
• The PM is currently attending the SCO (Shanghai Cooperation Organization) and BRIC summits in Yekaterinburg, Russia.
• SCO members are Russia, China, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. India, Pakistan, Iran and Mongolia are observers.
• Bombay High Court orders that RIL should honour the family agreement
• You might remember the extensive coverage we had given to the dispute between the Ambani brothers in our blogs from time to time. The coverage arose not out of our interest in a peek into their personal lives but because the family settlement held the key to the way some of our national assets are to be used and paid for.
• Having taken cognizance of the family settlement, the Bombay HC ordered that RIL should honour the supply of natural gas to the younger brother Anil Ambani at a price of $2.34 per mmBtu. This is at sharp variance with the figure of $4.20 per mmBtu fixed by the government.
• The ruling predictably had caused the markets to tank. The elder brother -- Mukesh Ambani -- is expected to slug it out in the Supreme Court. The following excerpt from today's ET headlines explains the dispute very succinctly:
• RNRL had filed a court case RIL in December 2006, accusing the latter of not providing gas at $2.34 per mmBtu as provided in the 2005-06 agreement. RNRL also wanted the court to stop RIL from selling to third parties any of the gas. Its contention was that it should get 35% of the KGD6 gas production at $2.34 per mmBtu and that RIL should not sell it to anybody. RNRL is a natural resources and trading firm floated by the Anil Ambani group. It was to buy gas from RIL and sell it to Reliance Power, which is implementing the Dadri project.
• RIL responded by saying the price has been declared invalid by the government. RNRL will have to buy gas at the price fixed by the government, it added. The arguments continued for more than two years with little headway. Earlier this year, the court gave a reprieve to RIL, allowing it to execute final agreements with third-party buyers at the government approved price of $4.2 per mmBtu. But it reserved final judgement on sales to RNRL till yesterday. The verdict, which was delivered by the division bench comprising justice JN Patel and KK Tated in the morning, affirmed RNRL’s right to buy 28 million cubic metres of gas per day at $2.34 per mmBtu for 17 years.
• In case the Ambani brothers fail to conclude the gas deal within the stipulated time, they can seek their mother’s help, the court said. The judgement says: “We dispose of these appeals with a direction to the parties that within one month from the date of pronouncement of this judgement and order, the parties should enter into a ‘suitable arrangement’, on the basis of quantity, tenure and price as specified and agreed between the parties under the MoU either by re-negotiating the terms and conditions of the agreement as to make it a bankable agreement, or revert back to Kokilaben who had reserved her ability to intervene again if the parties failed to act upon the MoU dated June 18, 2005, and the Anil Ambani Group may opt for a claim for damages.” The court said the family MoU provides for a remedy in the event of non-fulfilment of any obligations by any party.
• The rivalry between the Ambani brothers broke up India’s largest corporation, RIL, in 2005-06. The family feud began shortly after the death of RIL founder Dhirubhai Ambani in 2002.
• Take a look at this graphic which traces the tortuous course of the dispute.

Horticulture

• What are traceability norms in horticulture exports?
• When fresh fruits are exported it is mandatory to ensure that there are no residues above the prescribed level. The traceability solution helps in product recall and single window clearances. What typically happens in a traceability solution is that the authorities will be able to identify the exact farm from where the suspect product is produced.

Finance & Economy

• The brighter side of portfolio inflows into the country
• In 2009 alone India has received about $5.5 billion of FII money out of a total of $23 billion that has flowed into emerging markets. So India received close to 25% of the portfolio funds coming into markets in Asia, Africa and Latin America.
• Until 2007, India would receive less than 15% of the funds flowing into these markets. The discernible change is investors see India as safer than many other export-led Asian economies that are still suffering a negative GDP growth due to their excessive dependence on OECD economies.
• So going forward, India is bound to get a bigger share of both equity and debt from the global financial system, irrespective of what the likes of Standard & Poors’ and Moody’s might have to say.
• The road ahead for comprehensive GST in April 2010
• What are the issues / constraints being faced by the GST roll-out in April 2010?
• You have a decent answer for this question in the write-ups from two of the important people connected with its roll-out. Take a look at it here.

