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