Indian Current Affairs: 24.06.2009

Politics & the Nation

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

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.

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.

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.

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

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.

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Indian Current Affairs