There will be no posting for a month i.e., till 23.07.2010 as I am going on a month long trek to Kailash Manasarovar in China. Will be back from 23rd of July. Regret the inconvenience.
Politics & the Nation
Apex court pulls up ‘blogger’ judge of Karnataka high court
This makes an interesting, if not amusing, reading. A High Court going in appeal against an order of a bench of itself against it. And the bench itself showing lot of disrespect to its own Chief Justice. Looks somebody somewhere have lost track of discipline and appropriated for themselves much more than what is due under the law.
On amendments relating to the Civil Nuclear liability bill
Australia is no longer a favoured destination for Indian students
The increasing regularity with which Indian students have been targeted in racial attacks in Australia, appears to have finally taken a toll. Many of the Indian students are no longer preferring Australia as a destination for their higher education. It’s almost certain now that the number of Indian students going to Australia will take a big hit in 2010, and some experts even see a 75% decline.
Australia has received over 2.67 lakh global student visa applications in the fiscal year to May 31, 2010. The figure represents a fall of over 18% when compared to the record figures of 2008-09.
Indeed, Fall 2010 will be a tad different from previous years. A combination of factors such as stricter immigration norms, changing dynamics in the global job market and incidents of racism in some georgaphies is reshaping the decisions taken by Indian students on overseas education. Some are actually putting their overseas studies on hold for a year or two, despite having got their visas stamped. Many of them prefer to stay back in India and work–at least for now.
Finance & Economy
Direct Taxes Code watered down to keep all happy
The government has retained the form, but abandoned the spirit of the Direct Taxes Code (DTC) to have a simple, clean tax system without exemptions.
A revised discussion paper on the Direct Taxes Code, released by the Central Board of Direct Taxes (CBDT) on Tuesday, dropped many controversial proposals of the original draft code to help individuals and companies save on their tax outgo.
These include levying minimum alternate tax (MAT) on gross assets and taxing savings schemes such as the public provident fund at the time of maturity. Companies will pay MAT on book profits.
Tax collection in the early part of the ongoing fiscal grew at a rapid pace, possibly leading to a lessening of pressure due to government borrowing.
Indirect tax revenue, which includes Customs duty, central excise and service tax, increased by 49% in April and May to about Rs 35,000 crore from a year ago.
Advance tax payments by corporations are estimated to rise by a fifth in the three months to June 2010.
IRDA wins the ULIP battle
Insurance industry regulator Irda has emerged the victor in a high-profile tussle over the regulation of so called unit-linked insurance plans, or Ulips, with the government ruling that it and not the market watchdog Sebi would oversee the product.
This would set at rest all the issues regarding Ulips between the two financial regulators.
The government promulgated an ordinance late on Friday to amend four major laws that could revive the sale of Ulips and force the mutual fund industry to look for new avenues to get investors.
Irda and Sebi got into a legal battle over Ulips regulation after the markets regulator on April 9 banned 14 insurers from selling Ulips. Sebi withdrew the ban when bureaucrats brokered a truce, but only to revive it. Sebi moved the Supreme Court to club various public interest litigations against Ulips and resolve the issue of alleged mis-representation and the issue of jurisdiction.
The Supreme Court will have to take cognisance of the Ordinance when it hears the case on July 8.
The ruling is a relief to existing policy holders who were unsure of continuing with the product and new investors were wary of buying them.
Ulips are hybrid products incorporating investment and insurance cover. They account for more than 85% of the portfolio for life insurers. Insurers can now sell new Ulips launched after April 9, 2010.
The government will amend the RBI Act, the Insurance Act, the Sebi Act and the Securities Contract Regulation Act to include Ulips, scripts or any such instruments under the life insurance business. The Bill will be introduced in the monsoon session of Parliament.
In fiscal year 2009-10, Ulips accounted for more than four-fifths of the total insurance premium of around Rs 2.60 lakh crore that was collected.
US to check Chinese plans to build Pak reactors
The Obama Administration has decided to oppose China’s plans to build two civilian nuclear reactors in Pakistan. The deal is expected to be discussed at the NSG meeting being held in New Zealand next week.
China National Nuclear Corporation plans to finance two more civilian reactors at the Chashma site despite concerns raised about the safety of nuclear material in Pakistan. China earlier built two reactors for Pakistan. The deal oversteps the guidelines of the 46-country Nuclear Suppliers Group (NSG), which bars nuclear commerce between Nuclear Non-Proliferation Treaty (NPT) members like China and nonmember states like Pakistan.
A special leave of the NSG is required before such a deal can be finalised, as was done in the case of the Indo-US civilian nuclear deal, as India too is not a signatory to the NPT.
China disagrees. For its part, Beijing has maintained that the deal had been grandfathered before it joined the NSG in 2004 because it was completing work on two earlier reactors for Pakistan at the time. Washington appears unconvinced by the argument. Additional nuclear cooperation with Pakistan beyond specific projects that were grandfathered in 2004 would require consensus approval by the NSG.
The challenges to increased India focus by Britain
UK is reportedly trying to forge a new special relationship with India. What are the challenges it faces on its way?
From India’s point of view, New Delhi has been taking note of the criticisms by various organisations in India and the UK of the new government’s determination to cap immigration from non-EU countries and the more stringent visa rules for students, spouses and tourists brought into force recently.
Secondly, while the Cameron government is eager to take its ties with India to a higher level, it is aware of the competition from the US on that issue. Britain had been partially eclipsed by the US, which signed a nuclear co-operation deal with India in 2008. That was a game-changer for India in terms of its relationship with the US, when it came in from the cold after its nuclear tests and sanctions were lifted.
More on the Gulf oil spill and BP's troubles
The oil spill is happening because of an explosion on April 20 on an offshore rig. The explosion killed 11 workers.
The blowout preventer that is supposed to work properly and stop the oil spill following such explosions did not work. Oil is spewing, reportedly, at the rate of upto 60,000 barrels from the well.
BP’s well has reportedly used a cheaper technology than the industry standard and was less secure against natural gas blowouts of the type that destroyed it.
The spill — actually hundreds of thousands of small oil patches—has idled much of the US Gulf Coast’s multibillion dollar fishing industry and seeped into ecologically sensitive marches and wetlands despite the efforts of an army of workers to keep it at bay with oil-soaking booms.
Hollywood star Kevin Costner joined cleanup efforts on Friday, showing off his ‘dream’ machines to separate oil from water. He has developed them over 17 years — while the oil industry virtually ignored oil spill cleanup research — and BP has acquired 32 of the centrifuges.
Jose Saramago, considered by many to be the world's greatest novelist, was a late bloomer and wrote starkly allegorical fiction. Known for his unflinching communism and hard attacks on globalisation, Saramago, a lyrical fantasist, wrote many masterpieces such as The Gospel According to Jesus Christ, The Year of the Death of Ricardo Reisand Blindness.
Calling his books “written orality”, Saramago remained prolific till the end of his life. One of his last books was The Elephant’s Journey, a Quixote-like travel narrative about an Indian elephant named Salomon travelling from Lisbon to Vienna.
