29.09.2009

Politics & the Nation

• Noting about the failure of a break-through in the talks between the foreign ministers of India and Pakistan on the sidelines of the UN General Assembly, we also noticed this picture in the paper.
• Remember this picture? It is about the retreat ceremony called 'lowering of the flags' that takes place at the Wagah border between India and Pakistan.
• Are you a novice to this? Don't know anything about Radcliffe line? Then you should take a look at this wikipedia article that explains it well.
• Are you among the following groups?
• We are sure many of you are.
• According to a survey done by Tata Consultancy Services called Generation Web 2.0, students today are shifting their academic and social life online and embracing the digital world as true digital natives. The survey conducted across 14,000 high school children between the ages of 12-18 in 12 cities across India during 2008-09, said 63% of urban students spend over an hour online daily, 93% are aware of social networking, 46% use online sources to access news and over 80% have access to mobile phones.
• The Prime Minister is reported to have backed the Bharti-MTN merger deal.
• Is this right for a PM to do? A very well reasoned ET editorial on the subject is worth our attention.

Finance & Economy

• Developments on the Bharti-MTN deal
• All of you by now, know the issue of dual listing on which the fate of this deal is dependent. With the pressure on Indian government to allow dual listing, the government seems to have come up with an alternative to dual listing.
• Indian policy makers are reported to have suggested to their South African counterparts that they could consider the option of a structure whereby MTN’s shares could be listed in India in the form of Indian Depository Receipts (IDRs). These are shares issued by foreign companies in India, denominated in rupees and sold to local investors.
• In a mirror image of Global Depository Receipts or GDRs or American Depositary Receipts (ADRs) — an overseas firm will issue its shares to an Indian depository which will then issue depository receipts to local investors. The IDRs represent the underlying shares of the foreign company.
• IDRs are fairly close to capital account convertibility (the proceeds are freely repatriable). In the post-global economic crisis scenario, this could send out a politically strong message.
• However, it is not clear if the two companies are considering the IDR option at this juncture.
• Tackling the non-tariff barriers in international trade
• One time or the other you would surely have heard of this phrase 'non-tariff barriers.' Get a lowdown on these NTBs in this article by Prashant Goyal. Worth a read. Perhaps you can keep the article as reference material also.
• Personality: K. Cherian Verghese
• This former chairman and managing director of state-owned Union Bank of India, will now head the Board For Industrial & Financial Reconstruction (BIFR).
• Mr Varghese was a member of BIFR since April 2007. He takes over from Ms Binoo Sen, who retired recently.

International

• Personality: Roman Polanski
• He is in the news for being arrested on the charge of having sex unlawfully with a minor some thirty years ago! He is reported to have had sex with a minor girl by name Samantha Gailey (now Samantha Geimer). He was then 44 and she was 13.
• Roman Polanski is well known director of movies. One of the films for which he is well recognized is "Rosemary's Baby."
• He was travelling in Switzerland to collect a ‘lifetime achievement award’ at the Zurich film festival, when the arrest was made two days ago.
• Want to know more about him and this sordid saga? Take a look at it here.
• Can IMF be an impartial monitor of national economic policies?
• In the context of the Pittsburg summit of the G20 anointing the IMF with some primacy, this is the question that has suddenly acquired a huge interest. Three experts debate the issue. Take a look.

Language Lessons

• helmer: Noun
• A television or film director
• snare: Verb
• Catch in or as if in a trap; Entice and trap
• eg: The car salesman had snared three potential customers.
• propitiate: Verb
• Make peace with

28.09.2009

Politics & the Nation

• Quota law won't be binding on private foreign universities
• Foreign universities and education providers setting up campuses in India are unlikely to be required to provide for reservations for Scheduled Castes and Tribes and other backward classes (OBC).
• Even as minister for human resource development Kapil Sibal said that “reservation laws as applicable to Indian institutions” would apply to foreign universities setting up campuses in India. Only government education institutions are required by law to provide for reservation quotas; private unaided institutions are not required to set aside seats for Scheduled castes and tribes and OBCs.

Finance & Economy

• Risk weight for CRE (Commercial Real Estate) segment to go up?
• It is reported that the RBI is considering such a move to pre-emp another bubble in the local property market.
• Risk weight for this segment, which was at 150% (till November last year), was brought down to 100% by the RBI to facilitate credit flow to the sector that was reeling under a demand slump.
• RBI's expected move follows the earlier-than-expected sings of revival that this segment has been displaying of late.
• Currently, interest rates on most of the loans is between 7.5% and 12.5%, depending on the credit rating of the borrowing company. The current move will make loans to this segment costlier by 75-200 basis points.
• BTW remember the concept of risk weight?
• It is related to the capital adequacy ratio (CAR) of the bank. As per the present norms a bank is expected to maintain of CAR of 9%. What this means is that for every Rs. 100 that it lends, it has to have a capital of Rs. 9. This is the level at which the risk weight is stated to be at 1. But for riskier loans, the RBI mandates higher risk weight ratio. For eg., when the risk weight for CRE segment was at 150%, the banks have to maintain a capital of Rs. 13.50.
• Sarfaesi Act to be amended to give bankers precedence?
• It is reported that the government is considering bringing about an amendment to the Sarfaesi Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests) and also the DRT Act (Debt Recovery Tribunals Act).
• This is because when banks attach properties and are about to sell them, the sales tax authorities can lay first claim to the sale proceeds, because arrears of tax are treated as crown debt and hold precedence over all other dues.
• But bowing to demands from the banks that it is the money lent by them that needs to be given precedence in collection, the government is reportedly considering the amendments to allow such precedence.
• Till March 2009, under the Sarfaesi Act, banks have issued 3.41 lakh notices for an amount of Rs 68,127 crore. Of this the lenders have recovered Rs 19,396 crore involving 2.10 lakh notices and while settling with borrowers in 79,277 cases for a sum of Rs 11,249 crore.
• Want to get a peek into the interconnected world of metals, currencies and inflation?
• Take a look at this article that appeared in today's ET. A couple of titbits worth our attention:
• Taking a step back to look at the big picture, although the stimulus package made headlines at $2 trillion, it’s been widely reported total US debt, including social security, government pensions and Medicare in the first quarter of 2009 was $51 trillion and by May, USA Today reported, it grew to $63 trillion. Whichever figure it is, it is clear the US is overleveraged and in commercial terms “insolvent”; and this figure will continue to grow unless some active measures are taken.
• Currently, worldwide assets, including bonds, stocks and derivatives, are valued at around $500 trillion, approximately 100 times the value of gold. This means, in the worst case scenario, we will have 100:1 correction of today’s paper asset classes, turning into hyperinflation.

