Politics & the Nation- TRS sweeps in by-polls
- TRS scored an emphatic victory by bagging 11 of the 12 seats from which its candidates contested. The BJP retained its Nizamabad seat, defeating D. Srinivas, the PCC President.
- Seen largely as a referendum on the Telangana statehood demand, the by-polls were closely followed in the State of AP.
- High Court judges retirement age to be increased
- The Cabinet has cleared a bill to be presented to Parliament that will raise the retirement age of the HC judges to 65 from the present 62 years.
- Last time the retirement age of the HC judges was increased from 60 to 62 years in 1963.
- But the Opposition, particularly BJP, is demanding that the Centre should bar judges from taking up post-retirement jobs.
- The Centre is certain to find it difficult to meet this demand. But without the Opposition's support, it will not be in a position to have the bill passed in Parliament, as it needs to be passed with two-thirds majority.
Personality- Dr. Sudhir Parikh
- Eminent Indian American physician and philanthropist Dr Sudhir Parikh, who was awarded with the prestigious Padam Shri this year, has been recognized in the US Congress for his extraordinary contribution.
- He is an acclaimed and respected allergist and immunologist working in New Jersey.
- With the Padma Shri award, Dr Parikh becomes the only Indian American to receive the Ellis Island Medal of Honour and the Pravasi Bharatiya Samman.
- The Ellis Island Medal is the highest civilian honour presented to a US immigrant for community and social service.
- The Pravasi Bharatiya Samman award is the highest honour the Government of India presents to non-residents.
Finance & Economy- What is wrong with SKS Microfinance IPO?
- Take a look at this story about how and why the IPO is seen as not so desirable a thing for the world of microfinance.
- SKS was set up as a social enterprise -- a business based on the concept of doing well by doing good.
- India's stiff telecom rules rile US, Europe & Japan vendors
- India’s latest telecom regulations to secure the country’s mobile networks have stirred a hornet’s nest in the US, Europe and Japan.
- The vendors complain that India’s new telecom security requirements “raise potential WTO compliance concerns, which left unchallenged could throw billions of dollars in sales and export opportunities of US companies at risk”.
- The US business community is up in arms over India’s demand that all global telecom gear makers place their source codes and other sensitive design elements in an escrow account which can be accessed by mobile phone firms and security agencies here in case of any security threat.
- The Indian government on Wednesday also announced that all global gear makers, such as Nokia, Siemens, Ericsson and Alcatel-Lucent, which manage and maintain networks of telcos here should employ only Indian engineers for local operations while adding that these firms would be given a 24-month deadline to comply.
- Insurers, hospitals to restore emergency cashless claims
- State-owned insurers and corporate hospitals agreed on Friday to restore with immediate effect cashless medical claims for treatment of emergency cases.
- This is part solution to the month-long standoff between the two sides.
- Consumers were bearing the brunt of a decision by New India Assurance, Oriental Insurance, United India Insurance and National Insurance Company to stop cashless insurance reimbursements in a few big hospitals on July 1.
- Health insurance claims make up for about 115% of Insurance companies' premium receipts. With operational expenses, the claims have been running into 140% for the past 4-5 years in some cases.
- Up to 5% of India’s 1.2-billion population is estimated to be covered by mediclaim policies.
- Nearly 70% of this demographic have signed up with state insurers.
- India, Switzerland conclude talks to revise tax treaty
- The government has concluded the renegotiation for widening the ambit of its tax treaty with Switzerland to access information on Swiss bank accounts, a big step towards tracing Indian money stashed away overseas.
- The tax treaty has been amended on the lines of the OECD Model Tax Convention, which means it will not provide for roving enquiries, or fishing expeditions as they are commonly called.
- India’s income-tax authorities will be able to access information on Swiss bank accounts of Indians more easily, but only in specific cases where they have a prima facie evidence of wrongdoing.
- The government had approached Switzerland in April 2009 to renegotiate the DTAA to get access to information on bank accounts.
- Switzerland has also amended tax treaties with the US, France and Italy.
- UIDAI to help oil cos curb pilferage
- The Unique Identification Authority of India (UIDAI) and the oil ministry have decided to co-operate in issuing unique ID numbers (Aadhaar numbers) to citizens and help oil companies in checking pilferage of subsidised cooking fuel.
- A pilot project to distribute cooking gas and kerosene (meant for the poor) through bio-metric smart card is being executed by Andhra Pradesh and Karnataka in cooperation with UIDAI.
