Politics & the Nation
  • How should higher education be organized in the country?
    • Take a look at this ET op-ed story. Pankaj Jalote offers a very good model. In the process he lets us onto understanding the difference between private and corporate education:
    • In the higher education field, privatisation and corporatisation are actually quite different. Privatisation is regarding who controls the educational institute and the role of government in the management and funding of the institute, while corporatisation is about making profits. To make this distinction clear, universities may be classified as: public (i.e., those that are supported by government and are assumed to be not-for-profit), private notfor-profit, and private for-profit. The two types of private roles can have different purposes in higher education.
    • The US is the leader in the diversity of models it allows. There are about 650 public institutes that offer four-year degrees, 1,500 private not-for-profit institutes, and about 500 private for-profit institutes. It should be pointed out that all the marquee names that are quoted in support of privatisation of higher education — MIT, Stanford, CalTech, other Ivy League Universities — are all private not-for-profit.
Finance & Economy
  • WorldSpace goes bust
    • WorldSpace satellite radio service is saying it will be discontinuing its operations in India at the end of this year. This follows WorldSpace India’s parent company filing for Chapter 11 bankruptcy in the US in 2008. The filings did not cover Indian operations and executives said at the time the service would continue uninterrupted. That was not to be.
    • Consumers who have paid up for services beyond December 2009 stand to lose their money or patiently wait for bankruptcy proceedings in the US to untangle claims.
    • In India WorldSpace has about 4.5 lakh subscribers who have been paying it Rs. 1800/- per annum for availing the service. Reportedly this is 90% of the subscriber base worldwide for the service.
    • WorldSpace operated 36 channels with a wide range of genres, including regional language music. Channels such as Maestro (western classical), Riff (jazz) and Orbit (classic rock) were hugely popular. There is no other similar service in India.
  • Stats on cybercrime
    • According to McAfee’s 2009 state of the net survey, cybercriminals have siphoned $8 billion from consumers in the past two years.
  • On tax to GDP ratio in our country
    • India has a tax-to-GDP ratio of 11% at the central government level and about 16% including state and municipal taxes. This is well below the average 35.8% for OECD countries in 2007.
    • Tax reforms are aimed at increasing compliance and widening the tax base by lowering rates and removing exemptions. The government is hoping to redraft the new code quickly so that it can be placed in Parliament in the Budget session itself.
  • China set to overtake Japan as the second largest economy
    • China raised its 2008 growth estimate to 9.6% from 9% and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.
    • Gross domestic product was 31.405 trillion yuan ($4.6 trillion) last year. In comparison, Japan's GDP is estimated to be $4.9 trillion. China’s expansion will be more than 8% in 2009, according to government officials, and the nation is poised to overtake Japan next year, International Monetary Fund projections show.
  • India's status as world's back office is under threat
    • India is defined as the “world’s back office”, much like neighbouring China, which has been immortalised as the “world’s factory”. But that may be changing.
    • The Philippines is fast upstaging India’s back office supremacy, with BPO service providers and customers seeming to favour the Pacific Ocean nation as a better place for “voice-related” work, the mainstay of the global outsourcing business.
    • India has reportedly lost tens of thousands of jobs to the Philippines. The calibre of English is better and companies don’t have to put up with the mess (that exists in India) there,” says Pramod Bhasin, president & CEO of Genpact, India’s largest BPO company. The “mess” that Mr Bhasin refers to includes arranging transport for employees, security, power backup in offices, basic infrastructure that companies can take for granted in the Philippines and adds to costs in India.
    • Industry players reckon that India could have lost around 100,000 call centre jobs to the Philippines, although with annual revenues of $11 billion, India is still the largest player in the BPO sector, more than double of the Philippines’ $5 billion.
  • Take a look at how Japan is attempting a shift in its policy on Afghanistan
    • Is there something in it for other countries to emulate? Though the jury may still be out on this one, the attempt itself is laudable.
    • Japan is reportedly trying to train former Taliban to rehabilitate them into mainstream Afghan society. The aid being given by Japan will go into an initiative to provide paid vocational training to former Taliban fighters.
    • Take a look at this news report to get more details.
  • China jails dissident Liu Xiaobo to 11 years
    • China's most prominent dissident, Liu Xiaobo, was jailed on Friday for 11 years for campaigning for political freedoms, with the stiff sentence on a subversion charge swiftly condemned by rights groups and Washington.
    • Liu, who turns 54 on Monday, helped organise the “Charter 08” petition which called for sweeping political reforms, and before that was prominent in the 1989 prodemocracy protests centred on Tiananmen Square that were crushed by armed troops.
    • Liu has been among the most combative critics of China’s one-Party rule. His case attracted an outcry from Western government and rights activists at home and abroad. The unusually harsh sentence drew a fresh outcry that is likely to grow.
    • Liu has been a thorn in the government’s side since joining a hunger strike backing Tiananmen student protesters. He had been jailed for 20 months after 1989, spent three years at a labour camp in the 1990s and months under virtual house arrest.
  • UN budget approved
    • The General Assembly has adopted a two-year budget of $5.16 billion to cover the United Nations’ regular operations in 2010-2011. The budget is $300 million higher than the revised budget for 2008-2009 of $4.86 billion, which was approved last December.
    • The UN’s regular budget is funded by the 192 member states based on their income.
    • UN peacekeeping operations are funded separately.
  • World's fastest rail journey starts operations
    • The Wuhan-Guangzhou high-speed railway with the world’s fastest train journey with a 350 km-per-hour average speed, started operation on Saturday.
    • Two passenger trains rolled out the Wuhan Railway Station and Guangzhou North Railway Station, cutting the 1,068.6 km journey to three hours from the previous 10 and a half hours.
  • soiree: Noun
    • A party of people assembled in the evening (usually at a private house)
    • eg: Legend has it the famed Abbasid caliph Haroun al-Rashid was one of the first to do this, with his nightly soirees to check out the lives and opinions of his subjects.
  • trope: Noun
    • Language used in a figurative or nonliteral sense
  • set great store by someone or something: Idiom
    • to have positive expectations for someone or something; to have high hopes for someone or something.
