It will be an excellent piece for all those of you who are facing the International Relations paper.
Finance & Economy
Expats' dreams come crashing
Today the country hosts 50,000 expat workers, a majority of them sent by multinational firms to set up or augment their local operations. India ranks third only behind Hong Kong and Japan among countries with the highest proportion of expats earning more than $250,000, says an HSBC survey.
While an India posting was always a coveted entry on the CV of a global professional, the expat’s typical strawberry spring story could also be summed up in one word: perks... Luxurious homes with a battery of attendants, tickets for business or first-class travel, frequent free home trips, school fees for children, hefty relocation grants, and allexpenses paid family holidays back home — all on top of an already juicy salary.
But that could well change, as companies find it increasingly tough to cope with the expenses that an expat posting entails.
Leisure and perks are out of fashion in a scrimping world and the axe is being swung wildly.
Jet Airways has reportedly cut the salaries by 10% and has put a stop or reduced the number of perks. It is trying to replace its entire expat workforce with local emplyees.
Rebound in STT collections points to?
Ans: Possibly the return of the retail investor the bourses.
STT (Securities Transaction Tax) is a turnover tax levied on the total consideration, and in cases of share purchase transaction settled through delivery, it is levied at 0.125%. Transactions in derivatives trading attract a lower STT of around 0.017%.
The average daily turnover on the National Stock Exchange (NSE) stood at Rs 18,240 crore in July, much higher than in the post-crisis months when it hovered around Rs 10,000 crore a day.
Govt. PSUs flout the norms on Company Secretaries
Over 200 public sector undertakings (PSUs) do not have a company secretary on their rolls even though they are mandated to have one, the government informed Parliament on Thursday.
Under the provisions of the Companies Act, every company with a minimum paid-up share capital of Rs 5 crore is required to appoint a wholetime company secretary.
The role of the company secretary is mainly to ensure procedural compliance, but India’s biggest corporate fraud has put their roles under greater scrutiny.
The profession of company secretaries is overseen by the statutorily-formed ICSI, which formulates code of conduct for its members.
Science & Technology
Automobiles powered with urine!
Ohio University researchers have been able to achieve a breakthrough in making automobiles that can run on pee power.
Look at this editorial which gives details about the concept. Worth a read.
Schumacher returns to formula one racing
The most successful driver in F1 history said on Wednesday he’ll come out of retirement and plans to stand in for the injured Felipe Massa at the Ferrari team, with which he won five of his record seven world championships.
Schumacher’s comeback at the age of 40 was announced hours after Bayerische Motoren Werke (BMW) said it’s quitting the sport at the end of 2009, becoming the second carmaker in less than a year to withdraw from the auto-racing series amid slumping sales and friction between the teams and the governing body.
Ferrari said Schumacher will replace Massa until the Brazilian is able to race again. Massa left intensive care yesterday after suffering head injuries five days ago at the Hungarian Grand Prix.
Schumacher is the only driver to win seven championships in F1 and he owns most of the sport’s meaningful records.
Schumacher won an unprecedented 91 times, one fewer than the combined tally of the next two most successful drivers Alain Prost and Ayrton Senna.
gravy train: Noun
Income obtained with a minimum of effort
Not fit to assume responsibility; Generally incompetent and ineffectual
eg: But despite the ever-growing arms imports — a money-spinning business for many Indian politicians, civil servants and defence officers — India pursues an increasingly feckless policy towards China and has seen its military edge against quasifailed Pakistan erode to the point that recurring cross-border terror strikes are met with terror-emboldening inaction.
How should India deal with Pakistan? It is understood in some quarters that the writ of the Pakistani government doesn't run entirely in its territory and on some sections of the society too. Given that situation, how can India deal with a troubled Pakistan?
One is engagement with the nominal government of Pakistan to ensure that it retains whatever legitimacy before its own populace while trying to act against radical elements. The other, more substantial and difficult way in which India can help democratise Pakistani society is to steadfastly stay democratic within India itself.
The idea on which Pakistan was founded is anti-democratic, namely, that Hindus and Muslims cannot live together as part of a common nation and prosper with dignity. The only way to disprove this anti-democratic notion is for Hindus and Muslims to actually live together in harmony in India and prosper with dignity. So far, this democratic ideal has not been realised in practice. If the Indian polity strives hard to attain this ideal, much of the ground will wash away from under the feet of religious radicals in Pakistan.
While this process is on, India has to deal not only with Pakistan but also with the rest of the world. India matters to the world, in a positive sense, in a way in which Pakistan right now cannot. For India to play that role on the world stage, it cannot stay hyphenated with Pakistan in the world’s eyes. Indian politicians who obsess about diplomatic concessions to Pakistan are relics of India’s hyphenated past. India has to engage Pakistan’s nominal government from its actual position of superiority and encourage it to work for democracy, while freeing itself to deal with the rest of the world. And this is precisely what the present government has been doing.
Finance & Economy
Ever heard of NREGA plus?
Today's ET op-ed by Sameer Sharma discusses about it along with a few other similar programmes being taken up many other developing countries. Worth a read. Take a look.
He sums up the benefits of NREGA plus thus:
In short, the NREGA-plus development doctrine holds much promise to reduce the vulnerability of poor households to shocks. By making choices available to the poor the NREGA plus avoids the assumption that all poor are ready and willing to engage in physical work, only. Furthermore, contextual conditionalities, which are usually ignored in development programmes, are expected to account for the varying needs of diverse communities and unique characteristics of local areas; therefore, avoid a one-sizefits-all approach. Finally, NREGA plus will broaden and deepen the stimulus and meet the human and social needs of the disadvantaged, also.
Some of the social development programs taken up in other countries include:
Oportunidades (Mexico), Social Protection Network (Nicaragua), Bolsa Escola and PETI (Brazil), Family Assignment Program (PRAF — Honduras), Chile Solidario (Chile), and Program of Advancement through Health and Education (Jamaica).
Obituary: Rajmata Gayatridevi
Many of you might not have heard about this Queen. A reading of this obituary column will tell you something about her.
It is not just Vogue, we are sure all of you would agree that she is indeed a beautiful lady. Explore her photographs here.
Known for having shot a tiger at the age of 13, she was a keen sportsperson and fell in love with a King who already had two wives!