International

• The G8 formally gives way to the G20
• The G8 — wealthy nations Britain, Canada, France, Germany, Italy, Japan, Russia and the United States — has served in various forms as the premier economic forum since 1975 and holds closely-watched annual summits.
• In the recently concluded G20 summit at Pittsburg, it has formally been acknowledged that it is the G20 which will be the guardian of world economic governance henceforth.
• The summit decided to give developing countries greater voting rights at two major financial institutions — the International Monetary Fund (IMF) and the World Bank.
• Leaders committed to shift at least 5% of the IMF’s internal voting rights to the developing world and tasked it with a bigger role monitoring economic policy. They also vowed to increasing underrepresented countries’ voting rights by at least 3% at the World Bank.
• Thus the two day summit at Pittsburgh has seen a seismic shift in global economic diplomacy.
• The G20 will meet twice next year – in Canada in June and in November in Korea, and annually thereafter.

Acronym

• FSSBG: a framework for strong, sustainable and balanced growth
• Invented at the recently concluded G20 summit.

Art

• Ever heard of Pushpamala?
• Frankly, we didn't. But here she is in today's ET giving an esoteric interview. We advise you to read the interview; with the hope that many of you will be able to get a first hand feel of what is expertise about in a particular area. As for her area -- she is an expert in performance photography and dialogue disjunctured films.
• Understand a thing? Don't? Don't bother. Just remember her name. May be useful sometime down the line to show off your awareness in the area of art.

Language lessons

• ecriture
• If you read the art interview that we pointed out to you today, you would get across this word. It is a French word. So couldn't get the exact meaning of the word in English. Somehow the phrase "feminine ecriture" made sense in the interview. Looks like it has got something to do with presentation of the female form/character in artistic work - be it film, photography, painting etc.

26.09.2009

Politics & the Nation

• Why does India not sign the NPT? Nuclear Non Proliferation Treaty.
• India regards this treaty as grossly unfair as it sanctions the continuance of an unequal world order of ‘nuclear haves and havenots.’ India is all for non-discriminatory and global nuclear disarmament; the key words being non-discriminatory and global.
• The present secondclass railway compartment mentality of the existing formally-recognised nuclear powers that allows them to retain their nuclear weapons while the rest of the world is denied access is unacceptable.

Finance & Economy

• Realty regulatory draft bill ready
• Take a look at this news report. It is a welcome step; and should be implemented speedily. It is understandable that realtors will be upset with the provisions of the bill. But it is heartening to note that it really seeks to protect the interest of the retail home buyer.
• Deemed export benefits on the way out?
• Deemed export benefits or ‘duty draw back and refund of terminal excise duty’, is believed to be abused by exporters who make fake claims to demand excess refund of taxes paid in India. For this scheme, the government provides funds to the commerce ministry as a budgetary allocation.
• The finance ministry is now reportedly toying with the idea of scrapping this scheme from next year's budget.
• A very good editorial on what reform measures are needed to spruce up our act on the mining policy front.
• Take a look.
• Cash and accrual accounting -- differences
• Cash and accrual reporting differ in the time at which costs are recognised. Cash-based budgeting records receipts and expenditure at the same time cash is received or spent, without regard to the time at which the income generating, resource consuming, or liability increasing activity has occurred. Accrual-based budgeting, on the other hand, records transactions at the time the activity has happened, regardless of when the associated cash is actually received or paid.
• A cash-based system would incompletely account for all costs necessary to deliver a specific output, thereby, making comparisons with private — and within public-sector difficult. Cash based systems can result in understatement of government's commitments.

International

• What did India press for at the ongoing Pittsburg summit of the G20 leaders?
• In his speech at the summit, Mr Singh focused on three things: the need to sustain the coordinated stimulus measures by national governments around the world for some more time, at least till the end of 2010; the developed countries’ obligation to take the lead in quelling protectionist eruptions and concluding the Doha Round of trade negotiations fast and stimulating investment in the developing countries.
• Is it time to bid farewell for G8?
• The G20 summit underway here got a boost on Thursday night when, at the inaugural dinner for the leaders of the 20 leading economies and their spouses, host US President Barrack Obama said categorically that the Group of 20 has now replaced the G8 as the premier global economic forum. Rarely do changes in the global balance of economic power find such rapid reflection in the global architecture of economic cooperation as in the present instance, said Mr Obama.
• G20 to crack down on bankers' pay
• GROUP of 20 leaders said they will crack down on banker pay and better align economic policies as they turned from crisis management to delivering a new set of rules for the world economy. President Barack Obama and counterparts meeting in Pittsburgh crafted a plan to force banks to tie bonuses to risk and raise the amount of capital they hold, officials said, citing a draft of a statement. They pledged to maintain stimulus measures until growth takes hold and to narrow disparities in trade and savings. They also announced the G-20 will replace the G-8 as the main forum for steering the global economy.

Internet

• On LinkedIn
• We are sure you all -- or most -- of you would have heard of LinkedIn. It's an online professional networking enabler. Those of you who don't know it or have heard of it, an consider exploring it at least once to get a feel of the concept.
• This is an interview with the CEO of LinkedIn. He is currently on a visit to India. Do read the interview. It gives us insights into the new and fast developing trend of professional networking.

