28.11.2009

Finance & Economy

• Dubai rattles the world with its loan rescheduling program
• Dubai World, the government investment company with $59 billion of liabilities, sought to delay repayment on much of its debt.
• The announcement sent shockwaves throughout the financial and political world.
• Credit-default swaps tied to debt sold by Dubai rose as much as 131 basis points to 571.
• For India, which has tens of thousands of its citizens living and working in the emirate, the concerns are more direct: thousands of its expats staring at job losses and the economy, sharply reduced trade.
• India, which gets nearly a quarter of the remittances from the United Arab Emirates and has lakhs of labourers working in the region, could be worse off than most other nations if the crisis escalates into a full-blown one like the Russian or Argentinean crises of the past. India’s exports to the UAE stood at $23.92 billion in FY09.
• Investors believe that there could be more troublespots in emerging markets after Vietnam devalued its currency and raised rates.
• Continuation on Dubai crisis:
• European banks with exposure to the Middle East were badly hit, with HSBC Holdings falling 7.6% and Standard Chartered Bank crashing 7.5% on fears they may be holding a substantial portion of the debt owed by Dubai.
• British banks have the most loans outstanding to the United Arab Emirates in Europe, constituting $49.5 billion of a total of $87.3 billion extended by the continent’s lenders to the Gulf country as of June 2009, Royal Bank of Scotland Group said in a research report on Friday, citing Bank for International Settlements.
• BUT policymakers and Indian companies, which have operations in the Emirate, believe the impact may not be much.
• The potential loss numbers pale in comparison to the $2.8 trillion in writedowns the International Monetary Fund estimates US and European lenders will have made between 2007 and 2010 as a result of the global credit crisis.
• Take a look at this graphic which gives an excellent expo on the current crisis and the possible consequences thereof.
• Experts think that investors will take haircuts, European banks (which may be holding as much as $40 billion of Dubai’s $80 billion debt) will sell a slice of their investments, and a Kazakh-style clean-up and debt write-off will get the builder’s paradise up on its feet.

• Look at this editorial piece too to gain an insight into the issue.
• You can take a look at some of the world's biggest financial crises here.

• Govt. to infuse funds in banks for better CAR
• CAR is the summary measure of the amount of capital that is necessary to cover unexpected losses. Higher the amount better it is.
• Basel II Norms prescribe a CAR of 9% for banks internationally. But in India, the CAR of our banks is at 12%. In spite of this the government is cautious and wants to shore up the Tier-I capital of our banks.
• For this purpose it is getting about Rs. 16,000 crore from the World Bank as a soft loan and is reportedly adding another Rs. 5,000 crore of its own to infuse a total of about Rs. 21,000 crores in our banks.

• What is trail risk?
• It is a banking term for the chance that seemingly remote, nasty events might occur.

International

• India too announces voluntary emission cuts
• Faced with manoeuvres by the US and China, India on Friday upped its Copenhagen offer by promising to bring down carbon emissions by 20-25% between 2020 and 2030. India maintained that it would be voluntary and that the country would not take any internationally legally binding commitments.
• The development comes in the wake of the announcement by China that it would cut carbon intensity by 40-45% by 2020 from 2005 levels. This was cited as a move forward by the developed countries.
• In the past one week, there have been hectic activities on climate change in the US, China and Brazil, with all the three countries announcing their respective positions for the summit. The latest move by India is expected to buffer it against a possible charge that it’s the main hurdle before a solution.

Language lessons

• sherry: Noun
• Dry to sweet amber wine from the Jerez region of southern Spain or similar wines produced elsewhere; usually drunk as an aperitif
• port wine: Noun
• Sweet dark-red dessert wine originally from Portugal
• aperitif: Noun
• Alcoholic beverage taken before a meal as an appetizer
• easel: Noun
• An upright tripod for displaying something (usually an artist's canvas)

26.11.2009

Politics & the Nation

• We are really proud of our President
• Take a look at this picture of our President flying in a Sukhoi plane.
• It is really a matter of pride not just for the country's C-in-C but for the entire country. In the process she created history. Bravo President. By flying a Sukhoi at 74, you have sent us all a clear message.
• India and US ask Pakistan to act against terror
• On the eve of the first anniversary of the 26/11 terror attacks, Prime Minister Manmohan Singh and US President Barack Obama stepped up pressure on Pakistan, saying that it was imperative on its part to bring to justice the perpetrators’ of the attack.
• India and the US have also signed an MoU on counter-terrorism and five other agreements. Besides the memorandum of understand-ing on ‘advancing global security and countering terrorism’, the two countries signed pacts covering education and development, health cooperation, economic trade and agriculture, and green partnerships.
• Meanwhile Pakistan is reported to have framed charges against seven accused.
• While Zaki-ur-Rehman Lakhvi was coined as the mastermind, six others - Zarar Shah, Abu al-Qama, Hamad Amin Sadiq, Shahid Jamil Riaz, Jamil Ahmed and Younas Anjum were accused as handlers/facilitators.
• A special anti-terror court was set up in Adiala jail in Rawalpindi to prosecute them. All the seven had pleaded not guilty.
• They have been reportedly charged under the anti-terrorism act and the Pakistani penal law. The charges include providing training, financial support, accommodation, equipment and communication gear to the 10 terrorists who had attacked Mumbai, including the lone survivor Ajmal Amir Kasab, who is now in India’s custody.
• If you are a BJP baiter, this excerpt from today's ET editorial would help you sharpen you criticising abilities against that party:
• If political forces that seek to redefine Indian nationhood in terms of the religion of the majority had come to power at the Centre, it’s not just the Chidambaram reforms that would have been scuttled. A certain political climate has made refugee camps of the 2002 Gujarat pogroms a vital life support system for its inmates even today, nearly eight years later. If that sort of climate change had spread to the rest of the nation, as a result of the elections in May this year, local support for Mumbai-like assaults would be far more readily available. Misbegotten ideologies and their fanatical followers can sprout in limited numbers under any given conditions. But if conditions favour their growth across the minority space of the polity, policing would cease to be effective. But then, conditions have, if anything, turned more positive for inclusive growth. That is a plus.
• The comments were made in the context of the first anniversary of the Mumabai terror attacks.
• Today is National Law Day
• November 26 is celebrated as National Law Day because it was on this day in 1949 that the Constituent Assembly of India adopted the Constitution, which then came into effect on January 26, 1950.
• Take a look at the address to the Nation by the Chief Justice of India on this occasion.

