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"