Astronomy

• Now Helium is found on moon.
• It was only yesterday that papers were all excited about the discovery of water on moon; thanks to Chandrayaan I. Even the US is reported to have thanked India for the discovery.
• Now ISRO said that it has been able to detect deposits on the moon of a mineral which can be used to fuel power plants. Believed to be abundant on the moon, the non-radioactive Helium (He-3) is regarded as having the potential to power future nuclear fusion reactors for hundreds of years.
• ISRO said its Moon Impact Probe (MIP) and Hyper Spectral Imager (HySI) — two of the 11 scientific instruments that formed the cargo of the Chandrayaan-1 spacecraft — shattered the belief that the moon is bone dry. The payloads had detected the presence of water some months ago and this was confirmed by data gathered by the American space agency Nasa.

Music

• On Lata Mangeshkar
• Yeah, we know the topic may sound a bit out of date. But times will come when you will enjoy your knowledge of some little known things.
• Lata started singing at the tender age of 13!
• Her first film (where she acted) was Master Vinayak's Pahili Managalagaur, a 1942 Marathi film.
• Growing up in Sangli and being born into a Maharashtrian family, Marathi was her first language but their family spoke Persian at home.
• So far she has sung in 36 languages!
• Lata could not insure her voice. Because such insurance is not allowed in India. But look at some international greats whose body parts are insured:
• Cristiano Ronaldo’s legs insured for £90m
• Footballer David Beckham’s legs £70m
• Pop diva Jennifer Lopez’s butt $27m
• Singer Bruce Springsteen’s voice $3m

24.09.2009

Politics & the Nation

• Trade Unionism gone sour: Pricol VP gets murdered
• Take a look at this disturbing news report. Pricol Vice President (HR) Roy George died following a brutal attack by a section of workers. The incident has sent shock waves among the employers and investors in the State of Tamilnadu.
• Government plans to cut down litigation time to one year
• IF law minister Veerappa Moily’s mission is fulfilled, there will be no more stories of anyone spending a lifetime in litigation. The government is trying to cut down the life of litigation from an average 15 years to just a year.
• With 2.75 crore pending cases in the country, Mr Moily said the government aims to cut down the span of a litigation, first to three years and eventually bring it further down to a year over the next three years.
• As part of the proposed judicial reforms, steps are being taken to set up 5,000 new courts to implement speedy justice in the next three-four years.
• The Gram Nyayalayas will be put into operation from October 2, Mahatma Gandhi’s birth anniversary.
• Mobile Number Portability to kick in from December 31
• Number portability is slated to kick in from December 31 across the metros and category A circles, such as Tamil Nadu and Karnataka
• A user holding a mobile connection is eligible to make a porting request only after 3 months of the date of activation
• The regulator has not yet decided on the charges for number portability
• Two companies identified to carry out number portability -- Syniverse Technologies and MNP Interconnection Teleco Solutions.

Finance & Economy

• Another stock market bubble?
• This is an excellent analysis presented by C.P. Chandrasekhar. A must read for all of us. An excerpt for those of us who do not have the time/patience to read the entire article:
• There are three conclusions that flow from this sequence of events that lead to the current boom:
• The first is that using liquidity injection and credit expansion as the principal instrument to combat a downturn or recession amounts to creating a new bubble to replace the one that went bust.
• The second is that so long as the rate of inflation in the prices of goods is in the comfort zone, central bankers stick to an easy money policy even if the evidence indicates that such policy is leading to unsustainable asset price inflation.
• Third, that governments in emerging markets like India have not learnt the lesson that when a global expansion in liquidity leads to a capital inflow surge into the country it does more harm than good, warranting controls on the excessive inflow of such capital. Rather, goaded by financial interests and an interested media, the government treats the boom as a sign of economic good health rather than a sign of morbidity, and plans to liberalise capital controls even more.
• Signals of economic recovery
• More Indian companies and individuals are now borrowing from banks to build factories, buy cars and homes, taking advantage of low interest rates, a sign that economic growth may accelerate.
• All the top notch IT companies have announced lifting of hiring and pay hike freezes.
• India Inc mopped up a cool Rs. 3000 crore in a single day by selling treasury stock, normal stock and through IPOs.
• All these certainly point to a broadbased recovery. Whether it is a real recovery or only a blip remains to be seen. The real test will be when the government starts to unwind the stimulus it has unveiled. The timing of the unwinding perhaps will reveal a lot about the character of these signals.
• An excellent explanation about GDRs/ADRs
• Read this "ET in the classroom" column.
• Is there an unfair advantage available to overseas investors when it comes to mergers and acquisitions in India?
• Look at this ET editorial. It points out that there is in fact such an advantage and that SEBI’S decision to amend the Takeover Regulations in respect of depository receipts that enjoy voting rights will make the takeover regime consistent for local and overseas acquirers.
• We may be covering the global financial crisis in our blog for the last two years. But it ain't as good as the exposition given by Arvind Panagariya in his ET op-ed piece today.
• That's why Professors are well, Professors. It's very rare for us to reach that level of exposition. Take a look. We are not giving any excerpts; because we want you to read in full... word by word. It is a gem of a piece seen in a long time.

International

• The agenda before the Pittsburg summit of the G20
• The Pittsburgh summit is expected to focus on medium- and longterm issues such as a framework for sustainable and balanced growth, strengthening the international financial regulatory system, reforming the mandate, mission and governance of the IMF and development banks, strengthening support for the most vulnerable, an open global economy and energy and climate change.

