Politics & the Nation
  • An excellent comment on what's wrong with our post-harvest agricultural supply chain
    • The linkage between the farmer and the consumer that exists now is not only inefficient and wasteful and subject to abuse and manipulation but also inimical to boosting production. Any hint of a shortage in relation to demand immediately leads to hoarding and price manipulation, leading to a spurt in the price at the consumer end without any of that higher price going back to the farmer. Such inefficient transmission of price signals kills incentives on the farm to invest in more acreage, better inputs or innovative crop husbandry.
  • Government agrees to set up JPC on 2G scam
    • The Government has finally agreed to the Opposition demand for forming a Joint Parliamentary Committee, or JPC, to probe the 2G spectrum scandal.
    • Government leaders here said a 21-member JPC will be constituted to probe the issue and a formal announcement is expected to be made two days before the budget session, which begins next week.
    • There is acknowledgement in Congress that there should be some backchannel communication with political rivals to reduce tension between the treasury and the Opposition. Prime Minister Manmohan Singh, who kept himself away from the negotiations during the winter session, is expected to engage senior Opposition leaders in discussions on smooth functioning of Parliament.
  • Dayanidhi has a lot to explain
    • Take a look at this article.  It is your call to take a judgement on the episode.
  • Government to announce clean-up measures?
    • The government will soon announce wide-ranging political, administrative and judicial reforms to counter the image deficit caused by a blizzard of scams and a pervasive sense that the moral core of the state is withering away.  Initiatives reportedly will include measures to reform procurement and tendering process, and plugging loopholes in the system that has caused recent scams and controversies.
Finance & Economy
  • Infrastructure bond tax gains to be continued in the next year too
    • The Union budget for 2011-12 could extend the tax benefit on investments made in infrastructure bonds by a year while giving banks access to this special window in an effort to raise debt funds for building physical assets of the country. The last budget had allowed a deduction of an additional Rs. 20,000 for investment in long term infrastructure bonds, over and above the Rs. 1 lakh limit prescribed for investments in tax saving schemes.
    • Only dedicated infrastructure companies or lenders were allowed to raise funds through these tax savings bonds.
    • The budget for 2009-10 had limited the tax benefit on infrastructure bonds for one year. This was because the government was hoping to roll out of the Direct Taxes Code from April this year.
    • But now that the new code is unlikely to be implemented before April 2012, the government could extend the tax relief on these bonds.
    • According to the planning commission, the infrastructure sector would require $500 billion worth of funds in the 11th Five Year Plan ending in March 2012 and $1 trillion in the 12th Plan.
    • There is a restriction on the amount lenders can raise through these bonds — a maximum of 25% of their incremental lending to infrastructure sector over the previous financial year.
  • Nandan Nilekani to head the task force on direct subsidies
    • In a bid to check wasteful fuel and fertiliser subsidy and reach it to the intended beneficiaries, the government has set up a task force to suggest a suitable mechanism of direct transfer of subsidy to the consumers.
    • The task force will be headed by Nandan Nilekani, Chairman, Unique Identification Authority of India (UIDAI) and has been asked to submit an interim report within four months. Based on the interim recommendations, a six month pilot scheme will be run and the learnings from that will be go into the final report.
    • The task force will design IT systems, align it with the UID numbers, and also suggest changes in the administration and supply chain management.
  • The benefits of trusts in wealth management and succession planning
    • In an interesting article today ET discusses the benefits of trusts in succession planning for HNIs.  Some excerpts / notings:
    • Asset protection is one of the key features that a trust offers.  Trusts are a great way to ring-fence your assets.  Your company may get into trouble or there may be huge losses in your family business but the assets that you put into the trust will remain safe. That way at least that portion of your wealth is safe.
    • Another major hurdle that a trust would help you overcome is litigation. As an HNI, numerous dealings force you to interact with a host of people and institutions, any of whom could drag you into a legal tangle. A trust would safeguard you from many such legal issues.
    • Trusts score over wills as the latter don't allow flexibility and control over the end use of your assets. You cannot list out an investment mandate for your wealth nor can you allocate your wealth for somebody who is yet to be born, which you can do with a trust.
    • A trust helps you manage your wealth during your lifetime, unlike a will which is operational only after your death.
    • Having noted thus, let us also know that there are a couple of drawbacks for trusts.  Look at them:
    • A trust is managed by trustees.  So it is very important that you should be able to find a good and dependable trustee.
    • Second, envisage your beneficiaries well. There’s very little that you can do if you choose the wrong beneficiaries.
  • Know anything about Taylor rule?
  • On the failure of the G-20 in providing leadership
    • Prof. Nouriel Roubini, the famed economist who is credited with predicting the global financial crisis comments on the utter failure of the G-20 in giving global leadership.  Take look at the reasons given by him for the state of affairs:
    • First, when discussion moves beyond generic principles into detailed policy proposals, it’s much more difficult to reach clear agreements among 20 negotiators than among seven.
    • Second, G-7 leaders share a belief in the power of free markets to generate long-term prosperity and in the importance of democracy for political stability and social justice. The G-20, on the other hand, includes autocratic governments with different views about the role of the state in the economy, and on the rule of law, property rights, transparency, and freedom of speech.
    • Third, the Western powers now lack the domestic political consensus and financial resources to advance an international agenda. The US is politically polarized, and must at some point begin to reduce its budget deficit. Europe is preoccupied with its attempt to save the eurozone, and has no common foreign or defense policy. And Japan’s political stalemate on structural reforms has left it helpless to stem long-term economic decline.
    • Finally, rising powers like China, India, and Brazil are far too focused on managing the next stage of their domestic development to bear the financial and political costs that come with new international responsibilities.
    • Why should we care?  In short, for the first time since the end of World War II, no country or strong alliance of countries has the political will and economic leverage to secure its goals on the global stage. This vacuum may encourage, as in previous historical periods, the ambitious and the aggressive to seek their own advantage.
    • In such a world, the absence of a high-level agreement on creating a new collective-security system – focused on economics rather than military power – is not merely irresponsible, but dangerous. A G-Zero world without leadership and multilateral cooperation is an unstable equilibrium for global economic prosperity and security.
  • US budget deficit
    • Obama’s $3.729 trillion budget proposal for fiscal 2012 shows the deficit rising to a record $1.645 trillion in fiscal 2011, then falling sharply to $1.101 trillion in 2012.  Want to get a feel of the size of this?  Just recollect our economy's size.  Didn't we keep on reading that ours is a trillion dollar economy or nearing about that too often?  That's the size of the US budget deficit!
  • Know something about the Grammys
    • Take a look at this list of achievers in this year’s Grammys.
Language Lessons
  • fugue: Noun
    • Dissociative disorder in which a person forgets who they are and leaves home to create a new life; during the fugue there is no memory of the former life; after recovering there is no memory for events during the dissociative state;
    • A dreamlike state of altered consciousness that may last for hours or days;
    • A musical form consisting of a theme repeated a fifth above or a fourth below its first statement
  • conflate: Verb
    • Add together different elements
    • eg: ... a nuance generally missing from Indian agricultural policy that has tended to conflate food policy with production.
  • stodginess: Noun
    • Dull and pompous gravity