08.02.2011

Politics & the Nation

• Thomas defence in Supreme Court
• The defence by the CVC Mr. Thomas in his case pending before the Supreme Court made headlines.
• His lawyer had reportedly told the Supreme Court that since 153 MPs face serious criminal charges, the case against him should not be over-emphasised.
• Thomas’ lawyer came close to questioning the SC’s powers to question his appointment. He said the appointment was made after “the high-power committee headed by the prime minister” agreed that he was a suitable candidate. “This decision cannot be examined by the court.”
• The Suprme Court appeared to have not accepted the idea that judicial review of constitutional appointements is not possible.  
• In his submission, Thomas’ lawyer said that a mere charge sheet cannot be ground for questioning his suitability to lead the CVC. However, he agreed that a conviction would be sufficient ground for his removal.

• Fresh row over Isro’s spectrum allocation
• The Opposition has found another weapon to target the UPA government following reports that the Comptroller and Auditor General (CAG) was scrutinising a spectrum deal done by the Indian Space Research Organisation (Isro). The CAG is looking into a 2005 agreement between the Indian Space Research Organisation's commercial arm Antrix Corporation and private company Devas Multimedia. The private firm was leased around 60 MHz of the scarce S-band spectrum for 20 years for Rs 600 crore. ISRO was given the contract to launch two satellites for Devas too as part of the deal.
• However, the CAG clarified on Monday that it had not made any findings but only audit of certain activities of the Department of Space were under way.
• Devas, owned by former Isro official MG Chandrasekhar, sold a stake to a group of foreign investors, including Deutsche Telekom and private equity firm Columbia Capital, after the spectrum was allotted.
• The Law Ministry had described the contract as illegal and said the government should take back the spectrum citing national interest, a top government official who had seen the Law Ministry’s written opinion, had told ET.
• Devas had clarified then that the deal was first approved by the Antrix board, which had Isro chairman, representatives from the Department of Space as well as eminent external independent members such as Ratan Tata. It was then approved by the Space Commission, whose members included the Cabinet Secretary, Minister of State for Science and Technology, the National Security Advisor and Isro chairman. It also said that in 2005, the Union Cabinet too approved the deal.

Finance & Economy

• Inter-ministerial group set up to tackle inflation
• The government has set up the inter-ministerial group (IMG) to suggest measures to control spiralling prices, particularly of food articles The IMG, headed by chief economic adviser in the finance ministry Kaushik Basu, has been asked to firm up an institutional mechanism to read “warning signals” with regard to agricultural production. The seven-point terms of reference to the IMG include studying trends in international production and stocks, besides reviewing prices of major commodities and making recommendations for fiscal, monetary, administrative measures.

• Adverse auditor report to force a/c restatement
• A panel appointed by the Securities Exchange Board of India, has cleared a proposal that requires listed companies to restate their financial statements if their auditor comes up with adverse comments, commonly called audit qualifications.
• The decision, if endorsed by the Sebi board, will give the stock exchanges an overarching authority to call for restatement of a company’s accounts.
• The chief executive officer or chief financial officer of a company will bear the cost of the fresh audit. This will ensure that those responsible for the mistake pay for the folly and not the shareholders.
• The Committee on Disclosures and Accounting Standards on Friday recommended that stock exchanges be authorised to ‘prima-facie’ act on any ‘material’ qualification made by an auditor to seek a restatement of the company’s accounts.
• Listing agreement that stock exchanges enter into with companies will have to be modified to accommodate the new rule, the official said requesting anonymity.
• The proposal, if accepted, will provide auditors a final say on a company’s accounts as compared to the current practice of making a note of their qualified remarks. As per the proposal, while filing their annual reports companies will have to submit a declaration before the exchange giving details about the audit qualifications, if any.
• The stock exchange can then seek further inputs from the company and the auditor.
• Based on the information, the stock exchange will have to decide if the audit qualifications raised are ‘material’. The exchange can then forward the case to Sebi.
• The regulator will discuss the seriousness of the qualifications with the Institute of Chartered Accountants of India before ordering the company to restate its accounts.

• GDP at market price to cut deficit
• Finance minister Pranab Mukherjee will be able to present a much-lower-than-budgeted fiscal deficit for the current fiscal year this budget, thanks to a big 20.3% jump in GDP at market prices.
• Going by the advance estimates for GDP in 2010-11, fiscal deficit could fall to about 4.7%.
• Net borrowings, or the fiscal deficit, of Rs. 3,81,000 crore translated into 5.5% of the GDP, based on a nominal GDP of Rs. 69,34,700 crore estimated at the time of budget.
• The central statistical organisation pegs the nominal GDP at Rs. 78,77,947 crore.
• The government had earlier said it will borrow Rs. 10,000 crore less. The borrowing of Rs. 3,71,000 crore, on an expanded base, yields a deficit of 4.7% of GDP.

• What do you know about Exchange Earners’ Foreign Currency Account?
• Look at this ET in the Classroom column on the subject to know about it.

Language Lessons

• hives: Noun
• An itchy skin eruption characterized by weals with pale interiors and well-defined red margins; usually the result of an allergic response to insect bites, food or drugs
• eg: Considering what happened to global banking in areas that weren’t properly regulated, that one gives me serious hives if I think about it.
• feral: Adjective
• Wild and menacing