Science & Technology

• PSLV C14 successfully launched
• Three days after it celebrated its 16th birthday, a Polar Satellite Launch Vehicle named PSLV-C14 roared its way to success from the spaceport at Sriharikota on Wednesday, putting in orbit India’s Oceansat-2 and six nano satellites from abroad. This was the 15th successful flight of the PSLV in a row. The first PSLV flight took place on September 20, 1993. It was a failure then. But since then every launch of the PSLV was a success. You can look at the chronology of PSLV launches here.
• At the end of 18 minutes of flight, the PSLV’s fourth stage injected Oceansat-2 into orbit at a velocity of 25,000 km an hour at an altitude of about 728 km. Thereafter, spring-loaded action mechanisms catapulted four nano satellites called Cubesat 1, 2, 3 and 4 into orbit one after another. Two more nano satellites named Rubinsat 9.1 and 9.2 remained permanently attached to the PSLV’s fourth stage.
• The 960-kg Oceansat-2, put in orbit by the PSLV-C14, had three important payloads. They were the ocean colour monitor, a scatterometer (both designed by the SAC) and Radio Occultation Sounder for Atmospheric Studies (ROSA) built by the Italian Space Agency. The ocean colour monitor would gather data about plant life in the oceans which would provide information on where schools of fish were located. The ROSA would study the temperature and humidity in the atmosphere.
• The six nano satellites put in orbit by PSLV-C14 were educational satellites from abroad, meant to test new spacecraft technologies.
• Some important personalities in space science in India
• K. Radhakrishnan, Director, Vikram Sarabhai Space Centre, Thiruvananthapuram.
• ISRO Chairman: Madhavan Nair
• R.R. Navalgund, Director, Space Applications Centre, Ahmedabad
• An important space establishment: Liquid Propulsion Systems Centre at Mahendragiri in Tamil Nadu.
• The challenges before ISRO include launching a Geosynchronous Satellite Launch Vehicle (GSLV-D3) with an indigenous cryogenic stage from Sriharikota in December 2009 and the PSLV-C15 ahead of December.
• GSLV-D3 would put a communication satellite called GSAT-4 in orbit.
• The PSLV-C15 would put Cartosat-2B in orbit.
• ISRO had completed the preliminary design of Chandrayaan-2, which would boast of a lander-cum-rover. The rover would go about on the moon and pick up lunar samples, which would be analysed in situ. The launch of Chandrayaan-2 would take place in 2012-13.

Art & Culture

• Bath used by temple pilgrims found in Jerusalem
• Read this interesting news report.
• What is interesting about this discovery is that baths of that type which were used almost 2 millennia ago are still used in Jerusalem.
• Great Wall of China longer than originally believed
• New ruins of Great Wall of China discovered by the archaeologists show that the wall is longer than expected and stretches eastward by 11 kilometres.
• The newly discovered section, built during the Qin (221-206 BC) and Han (206 BC to 220 AD) dynasties, was found in northeastern Jilin province.
• It is generally believed that the Great Wall was built in different historic periods and adds up to about 50,000 km.
• The government departments announced in December 2008 the exact length of the Great Wall built in the Ming Dynasty (1368-1644) was 8,851.8 km.

23.09.2009

Finance & Economy

• SEBI comes up with its own twist to the Bharti-MTN deal
• The Securities & Exchange Board of India (Sebi) has likely compounded the hurdles for Bharti Airtel in its efforts to create the world’s third-largest mobile phone company with South Africa’s MTN Group, unveiling a rule change on Tuesday which will make the deal more expensive for MTN.
• What are the present rules?
• In case of ADRs/GDRs, the receipts are issued by depositories (like Bank of New York) which are the legal owners of the underlying stocks. Often Indian companies strike an arrangement where the depositories vote in consultation with the board of the Indian company. RBI had stopped this practice among banks which had issued ADRs/GDRs
• What has Sebi changed?
• Till now, ADRs/GDRs were outside the takeover code. But from now on, if an ADR/GDR investor indirectly owns 15% equity it will have to make an open offer, provided there is an arrangement to exercise the vote
• Does it throw a spanner in the proposed Bharti-MTN deal?
• Since under the current plan MTN would subscribe to Bharti GDRs, Sebi's new rule could force MTN to make an open offer to Bharti shareholders in India. This makes the deal more expensive for MTN, if the open offer is fully subscribed.
• What's the way out for Bharti?
• Bharti can propose an agreement where MTN shareholders surrender their voting rights to the Bharti board. Bharti can then approach Sebi for an exemption to the open offer. But there are doubts whether the MTN board and MTN shareholders will agree to this. Alternatively, Bharti can increase the cash payout to ensure MTN's shareholding is below 15%.
• Trading in 'directed credit obligations' to be allowed?
• Wow; what a phrase? What are these "Directed Credit Obligations"?
• Remember the priority sector lending mandate that is there for banks in India? It refers to them.
• The RBI is now reportedly considering allowing in trading of these DCOs. What this means is that, if a bank has exceeded its priority sector lending beyond the mandated 40%, it can then sell it to others which have fallen short of their mandate -- ofcourse for a price.
• Take a look at this report for a deeper understanding of the issues involved.
• One more committee on petro pricing
• And what it should do. Given that this is the third committee since 2004 to go into the vexed issue, and given also that the earlier committees had all come out with some meaningful suggestions which were not implemented, what should this committee do? Take a look at this well-written piece which will give us an insight / recap of the issue.
• What's wrong with sub PLR lending?
• The sub-PLR lending has now grown to nearly three-fourth of all bank lending, making the benchmark almost irrelevant.
• As banks have the freedom to price loans below their BPLR, there is no pressure on them to lower it when their cost of funds declines. Resultantly, while new customers are able to shop around for better rates, the majority of existing borrowers of floating rate loans are denied the benefit of declining interest rates. This flexibility to lend below the BPLR is the reason banks jack up BPLRs quickly in a credit squeeze situation, but do not show the same promptness in lowering rates when the pressure abates.
• On raisin production economics
• There is a global shortage of raisins (dried grapes) since the leading producer, Turkey, had unseasonal snow last year which meant there was no flowering, hence fall in grape production. The other major raisin producing country, Australia, has switched to wine grape production, thus creating a demand.
• However, India is not expected to benefit greatly. The three districts of Sangli, Solapur and Bijapur, the first two in Maharashtra and the last in Karnataka, are the main producers of the 80,000 tonnes or so of raisins produced in the country. Maharashtra’s two districts suffer from a lack of irrigation and power, preventing them from taking advantage of the global demand, according to a grape grower and raisin maker from the region.
• In 2005, the last year for which data is available, Turkey overtook the US as the world’s largest raisin producer at a time when global raisin production exceeded 6 lakh tonnes.