Showing courage; Quick to take offence
Unskillfulness resulting from a lack of training; Having no qualities that would render it valuable or useful
A disorderly outburst or tumult
eg: The kerfuffle over the weight of the doctor nominated by President Obama seems to be a case of much avoirdupois over nothing.
Excess bodily weight
Moving and bending with ease
We have had health ministers who are hardly sylph-like but that has not deterred them from weighing in on major health issues and assuming larger than life public images in a country where so many people are on subsistence diets.
Noun: talking or conversation, especially when long-winded or pointless
Verb: to talk, especially in a long-winded or pointless way
First, the central as well as the state governments must turn their ‘guns’ on corruption at every level.
Second, these regions (backward regions) need enormous and urgent investments in basic infrastructure of surface roads, water, power, schools, health centres and connectivity with mainstream India. To ensure that leakage of these funds is kept to the minimum, the government may consider setting up a central government commission, which will oversee these projects directly, with proper security cover for the workers of the projects.
Third, these regions could be opened up for adventure tourism, at least in limited areas, to create some quick employment.
Fourth, corporates could be provided special tax breaks for setting up their CSR or employment-generating activities in these areas. The CSR activities could primarily be in the area of education, heatlh and capacity building through vocational training.
Fifth, capacity building, design inputs and marketing linkages to market the unique and fine handicrafts of the region.
Recommend a read of the article at least once.
Finance & Economy
Disinvestment proceeds to go into NIF
The government said the disinvestment proceeds of public sector NHPC and Oil India Ltd (OIL) would be credited to the National Investment Fund (NIF), and ruled out any plan to restructure the fund.
Under the existing guidelines, the disinvestment proceeds are deposited in the NIF, which is managed by three public sector mutual funds—UTI Asset Management Company, SBI Funds Management and LIC Mutual Fund Asset Management Company.
The NIF currently has a corpus of Rs 1,815 crore. It generated an income of Rs 85 crore in the first year.
FTA with ASEAN gets cabinet nod
The Union Cabinet has cleared the free trade agreement (FTA) between India and ASEAN, a grouping of 10 southeast Asian nations, despite concerns over its possible impact on the country’s farmers.
As per the agreement, duties on 4,000 items out of the 5,000 odd items traded between the two sides will be brought down to levels ranging between 0% and 4% over six years. While 479 items (comprising mostly agricultural products from India’s side) will be shielded from tariff cuts, duties on products marked as sensitive (like garments and automobiles), will be reduced to 5% over 3-9 years.
ASEAN is India’s fourth-largest trading partner after the EU, US and China. Indo-Asean trade, which has been growing at a compounded annual rate of 27%, stood at $38.37 billion in 2007-08.
Sea food exports take a plunge on rejections by EU
India's sea food exports are increasingly being rejected by EU. There have been nearly 24 export rejections by the EU so far since January 2009. While nearly 19 rejections have been with respect to scampi, about 20 to 21 were in the consignments from Andhra Pradesh.
Almost all the rejection was due to the use of nitrofuran, a banned antibiotic, which the farmers are using in the hatcheries and farms.
The aquaculture production in general, including scampi and shrimp, has seen a decline due to global economic slowdown and the fall in prices of shrimp, incidence of diseases in the farms, supply of poor quality seeds, etc are the other reasons for the general decline of aquaculture in the country.
Faced with a spate of export rejections and slack demand, the production of scampi or the freshwater shrimp has registered a 53% fall to 12,806 tonnes in 2008-09 and that compared with the previous year. The estimated value of scampi fell by 52% and stood at Rs 205 crore.
AP experiments with co-operative farming
Co-operative farming will be the new mantra for boosting farm sector growth in Andhra Pradesh, the rice bowl of India.
While the nuts and bolts of the scheme will be firm up soon, the plan revolves around transferring the farmer’s land and land owning rights to a cooperative. The state government proposes to allow farmers to sell their shares to the existing members of the co-operative. And if existing members do not wish to buy the share, government will buy the share at a pre-defined market price.
The cooperative scheme is going to be tried on an experimental basis in two villages of every district in the state.
Agricultural growth in the state over the past five years topped 6.4%, surpassing the national average of 4%. Thanks to the increase in output, the state has become the second largest contributor of food-stocks to the national pool.
AP’s foodgrain production records an average annual growth rate 8.9% for the period 2004-09, as against the nation’s 1.9%
State contributes about 60% of total rice production to the national rice pool
Make unwanted and intrusive comments
Failure to attend (especially school)
(informal) spend time not doing much; fool around; Commit a faux pas or a fault or make a serious mistake
A very powerful criticism of the Baloch blunder committed by our Prime Minister; in the words of Brahma Chellany. An excerpt:
The inclusion of Baluchistan resulted from US pressure on India to address Pakistan’s concerns over Indian consular and other activities in Afghanistan. And the agreement to share real-time actionable intelligence is part of a CIA initiative to build cooperation between the Indian and Pakistani intelligence agencies. Even Hillary Clinton publicly sought “sharing of workable intelligence”. The Obama administration had made it clear it would wait for the Indian polls to be over before nudging New Delhi to reopen talks with Islamabad. The Sharm-el-Sheikh statement can only boost Washington’s Afpak strategy, a key component of which is to prop up the Pakistani state financially and politically.
Take yet another parallel. Just as Singh argued that without the nuclear deal India’s energy and economic interests would be seriously compromised, he now contends that without settling differences and making peace with Pakistan, India cannot be a great power. Every rightminded Indian would want peace. But to say that the country cannot emerge as a major power without making peace with the adversary is to go against the grain of world history and to embolden the foe to stay implacably antagonistic. Did China become a world power by coming to terms with Taiwan? Even if India surrendered Kashmir, would Pakistan be willing or able to stop cross-border terror attacks?
India’s meandering approach on Pakistan is just one example of Indian policy being unable to stay the course on matters critical to national interest. In the absence of realistic, goal-oriented statecraft or a distinct strategic doctrine, ad hoc, personality-driven policy-making is becoming the norm. A secure, prosperous India, however, can emerge only through institutionalised, integrated policymaking and the unflinching pursuit of clearly laid-out goals.
The last paragraph above could be given as an opening statement for a question and you could be asked to comment on that. For such a question, the first two paragraphs above could be very good answer.
Ram Pradhan Committee report
Ever heard of this committee? It is committee constituted by the state government of Maharashtra to probed the state government’s response to the 26/11 terror attacks.
