18.12.2009

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.

International

• 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.

Cinema

• James Cameron's Avatar opens to rave reviews
• Read a review of this movie. The movie appears to be doing great at the theatres.

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.