28.09.2010

Politics & the Nation

• India makes substantial progress in reducing maternal morality rate
• This is a story with a difference.  We are so accustomed to seeing / reading reports about our country that are non-flattering to say the least.  There is at least one area where we are making substantial progress as acknowledged by UNICEF.
• A WHO-Unicef-UNFPA-World Bank report, Trends in maternal mortality, says that 63,000 of the estimated 3,58,000 deaths due to complications during pregnancy and childbirth worldwide occur in India. That is, one in six women who die due to pregnancy-related causes worldwide live in India.
• It is necessary to probe further to see what the statistics on maternal mortality mean before we give in to our ritual cynicism and condemn the national record on improvement in maternal mortality.
• The report tells us that, first, Indian maternal mortality ratio (MMR) fell from 570 per 1,00,000 births in 1990 to 230 in 2008. This is a 59% decline. Second, given the uncertainty of estimation, it is possible that MMR could be as low as 150 or as high as 350 in 2008. Third, the estimate of 230 implies an annual decline in MMR of 4.9% between 1990 and 2008, only slightly below the 5.5% annual decline needed to achieve the ambitious Millennium Development Goal (MDG) of 75% reduction in MMR by 2015. Fourth, the report documents MMR decline from 390 to 230 between 2000 and 2008, nearly 6% annual decline with Janani Suraksha Yojana (JSY) only getting rolled out towards the middle of this period.
• If the above excerpts are leaving you still confused, read the entire story by following the link given at the beginning.

Finance & Economy

• Govt seeks to amend contract labour law
• With a vast part of the workforce now employed on contract basis without any job security, the Centre wants to amend the Contract Labour Act of 1971 to ensure a fair deal for such workers.
• The proposed amendment mandates that contract workers get the same wages, facilities and benefits as regular employees. So even if contract workers have no security of tenure, they would get better salaries with health cover and social security benefits under the Employees’ State Insurance Corporation and Employees’ Provident Fund, respectively.
• Though there is no official fix on how many of India’s 450 million-odd workers are employed on contract, such workers’ exploitation is being seen as one of the reasons for rising industrial unrest in recent times.
• Ironically, rules to give contract workers fair wages and benefits already exist under the 1971 law, but they aren’t implemented in letter or spirit.
• What is the impact of the proposed move?
• Firstly, it would take cognisance of the fact that contract labour is here to stay—something that trade unions have been refusing to accept for two decades. More importantly, the changes could set the stage for Indian industry to hire workers with more freedom and give Indian youth a chance to realise the country’s much-vaunted demographic dividend.

• Govt hopes to demystify budget-making process
• The finance ministry has reportedly prepared a comprehensive document that demystifies the budget making process of the government. The first ever compendium of general provisions and procedures of the budget will be released today by the finance minister Pranab Mukherjee. The 200-page document will outline the entire chain of events relating to the making of the union budget, lifting the veil of secrecy from this closely guarded process. The government hopes to make the budget process more transparent and also generate greater awareness about the budget and the systems.

