Politics & the Nation
- We just can't afford to miss this excellent article
- Do read it here.
- It is about the power of budget to spur rural spending. They have conducted a survey to find out what is happening to the money that is being earned by way of NREGA wages. Very useful insights.
- Trouble at Air India
- With the airlines losses accumulating to more than Rs. 7,200 crore till March 31, 2009 and a depleting cash position, the airline is unable to pay even salaries to its employees. It has reportedly decided to pay the June salary with a delay of over 15 days and has asked its employees to forego the July salary.
- The management's decision to hire over 300 retired Air India staff in past has come in for severe criticism and the government has reportedly ordered a probe into it while virtually demoting two of its directors that it sees as responsible for the move.
- Some tough days lie in store for the airline. Already many airlines in the world are reeling under severe losses because of economic downturn and swine flu and about 30 airlines worldwide have been forced to close shop in the past one year.
Finance & Economy
- Coke and Pepsi see record summer sales
- Coke has been seeing growth in sales for the past 11 quarters. Both the companies have seen over 30% growth in unit sales volumes in the quarter ended March 2009.
- While Coca-Cola’s Thums Up and Sprite are now the top two brands among all aerated beverages, PepsiCo’s drinks like Mountain Dew, 7-Up and latest launch Nimbooz are fast-tracking on growth.
- Industry growth has been coming from a combination of factors like investments in bottling lines, coolers and trucks, upping distribution footprint by tapping smaller tier-II and tier-III towns and cities, introduction of beverages in multiplepack sizes and localised-marketing activities. Both companies, US-based, have been facing declining or stagnant sales in developed markets like the US, owing to the slowdown. So, India’s growth stands out, and this explains why India is a key market for them.
- Banks ask RBI to relax provisioning norms for loans
- At present, the provisioning norms followed by RBI mandate that default in one loan automatically forces classification of other loans by the same borrower as NPAs, even though the borrower might be servicing the other loans regularly. RBI follows a 90-day norm, wherein an installment not paid within 90 days from the due date has to be classified as an NPA on the 91st day.
- Now, in view of the increasing delinquencies from borrowers on one account or the other, banks are requesting RBI to relax its provisioning norms so that only loans where default is there, get classified as NPAs. This relaxation is expected to shore up banks' performance. Provisioning shown for NPAs means reduced profits.
- Do you see indications of history repeating itself? The practices followed by Indian banks are seen largely as responsible for keeping them in good stead and insulating them from the ill effects associated with profligacy in lending practices. How is it that the very same banks are now seeking a relaxation in norms? Why prefer profits over good accounting practices?
- What steps were taken by the budget to broadbase the market and reduce volatility in stock prices?
- One statement of the FM in his budget speech that appears to have gone unnoticed by the market players is about mandate to all listed companies about their public shareholding. Public shareholding includes shares held by individuals and financial institutions, foreign portfolio investors, mutual funds and non-resident Indians, employees and others.
- The FM stated that this public shareholding in all should be at least 25% of the company's stock. Listed companies from sectors such as IT, infrastructure, communication and entertainment, which had been allowed to list with 10% public float on account of a special exemption by the market regulator, will now have to scurry around to increase public stake in their companies. This norm would also apply to all government owned companies too. That means disinvestment. Government-run companies such as IOC, NTPC, NMDC, MMTC and India’s third largest software exporter Wipro will have to take steps by December to raise public shareholding to the stipulated 25% over 3-5 years. The move will deepen and broadbase the stock market and bring down volatility in the market by reducing concentration of shares in a few hands.
- What are the hurdles in the way for GST roll-out by April 2010?
- Recommend strongly a read of today's ET editorial that answers this question directly.
- Some points that are worth our noting:
- Setting appropriate revenue neutral rates and arriving at a consensus on whether this should be a single or multiple rate.
- Agreeing on the threshold level at which GST should kick in.
- IT capability at the tax administration and the taxpayer level.
- Taxation of inter-state sales of goods and services is another bugbear.
- Framing rules on how the timing and place of consumption of goods and services is to be determined.
- Putting in place the necessary legislation. Centre can't tax goods; states can't tax services. An amendment to the constitution to enable this requires clearance from a majority of state legislatures too besides Parliament.
International
- Riots in China
- Till a few days ago many of us wondered as to how China manages to not have any sectarian clashes.
- But the clashes that broke out between Muslim Uighurs and Han Chinese in Urumqi (Xinjian Province in Chinese North West) on Sunday have shaken us and we are now left to wonder whether China also is having some weakness which have hitherto remain unnoticed.
- The ethnic clashes killed 156 and wounded over 1,000.
- The unrest erupted when Uighur protesters attacked vehicles before turning on local Han Chinese and battling security forces.
- They had initially been protesting over a brawl between Uighurs and Han Chinese several weeks earlier in a toy factory thousands of miles away in Guangdong province.
- Tensions have been growing in Xinjiang for many years, as Han Chinese migrants have poured into the region, where the Uighur minority is concentrated. Many Uighurs feel economic growth has bypassed them and complain of discrimination and diminished opportunities.
- Some Uighurs support the notion of an independent state and there have been a number of bombings and some attacks on security forces.
- Chinese authorities say the Xinjiang separatists are terrorists with links to al-Qaeda and receive support from outside the country.
- PM leaves for G8 meeting in Italy
- Though G8 meetings have become quite frequent of late, their summit officially is scheduled only once in a year. India has been a invitee to the G8 summits from the year 2003.
- The Group of Eight, G8 for short, is a forum created by France in 1975, for governments of eight nations of the northern hemisphere: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States. In addition, the European Union is represented within the G8.
- Lately, both France and the United Kingdom have expressed a desire to expand the group to include five developing countries, referred to as the Outreach Five (O5) or the Plus Five: Brazil, China, India, Mexico, and South Africa. These countries have participated as guests in previous meetings, which are sometimes called G8+5. Recently, France, Germany, and Italy are lobbying to include Egypt to the O5 and expand the G8 to G14.
Technology- Google announces Chrome OS
- We all know Google Chrome browser. We have been using it for the last one year.
- Now Google announced Chrome Operating System. It will be launched sometime in second half of 2010.
- This is going to give M$ a run for its money. It is also scheduled to launch its Windows 7 OS soon.
Language lessons
- chalet: Noun
- A Swiss house with a sloping roof and wide eaves or a house built in this style
- bugbear: Noun
- An imaginary monster used to frighten children; An object of dread or apprehension
- eg: "Germany was always a bugbear for France"
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