04.12.2010

Politics & the Nation

• India Post shifting to e-stamps in place of paper stamps
• The move will help save printing costs and also help the department tackle the menace of forged paper stamps, which is rampant in several states. The department sold stamps worth Rs 606 crore in 2008-09.
• Some premium segment products such as Speed Post are already using bar coded stamps and several large cities have computerised post offices. But most parts of the country, including rural and semi-urban areas, use paper stamps.
• The postal department, established in the 19th century as India Post Office by the British East India Company, is one of the oldest government departments in the country. The tradition of postage stamps started in 1852 when the British introduced the Scinde Dawk stamps. These stamps, embossed on red wax wafer, were the first in Asian countries. By around 1872, the British military started using stamps extensively to send official mails.
• Besides shifting to e-stamps, the postal department has initiated other e-enabled services to survive in a world that is going the digital way, particularly in the communications space. Its e-post service, for instance, allows sending of messages through email to be printed at post offices near to the address.
• On CVC’s impending resignation
• At least this what papers are trying to make us believe.  That the CVC, Mr. Thomas is going.  Look at this news report.
• The strange turn of events that took place so suddenly in his career is very baffling.  Apparently, many in the government circles believe that Mr. Thomas is clean.
• Allahabad HC to move SC
• Stung by the caustic remarks of the apex court on the working of the Allahabad High Court and the conduct of its judges, the high court has decided to approach the Supreme Court for removal of adverse observations.
• The judges of Allahabad High Court and its Lucknow bench held a meeting to discuss the SC’s observations, wherein it had remarked that "there is something rotten with the Allahabad High Court," and questioned the integrity of some of its judges.
• The review or curative petition for expunging the adverse remarks of the SC is likely to be moved by next week.
• Supreme Court Judges Markandey Katju and Gyan Sudha Mishra had on November 26, pointed out nepotism and corruption in the Allahabad HC and asked its Chief Justice FI Rebello to take corrective steps.

Finance & Economy

• In defence of Raja?
• Take a look at this piece written by V. Ranganathan from IIM, Bangalore.  Though it may sound as if it is trying to defend the much discredited former telecom minister Mr. Raja, it proffers really sane advice.  
• One argument that is put up against auctioning spectrum is that telecom companies will try to recover the high costs borne by them from consumers and they will do so by charging high prices.  But is this really correct?  Ranganathan says that this is unlikely for three reasons:
• First, the bid amount at auctions is a sunk cost for the telecom firms, and their profit-maximising behaviour in a competitive market cannot allow them the luxury of recovering their sunk costs, if their competitors decide to undercut them.
• Secondly, the firms will squeeze consumers as much as they can, based on what the traffic can bear, and not be content with just recovering costs. To make this point explicit, consider a case where each of those bidders who has paid a high bid amount, is refunded this amount. Will they reduce the price now? No way.
• Thirdly, telecom is an oligopoly, with large sunk costs, near-zero incremental (marginal) costs, and with a huge network externalities, where the winner (i.e., number 1) takes the most.
• In such a situation, market share is everything, and firms will try to maximise market share and not be worried about recovery of sunk costs. The first mover has an advantage and every firm will want to be that with a huge market share. Thus, low prices are inevitable.
• The size of our banks
• SBI, the nation’s biggest with about a fifth of banking assets, has a market value of $43 billion, compared with Citi’s $128 billion. The world’s biggest, ICBC of China, is valued at $237 billion, bigger than the nation’s listed banking sector.
• SBI is ranked 74th in global ranking and the second biggest, ICICI Bank, is at 145, and Bank of Baroda at 188.
• India’s strong demand a problem too: Goldman
• Indian consumers’ buying binge, the envy of the rest of the world, could be a source of trouble if the government fails to take preventive steps, warns an influential report.
• India’s high domestic demand, with all its possibilities, has some potential perils, the key one being a return of boom-bust cycles, says Goldman Sachs in a research note. However, there are few takers for this pessimistic view.
• The risk, according to it, in a scenario of domestic demand-driven growth is that a surge in capital-chasing growth and yield could drive asset and commodity prices higher, causing the real effective exchange rate to appreciate.
• This will further erode exports competitiveness, increasing the current account deficit further, particularly if commodity prices were to rise. In such a situation, a sudden reversal of capital flows can wreak havoc with bonds and equity markets, which can spill over to broader economy and derail growth, the report says.