    • eg: The Kelkar road-map for fiscal correction set much store by disinvestment.
  • nettlesome: Adjective
    • Causing irritation or annoyance; Easily irritated or annoyed
    • eg: Finally, there is Obama, who effectively abandoned a systematic course of action under the UN framework, because it was proving nettlesome to US power and domestic politics.
  • pesky: Adjective
    • Causing irritation or annoyance
    • eg: Obama’s decision to declare a phoney negotiating victory undermines the UN process by signalling that rich countries will do what they want and must no longer listen to the “pesky” concerns of many smaller and poorer countries.


Politics & the Nation
  • Know what is Ruchika case?
    • In 1990, 14-yearold Ruchika Girhotra was molested by SPS Rathore, who was then the Inspector General of Police in Haryana. Continued harrassment of Ruchika and her family led to her suicide three years later by consuming poison.
    • After so many years of investigations and filing of a CBI case, the CBI special court in Chandigarh had sentenced Rathore to six months’ imprisonment and a fine of only Rs 1,000. He got bail the same day and didn’t have to go to prison.
    • What makes a mockery of investigations and justice is the fact that the case was not investigated from the angle of abetment of suicide. The IG went on to become the DGP of Haryana in the meantime and had a peaceful retirement too!! This is what is wrong with the process of law in India. We, no doubt, have rule of law. But the process is so tortuous that it is as good as not having one.
    • Rathore, who got bail, reportedly is going to appeal against the verdict.
Finance & Economy
  • Pranab speak on subsidies:
    • It's fashionable for many (us included) to find fault with give away subsidies. Though we have been targeting our ire at the subsidy delivery mechanism, there is an element against subsidies per se also. But look at it from the point of view of a politician like Pranabda. You will appreciate the other view point also. He was asked the following question by an interviewer...
    • What is the thinking on reforming the pricing of fossil fuels? We have had many committees, but no action so far. The subsidy bill is already very high.
      • Take the case of kerosene, 300 million people have no access to electricity. What would be the material to light their homes? In village areas, where there is no electricity, you have no option but to buy kerosene. (The issue) you are raising, is a failure of the delivery system. But you cannot blame subsidies.
      • If I do not give subsidies, then prices will not come down. Prices will go up because demand and supply will operate there. If I could give them electricity to that extent, I could reduce subsidy.
      • In almost every Five-Year Plan, we have failed to reach the target we have fixed. Take the case of the Eleventh Plan — 78,000 mw of additional power generation capacity was to be added. We have revised the target. It will be about 60,000 mw. It has happened in earlier plans also. These are the problems that we will have to address. To solve one problem, I cannot create problems in other areas.
    • Why should diesel and petrol be subsidised?
      • For the obvious reason that you have to administer a scheme where there is a social acceptability. Diesel is used for public transport, cultivation. During this period of drought, to protect the standing crop in Haryana and Punjab, we had to provide energy at a very high cost because the choice was whether to protect your crops to maintain food production or think of your price of energy. There are various other factors that have to be considered.
  • An excellent primer on GST
    • This ET in the Classroom piece explains us all about questions that many of us wanted to know answers for, but shied away from asking because doing so would have exposed us as ignoramuses. Interesting. Read on.
  • Obama's medical bill is passed by the senate...
    • The US Senate approved President Barack Obama’s healthcare overhaul, backing sweeping changes in the medical insurance market and new coverage for tens of millions of uninsured Americans.
    • On a party-line 60-39 vote, Senate Democrats supported the most dramatic shifts in health policy in four decades.
    • The vote clears the way for tough negotiations in January with the House of Representatives, which approved its own version on November 7 that features different approaches on taxes, abortion and a proposed new government-run insurance programme.
    • Once House-Senate negotiators agree on a single bill, each chamber must approve it again before sending it to Obama to sign into law. Democrats hope to finish work before Obama’s State of the Union address in late January.
    • The overhaul, Obama’s top legislative priority, would lead to the biggest changes in the $2.5-trillion US healthcare system since the 1965 creation of the government-run Medicare health programme for the elderly and disabled.
    • The bill would extend health coverage to more than 30 million uninsured, covering 94% of all Americans, and halt industry practices such as refusing insurance to people with pre-existing medical conditions.
    • It also would require most Americans to have insurance, give subsidies to help some pay for coverage and create state-based exchanges where the uninsured can compare and shop for plans. Major provisions such as the exchanges would not kick in until 2014 but many of the insurance reforms like barring companies from dropping coverage for the sick will begin in the first year.
  • On international mobile workforce
    • An estimate of United Nations Development Programme puts the number of international mobile workforce at more than 200 million people.
  • Want a scathing criticism of the recently held climate summit in Copenhagen?
    • Look no further. What can be better than this one from Jeffrey D Sachs?
  • Social networking is an employer's scourge
    • According to a recent survey conducted by the Associated Chambers of Commerce and Industry of India, about 12.5 percent of productivity in the corporate sector is misappropriated each day by social networking sites.
    • A new genre of social gaming called “asynchronous” or “appointment” gaming allows people to play with their friends without having to be online at the same time. The low-intensity engagement has made games such as FarmVille, Cafe World, Restaurant City, Pet Society, and Happy Aquarium popular among employees who often log on during office hours.
  • On functional drinks...
    • Take a look at this graphic. It gives us a glimpse about health drinks segment in the country. It is a segment that is generating about Rs. 3,000 crore business in India.
  • diss: Verb
    • Treat, mention, or speak to rudely
    • eg: "the student who had betrayed his classmate was dissed by everyone"
  • floe: Noun
    • A flat mass of ice (smaller than an ice field) floating at sea
  • nitty-gritty: Noun
    • The choicest or most essential or most vital part of some idea or experience
  • polemic: Adjective
    • Of or involving dispute or controversy
    • Noun: A writer who argues in opposition to others (especially in theology); A controversy (especially over a belief or dogma)
    • eg: ...In that context, ramping up the polemic, Prachanda has declared the Maoists wanted to talk to India since it was ‘running the puppet government’ of Nepal.


