Indian Current Affairs: 13.06.2009

Politics & the Nation

Take a look at this article that appeared in today's ET. It reports that a substantial number of our Cabinet Ministers and MoSs are foreign and / or very well educated lot.
Prem Das Rai, the Sikkim Democratic Front MP, is the first-ever IIT-IIM double-dozer in the Lok Sabha.
There are more than a dozen of the ministers who are educated in foreign universities of repute.

Finance & Economy

Look at these excerpts, we are sure to draw this conclusion:
Industrial output clawed back into positive territory to rise by a better-than-expected 1.4% in April, its best performance in five months, and providing the clearest signal yet the country may have seen the back of the slowdown that has buffeted its economy since last October.

The experts feel that the excess liquidity in the system, easing of financial tightness and the pick-up in key indicators such as the purchasing managers index, infrastructure index and the rise in cement despatches pointed to a recovery.
A strong show by the intermediate goods segment and an expansion in 11 out of 17 manufacturing subsectors showed that the recovery is broad-based and sustainable.
Intermediate goods are inputs for production of other goods and growth in this segment suggest that manufacturers are expecting demand for finished goods to rise.

So reads a headline in today's ET. What exactly is a covenant? We all know the meaning of the word as "a signed written agreement between two or more parties (nations) to perform some action." That's fine. But the headline gives us a peek into its operation in real life.
Hindalco, a Birla group flagship company, has raised last year a $1 bn bridge loan during the process of its acquisition of Novelis, a Canadian company.
One of the points in the loan agreement is about debt-EBIDTA ratio, which Handalco promised to ensure at a certain level. But because of adverse market conditions seen in Europe due to softer metal prices on the London Metal Exchange and an overall reduced demand for metals, Hindalco is not able to maintain this ratio at promised levels. This is a breach of the covenant.
EBIDTA is a company’s operating profit which is earned from its main operations and doesn’t include interest payments and depreciation.
Now that there is a breach of the covenant, what would happen?
It is possible that the lenders would ask Hindalco to pay a certain fee -- called the 'waiver fee' in banking parlance -- and / or renegotiate the interest rate applicable to the bridge loan.

First, over the years, share of services in the GDP has increased gradually, services now account for a little more than 60% of GDP.
Second is the increasing contribution of services to international trade. India’s trade in services as a percentage of GDP stood at around 3.37% in 1990 which increased to around 15.37% in 2007.
Third, services contribute to the government indirect tax collection via the service tax and this share has been steadily rising.
Finally and most significantly, rising share of services in private final consumption expenditure (PFCE) mandates their inclusion in the basket. In 2007-08, one third of the total PFCE was on services. It has gradually increased over the past few years from about 26% in 1990 to around 33% in 2007-08.
Non-inclusion of services therefore does not give a representative picture of inflation.

The median age in the billion-plus population is 25 years and private-sector consumption makes up about 60% of economic activity. Consulting group AT Kearney says the sector will grow 63% between 2008 and 2013 to become a $833-billion market. By comparison, the median age in China’s billion-plus population is slightly older, at 30 years, and the private sector makes up a smaller part of the economy at around 40%.

Language lessons

Noun: Pounded or hit repeatedly by storms or adversities
Verb: Strike against forcefully; Strike, beat repeatedly
eg: Industrial output clawed back into positive territory to rise by a better-than-expected 1.4% in April, its best performance in five months, and providing the clearest signal yet the country may have seen the back of the slowdown that has buffeted its economy since last October.

Ability to make judgments free from discrimination or dishonesty; The quality of being honest and straightforward in attitude and speech
eg: In a polity where governments have blatantly used the reservation card to foster vote bank politics, regardless of what it does both to merit and to the fabric of a society already stretched thin by innumerable divisions of caste, community and religion, such candour signals rare political courage.

Indian Current Affairs