Over seven months after controversial oil regulator V K Sibal demitted office, the government has appointed S K Srivastava as the new director general of the Directorate General of Hydrocarbons (DGH).
Srivastava was Director (Operations) in state explorer Oil India when in late October last year he was given the additional charge of DGH after Sibal was denied an extension amid charges of favouring private parties.
Finance & Economy
A look at the tower companies in India
In the wake of the reports that ADAG controlled RCOM is hiving off its tower business, let us take a look at the tower companies and the number of towers they have in India:
Indus Towers 125,000
Reliance Infratel 54,000
Bharti Infratel 33,000
American Towers 8,000 (in India)
Some of the tower deals that happened in India this year:
GTL bought Aircel's 17,500 towers for Rs 8,500 crore
American Towers bought Essar's 4,500 towers for Rs 2,000 crore
That gives us a picture of how much could RCOM's tower business cat fetch. If the current negotiations that are reportedly happening with a few PE firms goes through RCOM's debt is expected to come down by about Rs. 15,000 crores.
UK Starts Probe into Sarva Shiksha Abhiyan Aid after reports Of corruption
The British government has initiated an inquiry into the manner in which funds from Department for International Development (DFID) have been used for India’s flagship elementary education programme, Sarva Shiksha Abhiyan.
The inquiry initiated following reports in the British media about “millions of pounds of aid for education and the ‘Sarva Shiksha Abhiyan’, that has disappeared into the depths of corruption without any benefit to the poor children”.
Reports in the British media put a monetary figure on the corruption ranging from £70 million to £340 million. The media is also quoting the Comptroller and Auditor General’s report stating that almost £14 million had been spent on items and luxuries that had nothing to do with schools.
Some snippets on our services sector
For every 10% increase in value added, employment rises by 3.5% in manufacturing, but by fully 6% in traditional services like trade, hotels and restaurants, and by an even more impressive 9.4% in modern services like financing, insurance, real estate and business services.
The services sector accounts for a large percentage of global GDP and an even larger share of global employment. By some estimates, as much as two-thirds of the global GDP now originates in the services sector.
In India since 1991, the services sector has consistently grown faster than the agriculture and industry, to the point where it now contributes nearly 60% of the Indian GDP. In the fiscal year 2009, of the 6.7% growth in GDP, more than 5 percentage points can be attributed to the growth in the services sector value added.
Spectrum fee eases fiscal deficit pressure
It is now expected the fiscal deficit of the Union government will be a lot lower than the 5.5% estimated in Budget 2010.
The unexpectedly aggressive bidding for spectrum to provide third generation mobile services and wireless broadband has fetched the government Rs 1,06,262 crore, 200% more than what was budgeted. All this money would be available to the Centre by the end of this month, as winners of the spectrum for wireless broadband have to pay up by June 22.
The spectrum fee will, in one stroke, cut budgeted fiscal deficit from Rs 3,81,408 crore to Rs 3,10,146 crore, or about 4.5% of the nominal GDP assumed in Budget 2010.
Deadly riots swept through Osh and another southern city of Jalalabad on Friday and Saturday, Kyrgyz news agency AKI press reported on Sunday. Kyrgyz and ethnic Uzbek groups set ablaze cars, and looted stores and markets. The Kyrgyz interim government, which imposed curfew in the entire Jalalabad region, has allowed police and troops to shoot to kill in order to control the riots.
About 117 people have been killed over the past three days in what is being described as the worst ethnic violence in Kyrgyzstan in the last two decades. The interim government in Kyrgyzstan, which took power in April after a popular revolt toppled President Kurmanbek Bakiyev, had appealed for Russian help to quell the riots.
Media reports added that violence continued unabated with Kyrgyzs rioters torching Uzbek villages and slaughtering residents. More than 75,000 Uzbeks are said to have crossed over to Uzbekistan. Tensions between Kyrgyzs and Uzbeks have erupted earlier too, and appear to have been reignited by the ouster of the president in April. Local Uzbeks largely support the country’s new leadership in a predominantly Kyrgyz stronghold of the former president Kurmanbek Bakiyev.
The provisional government has accused Bakiyev of provoking the violence in order to destabilise the country.
There are about 116 Indians trapped in Osh and Jalalabad towns. For the present they are reported to be safe.
NRIs may be able to vote in the 2014 Lok Sabha elections, with a group of ministers (GoM) clearing a draft bill giving them right to franchise. A long-pending demand of NRIs, the proposal is now ready for the Union Cabinet’s nod. The bill, seeking to amend the People’s Representation Act, was under the scrutiny of a GoM headed by defence minister A K Antony.
The bill was drafted four years ago in a bid to encourage participation of NRIs in the country’s economic growth by giving them an opportunity to be part of the democratic process. It was introduced in Rajya Sabha in 2006 and then referred to a parliamentary standing committee, following which it was examined by the GoM comprising Mr Ravi, parliamentary affairs minister Pawan Kumar Bansal and law minister M Veerappa Moily.
Under the existing law, an NRI’s name gets deleted from the voters’ list if the person is outside the country for more than six months at a stretch. The proposed amendments will allow an Indian citizen residing abroad to enroll in the voter’s list and exercise the franchise if the person is present in the constituency on the polling day. There are around 50 lakh NRIs, with Kerala alone having over 21 lakh NRIs.
Finance & Economy
Listed companies which have defaulted on loan payments to be named
A committee comprising senior government officials and financial regulators has proposed mandatory disclosure of loan defaults by listed companies, a move aimed at protecting shareholders’ interest and boosting investor’s confidence.
The proposal was reportedly discussed at the May 24 meeting of the High-Level Coordination Committee on Financial Markets. Market regulator Securities & Exchange Board of India (Sebi) will examine the practical aspects of the proposal.
At present, information on loan defaults is available only to the lenders, RBI and credit information companies such as CIBIL. As per the current practice, banks disclose a list of defaulters to RBI on a quarterly basis.
Industry officials and policymakers are of the opinion that disclosure on loan defaults will promote transparency and strengthen corporate governance.
Under the current laws, a company will have to disclose on a quarterly basis if its promoters have pledged shares amounting to 1% or more of the company’s capital. When promoters fail to repay, lenders dump their shares to recover their dues. Retail investors suffer in this whole process as they do not have access to information.
A section of industry officials and market analysts fear that such disclosures may lead to panic in the capital market.
If a company fails to repay the loan, the banks give a window of 90 days. Failure to make repayments in this period results in the loan being classified as a bad loan or non-performing asset (NPA).
BASICs meet in July
Ahead of the August round of negotiations at Bonn, the BASIC (Brazil, South Africa, India and China) countries will meet in Rio de Janeiro in late July.
It is expected that the other developing countries will be invited to take part in the deliberations. This is a part of the agreement that the four countries agreed to at their May meeting in Cape Town. In a departure from practice, the Rio meeting will have technical segment followed by the high-level ministerial segment. The technical segment would focus on three issues — equity, leveraging private finance, and science and possible scenarios.
Each of the four countries is working on a model for equity in carbon space. India has prepared a paper on a burdensharing model based on the principle of per capita emission, South Africa is working on a study which is based on the global development rights framework, China is preparing a carbon budget as well. Brazil already has an equity study, which it prepared in 1997.