Finance & Economy

• The battle lines for control of EIH (East India Hotels) are clearly drawn now
• We have noticed the reports that appeared about Analjit Singh's acquisition interests in EIH sometime back. He is joining hands with the Oberois for getting a controlling stake in EIH. A bit about him and Oberois.
• Mr Singh has built and sold many businesses — the most notable of which was his exit from mobile operator Max Telecom in favour of Hong Kong’s Hutchison Whampoa. The serial entrepreneur’s Max Group has interests in consumer-facing businesses such as telecom, healthcare and insurance.
• Founded in 1934, the Oberoi group operates 27 hotels under the luxury Oberoi and five-star Trident brands. Its other businesses include inflight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters.
• EIH is currently controlled by the ITC group, with a 14.98% stake. Oberois own 43%. They are reported to be selling 17% stake to Analjit Singh for Rs. 1250 crores. He is expected to buy another 9% from the open market. Thus put together they will get to hold 52% stake in EIH.
• It is a matter of time before management of EIH changes hands.
• A recap on the issue of transfer pricing
• Transfer pricing refers to price charged by an MNC from its associate firm for supply of goods and services. As transfer prices can be used by companies to shift profits out of the country and thus escape taxes, India, like many other countries, put regulation in 2001 to check these violations.
• Transfer pricing disputes are of significant concern to companies in a globalised economy where 70% of the deals are within group companies. India is no exception. Tax officers here are often accused of making aggressive assessments and high-pitched demands on MNCs. These companies can now move the DRP (Dispute Resolution Panel), which will have wide-ranging powers, and file their objections to assessing officer’s draft order. The resolution process is expected to be unbiased, as the DRP would comprise three income-tax commissioners.
• MBAs among you would love this piece
• It is about measuring corporate performance, from a Harvard Business School working paper.

International

• A very good commentary / criticism / solutions on and for reforming the fat pay at banking and financial institutions
• From TT Ram Mohan. Take a look. Some excerpts:
• Why should excessive executive pay at private institutions like Goldman Sachs not the 'in thing' to do in the present times? How are these present times different from the past?
• First, the taxpayer’s safety net for banks, which exists even in normal times, has since been extended to non-bank players, including Goldman Sachs. The net itself has grown bigger and stronger. It has included not just lender of last resort backing from the central bank but guarantees for various liabilities.
• Secondly, some players, notably Lehman Brothers and Bear Stearns, were allowed to fail while others were rescued through capital infusion and other means. This meant that the survivors stood to prosper in a more concentrated market.
• Thirdly, banks have benefited from attempts to stimulate economies through sharp reductions in interest rates. In other words, bankers have gained from policy measures that were required to clean up the mess that they had created in the first place.
• Therefore, it is hard to make the case that booming profits today at banks such as Goldman are the result entirely of sound risk management or superior investment banking skills or even a favourable trading environment.

Language lessons

• cooper: Noun
• A craftsman who makes or repairs wooden barrels or tubs
• profundity: Noun
• Wisdom that is recondite and abstruse and profound; Intellectual depth; penetrating knowledge; keen insight; etc; The intellectual ability to penetrate deeply into ideas; The quality of being physically deep
• recondite: Adjective
• Difficult to penetrate; incomprehensible to one of ordinary understanding or knowledge
• apparatchik: Noun
• A humorous but derogatory term for an official of a large organization (especially a political organization); A communist who was a member of the administrative system of a communist party

25.11.2009

Politics & the Nation

• "Indo US ties to shape up the Century" says Obama
• What a headline to savour with your morning cuppa!
• In the absence of a big-ticket initiative, the Indian PM's visit, coming as it does soon after the comments of Obama while on his visit to China, looked like as if it is destined for being confined to diplomatic niceties. But Obama appears to know quite well how to make grand statements and mollify the visiting PM.
• Besides, the two leaders announced new efforts to promote trade and investment, higher education and develop and transfer clean technology. The two sides also agreed to increase counterterrorism by way of cooperation between law enforcement and intelligence agencies.
• There are three specific areas where India and the US have a clear difference in approach. These include climate change, China’s role in the region and the issue of how to tackle terrorism coming out of Pakistan. India has clear markers on these issues. On climate change, India has shown that it is ready to show some amount of flexibility but cannot acquiesce to the US demand for a legally-binding cap on emission. India is uncomfortable with the current trajectory of Sino-US ties and also with the US approach to Pakistan and terrorism.
• A critique of the government's ATR on Liberhan Commission report (excerpted from today's report on the subject).
• Though a very long excerpt, we decided to give it because we found that it is one subject that is going to stay in public memory for a long, long time to come. Take a look...
• The 13-page ATR prepared by the government, listing out measures taken by it in keeping with the panel’s recommendations proved to be a disappointment.
• Like the suggestions themselves, the government was vague and evasive in its responses. The ATR, for instance, does not talk of filing any new cases against those held responsible for the demolition, directly or indirectly, and merely lists the status of cases pending in various courts on the Ramjanmabhoomi-Babri Masjid demolition (Case No. 197/92, FIR against lakhs of unknown kar sewaks in the special court, Lucknow; Case No. 198/92, FIR against 8 accused in the Rae Bareli special court; and 47 other cases pending in the Lucknow special court).
• The government also pointed out that it had already drafted the Communal Violence (Prevention, Control and Rehabilitation of Victims) Bill. This was in response to the Commission’s recommendation of enacting a special law providing for exemplary punishment for misuse of religion, caste, etc., for political gains or illicit acquisition of political or other power.
• On the panel’s desire that the demerger of religion and politics must be studied and implemented at the earliest, emphasised repeatedly all through, the government merely said it had “noted’’ the suggestion. Again, while the Liberhan Commission wanted the government to look into the possibility of barring a government which is formed on the premise of religion or which has religious issues on its agenda, the government merely said that it will examine the matter further.
• The report came out with a host of proposals for toning up the civil service, and to ensure their independence, and to disrupt the politician-bureaucrat-policeman nexus. “UPSC is examining changes in the recruitment procedure for the All India Service officers,’’ the ATR pointed out. It said police reforms were already there in its agenda.
• The government, on the other hand, rejected the commission’s recommendation to confer statutory powers on the National Integration Council, arguing that the proposal may not be practical. ``The council has been set up primarily to act as an advisory body to advise the government and other institutions of civil society to advance the cause of secularism and to preserve unity, integrity and communal harmony,’’ ATR mentioned.
• A very good editorial piece on the eve of the 25th Anniversary of the scrapping of the Silent Valley Project
• Many of you might not have been born when Silent Valley Project was a raging issue.
• Take a look at this good piece.
• On reforming our education system
• This is a very good piece on the subject which is well worth our attention. Take a look. An excerpt that defines what is a liberal arts education:
• Liberal arts education imparts an all-round training. It sensitises human mind by delving deeper into a subject, critically analysing it from a multi-dimensional perspective and expressing such analyses in a cogent manner. Considerable emphasis is given to development of writing skills. As the skill of communicating original ideas develops, it spurs new ideas. Thus, analytical writing synergises creative ideas. Besides, such education also ensures that children do not get burnt out due to academic pressure in high school.
• Company Law Board acting Chairman arrested on bribery charges
• It is a very unusual case. For it's perhaps the first ever time that the CBI arrested both the bribe giver and the bribe taker as both were unaware that the CBI is following them. Read on...

