16.08.2010

Politics & the Nation

• PM talks tough on Pakistan and Maoists
• Prime Minister Manmohan Singh has made it clear that the peace talks with Pakistan could not get an impetus unless Islamabad stopped backing outfits operating from its soil and exporting terror to India.
• Similarly he called upon Maoists to shun violence and come for peace talks in a bid to accelerate social and economic progress in eastern and central India, the region which has been at the receiving end of a spurt in Maoist violence of late.
• Maharashtra steps in to force builders to provide conveyance deeds
• A conveyance deed for a housing scheme is the clinching legal document that establishes the title ownership of the land on which the flats are built. Without a conveyance deed, the society members are legal owners of their flats but not the land on which the building stands. The conveyance deed is essential as it establishes the ownership of land and allows the societies to avail higher floor space index (FSI, which determines the quantum of construction on a given space) and transfer development rights given to builders in lieu of slum rehabilitation schemes.
• Under the Maharashtra Ownership of Flat Act, the conveyance deed has to be transferred by the builder to the registered co-operative housing society within four months of the society being formed.
• A large number of builders have refused this, prompting the cooperative societies either to move court or the state government which has enacted the relevant laws. The provision in the Act has virtually remained on paper. In 2008, the state government amended the Act and allowed societies to address applications to district deputy registrar of societies who was authorised to issue certificates that could be considered “deemed conveyance”.

Finance & Economy

• Biyani experiments with new trends of hiring in corporate India
• He came out with his ‘intra-preneur’ mantra to entice top talent from across India.
• According to him the idea of ‘intra-preneurship’ removes insecurities and fears from the minds of people and the commitment levels go up sharply. People then begin to enjoy what they do.
• Co-ownership is not always possible in the older companies.
• In case you are wondering who this Biyani is, we are referring to Mr. Kishore Biyani of the Future Group which is a very big player in retail and is foraying into other sectors very quickly.
• Tata Group to form ‘elite task force’ for PE play
• The Tata Group is putting in place an elite task force of senior executives, working and retired, who will act as mentors and give operational guidance to the portfolio companies of Tata Capital’s private equity practice.
• These senior executives will be drawn from various industries within the group from levels upward of middle management in the organisational hierarchy. They will include people who have recently retired and also those from the different inhouse training and developing centres that the group owns. The $71-billion conglomerate has presence in a variety of sectors ranging from salt to telecom to software.
• Exposure to large private equity deals in India over the past seven to eight years has commoditised the space, with promoters now opting to partner with private equity firms that provide value, in addition to financial capital. This value could be in the form of operational expertise — technological guidance for a manufacturing or pharma company — or managerial expertise in overseeing operations.
• The newly-founded Tata Capital, which is the financial services arm of the Tata group and is widely identified as the vehicle for the Tata group’s future banking plans, will raise $1 billion to invest across four themes, including the Growth Fund. Tata Capital is currently raising about $500 million for the Growth Fund, which will look at investing in small, unlisted and profitable Indian companies.
• PowerGrid to lease out towers to telcos
• In a move that would result in the re-rating of the company’s valuation, PowerGrid Corporation of India (PGCIL), the largest and one of the best-managed transmission utilities firm, is planning to lease out 80% of the towers to telecom companies, which in turn will make it one of the leading telecom tower companies in the country.
• The proposal is based on the report prepared by consulting firm Booz & Company, which has identified nearly 1,20,000 towers out of 1,50,000 towers capable of carrying both telecom airwaves and high voltage current without interrupting each other. However, these towers will be leased out in phases.
• As per the report of Booz & Company, leasing out 15,000-20,000 towers will increase the company’s profitability by as much as 500 crore. Once all the (identified) towers are leased out, they would generate profit, which is likely to be more than the current profit.
• In the last fiscal, PGCIL had earned a net profit of 2,041 crore and a revenue of 7,127 crore.
• A look at how or why the Indian economy is expected to perform better
• Take a look at this graphic.
• Reasons for the country's economic sweet spot
• The economy is growing much faster than the interest rate charged on government debt, ensuring a moderation in the debt-to-GDP ratio due to positive debt dynamics. India also has the advantage that more than 95% of its debt is financed internally. The country’s fiscal consolidation in 2010-11 has progressed much faster than anticipated. The factors that are responsible for this turnaround:
• First, the deterioration in central government’s fiscal deficit was as much a result of the cyclical slowdown as it was the large one-off payments made by the government. With one-off factors set to fade, the burden on fiscal finances will ease.
• Second, the government is benefiting from the return of cyclical buoyancy and an inflation tax. Nominal GDP growth has rebounded from a low of 5.6% year-on-year in Q2 of 2009 to a staggering 21% in Q1 of 2010. On an average, both real GDP growth and inflation are likely to exceed 8% in 2010-11, ensuring that the trend of inflationary recovery continues. In this backdrop, the government’s Budget estimate of 12.5% nominal GDP growth in 2010-11 is clearly an underestimate and we are likely to end up with nominal growth of 16% or higher.
• Tax buoyancy — defined as the percentage change in tax revenues divided by the percentage change in GDP — should rise too. Last year, the slowdown and tax cuts by the government had decelerated tax buoyancy from an average of 1.5 during 2004-08 to 0.3 in 2009-10. This is likely to rebound to above 1.
• Third, the government has enjoyed a bonanza on telecom spectrum and will benefit from higher disinvestment proceeds in 2010-11. Even in the coming years, disinvestment should continue to provide a cushion as new norms announced by the government on June 4 make it mandatory for listed companies to have a minimum 25% public holding, although public sector companies have been given a waiver and need only have a minimum of 10% public holding.
• Fourth, other incremental fiscal reforms are also ongoing. Petrol prices have been deregulated and the government has expressed its intent to deregulate diesel prices too. The government aims to implement structural tax reforms — such as the direct taxes code and the goods and services tax — on April 1, 2011, which should also add to revenue buoyancy.