The text book solution to a sovereign debt crisis and loss of competitiveness — as is the case with Greece, Spain, Portugal and Italy — is a substantial cut in government spending and a deep enough currency devaluation that makes the country's exports competitive. In addition, structural reforms to address the problem of inflexible labour markets and loss of competitiveness are needed. If there is enough appetite for the country's exports in the rest of the world, fiscal consolidation and a stable economy should be the end result. This economic prescription is difficult to follow in crisis-ridden Europe because the eurozone countries are unable to individually depreciate their currency. This robs these countries of a very potent tool to address the crisis and regaining competitiveness sans currency depreciation would be harder and more painful involving recession and deflation.
Saina Nehwal wins Indian Open
Saina Nehwal, the women's top seed and World No.6 overcame a stiff challenge from Choo Wong Mew of Malaysia, the second seed, to win 20-22, 21-14, 21-12 in 56 minutes in the singles final in the $1,20,000 Yonex Sunrise-India Open Grand Prix gold badminton championships.
A very good commentary on why deploying the Army against the Maoists is not a correct strategy
This is a very good editorial comment worth our reading. It cautions the State against deploying the Army to fight Maoists and draws attention to the successful strategy adopted by the state of Andhra Pradesh in combating Maoists.
Though we may wonder oftentimes that the kind of policies followed by the late YSR encourage fiscal profligacy, at times like these -- when we are presented with the challenges of containing Maoist depradations -- we will be left equally wondering about what is good expenditure. Is it the money spent on containing Maoists or is it the money splurged on our rural populace? Had the latter been done in a careful way, there may perhaps be no need for the former.
Finance & Economy
Centre mulling a nodal company for managing telecom networks
In the wake of its security concerns -- especially about Chinese telecom equipment manufacturers -- the Centre has mooted an idea of forming a nodal company/establishment that will be owned by all telecom operators and will be responsible for for managing, maintaining and building communication networks for them. All international equipment suppliers—Nokia Siemens, Ericsson, Huawei, and Alcatel Lucent, among others—will execute contracts for all service providers through this company.
The proposal is based on the premise that getting telcos and gear makers to operate within such a set-up will address security concerns arising out of foreign, especially Chinese, telecom equipment companies building and managing telecom networks in the country.
BWA autctions fetch record amounts; Mukesh makes a big-bang entry into the telecom scene
Reliance Industries Ltd (RIL) made a dramatic return to the telecommunications sector by buying Infotel Broadband just hours after the Nahata family-owned company became the sole winner of pan-India broadband airwaves in an auction that concluded on Friday.
RIL is set to acquire a 95% stake in Infotel Broadband for Rs 4,800 crore by subscribing to fresh equity. RIL will not be immediately pitted in direct competition with Anil Ambani-owned Reliance Communications (RCOM), which pulled out of the auction last week.
After 16 days and 117 rounds, the auction of broadband wireless access (BWA) spectrum delivered the government an unexpected bonanza of Rs 38,543 crore ($8.25 billion), twice the amount predicted by analysts. Infotel alone bid Rs 12,848 crore for 22 circles. In comparison, India’s largest telco by customer and revenues, Bharti Airtel, paid about Rs 12,300 crore for 3G frequencies in 13 circles.
The combined revenues for the Centre from the 3G auction that ended last month and the sale of BWA spectrum is Rs 1.06 lakh crore. The government expected to get Rs 35,000 crore.
The auction proceeds are expected to bring down fiscal deficit for FY11 to 4.5% of GDP against govt estimates of 5.5% of GDP
Budgeted fiscal deficit for FY11 will come down to Rs 3,10,146 crore from Rs 3,81,408 crore.
A good Q&A session related to BWA auctions excerpted from today's ET:
What is Broadband Wireless Spectrum?
Airwaves that enable access to faster internet data at download rates as high as 6-10 MBPS via the wireless medium. Basically, customers can access streaming videos. Technologies such as WiMax, Long-Term Evolution (LTE) amd Flash-OFDMA support such networks. In India, spectrum winners are expected to use LTE and WiMax.
What are the benefits?
Improved and faster internet connectivity on the move. To help people in remote and hilly areas, where wireline broadband is out of reach. E-governance and m-commerce will be easier.
When will high-speed mobile broadband services be launched?
Operators looking to ride the WiMax technology may offer services in a year. For Long-Term Evolution (LTE-4G) operators such as Qualcomm and now RIL, it might take about a year or more.
What will be the cost of wireless broadband services & devices?
Experts peg broadband service prices at Rs 500-700 a month. In the US, smartphones loaded with WiMax and GSM services cost about $300. LTE handsets are yet to be launched. WiMax laptops cost nearly Rs 500 more than WiFi ones. At about Rs 2,000, WiMax routers cost Rs 600 more than that of a WiFi router.
Industry roars at 17.6% in April
Industrial production surpassed all predictions to grow 17.6% in April, strengthening the calls for an increase in key policy rates in the quarterly monetary policy review next month despite the gloomy global outlook.
Buoyant consumer demand and higher infrastructure spending propelled factory output growth to its strongest since December 2009. But the smart pickup in industrial production, which dipped to 13.5% in March after clocking a 15%-plus growth for three straight months, left finance minister Pranab Mukherjee asking for more.
Official data released here on Friday showed that the industrial growth was at a 20-year high.
The blockbuster industrial output numbers for April support the government’s expectations of an 8.5% growth in gross domestic product in the current fiscal year, compared with 7.4% last year.
Wholesale food inflation had climbed to 16.74% for the week ended May 29, compared with 16.55% in the previous week, putting pressure on RBI to raise rates. However, concerns over the European debt crisis and slowing pace of global economic recovery may prevent RBI from opting for aggressive tightening.
Policymakers insist that the time may not be ripe for quickening monetary tightening.
China has only an official labour union. No other union is allowed to come into existence. China basically frowns on labour unrest. But subtle change is under way in China in recent times. The article points us to the evolving trends in China.
At Rs 16.4cr, Raza Sets World Record
A painting by SH Raza was sold at Christie's for £2.4 million (Rs 16.42 crore) on Thursday, making it a record for any modern or contemporary Indian work of art. Saurashtra, a 7-foothigh, richly-coloured abstract dating from 1983, had been expected to sell for £1.3-1.8 million.
The London auction price broke the previous record held by Raza’s work La Terre, which sold for £1.27 million (Rs 8.56 crore) on June 30, 2008, and Souza’s Birth, which set a record on June 11, 2008, with a similar price tag of £1.27 million. The earlier Raza and Souza prices were world auction records for the artists too.
Want to see the art piece that got this mind boggling price? Take a look. Understood anything?
Round gourd of the calabash tree; A pipe for smoking; has a curved stem and a large bowl made from a calabash gourd
Someone who is regarded as contemptible; Aggravation by deriding or mocking or criticizing
Verb: Harass with persistent criticism or carping
eg: Now, most dog lovers would probably want to throw a brick at the chap who suggests their keen, intelligent and highly sensory pets are brainless twits.
