At first we decided not to give importance to it and ignored any noting on it. Then, when the papers and TV channels started making a huge outcry, we had to sit up and take notice of some of the actors and incidents. But the issue, surely has now snowballed into a controversy.
It is time you read the full story. Look at it here. The allegations, counter-allegations et al. The questions and observations that deserve our attention:
Was any rule or norm of propriety broken when Kochi secured the contested franchise? Did Shashi Tharoor’s intervention earn IPL or its owner, BCCI a single rupee less? If not, what is the fuss?
As a minister from Kerala, did Mr Tharoor do wrong to lobby for an IPL franchise for Kerala? Catch any Malayali voter saying that. But should Tharoor have pitched, even if lawfully, for a consortium that grants sweat equity to a friend? That surely constitutes impropriety, if not a sacking offence. It’s high time we purged BCCI and other sporting bodies of both politicians and sleaze.
Trouble with Nano
The Rs 1 lakh car, which drew huge global attention as the world’s cheapest car, took a hit on its brand image after two Nanos caught fire in separate incidents in March and April, attracting local and international media attention with headlines screaming ‘smoking Nano’ and `Nano catches fire’.
Tata Motors has initiated some firefighting to drive Nano out of trouble before its image gets gutted.
The company has formed a core team of its best engineers and technicians to identify the root cause for the fire and find a solution by the end of this month.
Education Loans to become cheaper
Education Loans will become cheaper with the government planning to pay the interest for the duration of the academic programme, for which the student has taken the loan.
It is estimated that around 2-3% of education loans have turned sticky. So far public sector banks have given Rs 32,000-crore education loans to 16,98,601 students.
Under the proposal considered by the government, if the education loan is for seven years, which includes two years of study and a moratorium of one year, the interest cost for the first three years would be borne by government while the student has to pay principal and interest component for the remaining four years.
The interest holiday will be given only to students whose parents jointly earn a gross income of Rs 4.5 lakh or less.
Finance & Economy
Personalities shape Irda-Sebi turf war
The spat over which of the two regulates the much-fancied Ulips did not begin on April 9 at 10 pm, when market regulator Sebi banned 14 insurance companies from selling Ulips.
The seeds of the Sebi-Irda dispute were sown last August when the market regulator abolished entry loads for mutual fund schemes. But hardly anyone could have expected this to culminate in this very public spat, which is being increasingly shaped by the strong personalities.
Both sides have been discussing the issue since January but have failed to reach any agreement. Several discussions at the High Level Committee on Capital Markets, a forum for inter-regulatory coordination, have failed to yield results either. At a meeting held between the two regulators sometime in March, it was proposed that to create a level-playing field between insurance companies and mutual funds, the Irda would be the prime regulator of Ulips, with the insurance part of the product supervised by it while Sebi oversees the investment parts.
But Irda refused to buy the argument, since it has been mandated by law to regulate insurance companies, even though they invest in stocks. And Sebi stuck to its guns that since the funds are invested in stock markets, it can be treated as collective investment schemes, which fall under its purview.
A major bone of contention is the hefty commissions paid by insurance companies — as high as 45% of the first-year premium and has led to distributors recommending Ulips to investors over mutual funds’ schemes — to agents. The insurance regulator says the problem has been addressed with a cap on Ulip charges.
At one fell swoop last Friday, Sebi banned 14 insurance companies from selling Ulips after getting a view from the attorney general Ghulam Vahanvati and informing the finance ministry.
But Irda jumped in to defend insurance companies and asked them to ignore the Sebi order.
An excellent criticism of the current FDI policy -- especially relating to banking
Do read this ET editorial. It is commenting about the recent policy changes terming the ICICI Bank and HDFC Bank as foreign banks. Verfy forceful arguments. Worth a read.
What is the spat between NSE and MCX-SX about?
Simply stated, currency derivatives.
Both the stock exchanges have recently entered into this segment, after it was opened up by RBI in August 2008, and a fierce competition has ensued between the two. The average daily trading value in this market was more than Rs 18,000 crore in December, 2009 as reported by Sebi. The waiver of transaction fee and charging a low security deposit by NSE has been alleged as predatory by MCX-SX.
The predatory pricing is a device used by a competitor not to benefit the consumers but to eliminate the competitor and once the object is achieved the price returns back to normal or even higher, if recoupment is also desired. Thus, if a predator succeeds in such a strategy, it is not the competitor alone but the consumer who is ultimately hurt in the long run.
Areeda-Turner test: This average variable cost test is often used as a proxy to marginal cost and is the most popular test used by the competition authorities across the world in predatory pricing cases. The test is based on the economic concept that a firm cannot price its product or services below the marginal cost of production, otherwise it will prefer to shut down its production in the short run to minimise losses, unless and until it has some other intent.
He identifies two causes for its troubles: increased interest and depreciation charges arising out of fleet expansion before merger and high leverage. This may look simple at the first instance. Do read the article in full to understand comprehensively about the two causes.
On shale gas
In the context of the recent announcement that RIL has made investments in shale gas abroad, let us try to understand a little more about this energy source. Look at this graphic.
Artificial blood vessles from Jatropha?
This is an interesting story. This humble weed proved to be an excellent source of a biodegradable material that can be put to a variety of uses. Take a look.
An energetic style
eg: But as IPL teams, they are very public bodies, celebrating India’s collective verve for sport, competition, enjoyment and entertainment.
Morally wholesome or acceptable
eg: For years it was the mecca for shoppers from the subcontinent, even though the Indian government was wary about some of its less savoury denizens who set up home and headquarters there.
pied a terre: Noun
Lodging for occasional or secondary use
eg: As the Sania-Shoaib story was eclipsed by the Sunanda-Shashi saga, the focus shifted to Dubai again as the personal and professional pied a terre of the lady in the limelight, and the base of some backers of the Kochi IPL cricket team.
A person who is gullible and easy to take advantage of