06.06.2009

Politics & the Nation

• After Nine-Weeks,Multiplexes & Producers Arrive At An Agreement Over Revenue Sharing (Excerpt from this front page article in ET today.)
• Hindi (and some English) films will finally be screened at movie halls across the country, with the Multiplex Association of India signing an agreement with the United Producers and Distributors Forum (UPDF), ending a nine-week dispute over revenuesharing, among other things.
• The denouement came in the early hours of Friday, after numerous meetings across the suburbs of Mumbai, and an estimated Rs 300-crore loss for the industry. Both sides have had to give some, take some.
• The dispute began with the UPDF demanding ‘Fair Rights for Friday Nights’ at a flat 50% across all weeks for all movies, big or small, and the freedom to choose their distribution strategy.
• While the distribution part has been agreed to, the revenue-sharing now stands like this: post-deduction of taxes, multiplex owners have agreed to give producers 50%, 42.5%, 37.5% and 30% of the total box-office collections in the first, second, third and fourth week, respectively. These terms will be adhered to for all films, including Hollywood releases.
• There are some performance related revenue share clauses also in the agreement. But the point is that the dispute is finally over. Let's enjoy the movies. Both the lobbies have shown scant respect for the movie-goers.
• Planning Commission reconstituted: Montek Singh Ahluwalia retains position as Deputy Chairman
• The reconstituted Planning Commission comprises K Kasturirangan, Saumitra Choudhuri, Narendra Jadhav and Mihir Shah, while BK Chaturvedi, Abhijit Sen and Sayeda Hamid have got another term. More members are likely to be inducted later.

Finance & Economy

• Mumbai SEZ of Mukesh Ambani runs into trouble
• It is murkier. No doubt about it. What is murky about it? Why is it making it to the headlines of newspapers? Any idea?
• MSEZ approached the Supreme Court seeking a stay of the land acquisition process put in motion by the State government two years ago. When the government is acquiring land for the MSEZ why should the company that is promoting it want a stay? Because as per section 4 of the Land Acquisition Act, 1894 the acquisition process has to be completed within one year. At best another year of extension can be granted. Once this limit of two years is crossed and the land acquisition remains incomplete, then the whole process of land acquisition lapses. This period of two years is ending for this MSEZ land acquisition by June 8. So, if the company can somehow get to stay the process legally through court orders, that would give an automatic extension of time for the company to complete its project.
• The supreme court has seen through the game and refused to stay the process. As per the SEZ rules, an SEZ cannot come up on an area having less than 25% of the contemplated land area. Since the promoters in this case could not even acquire 25% of the land, the SEZ appears headed for a pre-mature death.
• But will it? As many in the country are aware of the enterprising abilities of the Reliance family, they will somehow find a way somewhere. What that way is going to be is anybody's guess at this time. Let us wait and watch.
• If you have stomach for more details on this imbroglio, do take a look at this lead story in today's ET.
• What is 'high finance'? Is there a thing called 'low finance' then?
• In his op-ed piece in today's ET, one of our favourite authors Bradford Delong defines these two terms for us:
• Low finance: the ability to use cheques, banknotes and credit cards rather than having to cart around chests of silver, scales and reagents to assay purity, and needing armed guards to protect the silver — and more guards to watch the first set of guards.
• High finance: pooling wealth to finance large enterprises, and portfolio diversification.
• He further goes on to tell us that
• High finance induces us to save and invest by promising us safe and liquid investments even in extraordinary times
• Investors who believe their wealth is securely liquid and that they are adding value for themselves by buying and selling are suffering from a delusion
• But we benefit from these delusions
• Confusing? But very interesting. Do take a look at the article.
• In spite a fall in the WPI numbers, why is that the common man does not see any reduction in prices of commodities essential for him? What exactly is the disconnect between CPI and WPI?
• Take a look at this explanation given in today's ET article:
• Firstly, WPI is a reflection of prices that exist at the wholesale markets and there exists a long value chain mired in opaque markets which add to its margins often to mark up themselves to what our common man sees as inflation. Reforms in the value chain connecting producers with consumers and increasing market transparency would help in transferring the benefit of lower increase in WPI into CPI in all groups of commodities, more so in the case of commodities which are closer to the common man.
• Secondly, given the current high volatility in forex rates (11%), equities (46%), interest rates (24%), and commodities (26%), value addition becomes a costlier process due to the high cost of risk management, which gets passed on to the consumers and reflected in increased prices of processed/value-added products. It essentially leads into a pricewage loop as it happened in the previous boom, breaking of which would need demand shrinkage that has the potential to lead to an unemployment spiral.
• Thirdly, the existence of an effective competition policy and strict monitoring would help avoid collusion among the few industries within a given sector, thus preventing higher mark-ups in valueadded commodities. Though the laundry list of inefficiencies in markets, manufacturers and service providers is unending, the first three here are obvious. It will be a combination of policy, institutional and regulatory reforms that would help shrink the spread between the WPI and CPI.

International

• Sri Lanka to become the latest back office nation?
• With LTTE confined to the pages of history, and blessed with the largest pool of UK certified accountants outside the Great Britain, it appears to be poised to become the favourite destination for back office accounting operations for many an MNC in the world. It may be competing immediately with Philippines and sometime down the line, may even give India a run for its money in the IT/BPO space.
• The country's NASSCOM like lobby, called Slasscom (Sri Lanka Association of Software & Services Companies) has ambitions to take the island’s $500-million IT-BPO business to $2 billion by 2012.

Personality/Obituary

• Who is Millvina?
• She was the last survivor of the Titanic. She passed away on May 31, 2009 aged 97.
• Her real name is Elizabeth Gladys Dean. Millvina was just nine weeks old when the ship sank. Millvina was too young to remember anything of that fateful journey. She worked as a cartographer for the British government during World War Two.

Miscellaneous

• Zero gravity wedding
• Two space fanatics will have a wedding that is out of this world—literally. Noah Fulmor and Erin Finnegan will be floating, possibly upside down, as they say “I do” in a specially modified Boeing 727-200 departing Kennedy Space Center at Cape Canaveral, US. The groom will offer the floating bride a ring made of fragments from a meteorite that crashed into the Earth 30,000 years ago. Finnegan will wear a designer wedding dress with trousers to protect her modesty during weightlessness. British space tourist Richard Garriott will officiate at the ceremony. However, their handful of guests will have to shell out £3,250 each to witness the ceremony.

Language lessons

• hobble: Verb
• Walk impeded by some physical limitation or injury; Hamper the action or progress of; Strap the foreleg and hind leg together on each side (of a horse) in order to keep the legs on the same side moving in unison.
• eg: The court’s decision brings the curtain down on a nearly three-year-old saga of political intrigue, business rivalry and strident opposition from farmers that hobbled the project from the start.
• potboiler: Noun
• A literary composition of poor quality that was written quickly to make money (to boil the pot)
• denouement: Noun
• The outcome of a complex sequence of events; The final resolution of the main complication of a literary or dramatic work
• gaunt: Adjective
• Very thin especially from disease or hunger or cold
• eg: Jobs was treated for a rare type of pancreatic cancer in 2004. He appeared gaunt at an Apple event last June and in January said he would take a leave of absence because his health problems were “more complex” than originally thought.