- Oil marketing companies will act as registrars for the UIDAI on behalf of the ministry for implementation of the project.
International- India, US sign nuclear reprocessing deal
- India and the United States have signed an agreement on the nuclear fuel reprocessing arrangements under the India-US civil nuclear deal completing another key step in implementing the landmark accord.
- The agreement will enable reprocessing by India of US-obligated nuclear material at a new national reprocessing facility.
- The new facility dedicated to the reprocessing of safeguarded nuclear material would be established by India under International Atomic Energy Agency safeguards.
- In turn, it will facilitate participation by US firms in India’s expanding civil nuclear energy sector.
Astronomy- Mars rocks may contain evidence of life
- Scientists have reportedly identified rocks which they claim could contain evidence of life on Mars. The rocks of Nili Fossae on Mars are almost identical to those in the Pilbara region of north-west Australia where some of the earliest evidence of life on Earth was recorded and preserved in mineral form.
Language Lessons- asunder: Adverb
- If something tears or is torn asunder, it is violently separated into two or more parts or pieces.
- fancy-schmancy
- a high brow word for a common item
Politics & the Nation- On insulating CBI from politics
- This is a very good "Face Off" column that deserves a read. In a lighter vein, is it really necessary to insulate it? Shouldn't the incumbent governments have some crony dirty tricks department of their own? Worldwide that is the norm.
Finance & Economy- Noel Tata set to take over as Tata International MD
- The role of the 53-year-old Noel Tata just got bigger in India’s biggest conglomerate on the 106th birth anniversary of JRD Tata, setting tongues wagging, yet again, on it being a step in the group’s succession plan for the top job.
- The reclusive Tata, who grew the retail business more than 10-fold in less than a decade, will be managing director at Tata International, a leather and engineering trading company with presence in 10 African nations, a region where it wants to double revenues to $1 billion in two years.
- Born in 1956 to Naval and Simone Tata, this half-brother of Ratan Tata has run retail company Trent for 12 years. He began his career at trading firm Tata International and rose to become a senior general manager. His father-in-law Pallonji Mistry is the largest shareholder of Tata Sons.
- The younger Tata was thrust into the job of heading Trent when retailing was at its infancy in India. With help from colleagues at group company Lakme, he opened his retail innings by taking over Bangalore-based Littlewoods, which eventually became Trent’s departmental store Westside. During his tenure, Trent’s turnover rose to 1,137 crore from 8 crore.
- Food inflation dips to 9.6% on cheaper cereals & veggies
- Food price inflation dropped to single digit 9.67% for the first time this year, even as the government continues to face a concerted Opposition attack on rising food and fuel prices.
- Headline inflation touched 10.55% in June and the government is worried that it will be even higher in July when the full impact of the fuel price hike is absorbed in the economy. The fuel price index rose 14.29% in the period, as against a 14.27% in the previous week.
- Most economists are also of the view that while food prices are cooling, core inflation is now a bigger problem.
- Whither Air India
- This is an ET editorial that argues against infusing more money into Air India as things stand today. Worth a look. An excerpt worth our noting:
- With the growth in passenger traffic at 28% in the first quarter, the Air India management has reportedly firmed up a scheme to acquire as many 127 new aircraft, hoping to break even by 2014-15. But with accumulated losses adding up to over Rs 14,000 crore, a debt burden of Rs 18,000 crore and dipping market share to boot, Air India’s gameplan for revival seems both fanciful and reckless.
- Will FDI in organized retail help all the stakeholders?
- This is a very good article that discusses the issue. Well worth a read. An excerpt from it that is worth our noting:
- To put things in perspective, about 40% of the country’s total GDP of $1 trillion comes from retail sales to Indian consumers. The local, one-off corner stores account for more than 94% of this total retail sales of around $400 billion. So-called organised retail that can be defined as a chain of anything more than 3-4 stores backed by an Indian entrepreneur or promoter, accounts for only 6% of total retail sales. This category includes names such as Reliance Retail, Spencer’s, Pantaloon, Aditya Birla Retail, Bharti, etc.
International- Facebook faces embarrassment
- The personal details of 100 million users of social networking website Facebook are now available for download after they were leaked online.
- Ron Bowles, an online security consultant, used a code to scan Facebook profiles, collected data not hidden by users’ privacy settings, and compiled a list, which is now available as a downloadable file, containing the URL of every “searchable” Facebook user’s profile, their name and unique ID, the BBC reported on Thursday.