International

• The Asian Highway
• Excerpts about this great project from today's op-ed.
• Expanded in stages, now comprising over 141,000 km of roads through 32 of the Unescap member countries, AH would extend from Tokyo in the east to Kapikule (Turkey) in the west, and from St Petersburg in the north to Denpasar (Indonesia) in the south. The initial AH routes AH1 and AH2 aimed at linking Bangkok with Tehran through Yangon, Dhaka, New Delhi, Rawalpindi and Kabul, with further connections to Turkey and the E-roads system in Europe.
• The AH project has so far been signed by 28 states of which 23 are parties to the inter-governmental agreement that entered into force on July 4, 2005. Contracting parties are responsible for building, upgrading and improving the network, also to instal stipulated signages along the routes. The agreement also includes a formal commitment of the parties to give full consideration to issues of road safety.
• The core AH network, comprising about 28,000 km, is categorised as either primary, class I or class II. The primary class signifies access controlled highway having four lanes or more; with design speed of 60-120 kmph, class I roads have a design speed of 50-100 kmph, and four lanes or more (divided); and class II roads design speed of 40-80 kmph and two lanes with 7-m width.
• WITHIN India, an aggregate of 11,650-km road routes fall within the AH network (11,624 km of national highways and 26 km of state highways), of which only about 90 km length comprises of primary roads and about 3,790 km of class I and 1,960 km of class II roads, the remaining being class III roads.
• The year 2009 marked the 50th anniversary of the AH project, in celebration of which Unescap, in cooperation with the International Road Transport Union, organised a truck caravan during August-October 2009 between Tokyo and Istanbul, encouraging commitment to, and investment in, improving infrastructure connectivity and transport facilitation. Although initiated by the Economic Commission for Asia and Far East at its 15th session held in 1959 in Broadbeach, Australia, it is Unescap, at its 48th session held in Beijing on April 14-23, 1992, that revitalised the AH project.
• The New South
• The North South paradigm was built around the Washington Consensus.  But the New South that is built around the idea that solutions to today’s development challenges are more likely to be found among those that have developed recently than those that went through their development phase over a century ago, is gaining ground and mind space of late.  
• Take a look at this very well written piece that explains the idea.  Worth a read.
• India scores major win in Cancun
• India has scored a major success at the Cancun climate change talks when its negotiators managed the backing of EU and G-77 for its proposal to set up a mechanism for technology transfer to deal with climate change.
• A discussion paper put forward by Environment Minister Jairam Ramesh detailing the structure of the technology mechanism has now garnered support from across the aisle. Broadly, it calls for a two-tier system to ensure technology transfer. The structure will comprise a technology executive committee and series of climate technology centres and networks.
• The mechanism proposes that the networks of existing institutions will report to the technology executive committee, which in turn will report to the Conference of Parties, the supreme decision making body under the aegis of the UN. This structure has been supported by EU, G-77 and China. The US however, is not in agreement. It would like the climate technology centres and networks in a structure that is parallel to the technology executive committee.
• The proposed mechanism will help rapid adoption of climate technology in a cost effective manner.
• The technology mechanism will help with human and institutional capacity building in technology utilisation, support and outreach in less developed countries, Africa and the island states.

Language Lessons

• humdrum: Adjective
• Not challenging; dull and lacking excitement; Tediously repetitious or lacking in variety
• eg: “a humdrum existence; all work and no play”