Indian Current Affairs: 13.09.2010

Finance & Economy

The government is likely to make it mandatory for mining companies to hand over a part of their revenues and make annual payments to land losers, bringing compensation rules in this sector in line with a policy followed by the Haryana government which has won the backing of Congress president Sonia Gandhi.
The revenue sharing model combined with annual payments is likely to find its way into a proposed legislation setting the rules for investment in minerals. The legislation, known as the Mines and Mineral (Development and Regulation) Bill is being written under the supervision of a group of senior ministers.

What is the liberalised debt regime that the Government is reportedly considering for alleviating the airline industry's debt burden?

The Government is reportedly considering permitting the airlines to use external debt to repay domestic loans. There is a proposal to exempt airlines from a regulation that bars Indian companies from using foreign debt (ECBs) to repay loans from local banks.
Usually ECBs are cheaper than local debt.
A final decision will be taken by a committee headed by the finance secretary. If the committee decides in favour of the airlines, it may have to face the same demand from other sectors.
Jet has debt of 13,750 crore while Kingfisher Airline owes 7,000 crore. Air India has total debt of over 22,000 crore.

Here is a good graphic that tells us how India received plentiful rainfall this season.

You might remember that the SC ruled that Competition Commission of India's investigations cannot be thwarted on flimsy grounds. The import of this judgement for the India Inc:
One, it firmly establishes the legitimacy of the Commission’s investigation into practices that distort fair play in the market.
Two, it has cleared doubts, if at all any existed, about the nature of appeals that the Competition Appellate Tribunal can entertain — the tribunal cannot thwart investigations initiated by the Commission.
Three, the Commission will need to complete preliminary investigations within 60 days.
Four, a possible flood of complaints from the private sector against exclusive arrangements between public sector enterprises and government departments in future could potentially lead to overhaul of purchase preference that state-owned companies enjoy.

International

Most countries in the powerful economic bloc fear “being swamped” with professionals from the country, especially in areas such as education, health, IT and accountancy. New Delhi feels the Association of South East Asian Nations (Asean) is getting panic attacks in the midst of trade talks aimed at opening up its services segment to players from India.
Experts watching the situation say Indian negotiators made a big mistake by entering into a deal on goods before signing a pact on services. They add that while Asean stood to gain a lot from the agreement already signed, India still awaits a breakthrough in talks to sign a services deal, which will be manna for its services industry.

We have been avidly following the writings of Bjorn Lomborg for quite some time. He has been consistently arguing that emission reductions would not make sense -- economically. Now his ideas seem to have been endorsed by R&D undertaken by a thinktank. A prominent finding of that research goes like this:
Trying to keep temperature increases under 2°C, as the G-8 industrialised nations have promised to do, would require emissions reductions of about 80% by midcentury. Based on conventional estimates, this would avoid total climate damages of about $1.1 trillion across the century. However, it would cut economic growth by around $40 trillion a year. In other words, we would effectively be spending $40 trillion every year by the end of the century to do just over $1 trillion worth of total good.
He goes on to add that this estimate is wildly optimistic. The calculation assumes that over 100 years, politicians everywhere in the world will consistently enact the most efficient, effective laws imaginable to reduce carbon emissions. Dump that far-fetched assumption and the cost could jump by a factor of ten or even 100.
To put it starkly, such drastic carbon cuts are likely to do a lot more damage than climate change to our quality of life (especially for those in the developing world).

Language lessons

Purported; commonly put forth or accepted as true on inconclusive grounds
eg: Thursday's Supreme Court verdict allowing investigation of putative anti-competitive practices by the Competition Commission of India is significant for several reasons.

Indian Current Affairs