Politics & the Nation
  • CAG fires a salvo against the Telecom Minsiter Mr. A. Raja
    • We have read recently in ET that the telecom ministry is considering bailing out the telecom companies with licenses from 2008 by allowing them to sell out or merge, paving the way for a possible consolidation in the 14-player domestic telecom market.  The circumstances under which these companies emerged in 2008 have resulted in allegations that the exchequer has been deprived of thousands of crores of revenues.
    • These companies, which include Videocon, Uninor, Sistema Shyam, Loop, S Tel, Etisalat DB and Allianz Infratech, have struggled with their rollout plans. For those that have launched services, the growth in the number of subscribers has slowed down to a trickle.
    • In a rare pre-emptive intervention by a constitutional body, the public accounts watchdog has now warned the telecom ministry against bailouts to mobile phone firms in violation of rules.
    • Recently, telecom minister A Raja, who is under fire for selling mobile licences and wireless spectrum to a clutch of new operators in 2008 too cheap, held out hopes of a ‘bailout’ for these firms, risking a fresh storm of corruption allegations against him and the government. Many of the new entrants are battling for survival as tariff wars in India’s ultra-competitive mobile market have significantly lowered average revenues per customer, making their businesses unviable.
    • The Comptroller and Auditor General of India (CAG) told the department of telecom (DoT) that allowing the new entrants to merge with incumbent cellphone companies will result in the combined entity holding more airwaves than permitted under current rules.
    • Allowing companies to exit without fulfilling their rollout obligations would violate existing regulations, said the CAG's letter.  Such a step, the letter said, would amount to letting off ‘companies that hoarded a valuable national resource (airwaves) without paying any revenue share to the exchequer’.
    • CAG is already investigating alleged wrongdoing in the allocation of 2G spectrum and licences to new companies in 2008. DoT has insisted that the watchdog has no business questioning policy decisions, and this position has been backed by the law ministry. This endorsement may provide crucial ammunition to Mr Raja in the latest standoff with CAG.
  • The troubles and travails of the differently abled
    • Take a look at this news report which shows how the differently abled are getting a raw deal at every stage, starting with the way they are counted.
    • The differently-abled account for 5-7% of India’s population in the age group of 6-14 years, but they make up only 0.4% of its workforce.  The point is that the figures relating to their census are suspect.  An advanced country like Australia has reportedly about 14% of its children identified as disabled, while that number for us in India is a paltry 2.1%.  A World Bank study done in 1999 had estimated that 6-10% of children in India are born disabled.
    • Civil society activists say various attempts by the government to identify and enumerate the differently-abled in the 6-14 years bracket have all been exercises in under-reporting — in the region of 55-70% — because of their restrictive definition of ‘disability’.
    • India included disability in the census for the first time in 2001, based on the seven disabilities listed in the Persons with Disabilities Act, 1995. According to the 2001 count, the latest available, there were 4.3 million differently-abled children in the age group of 6-14 years.
    • The last documented employment survey of the differently-abled in India Inc was done by the National Centre for Promotion of Employment for Disabled People in 1999. The survey, which looked at the workforce composition of the top 100 companies by size at the time, paints a dismal picture. The differently-abled made up just 0.4% of the workforce; 0.28% in the private sector and 0.54% in the public sector.
    • Recently, as part of the Sarva Shiksha Abhiyan (SSA), the government programme that aims to give primary education to all, the human resource development (HRD) ministry asked the states to count the number of differentlyabled (education is a state subject). The ministry broadened the definition of disability to include four more conditions stated under the National Trust Act, 1999, notably autism and cerebral palsy.
    • Yet, last month, when a parliamentary committee revealed the ministry’s findings, the 4.3 million figure had shrunk to 3 million. Each state had its own definition of disability. In addition, parents, especially in rural India, underreported disability in their household in the census. “There is a social stigma,” says Renu Addlakha, a senior fellow with the Centre for Women’s Development Studies.
    • If they are not counted as differently-abled, they are not recognised as differently-abled. If they are not recognised as differently-abled, they either do not go to mainstream schools or the schools don’t adjust their learning methods to help them blend in. If they are unable to blend in, they are not job-ready. If they are not job-ready, organisations are reluctant to employ them. It all starts from counting right, which, experts say, the government is getting wrong time and again.
Finance & Economy
  • One more exchange makes a beginning
    • The country's newest exchange is the USE -- United Stock Exchange.  It has among its promoters the BSE and Jaypee Capital, a significant volume provider in the derivatives market. Jaypee Capital currently owns 5% in the exchange. BSE owns 15% in the new exchange while other shareholders include 21 public sector and five private sector banks, which hold over 50% of the exchange’s paid-up capital.
    • On the first day, USE clocked volumes of 45,485 crore in four currency pairs, including rupee versus dollar, euro, yen and GBP, respectively, taking total volumes on the exchange-traded currency futures market to a record Rs. 87,389 crore. Against this, the combined volume of stock and index futures was a little over Rs. 46,000 crore.
    • The new bourse pipped established players in the segment like NSE and MCX-SX. NSE clocked a cumulative turnover of Rs 21,035 crore and MCX-SX Rs 20,869 crore by the close of trading on Monday.
    • Worldover, volumes of currency futures and options well exceed that of stock market volumes. While in international exchanges, the major investors are hedge funds, institutions and bulge-bracket speculators, the main players in India include banks and jobbers, who rapidly enter and exit the market to cash in on small price movements.
    • The global currency futures market is reportedly about $4 trillion a day.
  • REC gets infrastructure finance company status
    • The RBI has granted the Rural Electrification Corp (REC) the infrastructure finance company status.  This would allow the firm to lend more to power projects.
    • REC is into financing power generation, transmission and distribution projects in the country. With IFC status, REC can now take an additional lending exposure of up to 5% of its owned funds in case of a single borrower and up to 10% of its owned funds in case of a group of borrowers. The total permissible exposure would thus be 40% of owned funds in case of a group of borrowers.
    • REC also becomes eligible for issuance of infrastructure bonds and for raising funds up to $500 million ( 2,500 crore approximately) through external commercial borrowing (ECB) in a year.
    • REC is the second company after Power Finance Corp (PFC) to be accorded the status of IFC by the Reserve Bank.
  • Pricing freedom: IOC first off the block, raises petrol price by 27p
    • IOC is the first state-run oil company to exercise the pricing freedom announced by the government on June 26.  It has raised the price of petrol in its outlets by 27 paise.
    • In 2002, the government dismantled administrative price mechanism to attract private investments in refining and marketing sectors. That saw Shell, Reliance and Essar entering into fuel retail business. Since then private oil companies were free to charge market rates for petrol and diesel.
    • While India’s refining capacity increased 155% to 184 million tonne, private oil companies had to shelve their retail plans.
    • On June 26 this year, the government announced freeing of petrol and diesel prices, but allowed state-owned oil companies to fix petrol prices only.
  • SLR and Non-SLR investments
Language lessons
  • rumpus: Noun
    • The act of making a noisy disturbance
    • Verb: Cause a disturbance
    • Synonyms: commotion, ruckus, din, tumult, ruction