Politics & the Nation
  • Jharkhand gets hung assembly
    • The Jharkhand electorate has once again delivered a fractured veridict, but catapulted the Jharkhand Mukti Morcha (JMM) to the role of the decider. The election has shattered the expectations of BJP that its downwards slide of the last two years would be halted in Jharkhand. Equally importantly, it has ensured that Congress’ momentum is not halted.
    • The Congress, which took the right political call by signing a poll-eve deal with Babulal Marandi’s Jharkhand Vikas Morcha (JVM), has managed to take the alliance’s tally to 25 in the 81-member assembly. But a new government in Ranchi will be contingent upon the support of the JMM. It not only staged an impressive comeback by bagging 18 seats, one more than its previous tally of 17, the party has also made it clear that it will support whoever backs Mr Soren’s claim to lead the government.
  • Home ministry revamp on cards?
    • In a proposal that aims to give the home ministry full control over the plethora of intelligence and law enforcement agencies, including those under the ministries of defence and finance and even the PMO, in matters relating to internal security, Union home minister P Chidambaram has proposed the setting up of National Counter Terrorism Centre (NCTC), an overarching mechanism that will be singularly responsible for preventing, containing and countering terror attacks across the country.
    • According to him, a separate department could be created within the MHA to deal with matters not directly related to internal security — such as centre-state relations, justice, human rights, UTs, disaster management, census, freedom fighters welfare — and be dealt with by a junior minister, “more or less independently.”
    • Mr Chidambaram’s radical proposal not only seeks to limit national security advisor’s (NSA) role in presiding over counter-terrorism matters, leaving him to concentrate on external threats and policy, but also aims at making the home minister somewhat of an internal security czar.
Finance & Economy
  • How are cash subsidies better than oil bonds?
    • The government is reportedly ready to compensate state-owned oil marketing companies (OMCs) with cash instead of oilbonds for selling petro-fuels below cost. How is this a better system?
    • The principal gain in a system of giving oil companies cash subsidies is accounting transparency of public finances. When the government issues OMCs bonds, it doesn’t show the borrowing as part of the fiscal deficit, only the interest outgo on the bonds is shown in the budget, and the final cost of redeeming the bonds, when government borrowing will take a quantum jump.
    • From a systemic point of view, this piece of fiction matters little — having invested notional receipts from the government in the so-called oil bonds, the oil companies will have to borrow from the market for cash to spend. Gross public sector borrowing requirement, which is what puts upward pressure on interest rates and inflation, remains the same whether we have oil bonds or cash compensation. But cash compensation will do away with the fiction that oil subsidies do not widen the fiscal deficit.
  • India is largest producer of milk worldwide!
    • India retained its numero uno position in world milk production this year as well and is estimated to have produced 110 million tonnes of milk in 2008-09. India’s milk production was 104.8 million tonnes in 2007-08.
    • Milk procurement of the world is estimated to be around 688 million tonnes in 2008, which was up by 1.7% compared to the previous year.
  • Why is that American economists go gaga over consumer spending?
    • Because it accounts for over two-thirds of economic activity. Consumer spending has reportedly risen by about 0.5% in the month of November. This is the second consecutive month in which consumer spending has been seen rising. In the month of October it rose by 0.6%.
    • The data was the latest evidence that households were starting to feel a bit more comfortable spending after a long period of restraint following the most painful US recession in 70 years.
    • The US economy reportedly grew at an annual rate of 2.2% in the third quarter as government programs such as the popular “cash for clunkers” bolstered spending.
  • Why is that the US$ not likely to depreciate as much as it is feared?
    • This is an excellent article that one should read. We suggest that you read it in entirety. However, one excerpt that is well worth our noting is...
    • In the evolving global paradigm, the US has been importing goods and outsourcing services from emerging countries while simultaneously investing capital in fast-growing economies. Thus, even as the US trade deficit remains within 3-6% of the GDP, returns on US equity investments in emerging economies are steadily rising, and dividend outflow diminishing due to reduced foreign equity investments in the country. These factors will increasingly offset deficits, indicating a stable long-term BoP situation for the US. The US trade deficit was about $700 billion before the Lehman Brothers crisis, while it earned $500 billion on equity investments and $350 billion through debt investment abroad — sums that certainly matched its trade deficit. This investment income will continue to grow and should balance the net deficit in the US current account, eventually even matching US interest payments made to other countries on foreign exchange reserves.
  • Pinto in Vogue's top 10 list of stylish women
    • Indian beauty Freida Pinto beat off competition from celebrities like supermodel Kate Moss and Lady Gaga to be in the top ten list of fashion bible Vogue’s annual list of the most stylish women. Read more...
    • Remember this girl? She shot into prominence with Danny Boyle's Oscar winning film "Slumdog Millionaire."
  • Microsoft Word to have a facelift?
    • This move reportedly is a consequence of Microsoft losing a court case over a patent suit. The company was given time till January 11 to make the change or stop sales.
    • The dispute is over an invention related to customising extensible markup language, or XML, a way of encoding data to exchange information among programmes.
    • BTW do you know that Microsoft Word is used by more than 500 million people worldwide?
  • Lionel Messi of Argentina voted FIFA Footballer of the Year; Malappuram in Kerala erupts in joy!!
    • Why is that a distant country's football hero's achievement celebrated back here in India? That too in a country that is cricket crazy?
    • The answer lies in the cable television. Passion for European football in this part of the world has been fuelled by multi-channel television cable operations and sustained coverage by the local media. The influence of European football in Malappuram is such that players in the local Sevens tournaments, featuring seven-a-side teams playing for under an hour, wear jerseys of popular European clubs. Fan following is such that even the latenight telecasts haven’t deterred supporters from watching the matches.
  • An interesting/absorbing story in Indian cricket
    • About how are number one Test cricket side now; though our team's fortunes in T20 and ODIs dipped. Read on...
  • until the cows come home: Idiom
    • for a very long time
    • eg: We could talk about this problem until the cows come home, but it wouldn't solve anything.
