08.11.2010

Politics & the Nation

• Obama visit
• Take a look at this lead story.  The impression that gets entrenched after reading this is that the gap between US and India (economically) has narrowed so substantially that the US President is here trying to sell his wares to India.  
• On Pakistan sponsored terror
• He said that India has the biggest stake in a successful and stable Pakistan and has put the onus on India for re-engagement with Pakistan.
• He suggested that India and Pakistan take up the less controversial issues first, and then move their way slowly up to the stickier issues.
• The Indo-Pakistan dialogue was stalled after the attack on the Indian embassy in Kabul, believed to be a handiwork of the ISI, and suspended indefinitely following the Lashker-orchestrated attack on Mumbai in November 2008. Despite several dossiers to Pakistan seeking action against 26/11 masterminds like LeT founder Hafiz Saeed — whose role has been confirmed by both Ajmal Amir Kasab and American terrorist David Coleman Headley — Islamabad has let them go scot free citing lack of “credible evidence.”
• Incidentally, at least two serving majors of the Pakistan Army — Major Iqbal and Major Samir Ali — are wanted among the many 26/11 conspirators based in Pakistan. This, India argues, clearly points to the involvement of Pakistani state actors in the Mumbai attacks.

• Super regulator proposed for 62 quasi-judicial bodies
• The government has reportedly proposed a super-regulator that will oversee the working of all tribunals, regulatory bodies and authorities, as it seeks to put in place an institutional arrangement to ensure greater transparency and accountability of quasi-judicial bodies.
• The proposal is expected to generate intense debate, as it comes soon after a hotly-debated decision by the finance ministry to create a body for regulator coordination. The proposal faced resistance from financial sector regulators, which felt their regulatory autonomy would be undermined by the proposed body.
• As many as 62 tribunals and regulatory bodies in areas such as telecom, taxes, insurance, railways, highways, human rights and the press council are proposed to be monitored by the division.    
• The proposal follows an observation by the Supreme Court that there was no uniformity in administration of tribunals created by Parliament and suggested a wholly independent agency to oversee their working.
• The objective behind the central tribunal division was to ensure that if a chairperson or a member of any tribunal or regulatory body is not able to take sufficient interest in the working of the tribunal, the entire system will not languish and ultimate consumer of justice will not suffer, the justice department noted.
• The department of justice has also proposed setting up of a separate umbrella legislation to deal with matters related to code of conduct and enquire into complaints or allegation of corruption against chairperson and members of Central tribunals and regulatory bodies. A standing body headed by a retired Supreme Court judge or a retired Chief Justice of High Court will examine and investigate complaints of corruption and other types of misbehaviour and also recommend their removal if necessary.
• The justice department will finalise the cabinet note after receiving comments from all departments and ministries concerned.
• Currently all tribunals and other statutory authorities are under the administrative control of different ministries and departments as per the allocation of business rules.

Finance & Economy

• Status of our economy
• Thanks to ET, we are getting to see such economics dashboards of late quite frequently.  A glance at such figures is a must.  Take a look.
• Why are the Indian stock markets expected to perform better?
• The Sensex is valued at about 20 times estimated earnings, China’s Shanghai Composite at 17.5 times, Brazil’s Bovespa is trading at 13.65 times and Russia is trading at 8 times.
• Despite this, analysts remain bullish about the long term since the demography and construction of infrastructure to keep pace with demand will keep the economy humming. The central bank has forecast 8.5% growth this fiscal.

• RBI sets its face against pre-payment penalty
• Banks are losing their battle for penalty on home loan pre-payments as the Reserve Bank of India sees no case for such a levy given that lenders don’t play a fair game with borrowers.
• In a meeting with chief executives of banks last week, RBI deputy governor KC Chakrabarty backed the Competition Commissioner of India’s stance that banks waive the clause on pre-payment penalty in mortgage documents since it is anti-competitive.
• If implemented, this would erode one of the key elements of easy profits for banks which charge as much as 2% of the loan amount in some cases.
• Penalty on mortgage pre-payments has become a contentious issue between banks and customers who look out for ways to bring down their cost of funds.
• In the two years since 2008 when the central bank cut policy rates more than 5 percentage points, most banks did not pass on lower costs to existing customers, but offered lower rates to new customers. Feeling short-changed by bank practices, customers wanted to change their lenders, but stayed back due to the usurious penalties. New borrowers were offered loans at 8% while existing ones paid around 11%.
• Banks believe that pre-payment charges are disclosed upfront to borrowers and doing away with them would cause an imbalance in their assets and liabilities.
• The central bank argues that since most of the mortgages are on floating rates, there was no justification that pre-payment leads to losses for banks.

• Hyderabad to become the aerospace hub of the country?
• The Tata Group is reportedly planning to develop Hyderabad as its aerospace and defence business hub.  Tata group chairman Ratan Tata was here on Sunday to unveil the first Sikrosky S-92 helicopter cabin made in India by Tata Advance Systems (TASL).
• TASL has invested around Rs. 1,000 crore towards the manufacturing unit for Sikrosky cabins. The first cabin will be exported to the US by this month end.

• Titbits about our banking
• At present, nearly 90% of all banking transactions are done electronically in value terms; the share of electronic payment is just about 35% in terms of the number of transactions.
• There are 66 MICR cheque processing centres across the country.

International

• On the state of the US economy and what's wrong with it
• Today's op-ed from Ruchir Sharma belongs to the 'must read' category.  Take a look.  Some excerpts worth our noting:
• A major fault-line of the current US economic structure is that the top 10% of the population receives half of the total income compared with an average of 35% in 1950-90. This income skew is not conducive to an economy’s long-term growth prospects.
• Most talking heads on Wall Street are convinced that emerging markets as an asset class are the prime bubble candidate now; inflows into emerging market stock and bond funds have already exceeded $100 billion in 2010, making it a record year for portfolio flows to developing countries.
• On connectivity in South Asia
• The connectivity situation has improved dramatically in the eastern part of the South Asian region after Sheikh Hasina’s visit to India in January 2010. First, it was agreed that Bangladesh would allow use of Mongla and Chittagong sea ports for movement of goods to and from India through road and rail. The use of Chittagong, in particular, will give much shorter access to the Indian north-eastern states for goods destined to and from other parts of India and to third countries. Nepal and Bhutan will also be given access to Mongla and Chittagong, as an alternative to Indian ports, should they prefer to use them.
• Further it was decided to build the Akhaura-Agartala missing rail link on the eastern border of Bangladesh with India to be financed by a grant from India, thereby enabling shorter rail access to Chittagong port. The alignment of this line has just been finalised and is awaiting approval by the Bangladesh government.
• On inland waterways, India agreed to provide dredgers for deepening drafts and improving waterways for riverine traffic, which is the cheapest mode of transport between the two countries, and can even carry containers.

Language Lessons

• howlarious: Adjective
• So hilarious that you end up howling with laughter
• This word is not seen in dictionaries.  It is a slang.