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.