05.03.2011

Politics & the Nation

• PM owns up on tainted CVC
• A day after the Supreme Court dealt a major blow to his moral authority by quashing the appointment of the Central Vigilance Commissioner (CVC), Prime Minister Manmohan Singh accepted the responsibility for appointing PJ Thomas.
• But Singh’s ‘buck-stops-with-me’ stand is certain to bring the focus on the Prime Minister’s Office whose missteps have been complicating matters for Congress. The PMO cannot lay the blame for the embarrassment on any other arm of the government as the Department of Personnel and Training, which functions under the prime minister, did not incorporate details about the case against Thomas in documents placed before the selection panel. There is already considerable disquiet in Congress over the prime ministerial establishment’s failure to shield the party’s interests.

• AICC reshuffled
• Congress president Sonia Gandhi finally shuffled her pack on Friday but kept the same core team of senior leaders, rewarded “outsiders” who recently joined the party and drafted new faces from states for assignments into Congress Working Committee, the party’s highest decisionmaking body.
• Overall, the long-awaited reshuffle exercise has not sprung any surprises. The Congress president has not brought about any big-ticket changes or even tried to lower the average of her team. She has retained most senior leaders in the Working Committee, including Prime Minister, Ahmed Patel, A K Antony, Pranab Mukherjee, Motilal Vohra, Janardan Dwivedi and Ambika Soni. Home Minister P Chidambaram has been made a permanent invitee to CWC.
• One of the most striking factors was easing out of Andhra Pradesh leaders from all central roles. Former Andhra MP G Venkataswamy, who had recently made scathing remarks about Gandhi’s foreign origins and the coterie around her, was dropped from CWC. While Venkataswamy was no surprise, Andhra MPs V Kishore Chandra Deo and K Keshava Rao did not find a place in CWC.
• The Congress Working Committee will have 19 members, 17 permanent invitees and five special invitees. The office-bearers include nine general secretaries, eight in-charge of states, and 33 secretaries.

• Bofors case closed
• India’s best-known corruption case has been closed. After 21 years of investigations, a Delhi Court has allowed the Central Bureau of Investigation to close the infamous Bofors corruption case that brought down the Rajiv Gandhi Government and left a deep imprint on India’s psyche. A Delhi court held that the case be closed as more than Rs 250 crore has already been spent in investigations and all efforts to extradite Quattrocchi had failed.
• The case related to a Rs 1,437-crore deal between Swedish arms maker Bofors AB and the Indian Government in 1986. The company would supply 410 units of 155mm Howitzer field guns. The deal was signed in March, 1986, and soon after, allegations emerged that Ottavio Quattrocchi, an Italian businessman close to the then PM Rajiv Gandhi’s family, brokered the deal.
• It was alleged that Rs 64 crore was paid in kickbacks and the recipients included the PM. The scale of the alleged corruption was staggering in the mid-80s when the new young prime minister was seen to be vitalising the nation’s economy and imbuing it with a new energy, vitality and direction. It also seemed to be a terrible betrayal that a deal so important to national security might have been subject to corruption. For these reasons, Bofors became an allegory for corruption and impropriety in public life in India, even though no charges have been proved to date, despite investigations by several agencies across two decades.
• It is significant in the present context that the first Joint Parliamentary Committee probe was conducted in the Bofors case. The Opposition parties boycotted the JPC at the time and the committee headed by B Shankarananda only had members from the ruling Congress and allies and a sole member from DMK, which was then in the Opposition. Rajiv Gandhi and Congress lost the general elections in 1989 and the scandal is seen as a major reason for the electoral defeat. The 70-year-old Quattrocchi has never appeared in a court in India related to the case. He is also the only living defendant in the case.

