Indian Current Affairs: 26.08.2010

Politics & the Nation

Take a look at this photo-feature that appeared in today’s ET paying homage to her.
The Mother had captivated many a mind in India -- across faiths.

Income tax employees are on a war path over an outsourcing work that was allotted to Infosys. The work relating to processing of e-filed IT returns at the Central Processing Centre, Bangalore. The employees claim that Infosys employs college students to do the processing even as the department's own staff are kept away from the work and the vacancies are not filled up.
The employees union claims that about 27,000 vacancies remain unfilled even as the department is outsourcing work to private sector.

The government warmed up to the BJP in having this bill passed. It had agreed to all the suggestions given by the BJP and finally ensured that the bill is passed.
Hope you have followed all the drama and serious view points ‘for’ and ‘against’ the bill in the last few weeks.

Finance & Economy

Take a look at this news report.
The RBI is reportedly considering some 'regulatory forbearance' to bail out the ailing aviation sector -- especially the big three in the aviation sector viz., Air India, Jet Airlines and Kingfisher.
Air India has a total debt of over 22,000 crore, Jet Airways has borrowings of 13,750 crore while Kingfisher owes 7,000 crore.
The total loans given to aviation companies by banks is reported to be around 50,000 crore.
The regulatory concession that banks are seeking is that they should be allowed to restructure or change the terms of their loans to airline companies without classifying them as non-performing assets, or NPAs. If assets become NPAs then banks have to set aside more capital, a process known as provisioning. When loans are restructured, either the interest rate is lowered or the number of years over which they are repaid is increased. In some cases both concessions are on offer.

Facebook has beaten competitors like Orkut and Yahoo! to become the top social networking site in India with 20.9 million visitors in July this year.
India now ranks as the seventh-largest market worldwide for social networking, after US, China, Germany, Russia, Brazil and UK.

With columns like these, do we need to run elsewhere for staying well informed? That's why we are so much in love with "ET in the Classroom" column. Into the same genre would fall the "First Principle" column also that is carried out in ET.
Today it discusses a very important topic -- compulsory licensing. Take a look.

If you were ever asked to define banking, can you definition be comprehensive as the following one?
Banking performs some vital functions: intermediation of savings and payments. People who have surplus savings find a safe borrower in a bank, and the bank, in turn, passes on the savings to those looking for capital. In this process, the bank brings two additional services to the table. As a safe borrower, it lowers risk for the savers, and thus lowers the cost of capital for everyone. Further, by aggregating large numbers of deposits and repayments of past loans, as well as leveraging its ability to raise credit virtually at will, a bank also is able to give out long-term loans even though its own deposits are returnable in the short-term. This is called maturity transformation.
The bank also facilitates payments, allowing people to issue cheques on them, then honouring the cheques, issuing debit cards and credit cards. If one bank suddenly proves unable to honour the cheques drawn on it, it could disrupt the ability of other banks to honour their cheques as well, because of the interconnectedness of payment flows.
The above was an excerpt from today's op-ed in ET.

Bucket shops on brokers who use prices discovered on national exchanges to settle trades off the bourses, are called dabba traders. They pose a systemic risk. Such trading is illegal, but volumes are estimated to be many times that of those generated by the recognised exchanges.
Unlike on a recognised exchange, in dabba trading, a client does not necessarily have to put up a margin to trade or settle mark-tomarket positions on a daily basis. There is no contract note generated and the broker generates volumes without having to pay transaction fees to the exchange. The broker simply matches buy and sell orders and hedges himself with a main broker who trades on the exchange. The trade could be settled on a weekly or a monthly basis. However, if clients fail to pay the broker running the dabba operation, he can default his payment to the main broker and thus poses a systemic risk.
Forward Markets Commission (FMC) -- the regulator of commodity exchanges in the country -- plans to follow a two-pronged strategy of punitive action cum awareness and educational initiatives for exposing the ills of dabba trade.
Three national commexes went live in late 2002 and 2003. They include Mumbai-based MCX and NCDEX and Ahmedabad-based NMCE. Currently, MCX has over 2,000 members, NCDEX (848) and NMCE over 400.

Language Lessons

Having or showing arrogant superiority to and disdain of those one views as unworthy

(or writing or talk) treating the subject like a saint, esp. with too much reverence
eg: ...But, then, the book is not exactly an unqualified hagiographic endorsement of the kind leaders’ spouses spin out in India!