Indian Current Affairs: 04.08.2010

Finance & Economy

This Deputy Governor of RBI appears to have paid the price for his penchant -- speaking to the media. Not just insiders in RBI, but even bond market dealers refer to his penchant as "open mouth operations."
Take a look at this report.

Existing players Bharti Wal-Mart and Metro Cash & Carry are scaling up operations even as Carrefour and Tesco are drawing out rollout plans.
The JV between the world’s largest retailer Wal-Mart and Bharti Group, so far confined to Punjab, plans to build a national presence over the next 18 months with outlets in Karnataka, Andhra Pradesh, MP, Uttar Pradesh and Haryana.
Carrefour, which has tied up with the country’s largest retailer Future Group for India entry, is reported to have secured properties for cash-an-carry outlets in New Delhi, Bangalore, Chennai, Hyderabad and Mumbai. And it is expected to open its first store at Seelampur in New Delhi this month.
Tesco, which has partnered with Tata Group’s retail firm Trent, plans to invest £60 million in the country.
The country allows 100% foreign investment in wholesale and 51% in single-brand retailing, but none in multi-brand retail.
Analysts say organised retail is a $25-billion market of the $450 billion Indian retail market, and players like Wal-Mart and Metro have only begun to cater to the tip of the iceberg.
With rapid urbanisation and a booming middle-class population, the opportunity is huge and nobody wants to miss it. Not when most of the world is struggling to come out of the recession.

Take a look at this news story. A prominent real estate player has not paid PF dues. This resulted in CBI issuing look-out notices for the promoters in all the airports in the country -- to prevent them from leaving the country.

The telecom department plans to take legal action against all mobile phone companies for failure to cut services to customers who use handsets which do not have a unique identification number. This comes after a recent check by the telecom department revealed that no mobile phone company had complied 100% with the government’s 2009 directive, mandating all telcos to block calls to and from handsets that did not have International Mobile Equipment Identity (IMEI) numbers.
IMEI number is a 15-digit code that reflects on the operator’s network whenever a call is made or received from any handset and therefore allows lawful interception of all calls.
Mobile operators store these numbers in Equipment Identity Register (EIR) — so if a handset is stolen, and its owner can provide the IMEI number to his operator and all calls from the device can be barred.
The telecom department had asked all telcos to install EIR so that calls without IMEI or invalid identification numbers are not processed.
It is estimated that ther, and a significant majority of these handsets are cheap imports from China.

Look at this story. Maharashtra is proposing to levy entertainment tax on caller tunes @25%.

An impending surge in coal imports has the government worried about handling capacity at ports, prompting it to put together a plan to prepare them to handle inflow of over 230 million tonnes of coal as the energy hungry country buys fuel overseas to feed its power plants.
Poor infrastructure is already creating problems for some of the upcoming and running power plants to get coal in right quantity at the right time, which if not addressed could make it difficult for the country to add planned 100,000 MW capacity in the twelfth plan.
Indian ports just have just about adequate capacity to handle existing level of coal imports.
By the end of the current plan period imported coal will account for 11.7% of the estimated demand as against earlier projected 7%. This will rise further to over 20% by the terminal year of Twelfth Plan (2012-17).
Despite this visible demand, investments in the ports sector have been low, projected at Rs. 40,647 crore during the Eleventh Plan, which is less than half of the original target of Rs. 87,995 crore.
Private investment in the port sector is projected at almost 40% below initial estimates. India’s 12 major ports handle one-third of India’s external trade with a cargo handling capacity close to 575 million tonnes.

Has our banking system really been put through a stress test during the financial crisis?

Not really argues this analysis. Well worth a read. Some excerpts:
Indian banks and the regulator often take pride in stating that the domestic banking sector has more or less weathered the fallout from the global credit crisis. At a time when overseas banks showed losses, a sample of 48 listed private and PSU banks reported a 24% growth in profits in 2008-09 and 19% in 2009-10.
But profits were largely driven by gains from treasury rather than core banking operations. Secondly, the stress in the loan book did not truly reflect in banks’ balance sheets as the banking regulator, the Reserve Bank of India, made special dispensation in asset classification on problem loans.
Simply put, a steep cut in policy rates following the global meltdown after September 2008 helped banks post higher treasury gains as lower g-sec bond yields translated into higher bond prices. At the same time, changes in asset classification norms helped banks show lower ratio of bad loans. Banks merrily restructured all types of loans by giving borrowers longer time to repay debt; in certain cases banks even financed their interest payments.
The current fiscal year (FY11) could well emerge as one of a stress test for Indian banks. The impact of restructuring loans will start surfacing while treasury operations, which had been the key contributor to bottom line over the past two years, may no longer be a cash cow with interest rates set to move north.

Language Lessons

A composition that imitates or misrepresents somebody's style, usually in a humorous way; A word acted out in an episode of the game of charades
eg: But, Mr Kalmadi, who seems to have adopted a “brazen-it-out” approach, attempted another charade by setting up a three-member panel, comprising members of the organising committee, to investigate the charges.

Indian Current Affairs