The state government had not tabled the findings of the two-member committee in the recent monsoon session. It just presented an action to be taken report (ATR). The state had cited ‘sensitivity’ of the issue for deciding not to make the report public.
Nandan Nilekani assumes charge as Unique Identification Database Authority of India (UIDAI) Chairman
The UID project plans to create unique identification numbers for all Indians by 2011. Currently, India does not have any standard identification card or number to authenticate an individual’s identity.
The identification number, which will primarily help to “authenticate” an individual in the country, will be issued to Indian residents on voluntary basis. Any Indian can get the number by showing a residence proof. This can be used for government and private use, Mr Nilekani said.
The UIDAI chief also introduced Ram Sevak Sharma as the secretary and chief executive officer of the organisation who will assist him in rolling out the programme across the country in phases.
Finance & Economy
Core sector shows promise
The six core infrastructure industries grew 6.5% in June on the back of robust performance by cement and steel, adding to the cheer as news trickled in that monsoon showers had clocked 15% above normal last week.
The infrastructure basket comprising coal, crude oil, refining, power, cement and finished steel has a 27% weightage in the index of industrial production (IIP), and the June surge hints at overall industrial growth picking up, according to economists.
The government may now allow mobile number portability (MNP) by year-end, telecom secretary Siddhartha Behura said on Thursday. MNP was slated to come into effect in metros and large states on September 20, 2009, and the rest of the country by March 2010.
What experts predict about the ensuing (next week) monetary policy review by RBI:
With inflation expected to surge post-October, RBI may not tinker with key rates
But it is sensitising market on need for orderly withdrawal of liquidity pumped during crises
Most world markets are said to be done with interest rate cuts
RBI is likely to ease norms that will encourage banks to lend, such as more leeway for restructuring loans
There could be boosters for infrastructure financing by easing capital requirements on take-out financing
Time overruns may be condoned when there are no defaults
High Gold prices fuel fusion jewellery
According to estimates from the World Gold Council, demand for the first quarter of the current year fell 83% to 17.7 tonnes compared to the corresponding period last year. The fall in demand is in response to the rising prices. As against the average price of Rs.12, 147 per ten grams last year, gold is now hovering above Rs. 15,000.
Jewellers are therefore resorting to fusion of precious stones with steel, tungsten or titanium.
US housing sales bring cautious cheer
US existing home sales notched their third monthly rise in June in a sign the housing industry was slowly healing, but new jobless claims rose last week in a move distorted by unusual seasonal layoffs.
Retail sales in the United Kingdom also reportedly rose 2.9% in June compared to a year earlier and mortgage lending rose by 8% in the month as summer weather smiled on a struggling economy.
Buffet cashes in on Goldman shares
Warren Buffett’s option to buy shares of Goldman Sachs Group, part of an agreement reached at the depths of the credit crisis, has earned a profit on paper of about $2 billion, a return of more than 40%.
He has warrants to buy $5 billion of Goldman common stock for $115 a share any time in the next four years.
Goldman Sachs on Thursday passed $162 in New York trading for the first time since rival Lehman Brothers Holdings collapsed in September.
So, you see the timing by Warren Buffet? When any normal investor would have stayed away from Goldman Sachs, he had the guts to put money into it. That's why he is reaping rewards now.
Argumentation that is specious or excessively subtle and intended to be misleading; Moral philosophy based on the application of general ethical principles to resolve moral dilemmas
eg: ...Prime Minister Singh has turned to casuistry to camouflage his shift on Pakistan.
Serving to bring to mind; (used with 'of' or 'with') noticeably odorous; Having a strong pleasant odour
...Such a shifting goalpost is redolent of the nuclear deal.
Our Prime Minister appears to have been taken in by the Pakistani machinations at Sharm-El-Sheikh, Egypt during the recent NAM summit.
The joint statement that is signed by both the PMs during their talks on the sidelines of the summit has mentioned for the first time about Balochistan separatism. Indirectly, it is a reference to India aided / abetted separatist activity according to Pakistan. Allowing a reference to it in the joint statement made India appear to be acceding to the Pakistani charge that Baloch separatists are being aided and abetted by India.
This slip up has now come in handy for the opposition parties in India as well as Pakistan.
We are sure, the thought would have crossed your minds too sometime or the other. It's a logical step and one that will give some revenue to the banks too.
How many ATMs and how many PoS terminals are there in the country?
Reportedly there are about 10 PoS terminals for every ATM in the country. Sometime back we noted that there are about 35,000 ATMs in the country. That makes it 3,50,000 PoS terminals in the country. This would be a good enough number for enhancing the reach of cash withdrawal facility in the country.
Some snippets worth remembering from the report:
The facility is to be restricted for cash withdrawals upto Rs. 1000/- only.
There will be a transaction fee ranging from 2 to 3% on such withdrawals.
At present whenever we use a credit or debit card, there is a transaction cost varying between 1.5 to 2% of the amount. Though this is being paid by the merchants selling us the goods or services, some pass it on to us the customers.
Only 2-3% of state-owned bank customers use their debit cards to make payments, while 14-19% customers of private and foreign banks do the same.
There are 14.3 crore people holding debit cards in India.
Q1 direct tax kitty grows 3.65% to Rs 59,465 crore
Direct tax collections must grow by at least 9% for the government to achieve its budget target of Rs 3,70,000 crore. Any shortfall in tax collections will put further pressure on the fiscal deficit.
Direct tax collections, which include taxes such as those on corporates, firms and individuals, stood at Rs 59,465 crore during the first quarter of the current fiscal against Rs 57,373 crore during the corresponding quarter last financial year, according to official data released by the Central Board of Direct Taxes.
Taxpayers received Rs 17,600 crore as refunds from the government. This represents a 52.01% growth over Rs 11,578 crore given in refunds in the first three months of last fiscal.
What is the ACES bill and why should India bother about it? (Excerpts from an article by Arvind Panagariya in today's ET)
It is the American Clean Energy and Security (ACES) Bill of 2009. Though it is yet to become a law as it needs to be passed by their Senate, it does give India some jitters.
It provides for a “cap and trade” program that would place an annual cap on the overall carbon emissions in the US. The cap would progressively tighten to 80% of 2005 emissions in 2020, 58% in 2030 and 17% in 2050.