Finance & Economy

• Bits and pieces about 'social capital'
• Excerpted from today's op-ed in ET by Sameer Sharma.  The following excerpt can be a good answer to the question:  What is social capital and how have MFIs leveraged it?
• Social capital is a multidimensional construct having several forms and two forms of social capital — bonding (that links people together with others like them) and bridging (social ties that cut across differences such as caste, class or religion).  This definition was given by Avis Vidal.
• Bonding social capital promotes exclusive identities, gives precedence to the group over community and generates specific reciprocity; in contrast, bridging social capital is outward-looking, promotes acquaintances with different and distant people and leads to generalised reciprocity.
• The work of Xav Briggs has shown that the outcomes associated with the two forms of social capital are different. Bonding capital helps the poor to get by or cope with particular challenges (social support), as opposed to bridging capital that helps to change the opportunity set and get ahead in life (social leverage).
• Social capital is about relationships; therefore, freely accessible to the poor and the common availability differentiates social capital from other forms of capital.
• The MFIs have mainly limited themselves to using the existing bonding capital in groups to lend and recover. However, the simple but crucial support or leverage distinction and the fact that the two forms of capital interact, and mediation by intermediary structures is possible, has the potential to give competitive advantage to the poor by broadening and deepening their social networks. The MFIs can purposefully facilitate the development of meaningful bridging ties by working as intermediary organisations to help the poor to get ahead in life and move beyond the support networks that only help them to stay where they are and only cope with calamities of life.

• Government measures to bring down NPAs in farm sector
• RBI data show that the total NPAs in agriculture stood at Rs. 14,756 crore at the end of December 2010.
• With a view to bring them down the government has announced the continuation of interest subvention scheme for short-term crop loans to farmers.  The government has also enhanced the additional subvention by 100 basis point to 3% in 2011-12, bringing the effective interest rate on such schemes to 4%.

• Motor insurance premium up for overhaul
• Drive less, pay less. That’s going to be the selling point of at least three motor insurance companies in India.
• Modelled on a policy popular in Italy, this insurance plan lets you pay the premium according to the miles you drive. If you are not a frequent user of your vehicles, you will get to pay less premium when your motor insurance policy comes up for renewal.
• Bajaj Allianz, ICICI Lombard and Bharti AXA General Insurance are working on versions of the so called pay-as-you-drive policies. ICICI Lombard has, in fact, initiated a pilot project under which it has installed tracking equipment on a set of vehicles — a mix of owner-driven and commercial.
• The concept was unveiled in the European and US insurance markets a couple of years ago and is poised to debut in India.
• In Europe, insurers install a global positioning radio system which sends data, including average speed of the car, types of roads on which it runs — city or highway as well as the driving pattern.
• Insurance companies reportedly incurred about Rs. 3,500 crore loss in the current fiscal on account of motor insurance.

Obituary

• Arjun Singh is no more
• Veteran Congress leader Arjun Singh, who has had a long and chequered career in Madhya Pradesh as chief minister and as Union minister, died on Friday after a long illness.
• Singh (81), who was admitted to AIIMS some days ago with chest pain and neuro problems, complained of breathing problem around 5:30 pm. He suffered a heart attack and breathed his last around 6:15 pm.
• Singh leaves wife Saroj Kumari, two sons--Ajay Singh, an MLA in Madhya Pradesh and Abhimanyu--and daughter Veena.
• A loyalist of the Gandhi family and considered a shrewd strategist, Singh was chief minister of Madhya Pradesh between 1980 and 1985 and was made Governor of Punjab just a day after he took oath as chief minister for the second time in the state.
• He became governor at the height of militancy and helped a young Prime Minister Rajiv Gandhi reach an accord with Akali Dal leader Sant Harchand Singh Longowal which came to be known Rajiv-Longowal peace accord.

Language lessons

• abstemious: Adjective
• Sparing in consumption of especially food and drink; Marked by temperance in indulgence
• alfresco: Adjective
• In the open air
• Adverb: Outside a building
• eg: Of course, Indians are known to take recourse to alfresco measures if the pressure really builds up, so the mere denial of toilets may not enforce thrift.