- European confidence at 2-yr high on exports push
- European confidence in the economic outlook rose to the highest in more than two years in July and German unemployment declined for a 13th month as exports sustained a recovery in the region. An index of executive and consumer sentiment in the 16 euro nations increased to 101.3 from 99 in June. That’s the highest since March 2008.
- Stemcells coaxed to rebuild bone,cartilage
- Scientists have shown for the first time that it may be possible to replace a human hip or knee with a joint grown naturally inside the body using the patient’s stem cells.
- In experiments on rabbits, the researchers coaxed the animals’ stem cells to rebuild the bone and cartilage of a missing leg joint.
- Some statistics: In the United States, more than 200,000 patients received total hip replacements in 2006, and nearly half a million got new knee joints.
- If these trends continue, an estimated 600,000 hip replacements and 1.4 million knee replacements will be carried out in 2015. The United States accounts for 50% total procedures worldwide, with Europe accounting for 30%.
Books- Fault Lines: How Hidden Fractures Still Threaten The World Economy
- Authored by Raghuram Rajan, the Economic Advisor to the Prime Minister, this is one book that needs to be on our todo list, if not the bucket list.
- Take a look at this interview from Raghuram Rajan. Worth a read.
Politics & the Nation- Is UK on a wooing mission to India?
- If you read this article from David Cameron, the British Prime Minister, that is what we are sure to conclude. Take a look. An interesting read.
- Quraishi is the new CEC
- President Pratibha Patil appointed Election Commissioner (EC) Shahabuddin Yaqoob Quraishi as the next Chief Election Commissioner (CEC) under Clause 2 of the Article 324 of the Constitution.
- Mr. Quraishi will assume office on July 30 as the incumbent, Navin Chawla, demits office on Thursday. He will head the three-member Election Commission till June 10, 2012.
- Mr. Quraishi is an IAS officer of the 1971 batch from the Haryana cadre. Born on June 11, 1947 in Delhi, Mr. Quraishi is a post-graduate in history from St. Stephen's College here. He did his Ph.D in communication and social marketing.
- Mr. Quraishi became EC on June 30, 2006. Prior to that, he was Union Secretary, Youth Affairs and Sports. He also served as Director-General, Doordarshan (National Television Network), and Power Secretary of the Haryana government.
- Those who want the economy to flourish cannot afford to tolerate fascist or authoritarian politics, of which fake encounters are one ugly manifestation. Comment.
- If you are asked such a question, today's op-ed by TK Arun offers the best possible answer. To summarize:
- The quintessentially antigrowth nature of fascist politics works at three levels.
- One, curtailment of individual liberty is inimical to innovation and creativity. Capitalist growth thrives on innovation and creativity, which could have quite disruptive consequences for established businesses. The capitalist economy thrives on the basis of decentralised decisions. An authoritarian state that controls everything hampers such decentralised decision-making and makes the whole system suboptimal.
- Two, entrenched big business can use its proximity to the state — and the politicians who man it — to get rid of those who make trouble for them, whether extortionists like the late, unlamented Sohrabuddin or upstart industrialists. Crony capitalism and the fascist state are made for each other.
- Three, the fascist ideology is a combination of authoritarianism with mobilisation of the majority through whipped up hatred of a minority. The social schism created by such antagonistic mobilisation is immanent with disruptive violence. The discrimination that the minority faces under a fascist state deprives the larger community of the creative talents of that minority (First-rate physicists Einstein, Max Born and Schrodinger fled Nazi Germany). More perniciously, it prepares the ground for disruptive violence in society. Often, the violence is directed at, and borne by, the minority. Sometimes, there is retaliatory violence, on a massive scale.
Finance & Economy- RBI raises key policy rates; but banks raise only deposit rates
- In a move to tame price rise, the Reserve Bank of India (RBI) on Tuesday hiked its short-term indicative lending rate by 25 basis points from 5.5 per cent to 5.75 per cent and borrowing rate by 50 basis points from 4 per cent to 4.50 per cent with immediate effect. Take a look at this graphic.
- The central bank has also raised the projection for real gross domestic product (GDP) growth for 2010-11 to 8.5 per cent, up from its April policy projection of 8 per cent with an upside bias.
- Some banks have announced a hike in deposit rates without hiking their lending rates. To the layman this may sound a bit strange. Look at the following explanation:
- The central bank cut the repo rate, the rate at which it lends to banks, by 425 basis points, to 4.75% from 9%, between October 2008 and February this year. During the period banks cut 1-3 year deposit rates by 400 basis points to a low of 6%. But the benchmark lending rates hardly moved by 100 basis points between 14.25% and 13.25%. This action by banks boosted their profitability, leaving the customer poorer. Net interest margins of banks got a boost. These high margins leave scope for slower gains in lending rates even if the central bank keeps raising rates.