International

• G8 seized of rolling back the economic stimulus in an orderly way
• The over $2 trillion stimulus packages announced worldwide in the wake of the global economic crisis now need to be wound down in an orderly way. This is what has seized the attention of the G8 finance ministers meeting at Lecce, Italy.
• Policy makers trod a fine line in the knowledge that withdrawing stimulus measures too soon could choke the recovery before it starts, and allowing them to last too long might push up borrowing costs. They are also trying to reassure markets after the yield on the 10-year US treasury note rose last week to the highest since October.
• Indonesia claims a place among BRIC nations?
• Indonesia's economic growth is expected to be accelerating to 7% starting in 2011.
• Political stability and buoyant domestic demand will help boost expansion in the $433 billion economy.
• The country is expected to grow 60% in the next five years to $800 bn due to lower capital costs and stable administration.
• Government plans to spend as much as $34 bn to build roads, ports and power plants by 2017.
• Indonesia's President: Susilo Bambang Yudhoyono. He is expected to win the July 8 elections.

Language lessons

• revanchist
• Noun: A person advocating political retaliation, revanche, especially in order avenge past military defeats
• Adjective: Advocating a policy of revenge or retaliation.
• eg: Basically, post-Vajpayee, the BJP has been unable to resolve the issue of whether to maintain the moderate face, which Vajpayee embodied, or to depend solely on the revanchist agenda that has been its raison d’etre.
• raison d'etre: Noun
• Reason for being; The purpose that justifies a thing's existence

15.06.2009

Finance & Economy

• Tax break on housing loans to be enhanced?
• It looks like there is a case for enhancing the tax exemption limit on interest payment relating to a housing loan. There is a demand for enhancing it from the present Rs. 1.5 lakhs to Rs. 2.5 lakhs.
• The existing tax exemption limit is considered inadequate because a two-bedroom house in big cities costs at least Rs 25 lakh. Considering a person takes a loan of Rs 20 lakh at an interest rate of 9.5%, he would pay Rs 1,88,493 towards interest alone in the first year. His annual interest payment in the first five years would be more than Rs 1.5 lakh.
• If the exemption limit is hiked to Rs 2.5 lakh, then a person paying that much home loan interest in a year will save an additional Rs 31,000 in tax every year. This saving of over Rs 2,500 a month would be significant for most borrowers, making home purchases more affordable.
• Government to slash small savings rate?
• Millions of risk-averse Indians, a huge percentage of whom are senior citizens, invest in these savings plans that offer guaranteed returns and tax benefits, along with the government assurance of safety. The investment into these savings plans increased to Rs 143,668 crore in 2008-09 from Rs 123,652 crore in 2007-08.
• Close to 55% of savings by Indians are in bank deposits, and a shift of 15-20% of these deposits to small savings schemes can be expected if the term deposit rates are cut further.

Environment

• 26 new species frogs and insects discovered in India
• As many as 12 new species of frogs and 14 insects have been discovered by scientists across the country in 2008, according to the latest report of the Zoological Survey of India (ZSI).
• Since its inception in 1916, ZSI scientists have discovered 4452 new species and subspecies.
• The discoveries include a frog which changes colour and spots (Rhacophorous subansiriensis) found in the forests of Subansiri district in Arunanchal Pradesh and the diminutive frog (Philautus manipurensis) from Tumzane river in Manipur.
• Chirixalus senapatiensis is another frog species that has been found from the Mabing river bed in Manipur.
• Two new species of Cladocera and one new record of Sea Spider were found in the Visakhapatnam inshore waters.

International

• Titbits about the Paris air show
• The Paris Air Show is marking its 100th anniversary, although because it alternates every other year with the Farnborough International Airshow outside London, it is only on its 48th edition.
• It opens to industry and the press today, and then to the public June 19-21.
• To mark the centennial show, 30 historic aircraft from various aviation epochs will be on display, including a Bleriot XI, a plane shown at the first Paris Air Show in 1909. Plane spotters will be entertained with demonstration flights — including an Airbus show Wednesday to mark the planemaker’s 40 years.

Sport

• Our T20 campaign comes to a close
• Handed out a three run loss by England, we will now have to sit and watch others play for the T20 cup. What a loss!!

Language lessons

• quibble
• Noun: An evasion of the point of an argument by raising irrelevant distinctions or objections
• Verb: Evade the truth of a point or question by raising irrelevant objections
• bloomer: Noun
• Underpants worn by women; An embarrassing mistake
• ad-libbing: Verb
• Perform without preparation
• eg: His successor, however, dried up the market, as lampooning him would make even the most reckless of night time chat show hosts think before ad libbing.
• leitmotif
• A melodic phrase that accompanies the reappearance of a person or situation (as in Wagner's operas)
• eg: Stature, rather than height, has always been the leitmotif here, with most of the giants of the Indian political arena rarely topping Sarkozy’s height.