The cap and trade program of the US significantly differs from other similar regimes in place in accordance with the Kyoto protocol. Beginning in 2020, it requires the US President to impose tariffs on selected carbon intensive goods from countries that do not introduce caps on carbon emissions. It specifically targets India and China by requiring the US Trade Representative to annually certify that these countries are adopting emission standards at least as vigorous as those prevailing in the US.
Why is India opposed to agreeing to a cap on its emissions? (Excerpts from an article by Arvind Panagariya in today's ET)
The US, which had refused to ratify the Kyoto Protocol but is now keen on a post-Kyoto climate change treaty, insists that China and India undertake binding mitigation commitments. It reasons that these countries are among the world’s four largest emitters in absolute terms.
But beyond this size-based argument, there is little else on which the US case can be pegged, especially against India. Given India has the second largest population in the world with the US being a very distant third, it is hardly surprising that India is among the top four emitters in absolute terms. But in per-capita terms, it ranks a low 137th. Forty percent of the households in the country are even without an electricity connection. And there are 300 million people living in abject poverty. If India were to agree to even cap its emissions at current levels, let alone mitigate, its growth process will be crippled. And with it, the country would lose any hope of bringing electricity to all households or of eliminating poverty.
Therefore, from the viewpoint of its own citizenry, India has every reason to refuse mitigation commitments for some decades to come. It also has a good moral case. Rich countries have been responsible for more than 70% of the emissions between 1850 and 2000. India’s contribution to emissions during these same years was a paltry 2%. Even setting aside this history, Canada, US, Europe, Eurasia and Japan together account for more than 50% of the current emissions and India only 4.4%. If environment were to be viewed as a common resource, which it is, almost any principle of moral philosophy would say that developed countries must bring their emissions down very substantially before they demand similar reductions from the poor countries. The fact that they have emitted a lot in the past and they continue to do so today ought to give them rights to less, not more, future emissions than the poor countries.
As bad as can be; characterized by human misery; Of or pertaining to or resembling a dystopia
eg: "AIDS is one of the dystopian harbingers of the global villages"
State in which the conditions of life are extremely bad as from deprivation or oppression or terror; A work of fiction describing an imaginary place where life is extremely bad because of deprivation or oppression or terror
Abdul Kalam, our former President frisked at airport
In an outrageous incident, former President APJ Abdul Kalam, who is exempt from security checks, was frisked by the ground staff of American airliner Continental Airlines at the Indira Gandhi International Airport (IGI) when he was travelling to US. This led to an uproar in Parliament, forcing the government to order a probe and file an FIR against the airline.
Responding to demands for immediate action against the airline, civil aviation minister Praful Patel said a notice has been issued to the US based airline under Section 11A of the Aircraft Act for wilful violation of law.
Meanwhile, Continental Airlines appeared to care least saying that it was bound to follow the TSA (Transportation Security Administration) procedures. TSA requirements impose a final security check in the aerobridge just before boarding the aircraft. This procedure is reportedly followed by all carriers flying to the US.
This is not for the first time that an Indian VIP has been frisked at an airport. Last year, the then external affairs minister Pranab Mukherjee was frisked at Moscow airport. In 2003, the then defence minister George Fernandes was also made to undergo security screening in the US.
Update: Newspaper web sites are presently reporting that Continental has apologized to the former President.
Mahatma Gandhi International Award conferred
The Mahatma Gandhi International Award for Peace and Reconciliation was awarded to Aung San Suu Kyi, the jailed Burmese leader at a function in Durban, South Africa. It was received by Burmese Prime Minister in exile Thien Win.
The award was bestowed by the South Africa-based Mahatma Gandhi Foundation in recognition of her strong commitment to non-violence, justice and peace.
Finance & Economy
Govt kicks off stake sale in two PSUs?
The steel ministry has reportedly initiated steps to sell small stakes in profit-making state-run firms Manganese Ore India (MOIL) and NMDC, which it estimates could fetch the government up to Rs 25,000 crore.
The proposal is to divest 10% in unlisted MOIL through an initial public offer, and to divest 8-20% stake in listed NMDC (formerly National Mineral Development Corporation). In 2006, the government had finalised a proposal to sell 15% equity in NMDC.
NMDC, which produces 30 million tonne iron ore a year, is the largest mining company in the country. It reported a net profit of Rs 4,350 crore on a turnover of Rs 7,500 crore in 2008-09. MOIL reported a net profit of over Rs 695 crore on a turnover of Rs 1,300 crore during the period.
The pros and cons of allowing FIIs to increase their participation in government securities
But we would like to take a different stand from the editorial. We welcome the government's move, albeit with a bit of circumspection. While the move by the government is welcome, it should do its best to keep a continuous tab on the holdings of the FIIs so that any adverse impact of their withdrawl is countered effectively and in time.
What cannot be ignored in the current scenario is the fact that for all we may know dollar may be losing its strength in times to come. That is when other currencies, including India's, will gain in strength vis a vis the dollar. So, to err on the seemingly prudent side at the current juncture, may not after all be so prudent. Unless we take some risks, we will stay where we are.
Boeing gets help from India to build better aircraft
Boeing’s has a Technology Centre at Bangalore, the third of its kind outside the US, that will function as a centralised R&D organisation for its major business units. It acts as a focal point for collaboration with Indian R&D organisations, including universities and private sector R&D providers.
Boeing has collaborations with several institutions for development of aerospace technology. It has a tie-up with Indian Institute of Science (IISc) for research in aerospace material, structures and manufacturing technologies.
Boeing is working on some key technologies in India for improving the aircraft’s efficiency and bringing down its operating costs. The technology, once fully developed, will help Boeing build a fuel-cell powered futuristic aircraft, which will be lighter and more fuel-efficient.
Hillary's reiteration on RET welcome
The US secretary of state Hillary Clinton has reiterated American resolve to implement the Indo-US nuclear deal in both letter and spirit, and not withhold transfer of attendant reprocessing and enrichment technology (RET). Her statement would summarily put to rest persistent speculation, of late, that the Obama administration is having second thoughts about RET transfer to India. At the G-8 summit in Italy there were reports of moves to tighten the nuclear non-proliferation regime, with media reports suggesting India would not after all be able to access RET from abroad. Such fears can now safely be put behind us.
Jail term for Fujimori
The former Peruvian President, Alberto Fujimori, was sentenced to 7 1/2 years in prison for embezzlement on Monday after he admitted illegally paying his spy chief $15 million in government funds.