Finance & Economy

• Power firms surrender trading licences to CERC
• The government’s plan to ensure a balanced growth of the power market in the country by encouraging trading of power has received a severe jolt with as many as six companies surrendering their trading licences to the power sector regulator Central Electricity Regulatory Commission (CERC). More surrender of licences are reportedly in pipeline in the coming months from companies such as MMTC, Jindal Steel and Power, GMR Energy, Sarda Energy and Minerals, and Mahalaxmi Energy Trading.
• While companies say the prevailing adverse financial situation and a shift in their business strategy were reasons for the surrender, analysts point out that a low ceiling on the trading margin (4 paise per unit) fixed by CERC and competition provided by the power exchanges were also acting as disincentives.
• Trading is a licensed activity under the Electricity Act, 2003. Under the Act, trading is defined as an activity involving purchase of electricity for resale thereof. So far, CERC, which grants licence for power trading, has granted 44 licences for inter-state trading in electricity.

International

• Indo-US ties have less urgency for the Obama administration than ties with Pakistan or China, but have more long-term importance. Comment.
• If you are asked such a question, nothing can be a perfect answer than this piece by SSA Aiyar. A very good one and a must read for all those who want to understand the nuances in US policy towards South Asia.

Language lessons

• booby prize: Noun
• A prize given to one who finishes last in a contest

• stodgy: Adjective
• (used pejoratively) out of fashion; old fashioned
• eg: Whether it is the established MNC, the aggressive start-up, the stodgy family-run business or the new-age retail business, CEO poaching is the latest game in town.
• sorority: Noun
• A social club for female undergraduates
• verdure: Noun
• Green foliage; The lush appearance of flourishing vegetation
• regress: Noun
• The reasoning involved when you assume the conclusion is true and reason backward to the evidence; Returning to a former state
• eg: A strong trade union movement with deep access to the political establishment supported the project, dismissing environmental concerns as romantic regress.

24.11.2009

Politics & the Nation

• Leiberhan Commission's report leakage rocks Parliament
• Ahead of the 17th anniversary of the Babri Masjid demolition, the issue was pitchforked back into the centrestage of the country’s political discourse, with the Liberahan Commission report “indicting” the BJP’s top leadership for its failure to protect the disputed structure, being leaked. The Commission also found fault with the so-called second generation of BJP which enthusiastically backed the demolition job.
• While LK Advani, Murli Manohar Joshi and the late Vijayaraje Scindia are accused of leading the movement that led to the demolition, Kalyan Singh, Uma Bharati, Ashok Singhal, Vinay Katiyar, Giriraj Kishore and the RSS were held directly responsible. Former Prime Minister Atal Bihari Vajpayee figures in the report among those responsible for taking the country “to the brink of communal discord,” alongwith Opposition leader Mr Advani and Shiv Sena chief Bal Thackeray.
• Contents of the 900-page report, which was scheduled to be tabled in Parliament towards the end of the winter session, alongwith the action taken report (ATR), found their way into the media on Monday, taking the political class unawares. It, sure enough, created a furore in the two Houses of Parliament, with the principal Opposition party, the BJP, disrupting their proceedings in protest against the “selective leakage” of the report. The entire Opposition then joined hands to demand the immediate tabling of the report.
• The findings of the panel, which was set up by the then Prime Minister, late PV Narasimha Rao soon after the Babri Masjid’s demolition on December 6, 1992, to look into the circumstances leading to the event, were more or less on expected lines, barring insertions such as those on Mr Vajpayee, and the late Narasimha Rao. It virtually gave him a clean chit. “He (Narasimha Rao) rightly concluded that neither the central forces could be deployed by the Union in the totality of facts and circumstances then prevailing; nor could President’s rule be imposed on the basis of the rumours or media reports. Taking such a step would have created bad precedent for the future, damaging the federal structure of the constitution and would have amounted to interference in the state administration,” the report noted.
• Read the entire news report here.
• Some interesting snippets on the Commission itself:
• It took 17 years and 48 extensions for the Liberhan Commission probing the 1992 demolition of the Babri Masjid in Ayodhya to submit its report to Prime Minister Manmohan Singh in June this year. One of the country’s longest running inquiry commissions, which has cost the government nearly Rs 7 crore, the Liberhan Commission was set up to probe the sequence of events leading to the razing of the Babri mosque by Hindu mobs on December 6, 1992.
• During the entire tenure, the onejudge probe has been dogged by procedural delays, non-cooperation from key witnesses and even constant transfers during the early days of the commission’s functioning.
• The commission’s lawyer, Anupam Gupta, dissociated himself from the one-man panel after eight years because of differences with Liberhan.
• An excellent editorial comment on the leakage of the report to the media and the inordinate delay in the Commission's submission of report.
• Parliamentary privilege is one of the most over-rated institutions of democracy. The Fourth Estate is called thus only because it mediates information between the people and the state. The people have primacy, not their representatives. If important information is leaked to select groups, that would be breach of privilege. But making information available directly to the people through the media is no more a crime than Satyagraha is. As for judicial delay — the commission took 17 years and 48 extensions to state the obvious — it leaves justice to be a matter of interpretation by historians, without operative import.