The exchanges between the FBI and the Indian agencies as well as preliminary details of the NIA team’s interview with David Coleman Headley point to the ISI’s direct role in the Mumbai attacks. According to sources in the investigating agencies, Pakistan’s semi-rogue spy agency “planned and guided” the attack on Mumbai.
The Cabinet will clear amendments to the Hindu Marriage Act today by including “irretrievable breakdown of marriage” as ground for divorce.
Under Section 13 of the Hindu Marriages Act, which provides for grant of divorce, a decree of divorces for separation can be given only on the grounds such as “cruelty”, “adultery” and “desertion”.
The lack of this provision was recently pointed out by the Supreme Court while hearing a petition filed by Union power minister Sushilkumar Shinde’s daughter, Smriti Shinde. A 2006 judgement, too, had voiced the need for legislative intervention on the issue.
In 1981, a Bill was introduced to give effect to “irretrievable breakdown” as a ground for divorce, but it did not find acceptance as some were of the view that unscrupulous husband would desert their wives by taking advantage of this provision.
Finance & Economy
RIL drawing up plans to foray into telecom space
The board of Reliance Industries (RIL) is believed to have approved plans to enter the Indian telecommunications sector when the opportunity arises.
India’s largest private sector company is expected to go for only the lucrative corporate bandwidth market, or the business of selling telecom and internet services to companies rather than individuals.
It is likely that the company could unveil its intent to foray into telecom at its annual general meeting on June 18.
The government is currently auctioning frequency spectrum for broadband wireless access, or WiMAX, a technology that speeds up internet access and RIL is likely to set up a special purpose vehicle (SPV) to acquire one of the winners.
It is rare for a telecom company to sell only to companies, ignoring retail consumers. The only comparable initiative to what RIL seems interested in would be Tulip Telecom. But Tulip is small and has found it difficult to expand business beyond a point. Tulip offers companies wireless bandwidth solutions, including virtual private networks, on radio spectrum that is free for use. Only last month, the company announced plans to start its own overseas hubs for customers that required access globally.
In the year ended March 2010, Tulip had revenues of Rs 1,967 crore with a net profit of Rs 275 crore. Yet, RIL’s entry into the market will set the cat among the pigeons for telecom operators. Already beleaguered by falling call rates in India, the sector can ill afford a sharp decline in leased-line rates and corporate client spends.
Singapore denies ticket to unrated LIC
In a decision that may not go down well with New Delhi, Singapore has denied permission to India’s largest financial institution, Life Insurance Corporation of India (LIC), to set up a subsidiary there until it has a credit rating from an international agency.
About a year ago, LIC had sought Singapore’s approval to set up a life company to sell insurance policies, and talks with the local authorities were progressing well. The state-owned insurer, which runs a representative office in Singapore, was hopeful of getting a licence. But during the final round of negotiations, Singapore authorities insisted that the parent’s rating was a prerequisite for doing business in the island state.
LIC has argued that conventional rating measures would not apply to the corporation since it is a unique entity that functions with only a nominal capital. Unlike other corporate entities and insurance firms, LIC’s paid-up capital is only Rs 5 crore. LIC’s financial strength is derived from the fact that every policy issued by the corporation is guaranteed by the government.
LIC fears that a rating based on the standard parameters will be misleading and not reflect its financial standing.
Sebi slaps Rs 1-cr fine on Manmohan Shetty on insider trading charge
India's securities market regulator, the Securities and Exchange Board of India, or Sebi, charged Manmohan Shetty, the former managing director of Adlabs Films, with insider trading for selling shares of his firm in violation of rules while fining him Rs 1 crore for the offence.
The regulator has accused Mr Shetty of violating insider trading rules formulated by it that bar senior management personnel such as directors, besides other officers and employees, from trading in their companies’ stocks for 24 hours after information about the outcome of a board meet is made public.
Mr Shetty, the original promoter of Adlabs, had sold a controlling stake to the Anil Dhirubhai Ambani Group, or ADAG, five years ago. The group has renamed the company as Reliance MediaWorks. Mr Shetty sold the 10 lakh shares at an average price of Rs 402.60 on BSE on April 24, 2006, while the total market volume was 18,39,171 shares (including the 10 lakh shares sold by Mr Shetty).
Of all violations in the securities market, insider trading charges have been the most difficult to prove for regulators globally. As a result conviction rate is low.
Unlike in the US, where the securities market watchdog, the Securities Exchange Commission, or SEC, has powers to access emails and phone records while probing insider trading cases, the task is tough for India’s regulator that does not enjoy such powers.
What are the positive effects of better road connectivity?
According to a recent Planning Commission report, better connectivity has pushed up agricultural income in rural India by 17.6% and income from non-farm activities by 12.11%. The study conducted between January 2008 and May 2010, covered 14 districts in seven states.
The government has constructed about 18,240 kms of rural roads in 2009-10 under the flagship programme -- Bharat Nirman, about 76% of the target.
As per the report, connectivity has increased mobility in remote areas creating opportunities for trade. It also helped in improving their socioeconomic life. Before rural roads, it was difficult to take patients to the hospitals and even the doctors in primary healthcare centres and sub centres were reluctant to join service in the unconnected habitation.
The report also pointed at better healthcare delivery due to improved connectivity. Better access to health centres pushed up the number of people availing medical facilities from 62% to nearly 94%, it said.
Wherever roads were constructed, both direct and indirect employment opportunities increased by 25.29%, the report revealed. In Bihar the impact was clearly visible with employment increasing more than 70%, it added.
Connectivity also empowered rural women both economically and socially.
All good points and no bad points makes for a boring reading; isn't it? The report also found that Bharat Nirman projects are facing delays. It cited three main reasons for the delays --adverse weather conditions (around 37% projects, majority of them being from Assam, Bihar and Orissa), delay in acquisition of land (which affected 13.8% of the projects) and non-availability of labour and material (6.25%).
Broadband Wireless Airwaves auction touches record high
The cost of pan-India broadband airwaves, which crossed Rs 12,000 crore after 14 days of bidding, has baffled analysts and stunned telecom companies participating in the auctions, many of whom concede that the price has become ‘highly irrational.’
On Wednesday, the pan-India bid licence for BWA spectrum touched Rs 12,257 crore, after two weeks of auction, which translates into a revenue of Rs 36,772 crore for the government from the sale of three slots.
The government had estimated to garner Rs 35,000 crore from both 3G and BWA auctions combined. This takes the total revenues for the government from 3G and BWA combined to over Rs 1 lakh crore.
Big Mac recalls Shrek glasses
In a costly operation Big Mac is recalling the glasses it sold to customers because they contain a cadmium coating that is found to be capable of coming out into the hands of children. Cadmium is a known carcinogen and is also associated with a variety of health problems, including kidney and bone ailments. Read the full story here.
Once in a way we do need some laughter; don't we? This article is one such which puts us in lighter vein. Take a look. It's about different oaths that people are taking in Wall Street.
The Munjals of Hero Honda have partitioned their businesses in an amicable manner -- a rarity seen in India Inc.