This is the third conviction he is receiving. He was sentenced in April to 25 years in prison for authorising military death squad activity during his 10-year rule. Previously, he was convicted of abuse of power and sentenced to six years for an illegal search.
Mr. Fujimori acknowledged making the payoff — avoiding a drawn-out trial that could damage his daughter’s candidacy for the 2011 presidential election. Keiko Fujimori has said she will pardon her father if she wins.
Taro Aso dissolves Parliament
Prime Minister Taro Aso dissolved the powerful lower house of Japan's Parliament on Tuesday and vowed his divided ruling party will make a new start in national elections next month.
Japan's fractious political scene is dominated by two parties -- the LDP (Liberal Democratic Party) and the Democratic Party of Japan.
The doyenne of Hindustani classical music and one of the foremost exponents of the Kirana Gharana, Gangubai Hangal, died at a private hospital following cardiac arrest. She was 96.
A recipient of more than 50 awards, including the Padma Vibhushan, the Padma Bhushan and the Central Sangeet Natak Akademi Award, four honorary doctoral degrees and 24 titles, Ms. Hangal had the rare honour of being felicitated by nine Prime Ministers and five Presidents.
Born in a family of boatmen, hers was an incredible saga of struggle to reach the pinnacle of a musical career, dotted with poignant incidents of battling financial woes, ridicule by casteist neighbours and a constant battle between staving off hunger and delivering sublime music.
A correctional institution used to detain persons who are in the lawful custody of the government (either accused persons awaiting trial or convicted persons serving a sentence)
In a turn of events that no one expected, Ajmal Amir Kasab, the lone surviving terrorist in the 26/11 Mumbai terror strikes confessed to his crime and sought a quick end to the trial.
Having consistently denied the charges for over 65 days, it is puzzling as to why he preferred to confess now.
Keep watching the papers for more twists and turns that may unfold before us. For full details of the confession read this report.
The BMW hit and run case convict gets repreive from Delhi High Court
Remember this attention grabbing case in which six persons were mowed down by a speeding BMW car driven by Sanjeev Nanda, the grand son of former naval Chief SM Nanda?
The Delhi High Court gave him relief as it set aside his conviction under a stringent section, and reduced his sentence from five to two years. Justice Kailash Gambhir convicted Nanda, under 304 a (causing death by rash and negligent act) of the IPC, which carries a maximum punishment of two years. He set aside the trial court’s conviction under the provision of culpable homicide not amounting to murder that carried punishment up to 10 years prison term.
"An organisation that relies on rogues to do its work shall soon have rogues at its helm” -- Mahatma Gandhi.
“It is not power that corrupts but fear. It is the fear of losing power that corrupts those who wield it, and it is the fear of the scourge of power that corrupts those who are subject to it” -- Aung San Suu Kyi, the Burmese leader who is under house arrest for the last two decades.
Finance & Economy
Government measures to ensure liquidity won't drie up
The finance ministry and Reserve Bank of India (RBI) are readying measures to improve liquidity in the system and mute talk of the Centre’s massive borrowing programme inflating government bond yields.
As the first step, the investment cap in government securities (G-Secs) by foreign portfolio investors, or FIIs, is likely to be raised, an official privy to the move said. The current limit for FII investment in government securities is $6.5 billion while for corporate debt, it is $15 billion. FIIs are close to exhausting their investment limits in G-Secs while there is plenty of room for such inflows in corporate debt.
One more step that can reduce the pressure of government borrowing on the market:
Using the RBI's Rs. 88,000 crore Market Stabilization Bonds kitty for lending to government.
Will our SDR contribution to IMF not impact our cash flow?
No. The outflow on account of IMF contributions is placed at Rs. 30,000 crores. This will be a mere accounting entry as the government will be using the forex reserves to pay for SDRs' balance.
Centre to formulate place of supply rules?
The Centre is reportedly mulling the formulation of the Place of Supply Rules with regard to taxation of services soon.
Getting confused as to what these are? These are quite essential in the context of introduction of GST.
Why are they required? Tax can be levied only on a 'taxable event.' A taxable event can occur with reference to supply of goods at the point of consumption. Logically speaking taxable event in respect of services can be stated to have occurred at the point of consumption of services. But this need not necessarily be so. There is bound to be lot of litigation arising out of the determination of the 'locus' of delivery/consumption of services. So, it is good that the Centre has decided to frame these rules in the beginning itself.
Is it too complicated to comprehend?
Perhaps a full reading of this news report will make things clear to you. Strongly recommend a read.
While on this subject, it would also do us lot of good to read this article too.
It raises some pertinent questions with regard to the stated intent of the centre to implement partial GST if the need arose. Well worth a read. It describes the issues that are likely to arise if the decision to roll out GST in a phased manner is implemented.
A super structure to oversee the regulation of financial markets?
The centre is reportedly mulling the creation of a super structure to oversee the regulation of financial markets in the country. Though the body itself will not be a regulator, it is being conceived of a mechanism whereby representatives of all the nationwide financial regulators -- RBI, Sebi, IRDA, Forward Markets Commission and PFRDA -- will find a place on the board.
The government is yet to outline the domain of the oversight agency, but has made it clear to the players concerned that the jurisdictions of the existing regulators will stay.
Merchant power projects to get a shot in the arm
The government is reportedly considering giving customs and excise duty waivers to merchant power plants. The government is planning to permit projects that allow merchant sales of up to 40% of saleable energy in case of hydel power and 15% in thermal power to get zero import duty and deemed export benefit (excise duty waiver) on equipment purchase. It is also planning to extend its policy of giving price preference of 15% to domestic equipment companies till 2011.
Merchant sales allow project developers to sell power in the open market at marketdetermined prices instead of signing longterm contracts with state electricity boards.
Total solar eclipse tomorrow
As noted by us sometime earlier, there is total solar eclipse tomorrow. Only some cities in India will witness the total eclipse while all others will see it partially.
eg: The Congress on Monday unofficially signalled that the Indo-Pak joint statement signed at Sharm-El-Sheikh on resumption of the dialogue process with Pakistan may have been a diplomatic faux pas.
Move by degrees in one direction only
eg: BJP has ratcheted up heat on what it sees as a potential issue to revive its flagging morale ahead of assembly elections in a number states, including Maharashtra, where the 26/11 attacks took place.
