05.04.2010

Politics & the Nation

• Nuclear summit on April 12 and 13
• The summit is the brainchild of the US President Barack Obama.
• Our PM Mr Singh is scheduled to visit Washington on April 12 and 13 for the summit. He is among the 42 heads of state who will take part in the summit. Notably Iran and North Korea are not taking part in the deliberations.
• The summit will include two plenary sessions on April 13, that will focus on national measures and on international cooperation to enhance nuclear security. The leaders will first meet over dinner on April 12 where discussions will be held on the threat of nuclear terrorism. After the summit, an outcome document will be made public on April 13.
• India has continued to be active in the area of nuclear security. Since 2002, India has been piloting a UN resolution on preventing terrorists from acquiring weapons of mass destruction. India has also been collaborating with the IAEA on setting and enforcing standards on physical protection of nuclear material and facilities and combating illicit trafficking in nuclear material. India is also party to the Convention on the Physical Protection of Nuclear Material and is participating in the Global Initiative to Combat Nuclear Terrorism.
• Why is the Census important? Can you cite some of the achievements made by a Census ever?
• The government is spending about 37% of its total annual budget on social programmes. Regardless of which programme we are talking about unless we know the numbers involved and in which village, town, state of the country they live, we will not know how to budget for it. Nor will we be able to ensure effective delivery. And to the right people! This is where the importance of Census lies.
• Indeed the Census is the only source of primary data at the grass roots level on demographic trends, economic activity, literacy, education, housing, urbanisation, fertility, mortality, religion, etc.
• It also doubles up as an exhaustive case-sheet, alerting the government to adverse socio-economic trends, enabling it to take ameliorative action. For instance, it was the decline in sex-ratios that came to light in earlier Census operations that alerted the government to the practice of female infanticide. This led to legislation banning sex-determination tests and several special programmes targeting the girl child were also launched.
• Likewise the Total Sanitation Campaign was launched following the revelation in Census 2001 about the distressing lack of toilets in vast swathes of the country, including urban areas.
• Census 2011 is attempting for the first time ever a national Population Registry. Given what is being attempted — details of usual residence complete with photograph and biometric identity (10-finger prints) — it is going to be a gigantic logistical exercise.

Finance & Economy

• StanChart and Air India accused of shady deal
• High-street banks and bond houses are raising a hue and cry over a recent deal between Standard Chartered and Air India.
• What’s the brouhaha about?
• Nacil placed 10-year bonds at an interest rate of 9.13% with StanChart around March-end 2010 . Within a few days, the latter sold a slice of the portfolio to a retirement fund at around 8.70%. The bank thus made a killing from the deal.
• Why are rivals miffed?
• Bond traders say PSUs sell bonds at 60-70 bps above the underlying govt security and there was no reason for Nacil to pay more than 8.70%
• Institutions say there were enough takers in the open market, but StanChart took it on its books because the paper came cheap and could be sold at a higher price.
• What is StanChart’s take?
• AI deal was signed in March ’09 when the market was difficult. The government guarantee had not come in yet and AI’s balance sheet was in a bad shape, which hampered efforts to price the paper at the customary spread over g-secs.
• 3G auctions kicking off on April 11
• The much delayed 3G spectrum auctions are finally likely to take place on April 11.
• 3G services were due for launch in 2007, but have repeatedly been deferred amid troubles over freeing up airwaves and setting bid prices.
• Analysts have billed the auctions as a fiery contest because at stake are airwaves that will enable cellphone companies to break into high-speed internet and video-conferencing services and help them transcend the tribulations of a cut-throat market.
• The bids would be very aggressive and it is unlikely that companies would bid less than a billion dollars, given that the base price is $780 million.
• Telcos now offer services on 2G spectrum, but further allocations in this medium have been on hold till the government finalises a new allotment method. Before March 2009, when the allocations were stopped, telcos got spectrum based on subscriber numbers.
• ICICI, HDFC Bank set to sport ‘foreign’ label
• ICICI Bank and HDFC Bank, two of the country’s biggest lenders in which overseas investors own more than 51% equity, will now be treated as foreign banks, with the government having decided finally not to carry out further changes to its new policy on overseas investment.
• The government’s decision will impact future investment plans of these banks in subsidiaries or in sectors where there is a cap on foreign investment. But investments in financial services, including in insurance, which were all made before the new policy was announced in February 2009 will not come under the ambit of the new rules.
• The new rules categorise firms which are either predominantly foreign-owned or controlled as foreign companies. In the case of ICICI and HDFC Bank, foreign investment is over 51% although management rests with Indians. India’s foreign investment rules allow for overseas investors to hold up to 74% in private banks through secondary market purchases or through Global Depository Receipts or American Depository Receipts.
• Any new investments made by these banks in subsidiaries or other companies will be treated as foreign investment.
• Several Indian private banks such as ING Vysya Bank, ICICI Bank, HDFC Bank and IndusInd Bank have at least 51% foreign investment. Others such as YES Bank and Federal Bank have foreign investment precariously close to the 51% mark. There is unlikely to be any major regulatory problem since these private banks continue to be governed by the RBI’s licensing norms. However, banks will be cramped from investing in sectors that have foreign investment limits, should they wish to do so.
  