Take a look at this lead story in today's paper. Makes an interesting reading.
Bharti wraps up Zain deal
Bharti has reportedly closed the $9 bn purchase of the African operations of Kuwait's Zain Telecom.
This is India's second biggest overseas deal after Tata Steel's $13 bn purchase of Corus in 2007.
The completion of the deal gives Bharti Airtel a firm foothold in a market that it has long coveted: two previous attempts to enter Africa with MTN, the continent’s largest phone firm, came to nought.
Cash from the African operations will pay for the about $9-billion loan that Bharti has taken to fund the deal and will reportedly cost the company less than $200 million a year in interest payments.
The combined entity will be the world’s fifth largest, with 180 million customers, 42 million of them in Africa.
On the importance of tackling inflation
Inflation will be a nagging issue for India because: (a) We are a nation with a large population, which is underserved in terms of food, clothing, housing, etc, (b) Indian GDP is on the trajectory of high trend growth rate of over 8% and GDP per capita is growing at the rate of 7.5%. There is significantly high unsatiated demand at current level of economy, which is bound to rise significantly further as the GDP per capita increases. Hence, the managers of Indian economy have to address the issue of inflation with short-, medium- and long-term perspective.
On financial exclusion through KYC norms
This is an excellent piece written by Sandeep Parekh explaining how we are all getting financially excluded because of the KYC norms. An interesting read.
What needs to be done to fix our power sector?
Take a look at the prescription from a former Power Secretary:
One, bring back distribution to the centre of power sector reform. MoA signed with each state should be implemented.
Two, states refusing to reorganise electricity boards may be made ineligible to a number of benefits under various central schemes.
Three, theft control measures must be implemented by states with commitment.
Four, distribution business in such towns, where the loss is more than 25%, should be franchised. A similar initiative in villages is a condition for the rural electrification grant from the Centre. It should, therefore, be insisted upon.
Five, cross subsidy, as per tariff policy, must be brought within plus minus 20% of average tariff progressively, by January 2011.
Six, open access on distribution is key to competition in distribution. States which do not facilitate this should be denied various central benefits.
Seven, free power, as an approach, must be abandoned.
Tribunals for economic disputes, offences likely
The government plans to set up special dispute resolutions panels and courts to resolve economic offences and disputes, as it looks to make a clear distinction between cases of general and specialised nature.
The proposal will now be discussed and finalised by the law ministry. It may require changes in existing legal framework.
This initiative follows a suggestion made by the Prime Minister’s Council on Trade and Industry, which called for a special dispute resolution mechanism to administer all existing and future economic legislations.
Private funds flowing swiftly to infrastructure projects
Private investments in India’s infrastructure projects crossed $25-billion mark in the first three quarters of 2009, as conducive government policies and liquidity in capital market opened the floodgates of corporate funds into the booming energy and transport sectors.
An improved show by infrastructure industries helped India lead its South Asian neighbours in terms of economic performance, according to a World Bank report. India’s energy and transport sectors attracted 40% of total investment commitments worth a record $26 billion.
Investment commitments to new infrastructure projects with private participation grew by 15% in 2009.
This could be because of the country’s globally competitive manufacturing sector.
Basic about Pass through certificates
A pass through certificate (PTC) is created on conversion of a loan to an investible debt instruments such as bonds and debentures. The PTC has features of any other debt instrument and earn a return to the investor. Such certificates are sold against an underlying security which is generally the loan that a bank converts into securities or bonds.
In India, servicing of such PTCs is done by a special purpose vehicle (SPV) which is created by the issuer of such PTCs. The issuer is essentially a bank or an NBFC which benefits by converting loans to PTCs through what is known as securitisation as it generates further resources for the entity for further lending. The investor earns a fixed return like any other fixed income instrument.
From its humble beginnings in Uruguay in 1930 to a global phenomenon, the FIFA World Cup (WC) has grown as a passion for both foot-ballers and fans. With Uruguay, the football champion in the 1924 and 1928 Olympics, along with celebrating 100 years of Independence in 1930, FIFA decided to give the country the hosting rights for the first World Cup.
Only 13 nations participated in the first World Cup and Uruguay won. FIFA then asked teams to qualify for the following World Cup, held in Italy. Uruguay did not defend its title, miffed with the non-appearance of European nations on its soil. Italy went on to win in 1934.
The succeeding edition saw the host nation and defending champion given direct entries into the finals. Italy retained the title while many South American nations boycotted the event because of the finals staying in Europe. The next two tournaments were cancelled because of World War II.
The 1950 World Cup in Brazil saw England participating for the first time. The competition did away with knockouts and had two group phases.
A 17-year old Pele, displaying skills beyond his age, became the youngest player to win the WC. With the likes of Garrincha by his side, Pele and Selecao again won the World Cup in 1962.
England hosted the 1966 event and won, and it would be remembered for many things. The Jules Rimet trophy was lost and found, South Africa was banned for apartheid, the first WC mascot was unveiled, and North Korea became the first Asian nation to enter the last eight.
In 1970, Brazil coasted to a dominating triumph, with Pele becoming the first and till now only player to win three WCs. The team, which also had the likes of Gerson and Tostao, is widely recognised as the best ever football team.
Now in its 80th year, the World Cup touches down in Africa. The African nation, riddled with economic strife and racial tensions, has done all the spadework for the quadrennial event.
A quarter of a century after the worst industrial disaster in history, a Bhopal district court sentenced seven people, including business leader Keshub Mahindra, for two years in jail under sections of Indian law usually applied to road mishaps.
The Bhopal Gas Tragedy occurred on December 3, 1984, when leaking fumes of toxic methyl isocyanite from the Union Carbide plant spread to neighbouring slums, killing thousands and impairing a generation for life.
Mr Mahindra, chairman of car-and-utility vehicle maker Mahindra & Mahindra, was the non-executive chairman of the Indian arm of Union Carbide during the disaster while the other six were employees of the firm. An eighth accused died during the course of the trial that lasted 25 years, examined 178 prosecution witnesses and over 3,000 documents.
Representatives of the tragedy’s victims and their families who were protesting outside the Bhopal chief judicial magistrate termed the judgement “too little, too late” and accused the prosecution and CBI of failing the victims by “diluting” the charges.
The Monday verdict didn’t mention Warren Anderson, the Union Carbide global chief during the disaster. Anderson, who was arrested in Bhopal in 1984, was freed on bail on assurance that he will return. Four years later, the CBI chargesheet named him, and in 1989, the chief judicial magistrate of Bhopal issued a non-bailable warrant for his arrest for repeatedly ignoring summons. In 1992, Anderson was declared a fugitive by the Indian courts.
However, the US rejected India’s request for his extradition saying the request does not “meet requirements of certain provisions” of the bilateral extradition treaty. A fresh arrest warrant was issued against him in July 2009 by the Bhopal chief judicial magistrate, the latest in a series of such efforts.
Take a look at this graphic which gives details the chronology of the disaster.
Finance & Economy
TFC's recommendations on containing Naxalism
In the context of its urging the state governments to share their royalties from mining with local bodies to improve the lot of the local, tribal, people, this editorial comment which castigates the lethargic attitude of the States is well worth a read.