  • go bananas
    • go crazy, go nuts (slang), go insane, go bonkers (slang, chiefly Brit.), go mental (slang), go barmy (slang), go loopy (informal), go round the bend (Brit. slang), go frantic, go batty (slang), go doolally (slang), go round the twist (Brit. slang), go nutty (slang)
    • eg: People went bananas with boredom.
  • gibe
    • Verb: Be compatible, similar or consistent; coincide in their characteristics; Laugh at with contempt and derision
    • Noun: An aggressive remark directed at a person like a missile and intended to have a telling effect
  • knickknack: Noun
    • A small inexpensive mass-produced article; Miscellaneous curios
    • eg: Then we have Italian PM Silvio Berlusconi’s trail of nubile interests, a pastime that may be hit by his loss of two teeth and a mangled nose courtesy a well-aimed metal knick-knack by a bystander.


Politics & the Nation
  • The changing world of reality shows
    • We know that you all know about reality shows. Take a look at how their world is changing from this excerpt from a news story about a web-based reality show called "If I can Dream."
    • In addition to being shown globally on the web, ‘If I can Dream’ will be broadcast in the US on radio in a deal with Clear Channel and will also air on News Corp’s MySpace. The group of five comprises a musician, an actor, two actresses and a model and will follow them as they leave their hometowns and head for Los Angeles and a shared house in the Hollywood Hills. While it echoes previous reality shows, such as MTV’s ‘The Real World’, because it is played out on the web it will allow the audience to directly interact with the wannabe stars. Viewers will be able to connect with the contestants through text, blogs, MySpace, Twitter and Facebook as the action unfolds in real-time. The collective online thoughts and ideas of the audience will be recorded through blogs and video messages on ificandream.com allowing the five to test ideas, rehearse and audition in front of their audience.
    • Thought that reality shows meant only TV? "If I Can Dream" has got you on the wrong foot.
    • BTW, if you are asked to define a reality show, how would your definition be? Compare...
    • A television reality show features talent culled from the ranks of 'ordinary' people, not professionally trained actors. Reality show producers typically shoot hundreds of hours of footage per episode and use creative editing to create a narrative thread. Subjects of a reality show may be given some rudimentary directions offscreen, but the point is to allow the performers to act and react as normally as possible.
Finance & Economy
  • 3G roll-out to take a year more
    • With the government's announcement yesterday that it would stick to its January 2010 schedule for the auction of wireless 3G spectrum but allot airwaves only in August, the roll-out of 3G services in the country is going to take at least another year. The roll-out has been hanging fire for over two years now.
    • Mobile phone firms seemed pleased with the decision because the airwaves will be given simultaneously to all four successful bidders and allow them more time to muster the resources that will be needed to roll out their networks.
    • 3G services were originally scheduled to be launched in India in 2007, but have been repeatedly delayed amid troubles over freeing up spectrum and setting bid prices. First launched in Japan in May 2001, the services are available in over 90 countries today.
    • Europe unveiled its first fourth-generation, or 4G, network earlier this month. TeliaSonera’s 4G networks in Sweden and Norway offer mobile broadband at up to 10 times the speed allowed by third-generation technology, and other global communication companies such as US’ Verizon and Japan’s NTT DoCoMo are also slated to launch services on this platform within the next couple of months.
  • Government not to allow FDI in tobacco
    • At present the government does not allow creation of fresh cigarette manufacture capacity. But the current policy lacked clarity on whether FDI is allowed in this sector.
    • Japan Tobacco International Limited (JTIL) is the third-largest manufacturer of cigarettes in the world and the owner of brands such as Camel, Winston, Gold Coast and Salem. It had sought the Foreign Investment Promotion Board’s (FIPB) permission to raise its stake (from 50% to 74%) in its Indian unit — JTI India — in July and October last year and again in January this year.
    • India’s branded cigarette market is worth around Rs 17,000 crore annually and growing at 8-10% a year.
  • Want to understand the nitty-gritty of concepts like 'destination based consumption tax' and various types of GST?
    • Look no further; you have this excellent piece from Gautam Ray in today's ET. A must read. An excerpt:
    • Plainly speaking, destination principle provides for shifting the burden of taxation on goods and services to the point of their final consumption destination. A pure and perfect example of consumption taxation on the basis of this principle is the retail sales tax system as prevalent in the US. The entire chain of value addition activities preceding retail transactions is not subjected to tax in the US.
    • While on the subject, you should also read this comprehensive article that appeared on GST today.
  • On PC and notebook penetration in India
    • India currently has a PC penetration of about 5%. Last quarter, 21.8-lakh PCs got sold, of which notebook sales were about 7.3 lakh. Netbook sales were about 70,000 only.
    • Gartner estimates about 325,000 unit sales of netbooks (also called as mini notebooks) in India for the next year. Globally, however, about 60-million netbooks are expected to be sold, according to ABI Research.
  • What are biosimilars?
    • Biosimilars or Follow-on biologics are terms used to describe officially approved new versions of innovator biopharmaceutical products, following patent expiry.
    • Biopharmaceuticals are medical drugs produced using biotechnology.
  • India and China's climate change goals subject to review
    • The US administration is not buying into India’s claim that it has not accepted international review of its domestic climate change commitments. A senior advisor to President Barack Obama, David Axelrod, has said the US says it can challenge India and China if the countries do not meet their domestic emission goals.
    • India and China, which were among the five countries that negotiated this accord, have stressed that “international consultations and analysis” would be under international guidelines that will ensure national sovereignty. The US was clear that the “review” was the key.
    • What does this imply?
      • It means that both countries should be ready to face some penal levies from the US.
      • The Waxman-Markey legislation, which has been stuck in the US Senate, calls for levies on countries that do not accept binding emission cuts. This provision is in reference to emerging economies like India and China, both countries are not mandated to take on binding emission cuts under the Kyoto Protocol.
    • In his address to the press at Copenhagen, late night on Friday, President Obama made it amply clear that he was looking at a WTO like system for review. “The way this agreement is structured, each nation will be putting concrete commitments into an appendix to the document, and so will lay out very specifically what each country’s intentions are. Those commitments will then be subject to an international consultation and analysis, similar to, for example, what takes place when the WTO is examining progress or lack of progress that countries are making on various commitments. It will not be legally binding, but what it will do is allow for each country to show to the world what they’re doing, and there will be a sense on the part of each country that we’re in this together, and we’ll know who is meeting and who’s not meeting the mutual obligations that have been set forth,” the US President said.