International

• India, China on global investors radar
• CHINA, India and other Asian markets would be the preferred investment destinations over the next five years, says a survey. The bullishness in the emerging markets is because of the continued high growth and market size of China and India.
• So says the UK Trade and Investment (UKTI) report, prepared in collaboration with the Economist Intelligence Unit.
• Take a look at this news report for more details.
• Ms. Bokova to head UNESCO
• In what can only be described as a stunning upset, Irina Bokova, Bulgaria's former foreign minister and current ambassador to Paris became the first woman to head UNESCO, the Paris-based United Nations agency for education science and culture. She also became the first person from the former Soviet bloc countries to be nominated to this post.
• Ms. Bokova was elected on Tuesday by the organisation's 58-member Executive Board, winning 31 votes to defeat her rival, Egypt's culture minister Farukh Hosni, who polled 27.
• The Board will now forward her nomination to UNESCO's General Assembly to be held in November 2009.
• This was the most thrilling and closely fought election in the organisation's history with the candidates tied at 29 votes each in the fourth round. If the tie had continued in Tuesday's fifth and final round, the winner would have had to be drawn from a hat. Such a move would have been unprecedented.
• Take a look at this picture of Ms. Bokova.

Environment

• Indian girl asks for urgent action on climate change
• A 13-year-old Indian girl - Yugratna Srivatsava from Lucknow, speaking on behalf of the world’s three billion children, asked world leaders for urgent action on climate change.
• The ninth grader from St Fidelis College spoke at the high-level summit convened by the U.N. Chief Ban Ki-moon. India was represented by Foreign Minister S.M. Krishna and Environment Minister Jairam Ramesh.
• The summit is being held to mobilise political will ahead of the Climate Change Conference in Copenhagen in December, which is expected to yield a climate treaty to succeed the Kyoto Protocol.
• The student from Lucknow is also on the youth advisory board of United Nations Environment Program’s (UNEP) youth organisation called ‘Tunza ‘(to nurture).

Sport

• Kasparov takes early lead
• You might remember the ongoing exhibition match between Chess's all time greats Anatoly Karpov and Gary Kasparov at Valencia, Spain.
• Kasparov took two games lead in the match. These are played in the semi rapid format. Ten more games remain: two more in this same format and eight blitz games, in which each player starts with five minutes on the clock, with two seconds added after each move.
• What's the name Jayanta Talukdar associated with?
• Ans: Archery.
• Take a look at this news report. We get a peek into the world of Archery championships. You have quite a few titbits in it which are worth remembering.

22.09.2009

Politics & the Nation

• An SMS based search facility for knowing the insurance status of vehicles
• There is a statutory requirement for third-party liability insurance for vehicles in India. Despite this, insurers estimate that a large percentage of registered vehicles in the country are uninsured.
• According to data released by the insurance industry, there are around five crore policies in force while the total number of vehicles are over eight crore.
• A common searchable database has been discussed by the industry for several years. Besides identifying uninsured vehicles it would also enable companies to ascertain the claim histories of vehicle that seek to buy insurance from others when their rates are raised for poor claims track record. One reason why the database could not be completed was that the different level of computerisation of various companies.
• The IRDA is deploying technology that will enable this search. Under the new system, anyone who wants to know the insurance status of any vehicle plying in India has to SMS the registration number of the vehicle to a telephone number connected with the portal. The vehicle registration number will be searched in the system and insurance status of the vehicle with period of cover will be sent through SMS. In case of new vehicles, insured for the first time, instead of registration number, engine number or chassis number of the vehicle needs to be sent.
• AP shows the way to implement NREGA
• CAG has lauded the NREGA implementation in Andhra Pradesh because of the manner in which the state has leveraged IT for building a transparent and accountable system. Given the amount of commitment (almost Rs 40,000 crore allocated towards NREGA this year) for this programme, an IT-led execution at the grassroots level could go a long way in ensuring success.
• From the time a job seeker like Sanjeeva enrolls with a local village panchayat office to the allocation and monitoring of assigned work, leading to final wage payment, everything is registered and tracked using a software solution developed by India’s biggest software exporter Tata Consultancy Services (TCS), in collaboration with AP government officials.
• Over the past few months, the system has enabled AP to improve wage rates in Telangana districts from around Rs 30-40 to around Rs 80 by identifying relevant projects and assigning them accordingly. The system, which is web-enabled, allows users and other officials to sift through entire data, including the number of job cards issued across 22 districts and almost 21,857 village mandals, and identify the loopholes for addressing inefficiencies.