Finance & Economy

• Economic trends based on CEO churn
• Look at the following extract from a front-page news report. Notice how CEO churn is an indicator of better times.
• Executive search firm Redileon Search Partners, which surveyed around 1,000 CEOs from the top listed companies on the BSE, found that close to 106 head honchos left their companies this year in order to seek greener pastures. “Faster churn is an empirical management barometer for economic growth. When the 2009 full-year tally is completed, the total will be higher than ever before,” the search firm said in its findings.
• A very good analysis of the NREGP functioning
• Read this story in full. It is a very good analysis of the programme. Conclusions drawn from the analysis:
• First, the promise of 100-day employment to one member of every household that seeks employment is largely unfulfilled.
• Second, there are several in-built biases in the execution of NREGP. The poor are inadequately represented in those selected for participation. The duration of employment is systematically lower for poor households. At the same time, the non-poor are disproportionately represented, indicating some capture.
• Third, whereas few participants admit to paying bribes, several reported that personal acquaintance was necessary to secure employment under NREGP.
• Lastly, notwithstanding the unfulfilled employment promise of the NREGA, many participants indicated that they wanted to continue to work on NREGP. This is less of an indicator of the efficacy of the NREGP than of the fragility of their livelihoods.
• Job trends
• Professionals queue up for a stint with slump-proof NGOs
• While the Indian corporate sector seems to have shaken off the effects of the worst financial crisis the world has faced since 1929, recruitment activity in several sectors is yet to pick up speed. Non-governmental organisations (NGO) in India, however, are on a hiring mode, as memories of lay-offs during the downturn has resulted in record number of job applications from professionals in the corporate world.

International

• A very good graphic that explains the need for India of dual-use technologies and the issues surrounding it.
• Take a look at it here.
• Those of you who have the inclination to understand macro economics...
• Must read this piece by Paul Krugman. Though it's about US economy, most of it applies to India or for that matter any country in the world.
• India, China losing faith in US $?
• According to the latest data released by the US treasury department, India has reduced its exposure to US treasury bonds by close to 8% between June-September 2009 to $35.9 billion. China, the biggest investor in US treasuries at close to $800 billion, has also slowed down its pace of investment in US gilts. Between September 2008 and March 2009, it pumped in almost $150 billion in US treasuries. But since April, it has invested just about $30 billion.
• Besides India and China, even oil exporters comprising Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria and the Carribean banking centres, which have an exposure of over $150 billion each in US treasury bonds, have also slowed down their investment.

Sport

• World Athletes 2009
• In spite of giving their best, world's athletes are a lot less known than other sports personalities like the footballers, the racers, the tennis players and golfers. Take a look at this photo slideshow which celebrates the world's best athletes for 2009.
• Hope you recognize the faces.

Language lessons

• palpable: Adjective
• Capable of being perceived; especially capable of being handled or touched or felt; Can be felt by palpation
• perfidy: Noun
• Betrayal of a trust; An act of deliberate betrayal
• subtext: Noun
• The underlying meaning or message of a piece of writing or speech
• tractable: Adjective
• Easily managed (controlled or taught or moulded); Readily reacting to suggestions and influences
• eg: If this is the efficiency of facilitation that the government brings to bear on the success story of India’s infrastructure, what should we expect in other, less tractable sectors?
• cadge: Verb
• Ask for and get free; be a parasite; Obtain or seek to obtain by cadging or wheedling

23.11.2009

Politics & the Nation

• On curbing tax evasion
• Here is a good debate on the subject that is worth our attention. Take a look.

Finance & Economy

• RIL submits bid for LyondellBasell
• We have noted from ET about the possibility of RIL acquiring this big company. LyondellBasell is privately owned by ProChemie GmbH, a JV of Access Industries and ProChemie Holding. The company suffered a net loss of $7.3 billion on sales of $50.7 billion in 2008. It filed for bankruptcy in January. The company’s unsecured creditors have challenged the bankruptcy process. An attempt to resolve differences between secured and unsecured creditors by way of mediation is on.
• Analysts believe that RIL may not find it difficult to fund the purchase of LyondellBasell, although the target firm is 50% bigger. The deal could be in the region of $10-12 billion.
• RIL had recently raised about $660 million in a share sale and is sitting on $8 billion in treasury stock that can be sold, if required. Also, it has more than $4 billion in cash. If RIL wants to double its current net debt-to-equity of 0.35, it can borrow another $10 billion or around Rs 45,000 crore.

• This is one trend that we should not miss to take note of.
• Indian auto majors are hiring talent from Detroit! What a change in scene (umm...should we say fortunes?)
• Window to buy back FCCBs to close in Jan
• The government and the Reserve Bank of India (RBI) have reportedly decided to withdraw starting next January a facility that allowed Indian firms to buy back foreign currency convertible bonds (FCCBs) issued to overseas investors.
• This is yet another move to unwind measures introduced last year at the height of the global credit crisis.
• Companies that have issued such bonds, which have both debt and equity features, will have to convert them into shares or redeem them at face value, depending on investor preference.
• What prompted the move is the perception that the improvement in stock prices has brought about convergence between the spot and conversion price of these instruments.
• In November last year, the RBI allowed firms to prematurely buy back FCCBs that were trading at a steep discount — in some cases as high as more than 50% — hobbled by the freeze in global financial markets. The buyback was allowed on the condition that it had to be financed out of firms’ forex resources held in India or abroad, or from foreign borrowings. Initially, the RBI allowed companies to undertake buybacks worth up to $50 million, which was subsequently raised to $100 million.
• An FCCB is a bond to the extent that it has a principal and interest obligation, but it also gives investors an option to convert the maturity amount into shares of the company at an agreed price.
• When the open market price of the underlying shares is below the price at which bonds are to be converted, it does not make sense to exercise the conversion option. In such a situation, the conversion option becomes worthless and bonds start trading at a discount. The issuer can then buy them back and the difference, which represents a saving for the company.
• Profitable firms may have to earmark funds for CSR
• The Ministry of corporate affairs is reportedly working on the broad contours of a code that will require all profit-making companies to set aside an amount proportionate to their turnover or profits for corporate social responsibility (CSR) initiatives.
• The government plans to make the process consultative, rather than prescriptive, on the proportion of funds earmarked for CSR activities to make it acceptable for corporates. Once finalised, the code may be woven into the Companies Bill, 2009, that is currently being considered by a parliamentary standing committee.
• The proposal, if implemented, will see private companies stepping up their CSR activity. Currently, profit making PSUs across sectors are required to shell out up to 2% of their net profit towards CSR work.