Some interesting stats relating to forest produce...
A unique study — Green accounting for Indian states and Union Territories — found the value of our forest at Rs 88,60,259 crore in 2003.
The ILO Report 2009 estimates that the global market for environment products and services is projected to double to $2,740 billion by 2020 from the present $1,370 billion per year.
World export market for handicraft is estimated to be worth $350 billion.
The merits and demerits of fuel price control
The government has yet another backed out at the last minute from increasing the fuel prices. This is a very good article that discusses in this context some of the merits and demerits of a fuel price hike. Very enlightening. Don't miss it.
For example, the total debt of Greece is $226 billion while that of Spain is $1.1 trillion — almost four and a half times larger. Of that, about $220 billion is owed to French institutions, a similar number to German institutions and about $120 billion to British firms. With 20% unemployment, Spain has one of the weakest economies in Europe. Meanwhile of Italy's gross debt of $1.4 trillion, about 40% is owed to France, which amounts to almost half of the latter's GDP. The interconnectedness of these economies is such that the weakest link will determine the strength of the EU.
What is ACTA and why is it in the news?
ACTA is an acronym for anti-counterfeiting trade agreement; otherwise also known as 'Trips Plus' that is reportedly being given a shape by countries such as the US, Japan, the EU, Australia and South Korea.
The ACTA being negotiated between eleven countries (it also includes Canada, Mexico, Switzerland, NZ, Morocco and Singapore), proposes to widen the scope of protection and setting up higher standards for enforcement of intellectual property rights. It would extend to import, export and in-transit goods and includes infringement of all IPRs.
While the negotiations for the agreement have been going on for more than three years, the international community got to know about it this April through media reports.
It is feared that it could hamper India’s trade in a number of areas including pharmaceuticals and IT products.
Therefore India and China have decided to rake up the issue at the World Trade Organisation (WTO).
In working order
eg: As the euro depreciates, European exports do get more competitive but it throws the world economy out of kilter.
Delhi sends Afzal file recommending rejection of mercy plea
Afzal Guru should be hanged, the Delhi government said in its recommendation forwarded to the Union home ministry.
The state government’s opinion on the mercy petition of Parliament attack convict Mohammad Afzal Guru was given to the MHA after a good four years and 16 reminders to the Sheila Dikshit regime.
But President Pratibha Patil is said to be averse to clearing death penalties. She has informally conveyed to her aides her reluctance to clear death penalties for even the most-hardened criminals in view of her religious beliefs.
The host of organisations ranging from the Sanskrit-chanting RSS to the warmongering Bajrang Dal and the Vishwa Hindu Parishad, all draw sustenance from the self-same ideology of hatred that refuses to accept the composite, multicultural nature of the Indian state. So long as the RSS does not openly and comprehensively abandon this mother lode of communal hatred, all talk of its dissociation from individual acts of violence would remain just talk. A clear link of culpability exists between the perpetrators of all such forms of violence and those that provide not just logistical support but the ideological framework for it.
Finance & Economy
Listed cos must’ve 25% public float
Listed companies must have at least 25% of their equity available in public hands for them to stay listed on the stock exchanges.
The government has come out with this rule with a view to curb stock price manipulation. But there is no penalty that is prescribed if companies do not follow the rule. This is stated to make it as good as ineffective.
The rule is expected to trigger $34 bn share sales from companies such as Wipro, MMTC and Reliance Power.
The rule is a return to the position a decade ago before it was eased to 10% to feed the demands of companies in the technology and telecom sectors and extended to infrastructure, when these fads were running their course. The low floats led to inflated valuations of companies at the time of IPOs and ended in tears for many investors. Low stock supply also led to manipulation of prices in the secondary market.
There are at least 179 companies listed on the stock exchanges where the float is less than 25%. At current prices, these firms may have to raise Rs 1.6 lakh crore if promoters sell their holdings, nearly double the funds raised via share sale in fiscal 2010. If they attempt to achieve the 25% limit through sale of new shares, they may raise Rs 2.1 lakh crore.
In these days of internet downloads and file sharing, how are musicians surviving?
It is a well known fact that sale of recorded music is dropping steadily for musicians to survive. Therefore independent musicians are finding new ways to make money from their music. Let us take a look at some of the methods/sources:
Across the country, scores of musicians are turning entrepreneurs who host live performances, sell custom-built merchandise and score music for inhouse audio channels of companies.
Apart from live shows, they are earning additional revenue from composing sync music that goes into films, documentaries and television.
Scoring original music for companies to be used in retail stores or for in-house audio channels within offices is also emerging as a significant source of revenue for music bands.
One more method is running Internet radio stations to build on the brand created by their clubs / bands. At the clubs karaoke nights are being held frequently. It is the sponsorship for such nights that is raking in moolah for them.
Such alternate revenue streams are critical for independent musicians in India who also have to contend with the stranglehold that Bollywood and regional music have on the country’s music industry. Film music accounts for nearly threefourths of revenues.
The sale of recorded media will decline by nearly a tenth every year according to a 2010 report on the Indian Media & Entertainment industry compiled by Ficci and consulting major KPMG.
Last year, the sale of cassettes and CDs slid to just over half of the total revenues of Rs 780-crore Indian music industry.
Performance of Kyoto protocol -- an assessment
The rich must reduce so that the poor can grow. This was the basis of the climate pact signed in Rio. This was the basis of the Kyoto Protocol that committed the industrialised world to cut emissions by 6% over 1990 levels by 2008-12.
But the world has never been serious about this pact. Between 1990 and 2006, carbon dioxide emissions of the rich countries have increased by 14.5%. Furthermore, emissions from the growth-related energy sector have increased by 15%.
A filmmaker who has a personal style and keeps creative control over his or her works
eg: The world knows about Satyajit Ray as a movie auteur.
Strange in an interesting or pleasing way; Very strange or unusual; odd or even incongruous in character or appearance; Attractively old-fashioned (but not necessarily authentic)
A word or phrase spelled by rearranging the letters of another word or phrase
Use of the same consonant at the beginning of each stressed syllable in a line of verse
Can you make anything out of her stance on Maoists? We are thoroughly left confused. Perhaps this is the way the intelligentsia articulates its views. Take a look at this news report to understand what we are bemoaning about.
She is quoted as saying:
“It ought to be an armed movement. Gandhian way of opposition needs an audience, which is absent here. People have debated long before choosing this form of struggle.”
"The Naxal movement could be nothing but an armed struggle. I am not supporting violence."
Finance & Economy
Bank bailouts -- India's stand
India is not keen on any tax on banks to fund future bailouts, but is all for better regulation, finance minister Pranab Mukherjee is reported to have told in an interview on the sidelines of a meeting of finance ministers from the G20 countries at Busan, South Korea.
The proposal to tax banks is likely to be considered at the meeting. The crux of the idea under debate is that public money cannot be used to fund future bank bailouts. Instead, banks should be taxed to build a corpus for future bailouts.
India is not the only one opposed to the tax. Australia and Canada—whose banking system survived the financial meltdown unscathed—too are opposed to such a tax. The US and European countries favour a bank tax to pay for future bailouts.
