Supreme Court upholds reservation for OBCs in local self government
A five-judge Constitution bench of the Supreme Court on Tuesday upheld the validity of the provisions enabling state governments to provide for reservations for Other Backward Classes (OBCs) in panchayats and municipalities.
The apex court, however, asked state governments to reconfigure their political reservation policy saying not all groups which have been given reservation benefits in education and employment need reservations in the local self-government.
Look at what it observed:
'It would be safe to say that not all of the groups which have been given reservation benefits in the domain of education and employment need reservations in the sphere of local selfgovernment. This is because barriers to political participation are not of the same character as barriers that limit access to education and employment. This calls for some fresh thinking and policy-making with regard to reservations in local self-government.”
Finance & Economy
Telecom bounty to ease fiscal load
An unexpected bonanza from auction of radio spectrum to mobile operators looks set to give the government’s effort to tame fiscal deficit this year a major boost, outweighing pressure from a higher oil subsidy bill and possibly lower divestment proceeds.
The government appears to be on course to raise around Rs 90,000 crore from the sale of 3G and Wimax spectrum, well ahead of budgeted targets, leaving officials and analysts increasingly confident that meeting this year’s fiscal deficit target of 5.5% of GDP could be a cakewalk. An additional Rs 35,000 crore could come the government’s way if the new pricing norms proposed by telecom regulator Trai are implemented.
ICICI Bank’s capital falls on new a/c rules
The bank’s tier-I capital, which comprises equity and free reserves, is down by Rs 1,130 crore for the year ended March 31, 2010, due to changes announced by the Reserve Bank of India (RBI) on treatment of securitisation exposures and special reserves.
Banks securitise loans by transferring assets from their books to special purpose vehicles and slicing them into bond-like papers, called pass through certificates (PTCs), that are sold to other institutions. This gives banks the headroom for more lending. ICICI has been the most aggressive bank in the securitisation market.
Banks create special reserves by dipping into pre-tax profits. When they securitise loans in the form of PTCs, they also hold a certain portion of these PTCs.
Under the key changes, RBI has now said such investment in PTCs, where banks provide guarantees, have to be reduced from the capital. On the treatment of special reserves, the regulator has announced that only the portion of reserves that is net of tax payable should be added to the capital.
A bank’s lending capacity is determined by the capital it has. Banks are required to maintain a capital adequacy ratio (CAR) of 9%, which includes tier-I capital and tier-II capital (or subordinated debt).
Apex Court Clears Company Law Tribunal
This is a very good editorial piece that hails the creation of the NCLT -- Ntional Company Law Tribunal. Take a look at it to know the importance of winding up operations for the society at large.
See the relevant news story about the Supreme Court judgement here.
Home-loan-swap window to help beat rate hikes
The government may seek changes in the prepayment rules to enable a home loan borrower to shift to cheaper lenders if his bank raises interest rates soon after disbursing the loan.
The government wants banks to provide a two-month window to their new borrowers to shift to some other bank without prepayment penalty if they have raised interest rates too quickly after disbursement. The finance ministry is likely to take up the matter with the central bank to seek these changes.
Prepayment charges differ across the industry. While private sector banks charge the customer a steep 2% on the principal outstanding, some public sector banks charge as low as 1% when transferring loan from one bank to another.
The Competition Commission of India (CCI) had earlier sought replies from all banks after receiving complaints from loan borrowers, asking why prepayment penalty should not be held as anticompetitive practice.
Google displaced iPhone maker Apple to become the second-most popular provider of smartphone software in the United States during the first quarter, the latest sign of the increasing competition in the fastgrowing mobile market.
Smartphones featuring Google’s Android operating system accounted for 28% of US smartphone unit sales in the first quarter, behind top-ranked Research in Motion (RIM), maker of the Blackberry phone, which had a 36% share of the market. Smartphones, which allow consumers to surf the Web, send e-mail and run specialised applications on wide, colour screens, are increasingly replacing no-frills cellphones for many US consumers.
Apple has sold more than 51 million iPhones since it launched the device to wide acclaim in 2007 and the company says more than 200,000 apps are available for the phone.
Unlike Apple, Google offers its Android software to other phone-makers.