International

• Is America suffering from a governance crisis?
• Yes; if you were to believe what Jeffrey Sachs is saying in this article.
• The reasons, in brief, cited by him include:
• First, America is a highly polarized society. This can be gauzed from the approval ratings for Obama among Republicans, Democrats and independents. Political divisions have widened between the rich and poor, among ethnic groups (non-Hispanic whites versus African Americans and Hispanics), across religious affiliations, between native-born and immigrants and along other social fault lines. American politics has become venomous as the belief has grown, especially on the vocal far right, that government policy is a ‘zerosum’ struggle between different social groups and politics.
• Second, the political process itself is broken because of filibustering -- a procedural attempt to prevent a proposal from coming to a vote. To overcome a filibuster, the proposal’s supporters must muster 60 of 100 votes, rather than a simple majority.
• Third, is the crisis stemming from the role of big money in politics -- through what is practised as lobbying.
• Finally, policy paralysis around the US federal budget may be playing the biggest role of all in America’s incipient governance crisis.

• Unofficial WTO talks at Geneva
• Take a look at this graphic which briefs us on the unofficial talks scheduled for November 30, the contentious issues and India's offensive and defensive interests in this round.

Miscellany

• If you are asked to name a few Indian spices, what will your answer look like?
• Looks like a silly question; doesn't it? While reading a story, we tried to answer the question ourselves, but couldn't come up with an answer that contained more than four names at a time. Here is a list of more than 10 Indian spices:
• cumin, coriander, turmeric, ginger, cardamom, clove, fenugreek, cinnamon, nutmeg, fennel, red pepper

Language lessons

• doff: Verb
• Remove
• "He doffed his hat"
• yen: Noun
• A yearning for something or to do something
• Verb: Have a desire for something or someone who is not present
• eg: India Inc’s yen for best security practices is bringing in big moolah for trainers in South Africa and Israel.
• wry: Adjective
• Humorously sarcastic or mocking; Bent to one side
• eg: In January 1938, The Chicago Daily Tribune offered a wry definition of a recession, calling it “a new word for depression, coined by those who don’t like to admit that we’re still in one”.
• self fulfilling prophecy
• This phrase was brought into prominence by the Columbia University sociologist Robert K. Merton in his 1948 article in The Antioch Review titled “The Self-Fulfilling Prophecy.” He used the Great Depression as his first example.

21.11.2009

Politics & the Nation

• Why should cane growing and cane crushing be vertically integrated?
• This is because there is a market-distorting dependence on each other. For growers, mills in the immediate vicinity become monopoly buyers and, for mills, their basic raw material would become scarce if cane growers cut back on production. In other words, the assets of the sugar mill and the cane grower derive their value in the relationship between the two types of producers.
• It is precisely such producers, says Oliver Williamson this year's Nobel laureate for economics, that should be vertically integrated into a firm, rather than enter into a market contract.
• In this context, today's heading for one of ET's articles on the subject is very apt and interesting:
• "Caned Left & Right, Centre gives in"
• What a heading!
• What is still holding up the operationalisation of the 123 Agreement between India and the US?
• At this stage, there are still three steps that need to be concluded.
• One is an assurance from India on non-proliferation in the form of a letter. The second is the conclusion of the reprocessing agreement between the two countries.The third step is a civil liability law.
• Before Mr Singh’s departure for the US (he is on a State visit to the US from November 24), the Cabinet on Thursday had cleared the Civil Nuclear Liability Bill, which will allow India to join the international convention on civilian liability in case of nuclear damage.
• Kelkar advises government to divest
• According to Mr Vijay Kelkar, Chairman of the 13th Finance Commission, the value of PSUs, both listed and unlisted, at current fair market price is anywhere between Rs 13,800,000 crore and Rs 18,400,000 crore.
• If you disinvest 50% then you have $200-billion fund.
• He stressed that the government needed to focus on areas that it alone can take care of.
• He is reported to have said "We don’t now require public sector hotels, airlines, even many other areas ... earlier we didn’t have capital market, we didn’t have entrepreneurship...”
• Mr Kelkar’s comments come on the back of the findings of the TERI report, which suggest that unclean air and water could be responsible for the death of eight lakh people every year in the country. The report states that the quality of environmental services has a direct bearing on the health of people.
• A graphic update on the progress of e-Governance in India
• Take a look here.

Finance & Economy

• MNP to cost just Rs. 19!
• Mobile users unhappy with the services of their operators just need to pay a nominal fee of Rs 19 for moving to a new service provider.
• Subscribers in Delhi, Mumbai, Kolkata and category ‘A’ circles such as Maharashtra, Karnataka, Tamil Nadu, Gujarat and Andhra Pradesh will be allowed number portability from December 31 while the rest of the country will have the facility from March next year.
• Number portability is expected to intensify an ongoing price war that has already hit the sector’s profits and revenues.
• New mobile users would be permitted to change their operators only after 90 days of signing up with a service provider. The users who wish to change their operator will have to give a written undertaking to their existing service provider for switching to a new operator. Trai has fixed a four-day window for operators to process an application.
• End of the easy borrowing policies from January?
• Policymakers have reportedly decided to terminate the easy overseas borrowing policy for companies unveiled due to credit crisis last year, as they prepare to battle rising assets and commodity prices and to prevent currency appreciation, which erodes exporters’ profitability.
• India is among many countries, including the US, EU and Australia, that are reversing emergency liquidity measures unleashed after the collapse of Lehman Brothers.
• RBI in January did away with rules that mandated that companies borrowing overseas with an average maturity of 3-5 years had to do so within 300 basis points over the six-month London inter-bank offered rate, or LIBOR, the benchmark for borrowing and lending in global markets. ECBs of more than five years had to be within 500 basis points of this benchmark. These will be applicable again from January.
• Inflows impose cost on the government as it has to sterilise them. Dollar flow increases supply of rupee funds, which are then mopped up through bonds to keep high liquidity from causing inflation.

