22.03.2011

Politics & the Nation

• On the state of reservation politics in India
• Take a look at this very well written ET editorial.  A must read.  A comment that is worth our noting...
• The idea of affirmative action, or positive discrimination in favour of the downtrodden, has been subsumed by patronage politics in India.  The reservation policy, in effect, has become a battleground with political parties casting the electorate as competing caste groups and these social groups, in turn, striving for ever more backwardness.

• Some facts on phone tapping
• Phone intercepts are permissible under Section 5(2) of the Indian Telegraph Act. The Union home secretary or the home secretary of a state can allow interception.
• A phone can be tapped for 60 days.  Can be extended by another 60 days on credible evidence.
• Allowed only for public safety & integrity of the country. Three years imprisonment & fine for unlawful tapping. Penalty could be up to 50 cr.
• Between 7,500 and 9,000 phone taps are authorised by the Centre every month. Government says tapping does not exceed six months.

• Centre may list about 10 PSUs in FY12
• The department of disinvestment plans to list as many as 10 central public sector units that have turned profitable to raise the budgeted Rs. 40,000 crore from disinvestment in the next fiscal.
• There are 158 profitable state-run companies, of which only 47 are listed.
• The net profit of all the 217 central public sector units rose by 11% to Rs. 92,593 crore in 2009-10, according to data released by the department of public enterprises. These firms had made a net profit of Rs. 83,867 crore in the previous year.

Finance & Economy

• Look at our banking strength
• As on March 31, 2009, we had 27 public sector banks, seven new private sector banks, 15 old private sector banks, 31 foreign banks, 86 regional rural banks (RRBs), four local area banks (LABs), 1,721 urban cooperative banks, 31 state cooperative banks and 371 district central cooperative banks.
• In spite of these impressive numbers, more than half of our population is not having bank accounts.

• Rajat Gupta quits as ISB Chairman
• It was just yesterday that we were noting about this prospect.  Now it is confirmed.  Rajat Gupta, the former worldwide managing director of McKinsey & Co, has decided to resign as the chairman of Indian School of Business. Gupta’s resignation comes three weeks after the US Securities and Exchange Commission (SEC) filed administrative civil insider trading charges against him. The ISB executive board will meet on April 2 in Hyderabad to decide on the new chairman.
• Gupta, one of the first Indian Americans to become the CEO of a big US firm, has been charged with leaking secret details to Galleon Group hedge fund manager Raj Rajaratnam on Warren Buffett’s plan to invest $5 billion in Goldman Sachs at the height of the financial crisis. The deal helped ensure Goldman’s stability while Galleon Group made a profit of $18 million, according to US SEC charges.
• This is not for the first time ISB is in the spotlight for the wrong reasons. In October 2009, an executive board member, Anil Kumar, then director at consulting firm McKinsey & Co, was charged on the same insider trading scheme involving Galleon Group, following which he resigned from the board. In January 2009, ISB’s then dean M Rammohan Rao resigned as dean after Satyam Computer Services founder Ramalinga Raju admitted to inflating profits and revenue. Rao was a member of the Satyam board.

• National interest paramount, not MNC's contractual rights; rules SC
• The Supreme Court has ruled that private companies cannot complain about violation of their contractual rights by government when national interest is involved in awarding contracts for public projects involving taxpayers' massive money.
• A bench of justices VS Sirpurkar and TS Thakur in a judgment expressed anguish at the manner in which the Tehri Pump Storage Plant could not be taken up for the past three and half years due to the legal battle involving two MNCs — Voith GMBH (respondent No.1) and Alstom (respondent No.2).
• The apex court passed the judgment while staying an Uttarakhand High Court order which had halted the tendering process adopted by Tehri Hydro Development Corporation after Voith Hydro GMBH challenged the process as being in favour of rival bidder Alstom. In this case, the notice inviting tenders on the prime turn-key execution was issued on August 31, 2007. But the two companies, which were finally shortlisted for the contract, fought legal battles in the high court and the apex court accusing THDC of being biased in favour of the other.