Finance & Economy

• Bharti sweetens the MTN deal; SA remains unimpressed
• Even as the deadline for concluding the merger deal is fast approaching -- September 30 -- Bharti has reportedly been making a slew of last-minute concessions to sew up a deal with MTN. Bharti is offering to retain the top management of MTN for at least three years, giving the option of an all-cash offer to minority stakeholders of MTN, and more shares in itself for the same money, which would push up the cost of acquisition for Bharti.
• In spite of this South Africa appears to be unmoved and keeps on insisting dual listing. Why?
• Dual listing will allow the companies to retain their separate identities by listing MTN shares on an Indian exchange and Bharti shares on South African bourse while entering into “equalisation” agreements to collectively run operations and share profits and losses.
• South Africa is insisting on dual listing to ensure its home-grown multinational retains national character, while India does not allow dual listing, as it would need full capital account convertibility, change in listing norms and the Companies Act.
• For South Africa, it is a matter of pride, since it is the only telco owned by South Africans after Vodafone recently took over the country’s largest domestic telecom firm, Vodacom.
• The South African government is a stakeholder in MTN through Public Investment Corp, the state-owned pension fund administrator, which has a 24% stake in the telco. Besides, MTN’s expansion into Africa and West Asia has been propelled by bilateral agreements negotiated by the South African government.
• Sub-PLR lending to disappear?
• The Reserve Bank of India (RBI) is reportedly preparing to ban lending below the prime lending rate (PLR). The ban however, may not be a complete ban. Sub-PLR lending may still be allowed on short term loans. Let's await the RBI's policy statement on this.
• Sub-PLR lending came into existence a decade ago, after banks obtained permission from the central bank to lend below the benchmark rate. RBI had accepted the argument by bankers that by not lending below PLR they were losing customers to mutual funds and other lenders who were willing to invest in their short-term debt at below PLR rates.
• However, it has been increasingly felt that the existing practice of pricing loans is not transparent and does not effectively transmit changes in policy rates across the banking system. This led to RBI recently constituting a committee under executive director Deepak Mohanty for reviewing the PLR practice. Currently, around 75% of loans given by banks are at sub-PLR rates.
• India not too eager to allow foreign bank spread
• The RBI is reportedly silent on relaxing branch licensing norms for giving further space to foreign banks to expand in the country. This is amid concerns over the lack of reciprocity from other countries. The RBI is adopting a conservative approach because of restrictive rules in many countries in their treatment of Indian banks.
• There are 30 foreign banking companies operating in India and having 300-odd branches. In 2005, RBI released a four-year road map setting out the norms for the presence of foreign banks in India. It was to have implemented the second phase—where the regulations be further loosened—starting April 2009 but this was delayed because of the global financial crisis.
• Under World Trade Organisation (WTO) rules, India is committed to permitting the opening of 12 branches of foreign banks every year but the RBI has allowed more than this number to be opened.
• India issues a single class of banking licence to foreign banks and does not require them to move up from a lower to a higher category of banking licence over a period, as is the practice in several foreign countries.
• In the context of the likelihood of the government pursuing its disinvestment agenda this time round, how should it go about it?
• Take a look at this well-written article by an expert on the subject. Especially consider the suggestions he gives on coming out with the IPOs.

Science & Technology

• Santhanam sticks to his guns on the 1998 nuclear tests
• By now all of you would have known the consternation caused all around by the statements from this famous senior scientist. In spite of being almost booed down by the retorts he had been receiving from the senior functionaries in the scientific and political circles, he is displaying lot of guts and gumption in sticking to his stand that the 1998 nuclear tests did not give the desired result. Take a look at this news report.

Sport

• Karpov vs. Kasparov
• Former chess world champions Garry Kasparov and Anatoly Karpov are to play an exhibition match in Valencia, Spain. Kasparov and Karpov are dusting off their knights and pawns for an exhibition rematch marking the 25th anniversary of their first title bout - a grueling one that lasted five months and was eventually halted on grounds both were exhausted.
• An interesting snippet about Valencia, the Spanish town:
• Valencia is where the modern rules of chess were born in the 15th century when the queen — reputedly modelled on Isabel of Castile — was introduced to the board.

Language Lessons

• kerfuffle: Noun
• A disorderly outburst or tumult
• eg: Literal translations of that kind are precisely what led to the kerfuffle over Shashi Tharoor’s indiscreet twitterings, rather than any national lack of a funny bone.
• double entendre: Noun
• An ambiguity with one interpretation that is indelicate
• eg: English ... its capacity for nuances and double entendres, has accelerated its acceptance and usage around the world.
• go to the dogs: Idiom
• Become ruined; to become worse in quality or character
• eg: They sat in the bar the night before the election, moaning that the country was going to the dogs.

21.09.2009

Politics & the Nation

• Supreme Court intervenes in allotment of medical seats
• The Supreme Court has directed state governments to offer 15% seats of medical colleges to the Centre and conduct an ‘extended round of counselling’ to fill seats as per merit. The directive comes in the wake of a petition filed with the apex court stating that some medical colleges in J&K, Chhattisgarh and Gujarat had refused to offer seats for Centre’s quota of 15% as per Medical Council of India (MCI) guidelines.
• The total number of seats under Centres’ 15% quota were supposed to be 2,205 (1,972 for MBBS and 233 for BDS) for the academic year 2009. Due to delay on part of the states, there were 339 unalloted seats for MBBS courses, while 168 BDS seats were not allotted after the first round of counselling.
• Ad blitzkrieg against Naxalism
• Seeing that the war against naxalism needs to be fought at mind level, it resorted to an advertisement blitkrieg against naxals.
• Naxalism currently affects 2,000 police stations spread over 223 districts across 20 states. As many as 1,405 Naxalrelated violence killed 580 persons across the states until August 27 this year as compared to 1,591 incidents and 721 killings in the whole of 2008.
• The anti-Naxal force, the Commando Battalion for Resolute Action (Cobra), and the Chhattisgarh police together killed around 30 Maoist rebels on Friday in Dantewada district.
• Could high economic growth lead to lower corruption?
• This question was the subject of research in Australia recently. One of our favourite authors brings to our notice the results of this research. Take a look...

