Politics & the Nation- PAC does not endorse MM Joshi's draft report on 2G scam
- The United Progressive Alliance on Thursday prevented the adoption of the draft report on 2G spectrum allocation scandal by Parliament’s Public Accounts Committee by managing the support of the Samajwadi Party and the Bahujan Samaj Party in the committee. The PAC meeting which witnessed unprecedented scenes — heated arguments, adjournments and even ‘expulsion’ of Chairman Murli Manohar Joshi by members belonging to the UPA and supporting parties — pointed to the worsening of relations between the ruling side and the Opposition.
- Although the meeting did not adopt the report, there is room and precedence for Joshi to present the report to the Lok Sabha Speaker. The rules of PAC allow the chairman to present the report after conclusion of discussions and circulation of the report among panel members. What could also strengthen the hands of Joshi is a precedent set by former PAC chief Buta Singh. In 2004, Buta Singh tabled a report on the coffin scam without even perfunctory discussions with panel members. It would be interesting to watch how Speaker Meira Kumar responds if Joshi decides to present the report on Friday.
Finance & Economy- Percentage of people filing IT returns in India
- On the status of women and undernourishment in children in India
- India is home to about a third of the world’s underweight and stunted children under the age of 5.
- What explains undernourishment in children of this age group (even in children from well to do families) in India?
- Surveys suggest that this has got to do with our traditional social and cultural values and practices that hurt the health and welfare of our children.
- In India, a third of the children have low birth weight. A child’s birth weight is an indicator of the health and nourishment of the mother when she is pregnant as well as her overall health and nourishment as a child and while growing up.
- Only a third of the breast-fed children aged 6 to 9 months receive complementary foods in India. This results in retarded growth. Most of the retardation in the growth of the child in India occurs either during the pregnancy or during the first two years after birth.
- A sustained long-term dent in child undernourishment can only be achieved by improving the health, opportunities and rights of the mother, the primary caregiver of children. Not just legislative rights but rights to participate in decision-making both at home and outside it, opportunities for social interactions, rights to improve their lives through education and employment.
- The historical pattern of the state and status of women in India reveals that it is largely unrelated to economic growth. Let’s look at sex ratio — a number that has been much discussed since the release of the provisional 2011 census results. At 914 women per 1,000 men, the sex ratio at birth is the lowest since Independence.
- Debate on banning endosulphan
- We have noted about this raging controversy a few days earlier too. Today’s face-off has a good debate and presents two contrasting views on the subject. Well worth our attention. Take a look and draw your own conclusions.
- In this context it is interesting to note what POP stands for. Persistent Organic Pollutant. If a pesticide / insecticide is declared as POP under the Stockholm Convention, then the signatory countries to the Convention ban the item.
- The Stockholm Convention was adopted in 2001 and entered into force in 2004. It requires Parties to take measures to eliminate or reduce the release of POPs into the environment. The Convention is administered by the United Nations Environment Programme and is based in Geneva, Switzerland.
- Meanwhile it is reported that India has agreed to phase out endosulphan at the ongoing meet in Geneva of the Stockholm Convention. This means endosulphan will be listed in Annexe A of the Stockholm Convention on Persistent Organic Pollutants but exemptions will be allowed for crop-pest combinations. It will allow India to continue to use this broad spectrum pesticide.
- Chemicals listed in the Annex A of the Convention are banned for production and use due to the threat they pose to living beings, particularly the environment.
- This will not come as good news for the Left parties or the Kerala government, both of which have been actively seeking an immediate nation-wide ban on endosulphan.
- All exemptions sought by India have been accepted. The listing in the Annexe will take one year to be effective, and the exemptions are valid for five years, with the provision for renewal for another five years. Thus, making the time-frame for the global phase 11 years.
International- Some of the quirky commemorative days that the US follows
- National Pretzel Day (April 26)
- National Potato Chip Day (March 14)
- Pizza Day (February 9)
- Hamburger Day (December 21)
- Pak favouring MFN status to India?
- India and Pakistan announced a path-breaking blueprint to spur trade between the two nations at the end of a two-day meeting of the commerce secretaries of the two countries on Thursday in Islamabad.
- Pakistan said it would take immediate steps to ensure that non-discriminatory trade regime is operationalised at the earliest.
- India has been seeking MFN status from Pakistan for a long time, which would lead to the country getting the same treatment as other countries in terms of allowing exports. Pakistan so far has been allowing exports from India on the basis of a small positive list of items instead of trading the normal way using a negative list of excluded items. Pakistan said it will move to a system of trade-based on negative list as opposed to the current positive list.