  • oneupmanship
    • The practice of keeping one jump ahead of a friend or competitor
  • potshot: Noun
    • A shot taken at an easy or casual target (as by a pothunter); Criticism aimed at an easy target and made without careful consideration
    • eg: We urge Mamata Banerjee to devote her considerable energies to that and to improving the state of IR rather than to taking pot shots (deserved or un-deserved) at her predecessor.
  • peccadillo: Noun
    • A petty misdeed
  • haring: Verb
    • Run quickly, like a hare
    • eg: A measure of how much things have changed is the fact that South Carolina Governor Mark Sanford, a politician much lower down in the pecking (and peccadillo) order, has escaped impeachment over obfuscations related to his haring off to see his Argentine mistress using state facilities.


Politics & the Nation
  • Here is a good story about how India's youth are reportedly taking an interest in politics without being cynical.
    • Appreciate it. Will they stay uncorrupted by the system? Would like to see these faces some ten to fifteen years down the line. Even if some of us are not around by that time or lose track of it, the other youngsters in the group can surely keep a tab and know what came of these young ideologues.
    • What's the reason for this cynicism? Know the story of Chiranjeevi? Or for that matter many of these so called game changers who are in politics to do good to the country? Only JP (Jayaprakash Narayan of AP) appears to be holding his ground still.
  • India's so called demographic dividend
    • Among the large countries in the world, India will continue to have the best demographic trend as measured in terms of age dependency by ratio of old and children — people under 15 or over 65 to working age population — people 15-64. In simplistic terms, median age in India will rise from 25 years in 2010 to 30 years in 2025 while in China, it will rise from 34 years to 39 years during the period. In the US, Western Europe and Japan, it will rise from 37 years, 42 years and 45 years to 39 years, 46 years and 51 years, respectively. As of 2009, India’s total working age population (age 15 to 64) is likely to hit 765 million, or about 17% of the world’s working age population.
    • The UN population division estimates that over the next 10 years, India’s working age population is set to grow by a cumulative 138 million — significantly greater than the expected increase of 33 million in China. This compares with an increase of 12 million in the US and declines of eight million and 18 million in Japan and Europe, respectively.
  • Is the demand for smaller states justified?
    • Mythili Bhusnurmath takes a hard look at and backs it up with some figures. Some observations worth our noting from the article:
    • Back in the 1950s, the States Reorganisation Committee headed by Justice Fazal Ali recommended formation of 16 states and three centrallyadministered territories. The government, however, opted for 14 states and six Union territories. Today, we have gone from 14 to 28 states.
    • Per-capita GDP growth rate in all three cases has shot up after they were spun off. The case of Chhattisgarh is most striking, in that not only did the per-capita income growth rate go up almost five-old — from 3.4% prior to being spun off to over 15% in both 2006-07 and 2007-08 — the new state also grew faster than the parent state in both years. The picture is not very different in the Jharkhand and Uttarakhand either with both recording faster growth post the split.
    • Not surprisingly, human development indicators have also improved. Infant mortality and enrolment of girls — both good proxies for any measure of human development — are both vastly improved after division than before.
Finance & Economy
  • IPO bound companies to keep 25% with public
    • In an effort to operationalize a Budget announcement, the government is reportedly working on a notification that seeks to amend the relevant clauses in the Securities Contracts (Regulation) Rules, 1957.
    • Under the current rules, companies have the option to go public with 10% or 25% equity dilution. If the company goes for 10% dilution, then the issue size has to be at least Rs 100 crore, provided they issue 20 lakh shares. The government is scrapping the rules allowing companies to go for IPO with 10% dilution.
    • Companies planning to list may have to ensure that at least a quarter of their total equity lies with the public, as the government sets about its stated mission to ensure that investors get a wider selection of stocks to choose from.
    • The government had made clear its intention to make a minimum 25% public float compulsory during the last Union Budget.
  • On our AT & C (Aggregate Technilcal & Commercial) losses (a euphemism for theft of electricity)
    • Overall AT&C loss did drop from 38.86% in 2001-02 to 34.54% in 2005-06. Concurrently, the commercial losses of state power utilities reduced from Rs 29,331 crore to Rs 19,546 crore.
  • What was achieved at the Copenhagen Accord?
    • The accord, which was accepted by 26 countries, holds the promise of $100 billion in annual aid from 2020 for developing nations and pledges $30 billion by 2012. The accord sets a target limiting temperature increases to upto two degrees Celsius, but does not quantify greenhouse gas emission cuts.
    • The US-BASIC agreement envisages $30 billion will be made available to developing countries for fighting climate change by 2012, and larger sums thereafter. More significantly, the agreement says that both developed and developing countries will list their climate change actions, and, crucially, provide information on these actions through national communications and international consultations and analysis ‘under clearly-defined guidelines’.
    • The agreement brokered by US President Barack Obama with the BASIC group of China, India, Brazil and South Africa has committed these countries to keep negotiating to reach an agreement, hopefully, at CoP16 (16th Conference of Parties) in Mexico. This agreement was ‘recognised’ rather than adopted by CoP15. Unless all 193 members of the UN agree to this, it will have no legal sanctity.
    • Measured against the conference objective of coming up with a successor to the Kyoto Protocol, which committed developed countries to measurable emission cuts by 2012, the conference failed.
  • What are the implications of the Copenhagen Accord?
    • First, the ‘audacity ‘ of moral suasion and political leadership that has triumphed over procedural complexity and philosophical objections. Remember India’s sensitivity about the Measurable, Reportable and Verifiable (MRV) mechanism when it originally emanated from the OECD countries. The policing like provisos of the MRV had no chance of being accepted by an emerging country even if it had to accept mitigation targets. Under the Copenhagen Accord, BASIC countries are required to commit themselves to voluntary but internationally pledged mitigation targets something we would not have allowed given that our targets are voluntary. Mr Obama’s suasion has changed all this.