An assortment of foods starting with herring or smoked eel or salmon etc with bread and butter; then cheeses and eggs and pickled vegetables and aspics; finally hot foods; served as a buffet meal
A collection containing a variety of sorts of things
one who is prone to eating foodstuff sourced close to the point of purchase
India firmly reiterated its position that it was not in a position to take on “legally-binding targets” on reducing emissions. This statement came even as US Secretary of State Hillary Clinton accepted that developed countries had made “mistakes”, but that all countries need to take steps to reduce emissions.
Climate change and the divisive issue of how developed and developing nations should share the burden of carbon emission cuts is a key focus of the secretary of state’s visit. The Indian side expects considerable pressure from the United States on two major issues. The first, a formal level of emission cap — something that India has consistently opposed. India has refused to commit to carbon emission cuts until developed nations like the United States agree to cut emissions by 40% over the next decade.
The second issue which India expects will figure in the discussions is verification on efforts being made by India to respond to climate change. On this count as well, India has maintained that efforts undertaken domestically will not be subject to international monitoring or verification.
Government to promote pentavalent vaccines
The government is expected to upgrade the existing three-in-one vaccine for infants to a five-in-one by the end of the year under the national immunisation programme.
The government is reportedly negotiating with the World Bank for additional funds to expand the programme.
The pentavalent potion will enable infants to be immunised for five ailments—diphtheria, pertussis, tetanus (DPT), hepatitis B and haemophilus influenza type B (Hib) that causes pneumonia and meningitis—through a single shot.
The country’s national immunisation programme uses a tetravalent vaccine. The introduction of a pentavalent vaccine was recommended by the National Technical Advisory Group on Immunisation (NTAGI) on June 16, 2008.
According to the United Nations Children’s Fund (Unicef), routine immunisation rate in India is 65%.
Finance & Economy
Realty companies about to be favoured with a rule interpretation?
Read this compelling story. It is about how property companies are seeking an interpretation of rule that would favour them in the present trying circumstances to the detriment of foreign investors. In all likelihood the government may play ball with the realtors. As the entire story is a must read, we are desisting from giving excerpts.
Want to know how deeply can the failure of the monsoon hurt us?
With everyone watching the progress of monsoon with trepidation, let's take a look at why agriculture is important for us:
The share of agriculture in GDP is now just 18%, and barely 12% relates to crops (the rest is animal husbandry, horticulture, etc). Despite extensive irrigation, a drought will turn agricultural growth negative, as against average growth of 4.3% in the last five years. That will directly reduce GDP growth by at least 0.5%.
It indirect impact -- reduced employment and reduced rural spending on goods and services — will be even greater. That's why one suggestion that an ET editorial today gives is that NREGS should now be targeted at drought-hit areas rather than spread evenly over every district.
In defense of divestment
This is a very well researched article supporting divestment in PSUs. Well worth a read. Some excerpts worth our attention:
Size of the government’s assets in PSUs:
The total market value of government companies (including unlisted companies) is $406 billion. The market value of 55 listed public sector companies is $281 billion. The average government stake in these listed companies is 80%, and hence the government’s stake in them is worth $224 billion. These estimates are based on secondary market-based valuation tools.
The total workforce employed in quasi-government entities (including PSUs) of the central government (excluding those working directly in administrative machinery) is 5.9 million people, just 1.4% of the total workforce.
The median age of the Indian population is currently 23.7 years, one of the lowest among large nations. India is likely to add 141 million to its current working-age population of 750 million by 2018, according to estimates by the United Nations.
Government's proejcted borrowings for the ensuing fiscal have been giving fits to every finance/economic expert watching the financial scene India.
For those of us the lesser mortals who can barely understand the import of such programmes, this is an article that gives a good background on how things are likely to pan out in the coming year. Take a look. If you are weak in finance/ecnomics, you may find it incomprehensible though. So be warned. But an excellent article worth trying to understand what it tries to say.
A look at Air India's financial status
Amid reports that it may have to pay penalty to Boeing and Airbus for postponing and / or cancelling the delivery of some of the planes it had ordered earlier, a look at its financial status is well worth our attention:
Air India had placed orders for a total of 111 aircraft — 68 from Boeing and 43 from Airbus SAS — valued at Rs 50,000 crore for its fleet replacement and expansion programme in 2005. Currently, it has a fleet of 155 aircraft. Air India has paid Rs 8,000 crore for purchase of 24 aircraft, while Indian Airlines has purchased 24 aircraft at a cost of Rs 4,738 crore in the past three years. In the past two years, Air India has inducted 11 Boeing 777s and 15 Boeing 737-800s for its international routes.
Nacil, formed after the merger of Air India and Indian Airlines, has accumulated losses of Rs 7,200 crore till March 2009. This is more than 10 times the losses Air India posted in 2006-07, before the merger.
It has a workin g capital overdraft of Rs 15,000 crore, while fuel and manpower cost is about 60% of its total cost, against 45% in the case of private airlines.
ESOPs are not 'promoter' shareholdings
It is an interesting story. A proposal by the finance ministry to reclassify employee stock options (ESOPs) as promoter shareholding has been shelved for the present. Read this story for full details. But the gist is that:
There was a feeling that employees are closer to a company than the public and have access to privileged information
But to classify Esops as promoter holding, govt would have to distinguish between top management and ordinary employees, which would complicate matters
Finance ministry’s move is part of a larger policy change proposed on prescribing a higher minimum public shareholding
Besides an indicative public float of 25% for all listed companies, finance ministry had also proposed to take a fresh view on how to classify the holding of employees and other entities, such as FIIs, MFs and NRIs
Some quotes worth our attention for their pun
Definition of litigation: It is "a machine which you go into as a pig and come out of as a sausage."
Justice is "a commodity which, in a more or less adulterated condition, the state sells to the citizen as a reward for his allegiance, taxes and personal service.”
These quotes were from Ambrose Bierce's 19th century work "The Devil's Disciple"
The PM did well in demanding that Pakistan act first before expecting resumption of talks
On the sidelines of the NAM summit in Egypt, the PM made it clear to his counterpart that talks -- whether composite dialogue or otherwise -- can only begin in earnest only when India is satisfied that Pakistan has stopped sponsoring terrorism. To this the Pak PM was reported as saying: “You test us. We will work with India to prevent such things from happening again.”