- India has already given the MFN status to Pakistan, allowing trade to be done on the basis of a negative list. Pakistan said consultations with business chambers have already begun on replacing the positive list with a negative list and the process would be concluded by October 2011.
- The two countries will also set up groups of experts for expanding trade in petroleum products and to enable trade in electricity.
Politics & the Nation- Government to go ahead with Jaitapur nuclear park
- The Centre will go ahead with the 9,900 MW Jaitapur nuclear power park in Maharashtra. A high-level meeting convened by Prime Minister Manmohan Singh on Tuesday decided to set up an autonomous Nuclear Authority of India to address people’s safety concerns.
- The proposed Nuclear Regulatory Authority will be an autonomous body answerable to Parliament. It will subsume the Atomic Energy Regulatory Board. The government will introduce a Bill to this effect in the monsoon session of Parliament.
- The meeting also decided to provide a higher compensation for displaced people.
- Following the Fukushima disaster, there have been apprehensions about the safety of nuclear plants and this added fuel to protests in Jaitapur. The meeting acknowledged the need for better safety standards and decided to put each of the six reactors at Jaitapur under their own operations system. Government leaders said the operational safety review team of the International Atomic Energy Agency will be invited to conduct safety reviews and audit of all nuclear plants.
- At present, India operates 20 small nuclear reactors at six sites with a capacity of 4,780 MW, or 3% of total power capacity. It hopes to increase nuclear capacity to 7,280 MW by next year, more than 20,000 MW by 2020 and 63,000 MW by 2032, adding nearly 30 reactors.
- Justice PD Dinakaran moves SC to stay probe against him
- Sikkim High Court Chief Justice PD Dinakaran has asked the Supreme Court to stay an inquiry against him by a Parliament-appointed panel.
- The panel, appointed by the Rajya Sabha chairperson Hamid Ansari after the House initiated impeachment motion against him, had asked Dinakaran to respond to the 16 charges framed against him. The panel is examining charges of corruption, land grabbing, abuse of judicial office and amassing wealth disproportionate to known sources of income against Dinakaran. The three-member panel headed by Justice Aftab Alam of the SC, Karnataka High Court Chief Justice JS Khehar and senior advocate PP Rao had rejected Dinakaran’s plea seeking stay on proceedings till he is supplied with all documents being looked into.
- Dinakaran sought quashing of the panel’s order, which rejected his appeal, seeking recusal of PP Rao alleging that he was biased. Dinakaran had said he apprehended that there was likelihood of bias in the proceedings as Rao had earlier campaigned against him when his elevation to the SC was under consideration.
- Charges against Justice Dinakaran, who is due to retire on May 9, 2012, were levelled when he was Chief Justice of the Karnataka HC. He was subsequently transferred to the Sikkim High Court.
- The only Indian Prince who has been invited to the Prince William and Kate wedding
- Raghav Raj Singh, the current maharajsahib of Shivrati, a jagir in the former princely state of Udaipur, is the only Indian aristocrat to be invited to the wedding of Prince William and Kate Middleton in London on Friday.
- He is a good friend of Prince William. Singh, a Sisodia Rajput, has played with William at the famed Cirencester Park Polo Club and Windsor Polo Club, both favourites of the Wales brothers.
- Wearing a resplendent traditional Mewari sherwani and colourful headgear, he will stand out among the grey morning suit clad men in the congregation. His wife, Shelja Kumari, from the thikana of Umaidnagar in Jodhpur, draped in a classic sari favoured by Indian nobility and heirloom family jewellery is equally likely to stand out.
- An alumnus of Mayo College, Ajmer and St Stephen’s, Delhi, Singh did a stint at Cheltenham College in Gloucestershire as an exchange , which should come in handy for his future foray into healthcare and wellness segment in Rajasthan and Delhi.
Finance & Economy- Is it the right time to allow export of food grains?
- Yes, argues today's ET editorial. Look at its reasoning:
- First, India’s stockpile of foodgrains is now around 45 million tonnes, double the buffer stock that is mandated for food security. A bumper harvest is forecast, after which the government will add another 25 million tonnes to this pile.