    • The second and more serious implication of the Accord is that it inadvertently draws the BASIC countries to the fold of developed countries, an ‘identity makeover ‘in the new scheme of things. Graduating clauses (explicit or implicit) in a new Climate Protocol can produce great uncertainties to emerging economies like India that have very low per capita CO2 emissions. In the face of it, the Copenhagen Accord pushes into the backburner the per capita emission principle. India has been in the G77 bracket on account of its low per capita emissions (the other way our demographic dividend has helped us). This raises further implications about the continuing relevance of the principles of common and differentiated treatment to BASIC countries.
    • The third implication relates to finances. The Accord talks of a modest annual aid of $ 100 billion to help poor countries during 2012- 2020. Given the nature of the Accord and its implicit graduation clauses, BASIC countries will not be entitled to any share in the pie.
Language Lessons
  • scrimp: Verb
    • Subsist on a meagre allowance
    • eg: ...And there’s a lot of hot air in your packet of chips and biscuits, as food prices go through the roof and consumer product companies scrimp on quantity to protect margins.
  • cop-out
    • Noun: A failure to face some difficulty squarely
    • Verb: Choose not to do something, as out of fear of failing
    • eg: It would be easy to dismiss the 15th Conference of Parties at Copenhagen (CoP15) as a cop-out on climate change.
  • get one's goat
    • Informal: to anger, annoy, or frustrate a peron
    • eg: ...This is likely to get the goat of many high-minded nationalists in India, who will fault the government for submitting to ‘imperialist’ pressure.
  • euphemism: Noun
    • An inoffensive or indirect expression that is substituted for one that is considered offensive or too harsh


Politics & the Nation
  • Change of guard at BJP?
    • The long-awaited exercise of affecting a generational shift in the principal Opposition party was kicked off on Friday, with LK Advani assuming the role of chairman of the BJP parliamentary party, a new post created by amending its constitution.
    • After donning his new robe, Mr Advani installed his deputy, Sushma Swaraj, as Leader of Opposition in the Lok Sabha, while re-affirming Arun Jaitley as her counterpart in the Rajya Sabha. The two leaders will be reporting to him. SS Ahluwalia will remain the party’s deputy leader in the House of Elders.
    • Both Ms Swaraj and Mr Jaitley are in their 50s. So is the party’s president-to-be, Nitin Gadkari, who’s 52.
    • But with a new role created for him, ostensibly at an elevated level, will the generational shift that the BJP is seeking, come about?
    • Let's wait and see.
  • Quota for Muslims and converted Christians?
    • The Ranganath Commission has recommended Scheduled Caste status to Hindu coverts to Christianity and Islam. It has also suggested a 10% reservation for Muslims and 5% for other minorities in government jobs.
    • The commission has recommended delinking of Scheduled Caste status from religion and abrogation of the 1950 Scheduled Caste Order. The order originally restricted Scheduled Caste status to Hindus alone, but was later opened to Buddhists and Sikhs.
    • The recommendation of ‘religion-based’ quota not just goes against the Constitution, it could also give a handle to the Opposition to beat the government with. There is constitutional restriction on Christian and Muslim Dalits being allowed access to reservation.
  • On adoption legalities in India
    • It's very difficult for us to know the nitty gritty of adoption in our country. Take a look at today's ET editorial on the subject. It is quite educating.
Finance & Economy
  • Govt raises GDP forecast to 7.75%, but says prices a worry
    • In its mid-year review of the economy, the government said GDP growth could top 7.75% during the fiscal to March 2010, as attention turns to policy measures that will be required to keep inflation under check.
    • One of the measures that the RBI could be considering in the wake of high inflation is tinkering with the key policy rates -- the CRR, SLR, repo and reverse repo rates. Since the middle of September 2008, RBI has reduced its policy repo rate by 425 basis points to 4.75% and cut the cash reserve ratio to 5% from 9% at the end of August.
    • The RBI has already given the first indications of a tighter monetary policy stance by restoring the statutory liquidity ratio to 25% and withdrawing some special liquidity support measures.
    • The impact of a poor monsoon is seen being tempered by the robust growth in all other sectors, but industrial growth will be critical to sustaining the growth momentum this year.
  • Government's efforts at chasing black money
    • The government has, in an unprecedented move, posted two senior Indian Revenue Service (IRS) officers to Singapore and Mauritius, intensifying its efforts to crack down on money laundering amid growing concerns of links between tax evasion and terror funding.
    • The Central Board of Direct Taxes (CBDT) has appointed additional commissioners GT Venkateswara Rao and M Sampath as first secretaries at the country’s missions in Singapore and Port Louis for three years.
    • CBDT is not alone in posting officers abroad. The Central Board of Excise & Customs (CBEC) has officials permanently posted in Washington and Singapore for the same purpose. The Enforcement Directorate, too, has an official posted in Dubai to check on transactions that can have Indian connections.
    • The posting is to maintain effective co-ordination between the Indian tax authorities and the tax authorities of Singapore and Mauritius.
    • The posting assume significance in the light of the fact that PNs (Participatory Notes), account for about 17% of the $15-billion fund inflow into Indian stocks this year. PNS, by the way are derivative instruments sold by registered brokers here to investors overseas with Indian stocks as base.
  • What exactly is holding up signing of a joint declaration at the Cophenhagen summit?
    • It is the rich nations' refusal to give up their demand for contravening the UNFCCC and Bali Action Plan for forcing verification of climate change pledges that is proving to be difficult.
Language Lessons
  • torpor: Noun
    • A state of motor and mental inactivity with a partial suspension of sensibility; Inactivity resulting from lethargy and lack of vigour or energy
    • eg: Globally, after the two great wars, with the second one and its final solutions being more definitive, the human capacity for horror, it seems, reached an apogee only to relapse into a state of relative torpor.
  • stupor: Noun
    • The feeling of distress and disbelief that you have when something bad happens accidentally; Marginal consciousness
    • eg: "someone stole his wallet while he was in a drunken stupor"
  • plummy: Adjective
    • Very desirable; (of a voice) affectedly mellow and rich
    • eg: ...and he’s deploying complex theories about mass psychology and the media to plummy effect.