- RBI governor to be vice chief of joint market regulators’ body
- The government introduced a bill in the Lok Sabha that provides for a joint mechanism headed by the Finance Minister to resolve differences among the financial regulators - SEBI, IRDA, RBI and PFRDA.
- It had also proposed a joint commission comprising the Finance Minister as Chairperson and RBI Governor as Vice Chairman, Secretary in the Department of Economic Affairs, Secretary (Financial Services) and the heads of stock market, insurance, banking and pension fund regulators - SEBI, IRDA, RBI and PFRDA - as members.
- Dedicated debt corridor on anvil
- So reads a headline in today's ET. Is it a physical corridor?
- No. It is about enabling the establishment of dedicated debt funds to channelise foreign savings into the infrastructure sector. This is yet another attempt to address inadequate funding of this crucial sector that threatens to disrupt India’s economic progress.
- The finance ministry has reportedly written to regulators to facilitate the setting up of such funds by private entities, and allow them to tap into long-term foreign resources such as pension and insurance funds.
- Do you have a prescription for controlling inflation?
- By deploying monetary policy, we cannot hope to achieve medium- or long-term price stability. The decisive action to tackle inflation has to be in the form of acceleration of farm sector growth and ensuring comprehensive and timely distribution of agricultural produce. Also, focus must go back to economic reforms, which will ease supply-side constraints and bottlenecks.
Sport- Maradona is no longer Argentina's coach
- The Argentine Football Association (AFA) decided not to renew Maradona’s contract, ending his erratic 21-month stint in charge of the national team that had mirrored his own long personal history of unpredictable behaviour and defiance.
- The AFA had offered him a four-year contract to continue through to the 2014 World Cup, but Maradona said he would only stay if his entire staff remained.
- That was an unacceptable condition to AFA president Julio Grondona, who wanted to replace several assistants including Maradona’s close friend, Alejandro Mancuso.
Language Lessons- suss: Verb
- If you suss a person or situation, you realize or work out what their real character or nature is.
- balminess
- the quality of weather that is deliciously mild and soothing
- Sisyphean
- In Greek mythology, `Sisyphus` was a king punished in the Tartarus by being cursed to roll a huge boulder up a hill, only to watch it roll down again, and repeat this throughout eternity.
- eg: But whenever the US tries to train security forces in Iraq and Afghanistan so that we can leave behind a somewhat stable country, it’s positively Sisyphean.
- prêt-à -porter
- Ready-to-wear or prêt-à -porter (often abbreviated RTW; off the rack or "off-the-peg" in casual use) is the term for factory-made clothing, sold in finished condition, in standardized sizes, as distinct from made to measure or bespoke clothing tailored to a particular person's frame.
Politics & the Nation- On Pakistani complicity in terror
- Take a look at this lead story. It reports as to how a six year archive of classified military documents has revealed that Pakistan’s rogue spy agency ISI is running riot in Afghanistan, aiding the Taliban and other terror commanders.
- Though America may be red faced and seething with anger, what options does it have? It looks like as if it is in a quagmire of its own when it comes to dealing with Pakistan. It cannot love it; but it cannot hate it either.
- Kasab’s case heads for Bombay HC
- Take a look at this story. We all know that Kasab was given death penalty by the Special Court. Now the Bombay HC has to confirm the sentence, as it is a death penalty.
Finance & Economy- We missed out on the Indian Rupee symbol
- Look at this story that appeared on July 15. The Indian Rupee now has a distinct symbol of its own designed by one Mr. Uday Kumar, an IIT alumnus.
- It is a combination of the devanagiri ‘Ra’ and the English alphabet ‘R’.
- We can perhaps see the new symbol making its appearance on computer keyboards in the next year or so.
- Sebi wants PSUs to follow holding norm
- The Securities & Exchange Board of India has told the government that it is against a special dispensation for state-owned firms when it comes to complying with the new rules on public holding.
- The new rules, announced in June, make it mandatory for all companies to have a minimum public holding of at least 25%. Companies, which have higher promoter holdings, will have to pare them in a phased manner over the next few years.
- The Securities Contract Regulation Act, which stipulates the mandatory level of public holding in a listed entity, is administered by the government. The finance ministry can take the final call on this issue.