It's boom time for automakers in India
With record sales inducing a capacity crunch, motown in India is on a roll and is readying plans to invest about $30 bn in the coming 4 years. What a change? Take a look at this news report.
Mining bill to establish govt as ‘natural’ owner
The government plans to update the draft legislation on mining to unequivocally establish it as the owner of all natural resources, incorporating the substance of a Supreme Court verdict last month in the dispute between the Ambani brothers over the price of gas from the KG basin.
The move is intended to facilitate, with state governments’ cooperation, the allocation of mining leases to projects the government considers to be of national importance by cutting through procedural and legal snarls. The new mining bill itself seeks to clean up one of the most unreformed sectors of the Indian economy, bringing in transparency and reducing the scope for discretion in the award of permission for reconnaissance, prospecting and development of mining blocks.
The May 7 Supreme Court judgment established the government’s complete authority over all natural resources and gave the state the freedom to decide on contractors, pricing and allocation of natural gas. The inclusion of the provision in the new mining law is expected to help fast-track large projects worth several billions of dollars and also check widespread illegal mining.
Lodha to gift Mumbai world’s tallest homes
Lodha Developers, one of India’s biggest realtors, is taking a tall bet on Mumbai’s top-end residential property market and is reportedly negotiating with foreign as well as local financiers to fund what it claims would be the world’s tallest residential tower.
The tower will come up on the 17.5-acre plot of the defunct Shrinivas Mill in Lower Parel, central Mumbai, that the Lodhas got control of after purchasing the shares of Shrinivas Cotton—which owned the land title— some years ago.
The tower may have 117 floors. As and when the booking starts, the price should be around Rs 22,000 per sq ft.
The height of the world’s tallest residential tower—Queensland Number One in Australia—is 322.5 metres. Pentominium, the supertall skyscraper that’s under construction in Dubai, will be 516 metres with 120 floors.
Unreasonably rigid in the face of argument or entreaty or attack
eg: Fast-growing India needs a lot of pro-people creativity and the Left's mulish refusal to engage with ‘actually existing reality' hurts everyone, not least the Left itself.
A statement that deviates from or perverts the truth; Intentionally vague or ambiguous; The deliberate act of deviating from the truth
In a move that was widely anticipated, the Centre imposed President’s rule in Jharkhand, after none of the major political players could cobble together the numbers required to form a government. The assembly had simultaneously been placed under suspended animation.
This is the second time in two years that the state has been put under President’s rule. On January 19 last year, the Centre had imposed President’s Rule after the resignation of Mr Shibu Soren, who suffered a humiliating defeat at the Tamar byelection. Mr Soren was sworn in as the chief minister for the third time on December 30 last after the assembly elections. His government was propped by BJP, AJSU and the JD(U).
The decision to impose President’s rule in Jharkhand has, by and large, been welcomed by almost all the political parties.
Reform in land ownership record maintenance
The Centre has reportedly drafted a model law for the states to adopt, that transforms the way land ownership is recorded by doing away with deeds and directly registering the title to a piece of land.
When this is implemented, India will dump the cumbersome, antiquated system of establishing ownership through a chain of titles — a series of deeds that trace the change of ownership from the original transfer from the sovereign to the present — to the Torrens system of direct registration of title in a central registry. Under the proposed system, all parcels of land will be identified and entered into a register, with an owner specified. The state would guarantee ownership. When the owner sells his piece of land, the name of the owner would change in the register. If there is a dispute, it would go to a tribunal.
The proposed law would have a multiplier effect: reduce litigation across the country, ensure transparency, improve governance, revenues and productivity of capital. Industry will also find it easier to acquire land when ownership is not in doubt.
Finance & Economy
Telcos can buy Chinese gear on security check
In a big respite for mobile phone operators, the government has agreed to allow import of Chinese-made telecom gear, certified by international security audit firms such as Canada’s Electronic Warfare Associates, US-based Infoguard and Israel’s ALTAL Security Consulting, till a dedicated certification centre and test lab is in place.
The government will also allow self-certification of imported telecom equipment by mobile operators against a bank guarantee given to the communications ministry. Mobile operators will be liable for forfeiting their bank guarantee and can also face criminal proceedings, if any security threats are detected in ‘the self-certified equipment’ at a later stage.
The stop-gap solution, which will be in place for the next 12 months, will ensure that Indian telcos do not face project delays even as the NIC lab is being set up. Once functional, NIC will study the software codes of all telecom hardware to address the government’s security concerns.
The move will be a breather for Chinese vendors like Huawei and ZTE, as well as Indian telcos like Reliance Communications, Tata Teleservices and Uninor, among others, that are looking for cost-effective telecom gear to expand their networks. Many domestic mobile firms have been campaigning for a quick fix to the Centre’s failure to clear import of Chinese-made telecom gear, and have pointed out that buying costlier equipment from Western vendors could destroy their business case.
An interesting article. Can be read once. An important point worth our attention:
India has large shale deposits, with good prospects in the Gangetic plain, Punjab, Rajasthan, Gujarat. Tamil Nadu, Andhra and the north-east.
Want to start a bank?
Look at the kind of money that you need to have to do so.
Under the existing regulations, the initial minimum paid-up capital for a new bank should be Rs 200 crore and the promoter’s contribution shall be at least 40% of the paid-up capital of the bank at any point of time.
The current laws state that an individual company or its subsidiaries can only hold a maximum of 10% stake in the proposed new bank.
On deepening the corporate bond market
This is one subject on which we have been noting for quite some. Here is one more good essay that discusses the issue threadbare and comes out with some suggestions. Worth a look.
What is it that Pakistan and Bangladesh are demanding about cotton?
Pakistan and Bangladesh have demanded that the contracts for supply of cotton made by Indian growers before exports were suspended last month should be honoured.
India has now put cotton on the restricted list and its exports can only be allowed through licenses issued by the government.
The textile ministry had suspended exports of cotton on April 19 following complaints from the domestic textile industry of a 20% rise in cotton prices since October last year, which was increasing cost of production.
The commerce ministry subsequently lifted the suspension on May 21, after cotton farmers and states like Gujarat and Maharashtra protested against it, but allowed its exports only against licences.
Bangladesh’s economy is heavily dependent on textiles (which forms 80% of its total exports) for which they source cotton from India.
Pakistan grows a lot of its own cotton, in fact it is the fourth largest cotton grower in the world--but because of burgeoning demand from its textile industry it imports about 3 million bales annually, much of it from India.
Some trivia about the World Cup football
The 64 matches in World Cup 2010, which kicks off on June 11 in South Africa, could have a cumulative viewership of over 26 billion going by the trend in the previous tournament of 2006.
Some 700 million viewers watched the World Cup 2006 final between Italy and France.
Fifa sold World Cup TV rights for $2.7 billion.
India connection to the World Cup
Latex bladder from India is being used in the manufacture of footballs specially designed for the World Cup, incorporating eight thermally-bonded three-dimensional panels, all spherically moulded and textured with grooves to improve aerodynamics, based on inputs from researchers at the UK’s Loughborough University.