Politics & the Nation
  • A huge story on the Reddy brothers
    • This is one story that you must read. To understand how big business operates and how it can cock a snook at governance.
  • JNNURM to depend on private money?
    • Going by the way the funds under this flagship programme are utilized and the inability of the Government to pump in more funds for the scheme, this looks a distinct possibility.
    • Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was launched in December 2005. It has generated a lot of interest from state governments, leading to the utilisation of the Rs 1,00,000 crore earmarked for seven years in the first four years of its implementation.
    • With funds running out, the urban development ministry had sought Rs 50,000 crore more for the scheme from the Planning Commission.
    • Under the scheme, more than 460 projects were sanctioned in 63 mission cities with to improve the civic infrastructure and make it sustainable for the identified urban cities.
    • The core of the scheme: Central grant covering 50% of project cost for cities with population between 1 million and 4 million For cities with population higher than 4 million, Central grant is reduced to 35% of project cost North-East states get 90% project funding from the Centre For Jammu & Kashmir, Centre’s contribution is 80% of project costs Remaining funds comes from the state’s kitty, urban local bodies and para-statals.
Finance & Economy
  • More on the implications of changes in trading hours
    • Not that it really matters to us much; but it does allow us to get a peek into the mechanics / operations of typical stock brokers.
    • Take a look.
  • An explanation about why food prices are rising
    • Prices are zooming because of a fall in production due to the worst monsoon in about three decades. The supply shortfall is getting amplified, with traders pushing up prices with cheap money, as central banks, including India’s, are keeping policy rates at record lows to prevent economies from falling into depression. The crisis is averted, but the industry and traders want low-interest rates to continue.
    • The Food and Agriculture Organisation pointed out in a recent report that macroeconomic factors such as exchange rates, volatile oil prices and rising liquidity stemming from low-interest rates are prompting investors to put their cash in commodity markets.
    • While some economists are saying that continuation of low rates could lead to yet another asset price bubble and higher food prices, RBI has been maintaining that monetary policy may not be effective in controlling food prices.
  • Continuing the discussion on food inflation...
    • What could be the actions in the short and medium run that can help contain food inflation below 5% mark or so?
    • Writing in today's ET op-ed on the subject, Ashok Gulati and Kavery Ganguly offer four steps:
      • First, the government needs to unload the large wheat stocks that it has in its godowns to immediately bring down the atta prices by about 20-25%. Simultaneously, allow the private sector to freely import and store wheat at zero import duty.
      • Second, lower import tariffs on a host of commodities ranging from grains to vegetables and fruits, and remove all hurdles on private trade to import and stock those commodities.
      • Third, taxes and various cesses that are often imposed on primary commodities need to be urgently abolished, and replaced only by value-added taxes beyond the primary commodity stage.
      • Fourth is to usher in market reforms by compressing the value chain of agri-commodities.
  • Bits and pieces on US debt
    • US federal government is running a deficit of over $1.4 trillion for its fiscal year 2009, the highest in 60 years. The total debt held in dollarterms by the public (excluding government agencies but including foreigners) is projected by the US Congressional Budget Office (CBO) to rise from $5.8 trillion in 2008 to $14.3 trillion in 2019 — from 41% of the GDP to 68%.
    • Estimates by the CBO project the debt to rise to 215% of the GDP by 2039, more than double the annual output of the entire US economy.
    • China holds a whopping 13% of the US government bonds and, back in 2007, it was absorbing 75% of monthly Treasury issuance. China also reportedly holds $2.1 trillion in US currency.
  • James Cameron's Avatar opens to rave reviews
Language Lessons
  • cauldron: Noun
    • A very large pot that is used for boiling
    • eg: ...It’s a pinch of sugar to sweeten a cauldron of failed commitments.
  • parastatal
    • Adjective: Owned or controlled wholly or partly by the government: a parastatal mining corporation.
    • Noun: A company or agency owned or controlled wholly or partly by the government.


Politics & the Nation
  • On rethinking education:
    • Sudhakar Ram is CMD of Mastek, a software company. He has some sane ideas on revitalizing education in our country. We strongly recommend a read of this article.
    • Before we excerpt the suggestions, some excerpts that we found are worthy of our record:
    • Howard Gardner’s Project Zero at Harvard discovered that up to age four, almost all children are at genius level, in terms of the multiple frames of intelligence — spatial, kinesthetic, musical, interpersonal, mathematical, intrapersonal, and linguistic. But by age 20, the genius level proportion of the tested population dropped to 2%. We are educating the intelligence out of our children. Instead, we need to nurture and develop the multiple frames of intelligence within our schools and colleges. We need to fuel imagination, which Einstein said is more important than knowledge.
    • The current system of education — both at the school and university level — assumes that a finite amount of ‘knowledge’ is available. The emphasis is on cramming as much of this knowledge as possible into the available years of education. But this paradigm does not work for the 21st century; the quantum of knowledge has become so vast that it would take several lifetimes even to master a single discipline. What we need is children learning how to learn and provide facilities for life-long, just-in-time learning.
    • Everyday people tend to think we don’t have the ability — or even the right — to understand, let alone challenge, the specialists. In this quest for ‘know-how’ we are losing the ‘know-what’ — the meaning and purpose of life, the context for applying all this knowledge.
    • Of the 200+ million children of school going age, 35% drop out after primary school and another 50% after upper primary. Of the 20 million youth of graduating age, only around three million actually make it through college, and less than 500,000 are deemed employable.
    • So, how should we rethink education?
      • First, we need to nurture love for learning in primary schools.
      • Second, the focus of upper primary schools should be (a) to teach kids how to learn and (b) to support them discover their natural aptitude.
      • Third, high school curricula should focus more on building concrete skills and capabilities in multiple disciplines, rather than stressing exam results.
      • Fourth, universities of the future should offer life-long learning modules that allow people to acquire knowledge just when they need it.
  • Is it time for a second SRC?