Let us wait and see what happens next. Pakistan's government, including its army should realize that proxy war through sponsoring of terrorist activities cannot be the basis for furthering Pakistan's interests. Pakistan needs as much international help as it can get to put its house in order. India's consistent stand and restrained behaviour appear to have paid off in the medium term -- soon after the Mumbai attack -- in making the international community see India as a big victim of terrorism emanating from Pakistani soil.
US also says that the nuclear deal is on track despite G8 musings; US to get two nuclear park sites in India
In spite of the ruffled feathers that the G8 declaration caused here back in India, the US has categorically stated that the civil nuclear deal signed with India is very much on track and that the restrictions sought to be imposed by the G8 thinking will not impact India.
The US is going to press India during Hillary Clinton's visit for nuclear park facilities at two sites in the country. India is going to grant them the same to facilitate nuclear trade with India. The two sites will be used by US companies to locate reactors and sell reactors to the Indians. The sites are going to be located in Gujarat and Andhra Pradesh, if reports are to be believed.
Finance & Economy
Pope's veiled comment on outsourcing raises India Inc's hackles
The Holy Father’s gentle nudge to his flock to watch out for unholy ghosts lurking in the free market is putting the fear of God in India’s $50-billion outsourcing industry.
Pope Benedict XVI’s Encyclical released last week raised pointed questions on the adverse impact of outsourcing, although it steered clear of addressing the issue in region or religion-specific terms.
India’s outsourcing sector, which counts top global corporations as its customers and is up against rising protectionist clamour in the US, was quick to react, citing the inevitability of outsourcing in the era of globalisation and the importance of seeing business as what it is: business.
BTW do you know what is an encyclical? Look at today's language lessons section below.
Even as the Pope's letter was sinking into India Inc, UK’S biggest phone firm British Telecom (BT) announced that it will move back some 4,000 call centre jobs outsourced to Indian service providers, as the company seeks to ensure more employment opportunities for British workers and protect jobs of those employed directly by the company.
Both Infosys and Tech Mahindra, which count BT as one of their top customers, are expected to see a decline in back office outsourcing business from the phone firm.
We all know that the Air India is finding itself in a mess now. If you are asked to state some solutions to pull it out of the morass that it is finding itself in, will your suggestions tally with the following ones given in today's ET editorial?
The issue of bloated work force. It should have the freedom to shed workers and alter their generous salary terms.
The government must also decide urgently on the bailout package sought by the airline.
The airline needs to be given the freedom to be run on commercial lines. An important element of that is bringing in professionals at the top and not babus who may lack the domain knowledge to run a large airline.
A stock exchange listing would also help as regular disclosures, as opposed to infrequent information revealed to Parliament, would increase transparency and perhaps create pressure to effect change.
Class action suits in India
We have rarely seen such suits in India thus far. But a recent SEBI's decision is going the change this, in so far as class action suits against companies by investors is concerned.
In a first of its kind SEBI decided to fund a domestic investors’ association that has filed a class action suit against Satyam Computers, its former promoters, auditors and directors. The lawsuit is seeking compensation from Satyam and the parties involved for the losses these investors incurred in its stock price crash, after an accounting fraud came into light in January 2009.
The class action suit, which is a collective lawsuit presented by a representative-member before a court on behalf of a large number of investors, has been filed by New Delhi-based Midas Touch Investor Association in the Supreme Court. Midas, which represents three lakh investors, collectively holds nine crore shares of Satyam.
The market regulator will use the investor protection and education fund of Rs 15 crore, which has so far been used to sponsor investor education programmes, to fund Midas. The association will be reimbursed 75% of the total expenditure on legal proceedings that it will incur.
India-ASEAN FTA reached?
India and the ASEAN countries have reportedly finalised the free trade agreement (FTA). The text of the trade-in-goods agreement has already been finalised while discussions on agreements in investment and services will start soon. If true, it will be only a matter of time before the member countries of ASEAN and India get their cabinets to approve the agreement before it is inked.
The signing of the India-ASEAN FTA, which has been delayed due to a variety of reasons, was discussed during Prime Minister Manmohan Singh’s meeting with his Malaysian counterpart Najib Abdul Razak on the sidelines of the NAM summit in Egypt.
Under the agreement, duties on 4,000 items will be brought down over a period of six years.
The 10 Asean members are Brunei, Singapore, Cambodia, Indonesia, Malaysia, Laos, Myanmar, the Philippines, Vietnam and Thailand.
A letter from the pope sent to all Roman Catholic bishops throughout the world
The National Authority for Unique Identity, headed by Nandan Nilekani, will aim at providing a unique number to all Indians, but not smart cards.
It’s another matter that various ministries may, for their various purposes, choose to issue biometric cards using this unique number. But the Nilekani team itself will focus simply on ways to give all citizens a unique number, and let others issue cards for purposes they think fit.
The unique ID number will not substitute other existing numbers a person may have (PAN, passport number, ration card number). Rather, it will be an additional, unique number to be cited along with existing numbers for different purposes. This will help weed out duplicate and ghost cards that are widespread today (notably in BPL ration cards), and, may be, benami bank accounts and property deeds.
Citizens will not be obliged to get a number. But those that don’t will find it very inconvenient: they will not have access to facilities that require you to cite your ID number.
On creating broadbased economic growth (an excerpt from today's op-ed article by TK Arun)
More than one-fourth of India’s 600 districts are officially counted as Naxalite afflicted and Maoist violence is rated as India’s number one internal security threat. Policing alone cannot stop the trend. We need a new kind of politics that creates broadbased economic growth. Inclusive growth does not mean hand-outs from the state but converting people into active participants in the process of globalised growth. Hand-outs such as by the employment guarantee programme do serve a purpose, and are relatively easy to produce. However, making marginalised people stakeholders in the growth process is far more difficult.
Why is the Left finding itself at crossroads today? (an excerpt from today's op-ed article by TK Arun)
The Left believes that Capitalism has become moribund, devoid of any progressive, emancipatory potential and is, therefore, a system whose overthrow is the sole goal to be pursued in the interest of the people. This world view, fashioned in the 1950s, leaves the Left without any constructive agenda to deal with the world as it is.