Finance & Economy

• Policy regime relating to FIIs in for overhaul?
• SEBI is reportedly working on overhauling the policy regime relating to FII investments. A new qualified foreign investor framework (QFIF) is to replace the existing one on foreign institutional investors (FIIs).
• Currently, a foreign individual seeking to invest in Indian stocks has to be registered as a sub-account of an FII, which, in turn, has to apply to Sebi on behalf of the sub-account holder. Besides, the validity of the sub-account registration is co-terminus with the registration of the FII.
• The idea behind the concept paper was to remove unnecessary hurdles and make it simpler, and also to bring foreign investors on par with domestic ones. It is also expected to encourage more investors to come through the front door instead of the participatory note (PN) route. PNs are overseas derivative instruments with Indian shares as the underlying asset that allow foreign investors to invest in Indian equities indirectly, without revealing their identity to Indian authorities.
• If these proposals go through, individual foreign investors would be able to buy and sell securities on Indian stock exchanges directly by opening a demat account with a domestic depository and a dedicated bank account with mandatory cheque payment facility. This would also address ‘know-yourcustomer’ concerns of banks and depositories, as they would be liable to carry out all checks on the overseas investor before opening an account. Moreover, the mandatory cheque payment requirement would generate a paper trail that would help track transactions related to the account, and possibly detect money laundering.
• A recap of the Bharti-MTN merger issue
• Bharti and MTN have reportedly finalised the merger contours and are waiting for the assent from their respective governments.
• You might be aware that the proposed merger involves the Indian company taking a 49% stake in MTN and the South African company and its shareholders acquiring a 36% economic interest in Bharti. The deal and the structure is reportedly in place. According to the proposal that has been approved by both companies, Bharti will pay a total of $10 billion in cash and issue 442 million new shares to MTN shareholders worth an additional $4 billion for acquiring a 49% stake in the company. Bharti will also raise $3 billion by issuing fresh shares to SingTel on a preferential basis. No further negotiations are required between the two companies.
• As the Bharti-MTN saga enters the last round, the DLC issue is threatening to become a deal breaker. As both governments are showing little flexibility on the matter of dual listing, it would take nothing short of a miracle for the deal to go through. Will Sunil Mittal’s call finally go through? That's the big question that is there on every India Inc watcher's mind.
• For DLCs to be allowed in India, several laws, including the Foreign Exchange Management Act (FEMA) and the Companies Act, will have to be amended and full capital account convertibility will have to be allowed. According to at least two finmin officials, DLCs do not figure anywhere on the government’s and RBI’s radar at the moment. This is mainly because DLC implies a situation close to full capital account convertibility, which the Indian government or RBI is unwilling to consider.
• Look at the reach of India Post!
• It has 1.55 lakh post offices in the country.
• It is now roped in to offer various other services because of its reach. Take a look at this report about its foray into offering health insurance for the rural folk. Worth our notice.

International

• Pak govt, army backed efforts to help North Korea, Iran, says Khan
• AQ KHAN, the father of Pakistan’s nuclear weapons programme, has gone public with what the world at large had always suspected—that his efforts to help out North Korea, Iran and China in building their capabilities had the backing of the Pakistani government and army.
• Pakistan has all along denied that it had abetted Khan’s project, maintaining that he was doing it all alone, but the latest revelations are certain to make its claims suspect in the eyes of the US and other western nations.
• Khan writes about the Pakistani leadership in a December 2003 letter to his wife Henny that has finally been made public by an interlocutor. The interlocutor is a journalist contact by the name of Siman Henderson. Henderson has now made the letters public.

Sport

• India enters Davis Cup World Group after 11 years
• Thanks to Somdev Devvarman, India made it to the 16 team World Group in Davis Cup after 1998. Then it had lost to Italy. Thrice India reached in the final of the World Group but ended up runners-up on all occasions.
• Somdev Devvarman scripted a spectacular win over South Africa’s Rik De Voest in a high-voltage marathon five-setter to clear India’s passage.

Language Lessons

• lese majesty: Noun (also lèse majestè)
• A crime that undermines the offender's government; The crime of violating majesty, an offense against the dignity of a reigning sovereign or against a state.
• eg: Critics apparently don’t want to go anywhere near a comment which could be considered lese majeste since the ongoing austerity-drive is being led by Congress chief Sonia Gandhi who flew economy!

20.09.2009

Politics & the Nation

• Many of you are aspiring Civil Servants. Some of you already are. There is a very good lesson for both of you in today's article on why biscuit companies are selling sugar.
• Or rather, why they are forced to sell sugar; by government diktats. Learn from these experiences, don't ever be responsible for taking such decisions in your career. Read on ...

Finance & Economy

• DGH approves GSPC's 2 TCF gas reserves
• State venture Gujarat State Petroleum Corporation received approval for its field development plan entailing an investment to the tune of $1.7 billion for KG 8 from the Director General of Hydrocarbon. GSPC which also has approval for 2 TCF find in KG Basin is now aiming to start commercial gas production by December 2011 from KG – 8, 15, 17 and 28 wells.
• GSPC will use the Reliance’s existing pipeline network to evacuate gas from KG basin. GSPC will produce 120 million standard cubic feet of gas per day to begin with. Duirng the first 12 years, it is expected to maintain gas production at 200-300 million standard cubic feet of gas per day.
• One time or the other you would have come across the phrase "Private Placement" in our notings. What exactly is "private placement"
• Let us not re-invent the wheel and simply follow what is stated in today's ET Guide Book column on the subject. A very well written piece. Read it here.

Archaeology

• Dolmen with petroglyphs found near Villupuram
• A big dolmen with four petroglyphs that portray men with tridents and a wheel with spokes has been found at Kollur, near Tirukoilur, 35 km from Villupuram in Tamil Nadu.
• The discovery was made by K.T. Gandhirajan, who specialises in art history, when he led a team to that area.
• Petroglyphs are engravings made with a tool.
• This is the second time that a dolmen with petroglyphs has been found in Tamil Nadu. The earlier discovery in the Nilgiris district was also made by Mr. Gandhirajan. But it was a circular dolmen with a petroglyph on the slab wall (The Hindu, May 24, 2009).
• If interested in more details, read the full story here.

Technology Trends

• What is HD video?
• It refers to any video of higher resolution than standard definition (SD) video. HD TV resolution is 1080 or 720 lines which means higher resolution, while regular digital TV is 480 or 525 lines.
• Now it is the HD video technology that is making waves in the digital still camera space.
• Malvertisers and scareware
• M$ filed suits against ‘malvertisers’
• Malvertising is the term used to describe online advertising and works by camouflaging malicious code as harmless online advertisements. M$ sued five companies that used malvertisements to distribute malicious software or present deceptive websites that peddled scareware to unsuspecting Internet users.
• XACML & xHDL
• These are mark up languages. The search for protecting home based computers / networks from cyber attacks, has led to the development of these languages. Take a look at this news report. You will understand the terms well.

