01.10.2009

Politics & the Nation

• Yesterday's "Political Theatre" page in the ET has very interesting news:
• First it is our PM saying that we are for ending nuclear proliferation.
• Appreciating US President Barack Obama’s vision of a nuclear weapons free world, our PM said that India was committed to ending nuclear proliferation and participating in negotiations for a Fissile Material Cut-off Treaty.
• It was announced that the Mithi Virdi site in Gujarat and the Kovada site in Andhra Pradesh have been earmarked for American companies to setup nuclear parks there.
• Haripur in West Bengal has been kept aside for Russians to set up a second nuclear park after Kundankulam.
• Then it is the Supreme Court ruling which said that there should be no more construction of religious places of worship on public land
• The interim direction, which would be in force till final disposal of the case, would apply to all places of worship like temples, mosques, churches and gurudwaras.
• The court passed the direction while hearing a petition challenging the Gujarat High Court order of May, 2006. The High Court had asked the municipal corporations in the state to demolish all illegal structures, including places of worship, on public roads.
• But the SC had put the order on hold on an appeal by the Centre pointing out the law and order situation it was likely to create. The government expressed concern that if the HC order was not stayed, it would have serious ramifications on the unity, integrity and security of the nation. The Centre, in its appeal, had clarified that it was not justifying the existence of unauthorised constructions.
• After that it is the news that the Centre decided to drop the case against Ottavio Quattrocchi
• The Centre had informed the Supreme Court that the CBI has decided to drop the case against Italian middleman Ottavio Quattrocchi, accused in Rs 64 crore Bofors kickbacks case.
• It has said that the decision to close the case against Quattrocchi was taken also in view of the order of the Delhi High Court and also the fact that all efforts to extradite Quattrocchi had failed. The HC had held that no case of corruption was made out in the Bofors deal.
• The apex court, taking into account of government’s submissions, observed, “if the matter is not alive in trial court what can we do. Then there is no necessity to keep the matters pending in this court. It appears that CBI wants to withdraw the case.”
• But the petitioner's counsel has reportedly taken objection and argued that his petition has to be heard. Upon this submission the SC is reported to have posted the matter for hearing on December 11. The trial court is scheduled to take up the case on Saturday.
• Finally it is the Pakistani decision to handover two suspects to Saudi Arabia which has drawn the attention of political observers.
• While refusing to take any action either to prosecute or handover the Mumbai attack perpetrators, the Pakistani government has reportedly handed over two suspects -- the two sons of top Yemeni Al Qaeda leader Alawi, who are accused of planning the suicide attack on Saudi deputy interior minister Prince Mohammad bin Nayef in Jeddah last month.
• Saudi Arabia, according to the report, shared intelligence about Alawi’s son during Pakistan interior minister Rehman Malik’s visit to Jeddah early in September and asked Pakistan to trace and arrest Ali and Siddique who are allegedly the top planners of the suicide attacks. In less than a month, the Pakistani intelligence agencies handed over the two Alawi sons to Saudi Arabia.

• Has Montblanc erred in coming out with its limited edition pen?
• Reportedly it has come out with a pen that costs about Rs. 12 lakhs. It is called the "Mahatma Gandhi Limited Edition 241"; the 241 signifying the number of miles that the father of the nation had walked for the Dandi march.
• But the move appears to have fallen foul of the provisions of the ‘Emblems and Names (Prevention of Improper Use) Act, 1950’.
• Want to know some more details? Read this ET editorial.

Personality

• WIPO Director General Francis Gurry
• World Intellectual Property Organization

Finance & Economy

• Bharti MTN deal is off
• South African nationalism and India’s hesitation on capital account convertibility scupper the creation of a giant MNC from the emerging markets
• India's telecom czar Sunil Mittal’s dreams of forging a transnational alliance with Africa’s largest telco MTN were shattered for the second time in less than two years with Bharti Airtel and the South African company calling off talks a few hours before the expiry of the September 30 deadline after the South African government refused to soften its stance on the proposed deal structure.
• Codenamed ‘Project Green’ by Bharti Airtel and ‘Project Saffron’ by MTN, the two companies and their numerous advisors and bankers had worked on the transaction since the beginning of the year. After over eight months of torturous and complex discussions, both companies reached an agreement for a $24-billion alliance to create the world’s fourth largest telco spanning 24 countries and 200 million subscribers.
• Anyway, the issue has enlightened us about dual listing issue. We have covered about it extensively in our blog.
• Gift tax scope widened from today!
• What a party pooper right in the middle of the festive season!
• Till now gift tax is applicable only on gifts in cash of over Rs. 50,000/-.
• But from today onwards, any gift of Rs. 50,000 and above in kind also attracts gift tax.
• Budget 2009-10 has brought all gifts in kind into the tax net. Cash gifts above Rs 25,000 are being taxed since April 1, 2004. The floor was raised to Rs 50,000 effective April 1, 2006.
• The liability to tax is on the person receiving the gift.
• However, gifts from a relative, on the occasion of marriage, under will or by way of inheritance, in contemplation of death of donor, from any local authority, or from any fund or trust would be exempted from tax. Spouse, siblings, spouse/parents’ siblings and any lineal ascendant or descendant are defined as relatives under the Income-Tax Act.
• Fiscal deficit for April-September is at 45.5% of BE
• Take a look at this news report which gives details about it.
• Meanwhile, India's external debt rose marginally by $3.7 billion during the quarter to touch $227.7 billion as on June '09. The rise in debt was mainly due to an increase in long-term external debt, particularly NRI deposits.