International

• India vows to fight liberal import of used goods
• India has opposed suggestion by some developed countries for more liberal trade in remanufactured goods or refurbished old products fearing it could harm the country’s domestic industry and also have environmental ramifications.
• In a submission to the World Trade Organisation, or WTO, India has said that it was not ready to take on commitments to lower trade barriers in second-hand goods though it will participate in the discussions on understanding and defining of remanufactured goods, a stand endorsed by Argentina, Brazil, Equador and Venezuela.
• Discussions on remanufactured goods are taking place as part of the global trade negotiations at the WTO.
• The Doha round for opening up trade in goods and services is expected to result in gains worth an estimated $282 billion. Global trade in remanufactured products has already crossed $100 billion, according to some estimates, with a large number of companies like GE, Xerox and Caterpillar engaged in it.
• India does not have clear-cut guidelines on remanufactured goods. It allows imports against licences for select items such as capital goods but others like second hand automobiles are strictly prohibited.
• Countries promoting trade in remanufactured goods argue that it helps both developed and developing countries by increasing access to lowcost, superior quality products while helping solid waste management and encouraging transfer of technology and skills.
• But India is apprehensive that it could lead to a deluge of import of lowquality cheap goods and actually amount to transfer of waste from developed to developing countries.
• Moreover, it could serve a serious blow to the domestic industry such as the automobiles and the IT sectors as refurbished goods could be several times cheaper than the original products.

Technology

• Weak security links may put e-comm at risk
• Security experts are warning that websites that use encryption to communicate with users are more vulnerable to security threats. Those sites, which are typically identified by a closed lock displayed somewhere in the web browser, rely on a third-party organisation to issue a certificate that guarantees to a user’s web browser that the sites are authentic. But as the number of such third-party “certificate authorities” has proliferated into hundreds spread across the world, it has become increasingly difficult to trust that those who issue the certificates are not misusing them to eavesdrop on the activities of internet users, the security experts say.
• The power to appoint certificate authorities has been delegated by browser makers like Microsoft, Mozilla, Google and Apple to various companies, including Verizon. Those entities, in turn, have certified others, creating a proliferation of trusted “certificate authorities,” according to internet security researchers. According to the Electronic Frontier Foundation, more than 650 organisations can issue certificates that will be accepted by Microsoft’s Internet Explorer and Mozilla’s Firefox. Some of these organisations are in countries like Russia and China, which are suspected of engaging in widespread surveillance of their citizens.
• On cloud computing (excerpts from Ravi Venkatesan's article today)
• It can be defined as ‘a standardised IT capability, such as software, app platform or infrastructure, delivered via Internet technologies in a pay-per-use and self-service way’.
• If we were to break down the services that the cloud today provides, they can be classified into: one, software-as-a-service (SaaS), which comprises end-user applications delivered as a service rather than traditional on-premise software. Two, platform-as-a-service (PaaS), which provides an independent platform as a service on which developers can build and deploy customer applications. Three, infrastructure-as-a-service (IaaS), which primarily comprises the hardware and technology for computing power, storage, operating systems or other infrastructure delivered as an on-demand service rather than a dedicated onsite resource.
• India has the potential to emerge as the global competency centre for cloud services. An international study estimated the global cloud computing market to be over $70 billion by 2015 and that India, with its powerful ecosystem of independent software vendors, developers and system integrators, is ideally poised to address this growing opportunity. An additional 3,00,000 jobs related to cloud services are estimated to be created in the country over the next five years.

Medicine

• Superbug: Not the end of antibiotics
• With the discovery of NDM-1 (New Delhi Metallo-beta-lactamase) gene in gut bacteria in patients treated in some hospitals, obituaries are being written on antibiotics. But, is the scare really necessary?
• No; argues this well written article on the subject. A must read. It points out to us that this is not the first time that obituaries for antibiotics are written. 16 years ago -- in March 1994 to be precise -- Newsweek magazine raised the issue based on the warning issued by microbiologist Alexander Tomasz that many common bacteria are evolving resistance to more and more antibiotics.
• If antibiotics resistance becomes widespread, definitely human ingenuity will once again ensure that enabling environment is provided to experts to find the necessary cure.
• Phage therapy is one of the most promising cures around the corner. Phages, the virus that kill harmful bacteria, is one such cure and numerous research groups that are working quietly in the background will get the fillip soon, just like the lease of life that biofuels got due to the alarming price increase in fossil fuels.

Language Lessons

• sinistral: Adjective
• Preferring to use left foot, hand or eye; Of or on the left
• eg: For the first time in a while, both the US President and the British Prime Minister are sinistrally inclined.
• quotidian: Adjective
• Found in the ordinary course of events
• eg: It does indeed seem as if the world has conspired against them so far: from scissors and can-openers to steering wheels and writing, even the most quotidian of tasks are geared towards the dexterous, or right-handed, rather than the sinistral, or lefties.
• gauche: Adjective
• Lacking social polish