International

• Cold War vs. Cold Peace
• The kind of relationship that exists between China and India on the one hand and China and the US on the other comes to be described as Cold Peace.
• The Cold War and a bipolar global system ended in 1989 with the fall of the Berlin Wall and the liquidation of the erstwhile Soviet Union in 1991. The former Cold War system of international relations, however, has been replaced by a system of Cold Peace between competing powerful countries such as India and China or the US and China. The salient feature of the era of Cold Peace between powerful countries like India and China is that both have conflicting and competing areas of interest and, at the same time, both have clearly opted for a path of friendly or formal methods of resolving their bilateral disputes.
• In this context this one sentence sums up India's policy towards China:
• Cooperate and compete and make every effort to resolve conflicts between two big neighbouring countries is the essence of India’s approach towards China.
• On the Brahmaputra dam issue:
• All of you know that India is agitated about China constructing a dam across the Brahmaputra.
• The UN International Convention of 1997 on Non-Navigational Uses of International Water Courses mentions that the lower-reparian country should be consulted and its cooperation should be sought. India abstained in the vote in the UN and China had opposed this Convention of 1997. Because of this, India and China will have to enter into a political dialogue and negotiations on the issue of construction of a dam on Brahmaputra from the Tibetan side.
• Thus it is clear that India and China are in a state of Cold Peace where conflicts exist but the mechanism of dialogue is accepted by both the countries for resolving the bilateral disputes.

Science

• LHC at CERN restarted again
• After a year of repairs, the Large Hadron Collider at CERN was started again on Friday. Read this report that gives details about it.

Language lessons: Some interesting phobias

• lachanophobia
• fear of vegetables
• carnophobia
• fear of meats
• cibophobia
• fear of eating
• ablutophobia
• fear of bathing
• logizomechanophobia
• fear of computers
• zemmiphobia
• fear of the great mole rat, an African rodent
• pentheraphobia or novercaphobia
• fear of mother-in-laws

20.11.2009

Politics & the Nation

• Govt. caves in to opposition onslaught on cane controversy
• The issue has snowballed into a major controversy, with thousands of farmers converging in the streets of Delhi on Thursday to demand the scrapping of the ordinance, which has put the onus on state governments to pay farmers the difference between the state advisory price (SAP) and the central government-administered fair and remunerative price (F&RP).
• The latter, created by the ordinance, replaces the statutory minimum price.
• The government will have a difficult time in limiting the damage as the ordinance is already in place. It will now have to bring forward a bill to cut its losses.
• World Toilet Day: November 19
• It is an initiative by the other WTO — the World Toilet Organisation — which campaigns across the world for better toilet facilities.
• Drawing together 215 member organisations from 57 countries, the WTO has come up with the idea of publicising November 19th as World Toilet Day in order to break through the reluctance that most of us have to discuss proper sanitation.
• Want to see politicians hauled over the coals?
• You can't get it better than this one. This is from Mumbai High Court which put lot of inconvenient and embarrassing questions to Narayan Rane and the Shiv Sena.
• Makes an interesting reading. Read it here.

Finance & Economy

• Whoa, what an article!!
• It is in a very long time that we are reading such an article which presents ideas so forcefully and describes a situation so succinctly. This is from GN Bajpai, former Chairman of SEBI. While we do recommend strongly that you should read this article in full and even perhaps keep it for reference, we can't restrain ourselves from giving you some excerpts:
• On how faulty regulatory design led to the present global economic crisis:
• One of the common identified causes of the global economic crisis from which the world is yet limping out is the inefficacy of regulatory design — a permissive regulatory regime based on excessive reliance on the private sector, leading to ineffective oversight. Apparently, this permissive approach was prompted by a yearning to promote creativity. Ineffective oversight was, inter alia, rooted in the underpinning belief that markets are a better regulator, which was further compounded by the multiplicity of regulators and inefficacious coordination amongst them.
• There is a rethink on the regulatory design. In fact, there is now a coordinated and concerted attempt among regulators in all geographical jurisdictions not only to revisit and reengineer but comprehensively revamp the regulatory approaches, frameworks and processes. Knee-jerk reactions in some countries are also perceptible. Actually, some jurisdictions want to further burden already overburdened central banks with the responsibility of regulating financial institutions even beyond pure banking.
• On regulatory gaps / arbitrage:
• Though each regulator, in his anxiety to comprehensively and assiduously regulate, eventually tends to tread on the turf of other regulators, he still leaves regulatory gaps with ample scope for misconduct in the absence of coordination among regulators. This is being termed as regulatory arbitrage. Regulatory gaps have been an area of serious concern.
• Is the UK learning from India?
• We will be left to so wonder when we look at the recent legislative developments in the UK.
• The UK came up with a bill that gave more power to its financial services regulator to curb short selling. The bill proposes to give the Financial Services Authority jurisdiction to impose “emergency restrictions” on short selling. The FSA would also have powers to force all institutions to permanently disclose short positions in markets.
• It also proposes a law requiring British banks to disclose salaries and bonuses given to their best-paid traders and executives.
• There are plans for a Fiscal Responsibility Bill, which aims to cut in half the budget deficit over next four years.
• Remember the ruckus made by champions of capitalism when our own government imposed ban on short selling in certain commodities? Especially wheat?

International

• An excellent editorial advice to India on how it should respond to the joint US-China statement on enlarging the role of China in South Asia.
• A must read. Do it here.
• There can be very divergent opinions on this. We recognize that.
• EU chooses Belgian PM as its new President
• The EU leaders agreed on Trade Commissioner Catherine Ashton of Britain as the EU’s new foreign policy chief and Belgian Prime Minister Herman Van Rompuy as its President.
• Their appointments suggested the need for compromise outweighed the desire for big names like Tony Blair, the former British leader who was once considered a leading contender for the Presidential job.
• Read the full story about it here.
• Sheikh Hasina chosen for Indira Gandhi Prize for Peace
• Bangladesh Prime Minister Sheikh Hasina has been chosen for the prestigious Indira Gandhi Prize for Peace, Disarmament and Development this year.
• Ms. Hasina was chosen for her “outstanding contribution to the promotion of democracy and pluralism, her determined drive to alleviate poverty and secure social and economic justice for her people through inclusive and sustainable development, and her consistent commitment to peace,” the statement said.
• The award, carrying a cash prize of Rs.25 lakh and a citation, will be presented to her at a function to be held at a later date.