- The new rules, which have come into force following an announcement by finance minister Pranab Mukherjee in this year’s budget, specify that firms in which promoters own more than threefourths of the shares should increase the public float by at least 5% annually or in other words offer more shares to local investors. This is aimed at boosting liquidity in many stocks with a low percentage of public float and thus reduce the scope for manipulating stock prices.
- A recent study by Crisil Equities said there are at least 179 companies listed on the stock exchanges where the public float is less than 25%.
- Moody’s upgrades India’s sovereign currency rating
- Global ratings agency Moody’s Investors Service on Monday raised India’s sovereign currency rating one notch citing the economy’s resilience and the country’s commitment to fiscal reforms.
- Economists expects the ratings upgrade to galvanise more foreign investments into Asia’s third largest economy even though the revised ‘Ba1’ rating is still a level below investment grade.
- On the importance of capital inflows
- Take a look at this op-ed on the subject. Worth a read. Some excerpts on how capital inflows influence the macro environment:
- First, India remains dependent on capital inflows to fund its current account deficit. During the 12 months ended March 2010, current account deficit was $38.4 billion (2.9% of GDP). If capital inflows slow down significantly or turn into outflows, exchange rate will depreciate significantly and domestic liquidity environment will tighten. While the Reserve Bank of India (RBI) does respond with measures to offset decline in forex reserves by injecting liquidity, its response, by its very nature, has to be reactive with some damage to financial market confidence being inevitable.
- Second, capital inflows into India tend to be in nature of high-risk capital. Indirectly, this large source of risk capital acts as a catalyst to private corporate capital expenditure.
- Third, domestic risk capital allocation behaviour tends to be highly correlated to global markets. The domestic stock market, which is another major source of high-risk capital, is highly correlated to developed world equity markets. Foreigners own about 17% of the domestic equity market and about half of the free float available to them. Their decisions to sell domestic equity stocks tend to have a very large price impact.
- Fourth, net external surplus — capital inflows in excess of current account deficit — tends to keep real rates low. When inflows spike up, it tends to influence the overall cost of capital in the country. For instance, when capital inflows spiked up to $107 billion (8.7% of GDP) during 12 months ended March 2008, it made it difficult for the RBI to increase effective cost of capital in order to slow the aggregate demand growth. In other words, even if RBI were to sterilise the increase in liquidity — by forex intervention: buy dollars, sell rupees — the positive impact in the form of lower risk premia in domestic funding markets remains.
- Some high funda stuff know? That's why reading and re-reading the article is a must. That too it is not for faint-hearted.
- What is the best regulatory approach to regulate MFIs?
- In this very interesting article, this subject is discussed. It identifies 4 broad methods:
- Convert MFIs into banking correspondents (BC)
- Create a separate regulator for financial inclusion
- Regulate MFIs by encouraging greater competition in rural areas
- Regulate by size
- What's best from among the four? The article argues that any regulatory framework chosen must check corporate misgovernance and ensure microfinance doesn’t degenerate into predatory lending. The first option (banking correspondents) is not viable for the MFIs. When it comes to monitoring lending practices, the second and fourth options will face the same problems as the RBI. The third option, while enabling borrowers to choose their financial services provider, hinges on whether banks, etc, want to lend in rural areas.
- The alternative is to flank country-level regulation — which lays down principles to check more dubious practices by the industry — with state moneylending acts. If need be, interest caps defined in these acts can be tweaked to better accommodate the industry’s economics.
- All about capital adequacy ratio
Technology- On black hats, white hats and gray hats
- These are from the world of hackers. “Black hats” break into corporate computer systems for fun and profit, taking credit card numbers and e-mail addresses to sell and trade with other hackers, while the “white hats” help companies stop their disruptive counterparts.
- The “gray hats,” surreptitiously break into corporate computers to find security weaknesses. They then choose whether to notify the company and stay silent until the hole has been patched or embarrass the company by exposing the problem.
International- Oldest couple to get married at 97 and 87
- On tent-pole movies
- In Hollywood parlance such movies are big budget, big risk, big potential payoff types.
Sport- About Bobby Fischer
- This Chess legend died in 2008 at the age of 64, leaving behind him a legacy as well as some controversy. Take a look at this story.
Language Lessons- quagmire: Noun
- A soft wet area of low-lying land that sinks underfoot
- prime the pump (mainly American): idiom
- to do something in order to make something succeed, especially to spend money
- eg: By the time the movie arrives in theaters on Dec. 17, Walt Disney Studios will have spent 3 1/2 years priming the audience pump.
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