• Market economy status for Vietnam
• India isall set to recognise Vietnam as a market economy—a system where prices of goods are determined in the market and not by the government. This clears the last hurdle in the way of India’s free trade agreement (FTA) with all Asean members.
• Once Vietnam is given this status, India will have to accept prices supplied by it in all anti-dumping investigations against goods originating from that country.
• At present, India uses third-country prices for calculating dumping margins against imports from Vietnam.
• In the context of India making a transition to the GST regime from April 1, next year, it would be worthwhile for us to get exposed to the practices obtaining worldwide on the VAT/GST front.
• What else can give us this kind of exposure than listening to an expert on the subject? And that too one that that operates a true global level? Read this interview from Ine Lejeune, Global Indirect tax leader in PWC.

• USL's (United Spirits Limited, the Vijay Mallya company) Bagpiper set to become the world's leading whisky brand?
• But that's not the end of the road for Johnie Walker.
• Both Johnnie Walker and Bagpiper are whiskies; but they are as different as chalk and cheese. The Indian brand sells for about Rs 200 per 750 ml quart while the cheapest variant of the scotch whisky — Johnnie Walker Red Label — costs Rs 1,200.
• In 2008, Johnnie Walker sold 16.3 million cases to 15.4 million by Bagpiper. Sales of the Indian whisky have been growing at 10-11%, while the scotch brand’s volumes grew by 4% in the fiscal to June 2009.
• United Spirits expects to sell 17 million cases of Bagpiper whisky in the fiscal to March. Johnnie Walker sales during the same period are projected at 16.8 million cases.
• This may be the case volume-wise. But look at Johnie Walker sales!
• Globally, Johnnie Walker sales totalled over £2.8 billion (Rs 21,000 crore) compared to £450 million (Rs 3,500 crore) for Bagpiper.
• Mr Mallya launched Bagpiper as a trainee some three decades ago. He is doing his best to add insult to Diageo’s injury in the coming months: the beer-to-airlines tycoon sees United Spirits displacing Diageo as the world’s top spirits company by March 2011.
• If you are pursuing an MBA, or are an MBA and if you expect to become a reasonably well-informed person, you cannot ignore Jeff Immelt.
• Jeffrey Immelt is the CEO of GE (General Electric), the $183 bn behemoth that tries to reinvent itself all the time.
• Take a look at this interview with Immelt. You will get a peek into ideas and concepts like glocalization, reverse innovation, disruptive innovation etc.
• In his own words, this is what GE is trying to do:
• "to re-think the traditional model of developing high-end products in developed markets and selling these around the world."
• He further says:
• In today’s ‘reset’ world, GE needs to have more products at more price points.
• The emerging markets are becoming centres of innovation in various fields; they have unique market needs that require targeted innovation, not reengineered solutions from developed markets.
• Isn't it music to our ears?
• Should migration be allowed from EPF to NPS?
• Though official norms allow provident funds to invest up to 15% of their corpus in shares of companies, the EPFO has not been able to agree to even a 5% allocation. The EPFO could have been balking at the thought of raising the risk profile of the entire scheme. Although the increased risk would, over a long period, be compensated with higher returns, in the short-term, the exposure to equities could prove counterproductive and is not justified for those subscribers who are nearing retirement.
• The way out is to build an element of choice for its over 45 million subscribers by providing at least two investment options: the existing one without exposure to equities, and a new one that invests the maximum 15% allowed in shares. Younger subscribers with a higher risk-appetite would have the option to move to the plan that has equities while others could continue with the existing plan.
• When you already have NPS operating, which invests upto 50% of its corpus in equities, why not allow a migration from EPF to NPS, is the obvious question that comes to mind. Well, what's your take?

Internet

• Internet's local language offerings handout hope
• With less than 40 million active users and just about seven million broadband connections for more than a billion people, India’s internet penetration is pathetic.
• Yet, it’s changing. And the change is driven by not technology or affordability, but relevant content in regional languages.

Language lessons

• jingoistic: Adjective
• Fanatically patriotic