Indian Current Affairs: 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

Take a look at this graphic which briefly outlines the factors that led to the boom and things that could upset the apple cart.

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.

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).

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

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.

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

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

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

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.

Indian Current Affairs