- Second, the government and its main procuring and stocking arm, the Food Corporation of India (FCI), have proved that they cannot handle such large food stocks. In many places, grains are piled high under plastic sheets, exposed to the weather and rodents. Even after distributing rice for as low as Rs. 1 or Rs. 2 per kilogramme in states like Tamil Nadu and Andhra Pradesh, stocks stubbornly refuse to run down. It is likely that by the time the government decides to do something about this food mountain, worth around Rs. 40,000 crore, much of it would have become dinner for rats.
- Three, food inflation is not being driven by foodgrains, but by the spiralling prices of vegetables, edible oil, pulses and milk. Exports of foodgrains will not add to food price inflation at home; indeed, it might help to increase farmers’ incomes.
- Finally, the most compelling argument is about prices. The glut has pushed market prices of wheat to below the minimum support price (MSP) of Rs. 1,170 per quintal. Indeed, in states like Uttar Pradesh, wheat is being sold for Rs. 1,050 per quintal, a substantial discount to the MSP. In global markets, wheat is being traded at around Rs. 1,530 per quintal. So, if India lifts its export curbs on foodgrains, imposed after the food price scare last year, exporters can make a nifty profit, storage costs would come down and farmers’ incomes would go up, yielding some incentive to invest in technologies to boost productivity.
- RBI fines 19 banks for selling complex derivatives to corporates
- State Bank of India, ICICI Bank, Citibank and Axis Bank are among 19 lenders penalised by the Reserve Bank of India for violating currency derivatives norms and selling products to companies which did not understand them. This ends a three-year dispute between banks and small companies burnt by derivatives.
- The penalty may be small, ranging from 5 lakh to 15 lakh. But the ruling was a blow to banks since it vindicated the claims of tiny companies that claimed banks sold meaningless contracts to earn fees to boost earnings.
- The RBI has been scanning the derivative books of banks for more than a year and had sought information from 22 lenders about these transactions.
- The RBI order vindicates the stand of corporates, some of whom had sued banks on grounds of misselling. Others had claimed that some of the contracts were contrary to law, particularly the FEMA. Already, most matters had been settled out of court with banks picking up 25-50% of the losses. This order will hasten the settlement of remaining disputes.
- Banks had sold currency derivatives to allow corporates to either improve the earnings on their exports, lower the outgo on imports, or cut the interest and repayment cost on loans. The better exchange rates that such swaps and options offered always came with risks that most corporates either ignored or thought were academic — eventualities that are unlikely to materialise.
- Several bets backfired when currencies like euro, swiss franc and yen surged in 2007. By late 2007 and early 2008, when corporates were asked to pay up after the markets moved against them, there was a hue and cry. Private lenders, including ICICI Bank, HDFC Bank, ABN Amro (now RBS), Axis and Kotak were sued by companies. Most cases were settled out of court.
- Amid court feuds between banks and corporates, the RBI appointed an inter-departmental group to inspect the trades. The group spotted transactions where the underlier was inadequate while in some cases multiple transactions were done against photocopies of the same document that served as an underlier. In such situations derivative deals are no longer hedges, but pure currency bets.
- In some cases, documents on a company’s past export performance that is used to arrive at a hedging limit was not certified by the auditor. The RBI decision will be followed by parties in the case pending before the SC.
International- Compulsory sectoral talks not acceptable, says India
- India is examining the latest draft proposals circulated by the World Trade Organisation to bring to life the deadlocked Doha round of global trade talks, but will continue to oppose the US move to make participation in sectoral talks compulsory.
- Disagreement between the US and large developing countries, including India, China and Brazil, over sectoral negotiations to eliminate duties on select industrial goods has been identified by WTO director general Pascal Lamy as the biggest issue blocking the progress of the round.
- The US has been insisting that large developing countries should agree to eliminate tariffs on some industrial goods through compulsory participation in sectoral negotiations while the opposing countries maintain that it is outside the mandate of the Doha round.
- US charges 4 Pakistan based LeT men for 26/11 attack
- The US federal prosecutors have charged four Pakistanis — Sajid Mir, Abu Qahafa, Mazhar Iqbal (also known as Abu al Qama) and ‘Major Iqbal’, all from the Lashker-e-Taiba — as conspirators in the 26/11 attacks on Mumbai. The charges filed before an Illinois court on Tuesday mentions an unnamed individual, ‘Lashker member D,’ as co-conspirator.
- The accused face six counts of aiding and abetting the murder of US citizens in India, and three of the conspirators named in the indictment —Mir, Qahafa and Mazhar Iqbal — have been charged with conspiracy to bomb public places in India.