The ball for this World Cup was designed by Adidas. It is given the name Jabulani (Zulu for ‘Bringing joy to everyone’).
The World Cup mascot is Zakumi — an anthropomorphed leopard with green hair.
Kerala woke up on Monday to the sound of raindrops, though most of the day was sunny. But the India Meteorological Department confirmed that the monsoon had indeed arrived.
The news is particularly refreshing, considering that 2009 was the warmest year for the country since 1901. During 2009, the annual mean temperature was 0.913 degree Celsius more than the average mean temperature of 24.64 degrees C.
What ails Kashmir and what needs to be done? (Excerpts from today's ET editorial)
Despite the two decades of a massive counter-insurgency effort and even with an elected political structure in place, separatism hasn't dimmed in Kashmir. In the context of recent revelations that an army unit gunned down three youths and passed them off as infiltrating terrorists, what would you suggest to better the situation on the ground?
This incident underscores the failure of politics as usual, the need for resolute political will at the top to change the status quo on the ground. Those entrenched in the matrix of power in the state — the security forces, the local administration, the separatists — have little incentive to change a configuration which yields them lots of unaccounted money, unaccountable power.
Therefore the initiative for change has to come from New Delhi. At its core, the initiative must envisage Kashmir differently, New Delhi's relations with Kashmir differently. New Delhi should summon the needed political resolve to make the government machinery follow through on its promises. After having significantly pushed back militancy, the ‘holding operation' in Kashmir has to be envisaged as a consolidation of political practice, including allowing dissent, not the armed forces running amok.
Vivek Sahai takes over as chairman of Railway Board
Vivek Sahai, a senior railway official who earned accolades for deftly handling the suburban train operation in the wake of the Mumbai terror attacks, on Monday took over as the new chairman Railway Board.
Sahai, an Indian Railway Traffic Service officer, who was the Railway Board (member) traffic, has taken up the top job from S S Khurana upon his superannuation.
This is a must read for each one of us. Perhaps in what can be called 'inclusive governance', the Chattisgarh government has come out with the concept of Mitanin to spread healthcare availability. Can't we take a leaf out of this for improving other sectors of governance? The possibilities appear to be limitless. Is the political brass taking cognizance of this?
Finance & Economy
MTN rings Anil for merger with RCOM?
With the rapproachment between the two Ambani brothers making headlines all over the world, MTN is reported to be considering in its board meeting, as early as today, a merger with RCOM.
MTN is a South Africa based telecom giant with interests in Africa. Currently, South Africa’s Public Investment Body holds 18% in MTN, Lebanon’s Mikati family holds 10, while the rest is owned by institutional and individual investors.
In 2008 also there were merger talks between MTN and Anil Ambani. But they came to a naught with the elder brother Mukesh saying that he has the first right of refusal over RCOM and hence MTN cannot be acquiring any stake in RCOM without his refusal.
MTN has proved to be the runaway bride for many. So far, the company has entered into nine negotiations with a stated objective to sell out.
The last among them was Bharti Airtel. The proposed $24-billion transaction would have seen Bharti acquire a 49% stake in MTN while the South African company and its shareholders would have purchased 36% of Bharti. The deal would have created a telecom giant with the third-highest subscribers of any wireless carrier in the world.
If the RCOM and MTN join hands, the combined entity would have annual revenues of approximately $13.4 billion, with earnings before interest, tax, depreciation and amortisation of $7.7 billion. The two would also have 218 million subscribers, putting it among the top five companies around the world.
GDP grew at 7.4% in FY 2010
Indian economy expanded at a better-than-expected 7.4% in 2009-10, helped by strong growth in manufacturing and agriculture that lifted fourth quarter numbers, but faces global headwinds as it pushes for 8.5% growth in the current fiscal year.
The country’s gross domestic output grew by 8.7% in the fourth fiscal quarter as agriculture grew 0.7% and manufacturing cruised at 16.3%, data released on Monday showed.
The numbers emboldened finance minister Pranab Mukherjee to say the economy would grow by more than 8.5% in the current year. But his optimism is not shared by many others.
In the three months to March 2010, gross fixed capital formation—a measure of investment activity—grew 34.6% quarter-on-quarter, indicating that investments have begun to pick up. However, analysts suspect that these investments are largely by the government in infrastructure sectors and will like to see private players stepping in.
A number of developing countries from East Asia, Latin America and Africa have extended their support to India in its fight against an attempt by developed countries to narrow the difference between fake medicines and counterfeits.
Counterfeits are drugs produced in violation of intellectual property agreements. These are different from fake medicines.
WHO launched IMPACT in 2006 -- International Medical Products Anti-Counterfeiting Taskforce -- which allegedly represents the interest of multinational pharmaceutical firms. WHO, in partnership with IMPACT, has been actively considering using the term counterfeit to define fake and spurious medicines.
Developing countries including India argue that if counterfeits are confused with fake medicines, it could result in more seizures across the globe and affect supply of genuine and cheap medicines to the poor.
India had submitted that its genuine generic medicines were seized at European ports because EU followed intellectual property laws that went beyond the international Trips agreement and this should not be allowed to become the norm.
The attempt by the developed countries could adversely affect exports of generics from India worth Rs 30,000 crore annually.
Countries such as Thailand and Indonesia supported India’s position at the recent world health assembly, an annual gathering of 193 members of the World Health Organisation (WHO), in Geneva.
IT Department reiterates its stand in Vodafore Hutch-Essar deal
Vodafone had approached the High Court and later the Supreme Court of India after the department sent them a show-cause notice, to its Netherlands headquarters in September 2009, asking it to explain why tax was not deducted as it had paid $ 11 billion to acquire controlling stake in the Indian company. Then Vodafone approached the High Court and the IT Department won the case there. When the company approached the Supreme Court, it was directed to return to the I-T department to sort out the issue of tax jurisdiction.
Now, the IT department has reiterated its stand that tax is leviable on the transaction.
The issue is whether the Indian tax regime has jurisdiction to claim tax on a transaction that took place outside India between two overseas parties. The transaction was structured in a way that Hong Kong-based Hutchison International sold its stake in Hutch Essar to British company Vodafone through the medium of a Mauritius-based company.
The premise is that the ownership of Indian company Hutch-Essar changed hands because of a transaction that took place outside India. As a result the Indian authorities have every right to claim capital gains tax from the profit made from the investment in India.
If the I-T authorities have their way, the tax payable by the telecom major could be over $2 billion according to the revenue authorities’ earlier tax demands.
The British Queen is seeking a multi-million-pound ‘pay rise’ for the first time in 20 years to carry out her public role. Buckingham Palace officials have demanded a seven-figure increase in the Civil List—the annual £7.9 million which the Queen gets from Parliament to maintain spending on state duties, the Daily Mail reported. The £7.9-million grant covers the cost of the official royal household, from banquets and furnishings to housemaids and footmen.
But the Queen’s official budget is estimated to be overspent by £6 million a year. It is being covered by a £35-million emergency reserve, expected to run out by 2012—the Majesty’s Diamond Jubilee Year.