Language lessons

• spook: Noun
• Someone unpleasantly strange or eccentric
• eg: ...Nor does India lose anything by quietly asserting its exorcist capabilities, should any venturesome spook be tempted to waft this way.
• wonk: Noun
• An insignificant student who is ridiculed as being affected or boringly studious
• eg: There has been much excitement in the media and among some policy wonks over an alleged American attempt to appoint Beijing as a cop on the Indo-Pak beat.
• befuddled: Adjective
• Stupefied by alcoholic drink; Perplexed by many conflicting situations or statements; filled with bewilderment; Confused and vague; used especially of thinking
• eg: When gun-toting terrorists rampaged through Mumbai on November 26 last year, attacking soft targets, the never-say-stop megacity stood befuddled.
• bankroll: Verb
• Provide with sufficient funds; finance
• doughty: Adjective
• Resolute and without fear

19.11.2009

Politics & the Nation

• What's the issue about sugar pricing that is set to rock the Parliament session this time?
• The Sugarcane (Control) Amendment Order, 2009 issed by the government has replaced the statutory minimum price (SMP) with a fair and remunerative price (F&RP), and made it imperative for state governments which have announced a state advisory price (SAP) for sugarcane to bear the burden caused by the difference between the F&RP and the SAP.
• The order is being seen by state governments and farmers' associations as being loaded in favour of the mill-owners, which will only have to pay the F&RP. The SAP has always been more that the SMP by up to 20-50%. The move has brought the cane-growers, especially in UP, on the warpath.
• Hoping to cash in on their anger, Opposition parties have made common cause with a section of the ruling alliance to corner the Manmohan Singh government in the two Houses of Parliament during the winter session. The entire Opposition bloc, as also parties such as SP, BSP and RJD, which extend outside support to the ruling alliance, have declared their plans of opposing the order, trashing it as being "anti-poor and anti-farmer".
• On the merits and demerits of curtailing the role of Competition Commission of India
• Look at this editorial on the subject. It gives a nuanced view of the role of the CCI and that of the sectoral regulators and explains why it would be a bad idea to prohibit the CCI from looking into certain sectors.

Finance & Economy

• Government to auction ECB entitlements?
• If news reports are to be believed this is set to happen sooner than we think.
• The government is reportedly finalising plans to auction corporate entitlements to borrow abroad, a pre-emptive move relaying the message that the country is determined not to allow unruly capital inflows to disrupt the incipient economic recovery.
• Inflows in the first few months of the current fiscal are close to the levels seen in 2007-08. Portfolio inflows have crossed $16 billion since January, as against $20 billion in the whole of 2007. Foreign direct investment between April and September this year was $17.74 billion while FDI in 2007-08 was $35.2 billion.
• Under current ECB rules, Indian companies can access foreign funds on a first-come-first-serve basis within an overall limit set by the government and RBI. Companies can borrow overseas at an average rate, including currency hedging costs, of around 9-10%, which is still lower than the cost here. There are no policy restrictions on the rate at which they can borrow.
• ECB approvals for April-September 2009 totaled $7.1 billion as against $10.2 billion in the year-ago period.
• Among the options that the finance ministry is considering for the ECB auction is splitting of the $32 billion overall limit for the current year into parcels for sectors such as infrastructure, power and manufacturing.
• Capital conundrum
• Take a look at this graphic which presents the challenges posed by increased capital inflows into the country. A good one.
• Excerpts of the excellent trends about Asia pointed out by Janmejaya Sinha in his op-ed piece in today's ET.
• By 2013, the EU, Asia and the US will be equal-sized economic blocks contributing roughly 25% of global GDP. In contrast, in 2000, EU formed 32%, the US 28% and Asia 20% of global GDP. By 2020, China, Japan and India will be with the US and Germany at the top five economies of the world. Together, the three Asian countries will form 27% of global GDP.
• Today, 5% of the world's consumers — or, the US population — provide $10 trillion of global consumption. All of Asia, with about 45% of the world's population, adds up to only $7 trillion. But by 2020, Asia will consume $21 trillion of global produce, 140% of the US at that time, which will be consuming $15 trillion.
• Asia's average age will rise from 29 to 32 in the next 10 years while it will go from 40 to 43 in Europe and 37 to 38 in the US.
• There have always been strong companies in Asia, even today, if you sort through billion-dollar-revenue companies globally and correct them for double holding of some groups, you find about 12,500 companies of which 3,500 are from Asia.
• If you look at trade patterns, over time the share of inter-Asian trade has risen from 31% in 1990 to 45% in 2008. This is a very large number already and will grow even further in the coming years.
• What should Asia as a collective do?
• There is a need for a new idea of Asia: one that is less jingoistic, with a better understanding of common purpose and with some statesmanship from the bigger countries. China, Japan and India will need to show a leadership that will have to at least acknowledge that their power might be frightening to their neighbours. A new paradigm will need to be evolved in how they deal with each other. A common vocabulary developed to discuss issues on which there is a large agreement and a rhetoric that is less threatening and more cooperative on issues on which there is less agreement. This is going to be a long journey given the national trade-offs between liberty and economic progress that have been made in different countries and which are now institutionalised.
• Governance code for unlisted companies too?
• The government is all set to introduce a governance code for unlisted companies on the lines of the one for listed firms to encourage more companies to register on the stock exchanges.
• Elaborate disclosures and compliance with governance code is seen as one big reason why many companies do not want to raise public funds and list on exchanges.
• The proposed Companies Bill, 2009, (now pending with the parliamentary standing committee), may see unlisted entities being asked to follow specific norms of governance, similar to market regulator Sebi’s code on corporate governance for listed companies,
• Data shared by the ministry showed that out of over 7 lakh companies in the country, only 6,000 are listed on the NSE and/or the BSE.

Environment

• What is India's contribution to ensure that Copenhagen summit on climate change succeeds?
• While acknowledging that India could be a big polluter considering its large population and growing economy, New Delhi has said that it would ensure that its per capita emissions will never exceed that of developed countries.
• India's per capita emissions are now around 1.2 tonnes of CO2 equivalent and are expected to be around 2 to 2.5 tonnes by 2020 and 3 to 3.5 tonnes by 2030. The per capita limit is an onerous limit that India has imposed on itself.
• Further it said it is willing to submit a national communication on climate change actions and their impact on emissions every two years. India has suggested that the national communication could be used as a basis for international consultations.
• India has also unveiled tough new air quality norms. It announced that industrial and residential areas will no more have two different standards and put in place uniform norms in a major move to combat air pollution.
• The revised guidelines have added five more hazardous chemicals in the list of the National Ambient Air Quality Standards for monitoring. They are ozone, arsenic, nickel, benzene and benzo(a)pyrene.
• While indicating that it was willing to be "part of a solution", New Delhi has reiterated that developed countries will have to take on binding targets.