- The charges against the four LeT men carry a maximum statutory penalty of life imprisonment or death.
Politics & the Nation- Kanimozhi booked by CBI in the 2G spectrum case
- The Central Bureau of Investigation (CBI) on Monday accused Kanimozhi, the daughter of Tamil Nadu Chief Minister Karunanidhi, and Sharad Kumar—both shareholders in broadcaster Kalaignar TV—of conspiring with former telecom minister A Raja to obtain a bribe from entities linked to DB Realty, whose telecom arm (Swan Telecom) is alleged to have received airwaves at below market prices during Raja’s tenure.
- All the accused have, in the past, asserted that it was a normal business transaction. They have claimed that DB Group was looking to buy a stake in Kalaignar, but the deal fell through because of valuation differences. But the CBI has refused to accept this account. The chargesheet claims those charged could not produce any agreement or contract to substantiate their claim that the money was meant to acquire an equity stake. The agency also alleges the 'loan' was extended without any collateral. Securities were created only after the CBI registered an FIR.
- Further evidence of the irregular nature of the transaction stems from the fact that DB Realty and Dynamix Realty had borrowed from IL&FS Financial Services at interest rates ranging from 13.5% to 16%. But the loan to Kalaignar TV was at an interest rate of 10%, a fact the agency claims buttresses its case that the transaction was tainted.
- The money was repaid by Kalaignar between December 2010, just after Raja was questioned by the CBI for the first time, and February 2011, around the time Raja was arrested.
- Kanimozhi and Sharad Kumar have been charged under sections of the Indian Penal Code (IPC) and Prevention of Corruption Act, or PCA, pertaining to criminal conspiracy to obtain illegal gratification. Raja, in this case, has been booked for allegedly obtaining illegal gratification.
- The promoters of DB Realty, Kusegaon and Cineyug have been charged under a section of the PCA relating to abetting the act of obtaining illegal gratification.
- Suresh Kalmadi is put behind bars
- On Monday afternoon, the long arm of the law finally caught up with Pune Congress MP Suresh Kalmadi, who was arrested by the CBI for conspiring to award the contract for timing, scoring and result (TSR) system for the 2010 Commonwealth Games to a Switzerland-based company, Swiss Timing Ltd-Omega, at an inflated cost of Rs. 141 crore, causing a loss of some 95 crore to the exchequer.
- For Kalmadi, who had earlier this year been sacked from the chairmanship of the Commonwealth Games Organising Committee (OC), the political fallout of the development was immediate. Anxious to limit its political cost, the Congress acted with alacrity and suspended him from the party. He had earlier been removed from the post of secretary of the Congress parliamentary party. There are reports that the former Games OC chairman may be stripped of the chairmanship of the Indian Olympic Association too.
- The charge against Kalmadi and his accomplices in the OC is that they had awarded the contract to the Swiss company in a pre-meditated and calculated manner, brushing aside the claims of a competitor, MSL-Spain. The Spanish company, which had quoted a price of about Rs. 46 crore for installing the TSR project at various venues, had provided the system to the 16th edition of the Asian Games held in the Chinese city of Guangzhou last year.
- The Swiss company, keen on bagging the contract, had enlisted the services of Faridabad-based company, Gem International, to win over the OC bigwigs. The CBI has collected evidence suggesting that AK Madan, the promoter of Gem International, was the main conduit between Kalmadi and the Swiss firm.
- The Swiss company, it is learnt, paid Rs. 23 crore as an initial payment to Gem International for the services rendered by it. It was to pay an additional Rs. 7-8 crore to the Faridabad-based firm, but the filing of the case in the TSR scam put paid to the move.
Finance & Economy- What is the agitation about Endosulphan?
- Endosluphan is is an insecticide belonging to the class of compounds called organochlorines. India is one of the largest global producers of endosulfan. It is the supplier of 70% of the world’s endosulfan needs — a market valued at $300 million (Rs. 1,340 crore). Out of the 9,000 tonnes India produces every year, half is bought by the country’s 75 million farmers, making it the world’s largest consumer of endosulfan as well.
- But endosluphan is reportedly very toxic and causes lot of collateral damage. Some of the ill effects attributed to endosulphan include disease and birth defects, among humans and animals. The toxicity caused by it is stated to result in cancer, allergies and hypersensitivity, damage to the central and peripheral nervous systems, reproductive disorders and disruption of the immune system.
