16.03.2011

Politics & the Nation

• Nuclear disaster looms on Tokyo as plant explodes
• Japan faced a potential catastrophe on Tuesday after a quake-crippled nuclear power plant exploded and sent low levels of radiation floating towards Tokyo, prompting some people to flee the capital and others to stock up on essential supplies.
• The crisis appeared to escalate late in the day when the operators of the facility said one of the two blasts had blown a hole in the building housing a reactor, which meant spent nuclear fuel was exposed to the atmosphere.
• Prime Minister Naoto Kan urged people within 30 km of the facility—a population of 140,000—to remain indoors amid the world’s most serious nuclear accident since the Chernobyl disaster in Ukraine in 1986.
• Officials in Tokyo—240 km to the south of the plant—said radiation in the capital was 10 times normal by evening but there was no threat to human health. Around eight hours after the explosions, the UN weather agency said winds were dispersing radioactive material over the Pacific Ocean, away from Japan and other Asian countries.
• Levels of 400 millisieverts per hour had been recorded near the No. 4 reactor, the government said. Exposure to over 100 millisieverts a year is a level which can lead to cancer, according to the World Nuclear Association.
• Reading of the entire page 8 of today's ET is highly recommended.  It discusses the aftermath very well.
• How does a nuclear reactor work for producing power?
• Take a look at this graphic.

• Jaswant Singh moots reconsidering the 'no first use' nuclear policy
• According to a report by the Federation of American Scientists Pakistan now has a nuclear arsenal that is as large as 70-90 warheads.  India, according to Jaswant Singh has only about 50 to 60 warheads.  
• In this 'changed context' he feels it is time for India to reconsider its 'no first use' policy.

• Cabinet okays GST bill; but will it be passed?
• The Union cabinet has approved the Constitutional Amendment Bill to roll out the Goods and Services Tax (GST), hoping that a debate in Parliament will help build consensus on this crucial reform.
• The GST seeks to replace multiple indirect taxes, such as the central excise duty and services tax, and state taxes including valueadded tax, entry tax and purchase tax, with a neat single levy.
• The proposed tax will have two components, one levied by the centre and the other by the states, implying that both will need to have concurrent powers to tax a good or service.
• At present, the centre can impose taxes on goods at the factory gate and services while states can only tax goods at retail level. States do not have the power to levy tax on services.
• Thus, a facilitating Constitutional amendment is needed to allow the centre and states to levy this tax simultaneously.
• The finance ministry has revised the draft bill for the fourth time since the discussions on the new tax regime started to address the concerns of the states and ensure support for the legislation from all political parties. Mostly Bharatiya Janata Partyruled states have opposed the amendment saying it will undermine their fiscal autonomy.
• The latest Bill has proposed that a GST council be formed through a presidential order for taking decisions on all important matters.
• In addition, the Bill says the composition of the GST Dispute Resolution Authority will be decided by the Parliament.
• Furthermore, petroleum, natural gas, diesel and aviation turbine fuel have been kept out of the GST ambit in the final draft. After missing the April 2010 rollout deadline, the government has proposed to introduce it in April this year.
• But the new tax is unlikely to debut on this date. Officials have indicated that it may be difficult to roll out the GST from April 2012 as the process of ratification of the amendment will take time.
• After its introduction, the Bill will go to a Parliamentary standing committee.
• After its passage in Parliament, the Bill would have to be cleared by at least 50% of state assemblies and legislations.

Finance & Economy

• On measuring economic freedom
• How do we measure economic freedom, and how relevant is it for economic growth? Some answers come from Economic Freedom of the States of India 2011, a report just brought out by the Friedrich Naumann Foundation, Cato Institute and Indicus Analytics.
• This report focuses on three categories of freedom at the state level. One is the size of government relative to state GDP. The second is legal structure and property rights. The third is regulation of business and labour.
• You can have a look at the full report here.

• Let's get some gyan on loan syndication
• This is a market segment where large institutions operate as arrangers of debt for corporates. These institutions and their treasurers use their contacts and old ties to persuade banks, mutual funds and insurance companies to lend money to corporates. This is more of intermediation without the need for setting aside much capital and with the promise of decent fee income.
• The two major components of loan syndication are originating business and the capacity to sell down the loan or debt. Earlier, most banks which were syndicators of loans retained the loan on their books. But they were quick to realise that there was money to be made by churning the portfolio. The culture of underwriting and selling down the loan to other lenders started with the entry of ICICI Bank and Axis Bank, with IDFC, Yes Bank and ING Vysya Bank being among the relatively new entrants.
• The loan syndication business is two-decade old in this country. Earlier, it was left to, say, a chartered accountant to pitch with a bank for a loan on behalf of clients. SBI Capital Markets was the first major entrant. It rode on the SBI brand and emerged as an undisputed number one in this segment followed by IDBI Bank and Axis Bank.
• The loan syndication market is stated to be about Rs. 3,00,000 lakh in size.

Language lessons

• slough of despond: Noun
• (formal) extreme depression
• eg: For instance, in Bihar, historically the slough of despond, chief minister Nitish Kumar has generated rapid 10.5% growth.
• be too clever by half: Idiom
• to be too confident of your own intelligence in a way that annoys other people