Politics & the Nation
  • Ever heard of Fams?
    • It is a project that is initiated by UN's FAO (Food and Agriculture Organization). The key objective is to enable groundwater-using farmers with the necessary data, skills and knowledge to manage groundwater resources sustainably. The objective is to figure out the state of the aquifer and the gap between what is available and what is desired in the aquifer community.
    • Look at this fact: India is by far the largest groundwater user in the world, with more than 60% of irrigated farming and 85% drinking water supplies dependent on the resource.
    • It is in this context that Fams acquires significance. It reportedly had delivered excellent results in Andhra Pradesh where it was implemented. It has emerged as a dependable institutional tool for participatory hydrological monitoring and crop water budgeting.
    • Fams, implemented in seven drought-prone districts in Andhra, has led to rationalisation of water use by a combination of crop diversification and water-saving irrigation methods.
Finance & Economy
  • SEBI finds something fishy in the PMS
    • The capital market regulator is putting in a new condition to restrain individuals from using foreign institutional investors (FIIs) to manage their money like a PMS (portfolio management service).
    • It’s widely perceived that many rich Indians and NRIs often use FIIs to play the Indian stock market — transactions that not only go against the spirit of FII regulations but are also outright violation of rules.
    • Many foreign funds offer the service by structuring themselves in a way where they can cater to different sets of investors with distinct investment strategies. However, regulatory authorities want FII money flowing into the local stock market to be institutional in nature and broad-based in character — like a mutual fund bringing in funds raised from several investors.
    • SEBI told some FIIs recently that their investments have to be spread across the portfolio. In catering to separate sets of investors, FIIs pick stocks to suit distinct requirements and strategies. For instance, a particular scrip, attractive to one class of investors, may not be preferred by another. But the latest condition will ensure that the stock is spread across the different pools or classes of investors in the overall portfolio of an FII.
    • SEBI turns its glare on multi-class structures too
      • Mauritius entities — the vehicle through which most FIIs route their investments to India in order to get the tax advantage — often have a multi-class structure. A multi-class structure is one where the FII is like an umbrella asset management company of a mutual fund with different schemes of the fund pursuing their respective strategies. These classes are called cells in legal parlance. Sebi was holding back the registration of several FIIs due to their multi-class nature. Here, the fear is that while the umbrella firm gets registered as an FII, the regulator may have little control over the different pools, or cells, under the firm. This is because once a multi-class share entity is registered, it can go on adding new cells which, outside the regulatory radar, can be conduits for round-tripping.
      • Earlier, Sebi had banned protected cell companies (PCC) structures, a popular structure globally for funds wishing to segregate assets and liabilities into each cell dedicated to different strategies or investors, from getting registered as FIIs. Multi-class FIIs are very similar to PCCs, with each cell having separate accounts and functioning with an understanding that losses of one cell can not be recovered from another.
  • The irony of our food management system
    • As much as 10 million tonnes (MT) of wheat, half of the Food Corporation of India’s (FCI) stock of the grain, is stored in the open and runs the risk of getting spoilt and by being eaten by rodents. The government is expected to procure another 24 MT of a record estimated 82 MT wheat output that will start arriving in the markets in April.
    • The buffer stocks of cereals are way too large — for wheat, five times the norm, and for rice, at 24 MT, twice the requirement.
    • These mountains of grain will be built and rot, even as food prices stay stubbornly up.
    • What should the government be doing?
    • It should be releasing grain to traders at a price above the procurement price but below the market price. Further it should be releasing grain directly to the consumers through the 4.5 lk outlets of the PDS system in the country.
    • The government must start revamping the distribution of consumption subsidy. Food coupons or cash transfers to women members of the target households, as discussed in the recent Economic Survey, could be explored.
  • Does introduction of GST lead to reduction in prices?
    • Take a look at this graphic which explains how it does reduce prices.
  • Some snippets of info about our employment scene
    • Indian trade unions cover only 7% of our labour force .
    • Our labour laws have painful costs -- 26% unemployment, 93% unorganised employment, corruption, blue-collar exploitation, migrant abuse and incentives to buy machines over hiring people.
  • IBM accuses Microsoft of funding a research report that accuses IBM of monopoly and restrictive trade practices
    • Take a look at this news report. Those of you from the IT industry will easily understand the issue.
    • If IBM's accusations are true, what a turn it would be? It is surprising that M$ did not find its own trade practices as restrictive at all, while accusing IBM of the same. PCs were never known to exist without DOS in the beginning. The metamorphosis of that situation into Wintel domination is equally well known.
    • All these thoughts do not however mean that IBM should be allowed to get away with proprietary s/w or h/w that will restrict user chocies. Users should be allowed to run a mainframe with their own s/w if they so wish.
  • Look at this Apple Google rivalry
    • Looks like today it is our turn to vicariously live the battles between tech giants. Look at why Apple and Google are fighting each other. Here.
  • subterfuge: Noun
    • Something intended to misrepresent the true nature of an activity
    • eg: But as the controversy over the Tayals of Bank of Rajasthan using front companies to transfer shares shows, subterfuges are possible, especially in the Indian context where governance structures are weak and benami companies not an exception.
  • fisticuffs: Noun
    • A fight with bare fists; Fighting with the fists
    • eg: While the discord between Apple and Google is in part philosophical and involves enormous financial stakes, the battle also has deeply personal overtones and echoes the ego-fuelled fisticuffs that have long characterised technology industry feuds.