21.12.2009

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.

International

• 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