This constitutes a strategic deprivation for the Left and leaves them in a peculiar bind. The Left was on a strong wicket while it mobilised the people against pre-capitalist land relations and brought about land reforms, wherever they were in a position to. However, after having established the pre-requisites of capitalist growth, they could not take things forward. After all, their job is to topple capitalism, not build it. At the same time, to win elections, you have to be seen to be trying, at least, to create jobs. Now, jobs can be created in the government sector, but only to a limited extent. So, for job creation at large, the Left has to dirty its hands by building capitalism, in some form or the other. It is this reduction of engaging with the real world to a vague compromise with its basic strategic programme which lies at the root of the Left’s problems, including underdevelopment of its areas of influence, Kerala, West Bengal and Tripura, and alienation of the people of Lalgarh.
In this excellent piece (two excerpts from which are given above) TK Arun gives some same advice to the Left parties.
Will the Left listen? Lalgarh and Singur should ideally be the turning points for Left to take a revisionist approach. China did it and transform itself. In Russia the Left fell by the wayside. Only in Cuba is still holding forte in the same old form in which it was heralded. Can the Indian Left see the writing on the wall?
On crop insurance
Only around 4% of the country’s farmers have availed a crop insurance scheme. More shockingly, a National Sample Survey Organisation study in ‘03 revealed that 57% of India’s farmers were unaware of crops being insured.
With monsoons playing truant, it is time the government spruces up its act and comes up with a workable risk protection scheme for farmers.
Government gives go-ahead for swine flu vaccine production
India's drug regulator has given approval to three domestic biotech firms to start tests and analyses to develop a vaccine for swine flu, or the H1N1 virus.
Bharat Biotech, Panacea Biotech and Serum Institute will now be able to procure seed strains from labs in the US and UK to manufacture the vaccine.
The domestic companies are expected to take at least six months before they apply for an approval for the next stage of trials. Once the companies submit their preliminary test and analysis data, they will have to apply for potency test, pre-clinical trials and finally clinical trials before launching the medicine in the market.
But it is believed that by September, global companies might be able to roll out a vaccine in the country.
Finance & Economy
In defense of monetization
We have been noting for quite sometime about how the government's planned borrowing to an extant of close to Rs. 4 lakh crore is going to stoke inflationary pressures.
Read today's ET editorial to understand the reasons why monetization of the deficit is better at the current juncture. Solid case made out -- yes; but we will escape being mauled by inflation only when there is timely action by government on rolling back of the stimuli at an appropriate time.
Anil Ambani funds DreamWorks of Steven Spielberg
It is the biggest and the most high-profile deal in Indian entertainment. Anil Ambani-promoted Reliance Big Entertainment (RBE) has finally sealed the funding for its much-hyped 50:50 joint venture with Hollywood’s iconic director Steven Spielberg’s DreamWorks.
DreamWorks Studios will get an initial funding of $825 million, which includes equity from Reliance ADAG to make films for a global audience. The company would make five to six films per year, and the first production would start this year for release in 2010. Of the $825 million, $325 million will be equity infused by Anil Ambani as his personal investment, $150 million will come from The Walt Disney Company as a distribution advance, and the rest will be funded by JPMorgan via debt.
This is not Mr Ambani’s only venture in Hollywood. BIG Pictures, owned by RBE, has plans to produce films with Nicolas Cage’s Saturn Productions, Jim Carrey’s JC 23 Entertainment, George Clooney’s Smokehouse Productions, Chris Columbus’ 1492 Pictures, Tom Hank’s Playtone Productions, Brad Pitt’s Plan B Entertainment, Jay Roach’s Everyman Pictures, Brett Ratner’s Rat Entertainment and Julia Roberts’ Red Om Films.
Mesmerizing plans; aren't they? The initial rash of investments made by Anil Ambani soon after he parted ways with his brother now appear to be having a big plan behind them.
Government targets Rs. 15K crore disinvestment?
The Economic Survey had recommended an annual disinvestment target of Rs 25,000 crore.
The budget did not have much to say about this.
But the Finance Secretary is reported to have disclosed that the disinvestment plans are on; refraining however to mention any target for raising funds from disinvestment. But going by the corridor rumours the figure that the government might be looking at may be of the order of Rs. 15,000 crore.
The public sector firms that figure in the road map include NHPC, Oil India and Tyre Corporation. Disinvestment in NHPC and OIL India alone is expected to fetch around Rs 3,500 crore.
Small savings accounts get a boost with NREGS
Some 31.2 million postal savings accounts were opened in 2008-09 to facilitate wage disbursal under the National Rural Employment Guarantee Scheme (NREGS), helping the country’s postal system regain at least some of its lost sheen. The number is expected to cross the 50-million mark by the end of 2009-10 when disbursals under the scheme will cross Rs 10,000 crore, said a senior official at India Post.
PM calls for an international convention on terrorism
Addressing the NAM summit at Sharm El-Sheikh, Egypt the PM called upon NAM countries to agree upon a comprehensive convention on international terrorism.
At the meeting that is taking place in the backdrop of economic recession, the economist prime minister used the opportunity to drive home India’s point about the need for a new international financial architecture that relies on the participation of all countries. He said the developed world cannot shirk off its responsibility as the ongoing crisis emanated from the advanced economies.
G8 restrictions not to hinder nuclear trade with France
The G-8 recommendation to raise the bar on transfer of enrichment and reprocessing technologies to countries that do not have it seems to be unravelling. In his talks with Prime Minister Manmohan Singh, French President Nicholas Sarkozy has told the Indian side that it will have no bearing on his country’s nuclear trade with New Delhi.
Sources in the government said Mr Sarkozy conveyed to the prime minister that France will not allow G-8 stand on the matter to come in the way of nuclear negotiations with New Delhi. This assurance came during their luncheon meeting in Paris on Tuesday.
The agreement between India and France allows India to reprocess French-origin nuclear fuel on its own. France has exhibited flexibility on the reprocessing issue and has indicated that it is also willing to reprocess fuel on its own territory if India wants.
This development augurs well for India as it comes on the back of Russsia’s nod to reprocess fuel that it supplies to India. The support from the two countries is expected to strengthen India’s case.
Iranian airplane crash kills 168
A Tupolev aircraft crashed in Iran on Wednesday on its way to Armenia after catching fire in mid-air and ploughing into farmland, killing all 168 people on board just 16 minutes after take-off.
In the worst crash in Iran for six years, the Russian-built Caspian Airlines plane left only scattered bits of incinerated metal and fragments of the bodies of 153 passengers and 15 crew across a wide area around a deep smoking crater in the ground. The Tu-154 plane, flying to Armenia’s capital Yerevan from Tehran, crashed near the northwestern city of Qazvin shortly before noon .