Indian Current Affairs: 27.10.2009

Politics & the Nation

Take a look at today's ET editorial on the subject. It gives an excellent ringside view of the matter. An excerpt which we couldn't resist from giving:
Pakistan’s policy of differentiating between terrorists operating on its eastern and western flanks, and of elements within the security establishment still abetting the groups arrayed against India, was based on the fundamental misconception that different extremist Islamist groups would not, after a certain point, seek similar objectives. Tackling the Taliban in south Waziristan, thus, must be supplemented by going after the groups in south Punjab as well — and by initiating a far-reaching agenda of development and governance.

It accused India of backing the Taliban to create instability in Pakistan. This comes after revelations by western security experts that troubles within Pakistan were being fomented by the Tehrik-e-Taliban, Al Qaeda and extremist outfits operating from its soil.
These accusations only prove that Pakistan has few parallels in adopting over-the-top posturing.

Finance & Economy

The need for such a clarification arose out of the revised FDI policy announced in February 2009.
Under the revised FDI policy, a joint venture company in which the Indian entity has more than 50% stake and the right to nominate majority of its directors will be deemed to be an Indian company.
If such a joint venture makes investment in another company, the entire investment in that company will be counted as Indian investment. Under the earlier policy, downstream investment by such a joint venture was counted as indirect foreign investment.
The new rules, it was argued, allow indirect entry into forbidden sectors such as multi-brand retail through layered corporate arrangements where initial foreign investment is kept below 50%.
Look at this graphic too for a bird's eye view of the issue.

Take a look at this story; it is an interesting read that points to the emerging trends in corporate India.
A global study published last year showed that companies can save $1.65 in healthcare expenses towards employees for every dollar spent on a comprehensive employee wellness programme.

Former McKinsey CEO Rajat Gupta, NRI businessman Ramesh Vangal and a string of foreign investors have, according to a Reserve Bank of India (RBI) report, “acted in concert” with local investors while buying shares in Tamilnad Mercantile Bank (TMB), an old, closely-held private sector lender.
The regulator has observed that the nonresident investors and some influential Nadar community members had “formed a group” when they acquired a substantial stake in the bank two years ago. Under banking regulations, RBI’s approval is mandatory for transaction of 5% or more equity of a private bank. If the shares change hands without regulatory clearance, RBI has the power to cancel voting and dividend rights on the bloc of shares.
The entry of top-flight professionals like Gupta and Vangal in TMB two years ago had caused ripples in banking circles. Mr Vangal, former president — Asia Pacific for PepsiCo Foods, is the founder of the Katra Group and is widely known as the man who led PepsiCo’s entry into India. Mr Gupta, the first India-born CEO of a US transnational, is also an independent director at Goldman Sachs.
To get an inkling of the power struggle that is going on for the control of TMB, do read this story that appeared in today's ET. Don't miss the last couple of paragraphs of the story.

India fares better in overall prosperity, despite weak economic indicators, and is ranked 45th in the world, ahead of China’s 75th rank, according to indices compiled by global think tank, Legatum Institute.
The composite prosperity index is compiled based on nine parameters, including factors such as economic fundamentals, environment for entrepreneurship and innovation, access to quality edu c a t i o n , democratic institutions, governance, health, personal freedom, social capital and security. The index ranks world’s 104 countries, covering 90% of the world’s population.
Finland tops the Index, followed by Switzerland, Sweden, and Denmark; the United States is 9th and the United Kingdom is 13th. India is ranked 5th on measures of social capital, which reflects among others, the percentage of citizens who volunteer, give charity, help strangers, and who feel they can rely on family and friends. In this area, India is ahead of Finland, the US, and the UK which occupy the sixth, seventh and the 11th spot, respectively.

International

The US healthcare system wastes between $505 billion and $850 billion every year, according to a report. That’s one-third of the nation’s healthcare bill.
The waste results out of some of the most obvious inefficiencies, mistakes and fraud.
One example — a paper-based system that discourages sharing of medical records reportedly accounts for 6% of annual overspending.

France hopes that it will be able to settle the dispute about import duties on wines and spirits with India to mutual satisfaction without going through the WTO dispute settlement mechanism.
In 2007 India had slashed the additional customs duty it charged on imported spirits, up to 150% of value of imports in some case, but simultaneously hiked the basic customs duties to 150% from 100%.
Prior to this, the European Commission had dragged India to WTO in 2007 seeking redress of its grievances which included what it called denial of ‘national treatment’ to liquor imported from Europe.
Under the national treatment rules, imported products have to be treated on par with domestic items. The WTO consultation process on the issue was suspended following New Delhi action on duty front in 2007.
EU is not completely satisfied because of the increase in basic duty. Moreover, major consuming states of imported wines such as Goa, Tamil Nadu and Maharashtra also impose special fee on these items. In 2007 EU exports of spirits to India amounted to about 57 million euros, while EU exports of wine totalled about 11 million euros.

Miscellany

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