13.01.2010

Politics & the Nation

• CJI comes under the RTI Act, rules Delhi High Court
• In a landmark verdict, the Delhi high court said the Chief Justice of India is a public authority and his office comes within the ambit of the RTI Act. It further rules that the concept of judicial independence is not a judge’s personal privilege but responsibility cast on the person.
• This is in sharp contrast to Chief Justice of India K G Balakrishnan’s stand that his office was outside the ambit of the transparency law.
• However, the high court added that notes, jottings and draft judgments of the CJI’s office would not fall within the umbrella of the transparency law. But “if the judge turns in notes, along with the rest of his files to be maintained as a part of the record, the same may be disclosed,” court said.
• Giving a wider interpretation to the transparency law, the court said that right to information was part of Fundamental Rights enshrined in Articles 14 (right to equality), 19(1)(a)(freedom of speech) and 21 (right to life) of the Constitution.
• The source of right to information does not emanate from the Right to Information Act. It is a right that emerges from the constitutional guarantees under Article 19(1)(a) as held by the Supreme Court in a catena of decisions, it said.
• The apex court will now have to appeal to itself against the high court order.

Education

• Thought Civils is the only charmed circle to be in?
• After reading this news story, some of you may surely be tempted to try the legal profession. Take a look.

Finance & Economy

• Strong IIP numbers
• Industrial production grew at a two-year high 11.7% in November 2009, putting India on track to achieve 8% economic growth in the current financial year and strengthening calls for a hike in interest rates to tame rising prices.
• The growth is boosted by a massive 37.3% jump in consumer durables and 12.2% increase in capital goods.
• Favourable economic data and high inflation rates may prompt RBI to absorb excess liquidity in the system through a hike in cash reserve ratio (CRR), the interest-free reserve banks keep with the central bank, and even raise interest rates when it undertakes the quarterly review of the monetary policy later this month. Bond yields rallied to a near 15-month high after industrial production data was released in anticipation of a rate hike.
• RBI sees red over teaser home rates
• The Reserve Bank of India (RBI) has expressed concern on banks offering home loans with teaser rates, or schemes where monthly instalments rise after the initial years. Its worries stem mainly from the fear that borrowers may subsequently find it tough to repay the loans once interest rates go up after the first couple of years during which the rates are pegged at a fixed rate.
• RBI’s concern can perhaps be traced to the fact that the genesis of the mortgage crisis in the US lay in home loans extended to borrowers who struggled to repay. These loans, popularly known as sub-prime loans because they were given to people in lower income groups, included so-called adjustable rate mortgages where the repayment is low in the initial months with instalments rising in subsequent months, somewhat similar to teaser rates.
• Lenders in India, however, say there is no cause for concern as far as quality of lending is concerned since repayment capacity is assessed based on the overall liability and not the first year’s rate. Analysts say the average cost of long-term funds for Indian banks is in the range of 5-6%. Banking honchos say that the rates for special loans remain below the cost of funds for most banks and so they do not necessarily have any special effect on bank finances.
• Pvt. companies face mining ban in tribal areas
• The latest version of a legislation on India’s mining sector — known as the Mines and Mineral Development and Regulation, or the MMDR Bill, — proposes making large parts of mineral-rich areas in India out of bounds for private and foreign companies.
• What are the issues involved in such a proposed ban? What is the present regime? What is the law of the land saying on the issue? What is the current status of the foreign investment in the sector?
• In the wake of the proposed ban, all such questions arise in our mind. If you read this news story, you will have all such queries answered. An excellent news story. Do take a look.
• Concerns over banking NPAs
• The banking sector has 2.4% of their loans as NPAs now.
• Restructured bank loans worth a whopping Rs 30,675 crore may turn bad in 2010-11, which may pushup banks’ gross non-performing assets (NPAs) on an average by one percentage point . This is a prediction by Fitch Ratings, which has just completed a study on banks’ restructuring loan portfolio. Banks’ ROA could be lower by 13 basis points in 2010-11, too, owing to surging NPA levels.
• During 2008-09 and the first quarter of this fiscal, banks have restructured Rs 1.23 lakh crore collectively, which is 4.4% of total bank loans, primarily to help ease temporary cash-flows and liquidity problems faced by companies following the global financial crisis. Four industries — namely, infrastructure, textiles, commercial real estate and steel -- together account for nearly half of the total restructured loans.
• According to Fitch, around 15-25% of banks’ restructured loans may turn NPAs in this fiscal.
• Fiscal deficit to be at manageable levels next year?
• The government may be able to contain fiscal deficit below 5% levels in the next financial year, helped by higher revenue collections from a buoyant economy that is expected to grow at around 9%.
• Chairman of the prime minister’s economic advisory council chairman (PMEAC), C Rangarajan, said that the fiscal deficit in the next financial year could come down by up to 1.5 percentage points due to higher revenue inflows. A number of stimulus measures taken by the government in the last financial year to boost demand in the economy had pushed the deficit to a 16-year-high level of 6.8% of the gross domestic product.
• What's there to financial inclusion than a 'no-frills' account?
• Take a look at this article for a neat answer.

Climate change

• Pause in global warming?
  
• A new study by Prof. Mojib Latif claims that the cyclical changes in ocean currents known as North Atlantic Oscillation could dominate over man-made global warming for the next few decades. Latif said the world could be in for a spell of cooler temperatures, rather than hotter conditions, for the next 20 or 30 years as a result of changes in the Arctic conditions which have brought many countries to a standstill over the past week.
• Copenhagen reminds us that we have been destroying the life systems on which human well-being depends. In a scarcity situation, the atmospheric resource cannot benefit only a small proportion of the global population.
• If you are some such question, today's op-ed by Mukul Sanwal offers the best answer. Take a look. But an excerpt from article which can be a probable answer is...
• According to the Copenhagen Accord, actions to hold the increase in global temperature to below 2 degree Celsius will be based on equity. The best way is to equitably share the carbon budget of cumulative GHG emissions, so that patterns of resource use are common for all citizens. A new balance of rights and obligations has to be defined based on criteria for equitable sharing of the carbon budget of cumulative emissions to achieve the 2-degree goal. Such agreement must be a pre-condition for the demise of the Kyoto Protocol.
• Second, the principle of common but differentiated responsibilities and respective capabilities should also be re-defined, with financial contributions based on the burden sharing criteria. We should shift the focus of financial contributions from national budgets to consideration of international taxation, like a form of the Tobin tax on financial transactions. At least two-thirds of the GEF funds, provided on a grant or concessional basis, should be restricted to the least developed countries and be focused on adaptation, including insurance. Technology transfer should also move beyond seeking amendments/ clarifications to the IPR regime and focus on joint research of transformative technologies, including new seed varieties, which would be shared for a new ‘Green Revolution’.
• Third, the relationship with the global trading regime remains an unresolved issue. The role of market mechanisms and offsets, as well as the possibility of providing any legality to border tax adjustments action under the WTO, needs to be researched. Here too, as long as a country is within its fair share of the carbon budget of cumulative emissions there would be no unfair competitive advantage.