• Free pricing of urea to rationalise use: Panel
• A committee set up by the government has suggested freeing the prices of urea and inclusion of the fertiliser in the new nutrient-based subsidy (NBS) scheme to discourage its excessive use, stem soil degradation and reduce government subsidy.
• The panel, led by former agriculture secretary T Nanda Kumar, also recommended a “comparatively higher level” of subsidy for critical nutrients like sulphur, zinc and boron to make them affordable to farmers.
• The NBS currently includes nitrogen, phosphorous, potash and complex fertilisers. Its underlying concept is equal subsidy for the same nutrient in any form, either as a straight fertiliser or as a complex one.
• Fertiliser subsidy is pegged lower at Rs. 49,980.73 crore this fiscal year from Rs. 52,980.25 crore last year on the premise that it would drop in the NBS regime.
• Keeping urea, a key source of nitrogen, out of the NBS has led to heavy use of the cheapest fertiliser in the first three months of the policy, defeating its objective of balanced use of nutrients.
• When the NBS scheme was introduced in April, subsidy for indigenous and imported P&K fertilisers was announced on an annual basis for 2010-11, based on the prevailing fertiliser prices and price trends in the international market. That allowed the private sector to clinch imports at attractive prices while domestic competition was expected to keep prices affordable to farmers. The Centre plans to amend the new pricing scheme for urea to determine the quantum of urea subsidy, although the industry has demanded inclusion of urea in the NBS and free imports either within or outside the scheme.
• The new WPI still has holes; hence govt. mulls additional indices
• The reworked wholesale price index (WPI) with a new base and a current product basket will give a more reliable measure of price inflation, but it falls short as a relevant measure of inflation for policymakers.
• While the WPI is a weekly index, it is not either the international equivalent of the producers’ price index or the consumer price index (CPI). This technically makes India’s inflation measure incomparable with the rest of the world.
• The various retail measures of inflation are of extremely poor quality. Besides, the four retail measures of inflation – CPI for rural labourers, agricultural labourers, industrial workers and urban non-manual employees — are too narrowly targeted, making them irrelevant for macro policy formulation. The central bank, therefore, considers all the measures of inflation, behaviour of individual components, and other economic and financial indicators to assess inflation.
• The government plans to launch three new retail price indices by early next year, based on consumption patterns revealed in the large round NSS surveys, making the indices more representative.
• The proposed CPI rural and urban indices would be based on weights taken from a large sample of over one lakh households. The two indices will be combined, proportionate to their relative weights in the economy, to arrive at a national measure of retail inflation.
• A strong argument in favour of a USO Fund for banking
• Remember the noting we made about RBI asking governments not give their transaction business to private sector banks?  Here is a strong argument advanced by today's ET editorial on why such a move is retrograde and what could possibly be a better alternative:
• ...all banks could contribute to a Fund whose corpus could be used to subsidise unviable banking operations. As for the mandate for managing government business, whether of the Centre or the states, it must be given to whichever bank gives the best service at the most competitive (read, least) cost. Anything less would mean hurting the taxpayer twice over; once by using a less efficient instrument (banks) to achieve socio-economic goals and then by not using the most competitive bank to handle government business.
• About Overnight Index Swaps
• Here is a good ET in the Classroom column that explains the concept.

International

• US wants internet to be wiretap-ready
• US security officials are seeking sweeping new regulations of the internet, arguing that their ability to wiretap criminal and terrorism suspects is “going dark” as people increasingly communicate online instead of by telephone.
• Essentially, officials want Congress to require all services that enable communications – including encrypted e-mail transmitters like BlackBerry, social networking websites like Facebook and software that allows direct “peer to peer” messaging like Skype – to be technically capable of complying if served with a wiretap order. The mandate would include being able to intercept and unscramble encrypted messages.
• The technorati complain that the security agencies basically want to turn back the clock and make internet services function the way that the telephone system used to function.
• But law enforcement officials contend that imposing such a mandate is reasonable and necessary to prevent the erosion of their investigative powers.
• Investigators have been concerned for years that changing communications technology could damage their ability to conduct surveillance. In recent months, officials from the FBI, the Justice Department, the National Security Agency, the White House and other agencies have been meeting to develop a proposed solution. There is not yet agreement on important elements, like how to word statutory language defining who counts as a communications service provider etc.
• In the United States, phone and broadband networks are already required to have interception capabilities, under a 1994 law called the Communications Assistance to Law Enforcement Act. It aimed to ensure that government surveillance abilities would remain intact during the evolution from a copper-wire phone system to digital networks and cellphones.
• Often, investigators can intercept communications at a switch operated by the network company. But sometimes — like when the target uses a service that encrypts messages between his computer and its servers – they must instead serve the order on a service provider to get unscrambled versions.
• Like phone companies, communication service providers are subject to wiretap orders. But the 1994 law does not apply to them. While some maintain interception capacities, others wait until they are served with orders to try to develop them.
• To counter such problems, officials are coalescing around several of the proposal’s likely requirements:
• Communications services that encrypt messages must have a way to unscramble them.
• Foreign-based providers that do business inside the United States must install a domestic office capable of performing intercepts.
• Developers of software that enables peer-to-peer communication must redesign their service to allow interception.
• Providers that failed to comply would face fines or some other penalty. But the proposal is likely to direct companies to come up with their own way to meet the mandates.

Language lessons

• bleat: Verb
• Talk whiningly; Cry plaintively
• eg: The lambs were bleating.
• leitmotif: Noun
• A melodic phrase that accompanies the reappearance of a person or situation (as in Wagner's operas)