Politics & the Nation
  • A 26/11 was also planned for Delhi
    • Take a look at this news report to get an inkling of the conspiracies hatched against India
Finance & Economy
  • Indian tomatoes are being exported to Pakistan in a big way
    • Large quantities of Indian tomatoes are headed to flood-hit Pakistan as traders seek to profit from 10 times higher prices across the border. Brisk exports from Maharashtra’s Pimpalgaon—the largest tomato and onion mandi in Asia—to Pakistan have lifted local prices of tomatoes to Rs. 30 per kg instead of the usual Rs. 15 each October.
    • Though India grows less than 1% of the world’s tomatoes, its tomato-processing industry is the largest in Southeast Asia, more than twice that of Japan, and considerably bigger than that of Thailand and Taiwan.
    • India’s summer crop of tomatoes is grown mainly in Nashik, Bangalore and parts of Himachal Pradesh due to ideal temperature for flowering.
  • An excellent debate on RBI's intervention to check the rupee rise
    • Take a look at this debate.  Especially Indranil Sengupta's reasoning.  Interesting.
  • Titbit on capital inflows
    • The current situation is similar to 2007 — the last time India received net capital inflows of this scale — but there are also differences. India’s current account deficit was 1-1.5% of GDP in 2007, but is substantially higher, at 3.7% in Q2 2010. The rise in current account deficit has increased its absorptive capacity and, therefore, the threshold of net capital inflows that the economy can absorb.
  • On how companies are flouting the FDI norms and what the is Government proposing to do to tackle the issue
    • FDI policy is in place to ensure, among others, that foreigners don't own or control large companies in sensitive sectors.  To this end, the FDI policy, which is adminsitered by the DIPP (Department of Industrial Promotion and Policy) through its various Press Notes, prescribes certain limits and controls on foreign holdings in companies registered in India.  One such instrument is the definition of 'control' mentioned in the FDI policy.  The 'control' as defined by DIPP for FDI purposes is different from the 'control' that is defined in the Companies Bill.  The latter is more water tight and can plug the loophole being used by the foreginers while making FDI in India without appearing to exceed the limits laid down in the FDI policy.
    • The current foreign investment policy says any Indian company ‘owned or controlled’ by a foreign company would be considered a foreign company.  While a more than 50% equity holding was sufficient for establishing foreign ownership, control was defined as ability to appoint a majority of directors.   This precluded other indirect ways of obtaining control such as lein over voting rights and equity purchase agreements -- a loophole used extensively by foreign investors to control Indian ventures without violating the sectoral caps. Such arrangements violated the FDI policy in spirit while paperwork was in order.
    • Now the Government is reportedly considering altering the definition of 'control' included in FDI policy to make it similar to the one that is used in the Companies Bill.
    • The Companies Bill, which is under Parliament’s consideration, has a more comprehensive interpretation of 'control.'  Apart from the right to appoint a majority of directors, the bill defines 'control' to include the ability to influence management or policy decisions.
    • The bill goes on to say that this ability to influence decisions could be by virtue of direct powers such as shareholding or management rights, or indirect ones such as shareholders agreements or voting agreements or in any other manner. Effectively, the new bill covers every possible way of exercising control. Company law experts say inclusion of the new definition of 'control' will remove the loopholes in the FDI policy.
  • Sudhir Vasudeva to head ONGC
    • A government panel has selected India’s largest energy explorer Oil & Natural Gas Corp (ONGC) director-offshore Sudhir Vasudeva to head the state-run company after incumbent R S Sharma retires on January 31 next year.
    • The panel’s recommendation will be sent to the appointments committee of the cabinet (ACC), which will take a final call.
    • Mr Vasudeva has been actively involved for about 19 years in development and management of the Mumbai High, India’s prime oil asset. He was involved with the producing oil field of ONGC between 1979 and 1990 and again between 2000 and 2008. He used innovative technology to arrest the declining output from the ageing field. A chemical engineer and a management graduate, Mr Vasudeva joined ONGC’s first lot of executive trainees in 1976 and topped the batch. He was appointed as director-offshore of ONGC on February 1, 2009.
  • On the CCI's functioning
    • Although the CCI (Competition Commission of India) became fully functional in May 2009, provisions relating to clearance of mergers are yet to be notified.
    • Currently, the regulator only has powers to check abuse of dominant position and anti-competitive agreements between companies.
    • The ministry of corporate affairs has, in the new draft sent to CoS (Committee of Secretaries), reduced the timeframe for vetting of M&A proposals to 180 days from the 210 days specified earlier. Also, companies with a turnover of Rs750 crore and above and assets worth more than Rs 250 crore would mandatorily need to come before the CCI.
    • You might note that the RBI has a strong objection to the CCI looking into M&A issues between banks.  As a banking regulator, it wants its turf to be protected.  But once government accepts the RBI's line of thinking, then there may be more such demands coming from other sectors too.
  • Definition of a zero coupon bond
    • A zero coupon bond (also called a discount bond or deep discount bond) is a bond bought at a price lower than its face value with the face value repaid at the time of maturity. There is no coupon or interim payments, hence the term zero-coupon bond. Investors earn return from the compounded interest all paid at maturity, plus the difference between the discounted price of the bond and its par (or redemption) value. In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made semi-annually. The investor also receives the principal or face value of the investment when the bond matures. Zero-coupon bonds may be long or short-term investments. Long-term zero coupon maturity dates typically start at 10 years. The bonds can be held until maturity or sold on secondary bond markets.
Language Lessons
  • livid: Adjective
    • Feeling or showing extreme anger
  • preternatural: Adjective
    • Surpassing the ordinary or normal; Existing outside of or not in accordance with nature
    • eg: Beyond his preternatural affability there is some acid and some steel.
  • entree: Noun
    • The principal dish of a meal; [Brit] Course served between the first and main course of a meal; a starter