Language Lessons

• Green mile: Noun
• You will not find the definition / meaning for this phrase in any conventional dictionary. Green mile refers to the stretch of green linoleum to the electric chair in a jail. If you had seen the movie "The Green Mile" you would understand it instantaneously.
• The Green Mile is a 1999 American drama film directed by Frank Darabont and adapted by him from the 1996 Stephen King novel of the same name. The film stars Tom Hanks as Paul Edgecomb and Michael Clarke Duncan as John Coffey.
• The film is primarily about Paul and his life as a corrections officer on Death Row in the 1930s. The movie is told in flashback by the protagonist in a nursing home and follows a string of supernatural events upon the arrival of John, a man convicted, but not guilty, of murder. His domain was called the "Green Mile" because the condemned prisoners walking to their execution are said to be walking "the last mile"; here it is on a stretch of green linoleum to the electric chair.
• Eg: If manufacturers are to be believed, the conventional video camera is already walking the green mile.
• dolmen: Noun
• A prehistoric megalithic tomb typically having two large upright stones and a capstone

18.09.2009

Politics & the Nation

• With the likes of SM Krishna and Sashi Tharoor making it to the headlines for the wrong reasons and the likes of Soniaji and Rahul Gandhi making it to the front pages for the right reasons, the drive for austerity in these difficult times has gathered much more than its share of attention.
• Do such drives serve any purpose? For a healthy debate on the issue take a look at today's ET debate.

Finance & Economy

• The NSE Nifty crosses the psychological 5000 mark!
• Take a look at this graphic which briefly outlines the factors that led to the boom and things that could upset the apple cart.
• McDonald's making record losses in India
• Those of us who were frowning at the junk food mammoth's entry into India and were worried about the forays it will make into the Indian palette may draw comfort now. It reportedly is making record losses, even 13 years after its entry. Its accumulated losses are reportedly at Rs. 350 crores.
• This inspite of the fact that the fast-food industry is growing by 40% in India.
• FCCB buyback shores up profits for India Inc
• Some companies bought their own convertible bonds (Foreign Currency Convertible Bonds) in the June quarter, when they were trading below their face value which led to a reduction in companies’ debt and also added to some profits. The difference between the face value of the bond and the lower market value at which they bought was treated as profits. For many companies, the gain is in the 16-150% range of their quarterly profit before tax.
• If a convertible bond has a face value of $100 and the company bought back at $80, then the gain of $20 (100-80) would, usually, go to the profit & loss account, either as an exceptional income or sometimes as a part of other income.
• Investors in convertible bonds in the past financial year sold off their investments at fire-sale prices to reduce their leverage in the wake of the credit crisis. Some Indian companies took advantage of those low prices and bought their own bonds which helped them reduce their debt facilitated by relaxation of rules by the Reserve Bank of India (RBI).
• Some titbits about our plantation sector
• India’s 1951 Plantation Act stipulates that any plantation measuring five hectares or more or employing 15 people or more should not just provide negotiated wages but also offer free facilities like housing, medical-care and education. Producers of plantation commodities in other countries are not constrained by such legislation.
• It is estimated that plantations in South India alone provide direct employment to over 1.3 million workers in remote areas.

International

• Good news from America?
• THE number of Americans filing first-time claims for jobless benefits fell unexpectedly last week, a sign that the labour market is deteriorating at a slower pace as the economy pulls out of the recession.
• Applications dropped by 12,000 to 545,000 in the week ended September 12, from a revised 557,000 the week before, Labour Department data showed in Washington on Thursday. The total number of people collecting unemployment insurance rose the prior week, to 6.23 million.
• The job market may be starting to stabilise as government and private reports reinforce forecasts that economic growth will resume this quarter.
• Even on the housing front, there is appearance of positive news:
• Builder in the US broke ground in August on the most houses in nine months, led by a jump in multi-family dwellings that overshadowed a decrease in construction of single-family homes.
• Housing starts rose 1.5% to an annual rate of 598,000, as anticipated, figures from the Commerce Department showed in Washington on Thursday.
• This, coupled with Ben Bernanke's statement that the recession is likely already over, may bring cheers all round. Let's hope so.
• BRIC nations are the new FDI destinations
• The Unctad World Investment Report 2009 predicts global inflows to fall from $1.7 trillion in 2008 to below $1.2 trillion in 2009. Recovery is expected to be slow in 2010 (to a level of up to $1.4 trillion) and gain momentum in 2011 (approaching $1.8 trillion).
• The report shows there has been a huge surge in investments in developing and transition economies, increasing their share in global FDI flows to 43% in 2008. This is partly due to a concurrent large decline in FDI flows to developed countries (29%). FDI inflows to South Asia in 2008 amounted to $51 billion. Inflows to the two largest emerging economies, China and India, also continued to increase in 2008.
• According to Unctad secretary-general Supachai Panitchpakdi, “The Bric countries (Brazil, Russia, India, China) are the most favoured destination for FDI.

Society

• Big fat Indian weddings are making a come back
• Companies in the business of managing plush weddings in India and abroad, an organised business worth Rs 5,000 crore about a fourth of the total Rs 20,000-crore Indian wedding market, are already witnessing rush from the clients.

Sport

• Cricket rankings: ICC ODI rankings
• 1. Australia (127), 2. South Africa (127), 3. India (126), 4. Pakistan (109), 5. Sri Lanka (108), 6. New Zealand (105), 7. England (102), 8. West Indies (78), 9.Bangladesh (55), 10. Zimbabwe (26).

Language Lessons

• stela: Noun
• An ancient upright stone slab bearing markings
• Rosetta Stone: Noun
• A part of an inscribed granite stela that was originally about six feet tall and was set up in 196 BC; the inscriptions in hieroglyphics and Demotic and Greek gave the first clues to the decipherment of Egyptian hieroglyphics
• eg: Released last week, Lucy Tobin’s compendium of teenage English — teenglish for the uninitiated — is another one of those modern rosetta stones of popular idiom that could help grown-ups understand the next generation’s mysterious and ever-changing lexicon.
• trousseau: Noun
• The personal outfit of a bride; clothes and accessories and linens
• profanity: Noun
• Vulgar or irreverent speech or action