• The rising oil prices give jitters
• Take a look at this write up which gives details on the issue. Oil prices are fast becoming a concern for our economy.

International

• The US is recovering
• Employers in the US created more jobs in March than at any time in the past three years, showing the recovery from the worst recession since the 1930s is broadening and becoming more entrenched.
• Payrolls rose by 162,000 workers, the third gain in the past five months and the most since March 2007, figures from the Labor Department showed on Friday in Washington.
• The Earth Hour
• At the stroke of 8:30pm on Saturday, March 27, nearly a billion people in more than 120 countries demonstrated their desire to do something about global warming by switching off their lights for an hour.
• First organised in Sydney, Australia, in 2007 by the local chapter of the World Wildlife Fund, its popularity and the level of participation (both individual and official) that generates has exploded in recent years — to the point that there is barely a corner of the earth that the campaign hasn't touched.
• Andy Ridley is the person who is credited with the idea of observing the Earth Hour; over drinks with friends in a Sydney pub several years ago. Ridley is also the executive director of Earth Hour Global.
• But what does Earth Hour accomplish?
• Look at what Bjorn Lomborg, a powerful commentator on global warming issue says on the observation of the Earth Hour:
• "Switching off our lights and promising to cut carbon emissions may make us feel momentarily virtuous, but that's all it does."
• Beware of the British libel law
• You can sue anyone for libel in a British court, even if both parties are foreigners, and so is the publication, as long as the disputed material can be accessed online anywhere in England or Wales. Jurisdiction is irrelevant; it doesn’t even have to be in English. The onus of proving that it’s not libel is on the defendant, and London’s courts have a reputation of handing out massive damages.
• If you believe allegations in the American media, there are a bunch of law firms who specialise and thrive in winning libel judgements, with huge fees.

Personality

• James Leape
• He is the Director-General of the World Wildlife Fund.
  

Language Lessons

• halcyon: Adjective
• Idyllically calm and peaceful; suggesting happy tranquillity; marked by peace and prosperity
• eg: A pile of debt amassed during their halcyon days of growth is crimping a full-out revival of realty companies savouring a sharp uptick in demand after a long spell of duress.
• scrum: Noun
• [Brit] A disorderly crowd of people
• eg: A vast scrum of developers was staring at defaults to mutual funds and banks last year, but the government rescued them by easing lending norms.
• preen: Verb
• Clean with one's bill; Pride or congratulate (oneself) for an achievement; Dress or groom with elaborate care
  
• eg: ... That would, surely, give some of our politicians something else to preen about.
• slouch: Noun
• An incompetent person; usually used in negative constructions; A stooping carriage in standing and walking.
  
• eg: Billion-dollar bids will not make the auctions a no-contest, because other companies in the fray are no slouches, said telecom analysts.