30.03.2010

Politics & the Nation

• NAC revived
• The government has revived the National Advisory Council (NAC) with Ms Sonia Gandhi as its chairperson. The council, which played a seminal role in the policies of UPA-I, is expected to set the priorities for the Manmohan Singh government.
• You might remember that the National Advisory Council was operational till the end of UPA-I tenure, but it had lost all its clout after Ms Sonia Gandhi resigned as chairperson in the wake of the ‘office of profit’ controversy in 2006. Although the government subsequently removed the chairperson’s post from the office of profit list, the Opposition’s charge of “dual authority” prompted Ms Gandhi to stay away from the panel.
• The revival means that the Congress party will have more say in setting the direction for the Government.
• On religion based reservations
• Why are they bad? Take a look at this write up from Arif Mohammad Khan, a former Union minister who resigned as minister from Rajiv Gandhi’s council of ministers in 1987 after the government moved a bill in Parliament to overturn the Supreme Court verdict in the Shah Bano case.

Finance & Economy

• All share sales before float to be promoter stake
• The government wants to now classify all equity placements before a public offer to any investor, including private equity firms, or employees as promoter equity. This implies that Indian companies will have to offer more shares in a public offering to investors, in keeping with changes in rules proposed by the government to boost public holding in listed firms and liquidity.
• This will form part of the new rules under which all listed companies will have to consistently maintain a public holding of at least 25%.
• The plan envisages companies, which do not have a public holding of less than 25%, attaining that mark by diluting their holdings annually by 5% or so over the next few years.
• The key change, which has now been proposed compared to the earlier norms, is that equity placements to institutional investors will not be counted as part of public holding. A move that will force companies going public to offer more shares or dilute their equity to fulfil the new norms. Although promoters may baulk at the move, it is expected to widen the number of stocks on offer and help check manipulation of shares in companies with low public float.
• The proposal to increase the minimum public holding in listed companies was first mooted in early 2008. The finance ministry had even put out a discussion paper seeking stakeholder views. It could not be implemented because of the turmoil caused by the global financial crisis. With the market regaining stability, the UPA government has again revived the idea and now hopes to implement the proposal sometime next fiscal.
• Finance minister Pranab Mukherjee outlined the proposal in his Budget speech in July 2009. Companies, already listed on the stock exchanges, will get between 3-5 years to comply with the minimum 25% listing requirement.
• A look at the financial regulation laws in India
• Today we have the Insurance Regulatory and Development Authority (Irda) Act of 1999, Securities and Exchange Board of India (Sebi) Act of 1992, Securities Contracts (Regulation) Act of 1956 (SCRA), Forward Contracts (Regulation) Act of 1952 (FCRA), and the Reserve Bank of India (RBI) Act of 1934. Add to that the Companies Bill and the still-born Pension Bill and we have a cornucopia of laws on financial regulations.
• On managing monetary and fiscal policies
• This is one article that you can hardly miss reading. Wanted to know how or why gold standard failed? What were its limitations and so on?
• Ever wondered how Ben Bernanke earned the epithet of "Helicopter Ben"?
• Did you ever suspect that there could be tools other than interest rates to manage money supply?
• For all such things you will find very good answers and explanations in this beautiful article by Alok Sheel.
• A must read.
• An excellent primer on state development loans
• Take a look at this ET in the Classroom column. This too is a must read.

Technology

• The interface of the future
• How would it be if you can wave your hands in the air and flip through photographs on your laptop or computer? Or how nice it would be to just make a motion in the air and switch on your TV?
• Yes, these are the things that become possible with the technology that is being delivered by a Silicon Valley start up called Canesta.
• An interesting read. Read this piece.

Language Lessons

• killjoy: Noun
• Someone who spoils the pleasure of others
• cowry: Noun
• Any of numerous tropical marine gastropods of the genus Cypraea having highly polished usually brightly marked shells