    • Take a look at this lively and timely debate. Some excerpts worth our attention:
    • If size was a determinant of governance, Uttarakhand and Jharkhand — both states created in 2000 — should not have had such disappointing records. Those who fought for their statehood, and for local non-exploitative control over their natural resources, have been completely marginalised, as the idealism of the new experiment has been overtaken by the jaded practices of politics-as-usual.
    • ...empirical evidence is unambiguous: size is irrelevant to the quality of governance and development.
    • The new claims being heard today have much less substance. They are propelled by the same impulse to splinter that characterises our political parties. Sections of the political class that are unable to make a convincing play to capture power in an entire state will seek such forms of minor secession that provide them with smaller, more easily controllable pocketboroughs. Just as large political parties tend to spawn smaller parties — unsurprisingly organised as family firms — so also large states are seen as fair game for building smaller fiefdoms.
Finance & Economy
  • Ad campaign that left Häagen-Dazs red-faced
    • We have noticed sometime back that Häagen-Dazs (It is a brand of ice cream, established by Polish immigrants Reuben and Rose Mattus in the Bronx, New York, in 1961) is making a foray into India. It is an internationally very well nown premium brand ice-cream.
    • In its ad campaign (which was handled by TBWA) the choice of wrong words led to a marketing nightmare for the company. Look at what happened:
    • A day before the US brand opened its first outlet in a south Delhi mall, it put up signboards around the area for a “preview for international travellers” with the telling rider, ‘Entry restricted only to holders of international passports’.
    • An Indian who saw the sign and was turned away from the store — only because of lack of space due to weekend rush, according to Häagen-Dazs — took a photograph. He e-mailed it to a Times of India blogger; within minutes it had gone around the globe, inciting a hail of protests that left the company red-faced.
    • “An error was made in the creative execution,” Anindo Mukherji, MD of General Mills India, which markets the brand here, told ET, adding more precisely: “It was a wrong choice of words, and we regret the error.”
    • But the words of the teaser campaign left the company vulnerable to the charge of apartheid.
    • It emerged that what Häagen-Dazs really wanted to convey was ‘Now get a taste of abroad right here in India’.
  • Come Friday stock exchanges will function from 9.00 AM
    • Both BSE and NSE announced that they will be functioning from 9.00 AM from Friday.
    • The move has not left many market participants enthused.
    • The original advocates of early market hours were those who felt that foreign fund managers used the shallow Singapore market to hammer the Nifty by short-selling Nifty futures there. However, this problem may still persist, as Singapore will open well ahead of the Indian market, despite the advanced timings.
    • What do early openings mean for different stakeholder?
      • Arranging for margin funds so early could be a tough task, as banks are unlikely to open that early. Market players say other related systems should be put in place before advancing the trade timings
      • Despite advancing the timings, arbitrage deals between Singapore and India will continue since the overseas exchange will still have a lead time
      • Life will be demanding for traders, particularly those in small broking houses and staying in distant suburbs
  • Cheque may be history; sooner than we can predict
    • After more than three centuries, the humble cheque is set to become a historic relic after British banks voted to phase it out in favour of more modern payment methods. The board of the UK Payments Council, the body for setting payment strategy in Britain, agreed on Wednesday to set a target date of October 31, 2018 for winding up the cheque clearing system. The board is largely made up of Britain’s leading banks.
    • Last year, around 3.8 million cheques were written every day in Britain, compared to a peak of 10.9 million in 1990, the council said. It costs about one pound to process every cheque.
    • The oldest surviving cheque in Britain was written in 1659, according to the council and made out for 400 pounds (equivalent to around 42,000 pounds today). It was signed by Nicholas Vanacker, made payable to a Mr Delboe and drawn on Messrs Morris and Clayton, scriveners and bankers of the City of London. In those days, cheques would have been exchanged informally in coffee houses. It was not until 1833 that the first clearing house was built in London to exchange cheques.
  • Bombay High Court throws a spanner in the works for foreign law firms
    • The Bombay High Court ruled that foreign law firms cannot carry on non-litigious practice in India, which includes drafting of applications, consultancy work or any legal work that does not involve appearing before the courts, unless they abide by the Advocates Act, which governs the conduct of Indian lawyers. The two-judge bench said that a decision by the Reserve Bank of India allowing foreign law firms to open liaison offices was not justified.
    • The ruling means that foreign law firms can function in India only if all the advocates in their offices are enrolled with the bar councils of Indian states or with the Delhi based Bar Council of India, the apex regulatory body for lawyers. Lawyers possessing a degree from international law schools, which are recognised by the Bar Council of India, can also practice, provided they register themselves.
    • International firms Ashurst, Chadbourne & Parke and White & Case had opened liaison offices in India after Reserve Bank of India granted them permission under the Foreign Exchange Regulation Act or FEMA, with the condition that these firms would not earn any income in India. Lawyers Collective had challenged the permission granted by RBI to the foreign firms.
    • Under India’s Advocates Act, which was enacted in 1961, only an “advocate” can practise the “profession of law”, an advocate being a person with a law degree and enrolled with state bar councils or the Bar Council of India.
  • Sportspersons' expensive divorces
    • The escapades Tiger Woods had with various women are tumbling out of the locker without a break. For the sake of staying away from somebody's personal life, we maintained a stoic silence in our blog about the issue so far. But not any more.
    • If he were to divorce his wife, it is reported, that he would have to shell something like $300 mn to his wife Elin Nordegren.
    • For the record, Tiger’s pal, basketball legend Michael Jordan holds the current record of most expensive divorce in all sports, having reportedly paid over $US150 million to his former wife, Juanita.
    • The record for ‘most expensive’ divorce among golfers is held by the Shark, Greg Norman. His ex-wife Laura Andrassy was said to have accepted a reported sum in the region of US $ 102 million plus some estate in the form of a luxury house or two, when he parted ways with her.
Language Lessons
  • wonky: Adjective
    • Turned or twisted toward one side; Inclined to shake as from weakness or defect
    • eg: The resultant differential taxation can lead to inefficient production and lower output; and differential tax rates on final goods and services would affect consumption patterns, and send wonky price signals.