International

• With news like this coming in, will you be working for Goldman Sachs and the like?
• This question may seem oddly timed for many of us, because working for such behemoths is a dream come true not just for lesser mortals (read... those from non-IIT and non-IIM backgrounds) but even for Gods (read... those from IITs and IIMs.) But a time may perhaps come when working for the big consultants may prove to be a liability!!

Language lessons

• snide: Adjective
• Expressive of contempt
• eg: But consider two facts to remove all snide laughter from a debate on Hindi’s future: one, ...
• dawdle: Verb
• Take one's time; proceed slowly; waste time; Hang (back) or fall (behind) in movement, progress, development, etc.
• eg: The government behaves as if third-generation (3G) telecom services are an indulgence for the public and a revenue source for itself. Why else would it dawdle on 3G licences the way it has been?
• desultory: Adjective
• Marked by lack of definite plan or regularity or purpose; jumping from one thing to another
• eg: In India, DD has a desultory plan to go digital by 2017...
• wino: Noun
• A chronic drinker

18.11.2009

Politics & the Nation

• On the Bangalore principles of judicial conduct
• In the context of a few Supreme Court judges recusing themselves from hearing the dispute between Reliance brothers, the principles governing the conduct of Judges have come into focus again. There are two such broad principles / statements adopted by the judiciary -- worldwide and also in India.
• The Bangalore principles of judicial conduct are the UN-sponsored judicial code formulated to establish standards for ethical conduct of judges. Adopted in 2002 by judges from across the world including Inida are based on a celebrated 19th century English judgement Dimes vs Proprietors of Grand Junction Canal, where a decision of Britain’s judge was set aside on discovery that the judge had substantial shareholding in the canal company. In this case, the court went beyond the principle, “No man could be a judge in his own cause,” and concluded that the said principle is not confined to a cause in which the judge is a party, but applies to a cause in which the judge has an interest.
• There is another set of principles adopted by Judges in India: the 1997 ‘Restatement of Judicial Values’ which are statements based on the Doctrine of Necessity. The said doctrine repositions law in relation to the state and society, providing for standards external to law to judge its adequacy.
• In this context, take a look at the pendency of court cases in India:
• As of June 2009, 52,000 cases are in the Supreme Court (24 judges and seven vacancies), almost 4,00,000 cases in high courts (652 judges and 234 vacancies) and a whopping over 2.5 million cases in subordinate courts (13,723 judges and 2,998 vacancies). The ratio of judges is as low as 12 per million, compared to 107 in the US, 75 in Canada and 51 in the UK.

Finance & Economy

• The power of South in the film industry
• Films made in the four southern languages—Tamil, Telugu, Kannada and Malayalam— accounted for more than three-fourths of the country’s total revenues from film content in 2008-09, generating more than Rs 1,700 crore.
• Out of the Rs 1,700-crore revenues in FY09, Rs 1,300 came from domestic theatrical collections. The region accounts for more than half the total operational screens in India.
• Also, more than 35% of the films produced and certified by the censor board never get released because the product may not be up to the mark or for lack of distributors interested in the same.
• RBI trains guns on structured debt
• So reads a report's heading. In this context the following Q&A on that is enlightening:
• What is structured debt?
• Debt that the lender has tailored specifically for the borrower. Structured debt often includes incentives and options for the borrower to do business with the lender. The most common among these structured debts was equity-linked debentures (ELDs)
• The most common among these structured debts was equitylinked debentures (ELDs), which were aggressively sold by securities arms of foreign and private banks and foreign NBFCs. A comparatively new debt instrument in the Indian financial market, ELDs came in two types: (a) principal protected, where the principal amount is fixed while the interest component is variable and linked to stock market movements; (b) the more risky variant is the nonprincipal protected instruments where the even the principal is linked to the market.
• How big is this market?
• Over Rs 15,000 crore of such structured debts are outstanding in the market.
• Why is RBI interested in regulating it?
• RBI may be uncomfortable with instruments that investors may not fully understand and end up losing money. RBI may also want to curb the back-to-back transactions that happen in offshore markets against these issuances.
• 'Safe harbour' rules.
• You might remember that the finance minister had announced in the budget that the Central Board of Direct Taxes (CBDT) would come with "safe harbour" rules which would reduce impact of judgmental errors in determining transfer price in international transactions.
• A recap of the concepts and progress in this regard:
• 'Safe harbour' and 'Trnasfer pricing' are closely interconnected.
• A 'safe harbour' would essentially mean circumstances in which the Indian revenue authorities shall accept the transfer pricing declared by the taxpayer. Transfer pricing provisions in general require income arising from an international transaction between two or more related organisations to be calculated at an arm's length price or at a price comparable to similar transactions between unrelated parties.
• Introduction of the safe harbour rules is expected to improve the foreign investment climate by providing clarity on tax liability and simplicity in tax administration.
• India had introduced transfer pricing norms in 2001 but complexity has resulted in an increase in litigation in such tax cases. Industry bodies such as CII, FICCI and Nasscom had in past asked the government to introduce safe harbour principles, advance pricing arrangements to provide certainty to already present MNCs and new investors.
• Provision of safe harbours for noncore services is common practice in some advanced countries like United States and Australia as well as some emerging economies like Brazil, Mexico, and in some form, even in China.

International

• Know about the Michelin guide?
• Michelin, the world’s largest tyremaker, has been publishing its restaurant and hotel guide since 1900. Distributed for free until 1920, the guide was originally meant for chauffeurs and included tips on using and repairing tyres. One star indicates a very good restaurant, two means excellent cuisine worthy of a detour, while three denotes exceptional cuisine.
• The Michelin Guide gave top billing to 11 restaurants in Tokyo, vaulting the Japanese Capital over Paris as the city with the most three-star eateries.
• Paris, home of the Michelin Guide, has 10 three-star restaurants. Tokyo has a total of 261 stars, more than any of the cities Michelin covers in 23 nations. New York has four three-star restaurants.

Language lessons

• factotum: Noun
• A servant employed to do a variety of jobs
• impudent: Adjective
• Marked by casual disrespect; Improperly forward or bold
• eg: He has a certain impudent charm as he actively seeks out debate.
• bedrock: Noun
• Principles from which other truths can be derived
• eg: An independent and impartial judiciary of undisputed integrity is akin to a bedrock institution ensuring compliance with democracy and the rule of law.
• umbrage: Noun
• A feeling of anger caused by being offended