- Though more than 80 countries have banned endosulfan our country has not yet banned endosulphan. It is not approved to be used in rice fields in several other countries. The use is severely restricted in others.
- Now the agitation in Kerala against the use of endosulphan is gaining momentum. But the Centre had stated that it is not in favour any ban on the insecticide.
- Let's wait for more press to roll out. Then we can think for ourselves to take a stand.
- SEBI asks CCI to adopt its buyout norms
- Taking note of conflicts in takeover laws, capital markets watchdog Sebi has sought alignment of norms set by the competition regulator with its own regulations.
- It has written to the corporate affairs ministry and Competition Commission of India, or CCI, to address the issue and prevent chaos.
- The Sebi takeover norms for listed companies make it mandatory for an acquirer, who has triggered an open offer under Sebi rules, to inform the regulator within four days the timeline of the offer. Under the rules prescribed by the CCI, the acquirer has up to 30 days to announce the details of the offer.
- The regulator has also flagged the need for reconciling the time given to the acquirer to make an open offer. Under the competition law, the commission can take up to 210 days to clear an acquisition, which would mean that open offer can happen only after the clearance. Sebi’s regulations give an acquirer 55 days to complete the open offer once it is announced.
- In absence of an asset transaction thresholds every asset - current assets or fixed asset - that is acquired after 1 June 2011, would have to be notified to the Competition Commission and it could also include issue of bonus, rights shares or even stock or stock-in trade.
- The CCI norms also require every deal to be intimated to it even if controlling stake is not being acquired.
- The new IIP to has some of the same old problems that beset the old IIP
- The new index for industrial production, or IIP, that is expected to be launched soon has not enthused economists as they expect it to have one major flaw of the old index, month-on-month volatility.
- The source of this volatility is largely from the capital goods segment, a flaw that the new index has not addressed.
- The reason lies in the way the index has been formulated -- it takes into consideration the end product manufactured by companies, including those products that have a manufacturing cycle extending to a quarter or more.
- This results in sharp spikes in months in which manufactured products reach the factory gate while equally sharp dip in other months.
- These spikes and dips are not necessarily consistent with the investment or demand patterns in the economy making it difficult for analysts to exclusively rely on factory output numbers given by the IIP.
- The current IIP series is based on data received from 3,900 sources. The new series will get information from around 4,800 sources and the coverage will expand to 300 items from a current 213 items. The base of the index will be revised from the current 1993-94 to 2004-05.
- Investors to get emails as India Inc is set on a green drive
- The government has asked corporates to communicate with their shareholders electronically in order to cut down on the use of paper. The move is part of the latest ‘green initiative’ by the ministry, but could also help companies cut costs by obviating the need for paper-based communication.
- Under the Information Technology Act, 2000 service of documents in electronic mode is considered valid delivery. The ministry of corporate affairs has directed all companies to maintain a formal register of valid e-mails of all its shareholders where key communication like notices of company meetings can be sent. Currently, companies are required to communicate with their shareholders through the postal route.
- The trigger for the move came from a decision of the country’s postal department has decided to discontinue their postal facility under ‘certificate of posting’ route, which allowed companies to send out bulk mails.
Language Lessons- adumbrate: Verb
- Describe roughly or briefly or give the main points or summary of; Give to understand
- eg: For instance, back in the 1950s, it was purposefully adumbrated that we were drawing up five-year plans so that...
Politics & the Nation- Sri Satya Sai Baba is no more
- Sri Sathya Sai Baba, whose message of love, peace and humility, resonated with millions of people including politicians, dictators, businessmen and cricketers, breathed his last on Sunday. He was 85.
- We deeply mourn the loss of this great soul which taught humanitarianism to one and all irrespective of caste, colour, creed and religion.
- Baba, as he was popularly called, was in poor health for the past one month and died after multiple-organ failure. He leaves behind an enormous spiritual legacy, a wide network of charitable institutions, hospitals, schools, colleges, which some estimate to be worth about Rs. 40,000 crore, and a void in the hearts of many people who consider him to be a living god.
- Sai Baba was born on November 23, 1926 in Puttaparthi, but his spiritual journey actually began 14 years later when he announced to his stunned villagers that he was the reincarnation of Sai Baba of Shirdi, who had passed away in 1918. The story quickly became legend andBaba acquired God-like status after he started performing miracles which drew enormous number of followers. Controversy ensued when rationalists and scientists questioned the basis of his miracles and his refusal to allow himself to be tested. An incident at his ashram when police killed four intruders into his room and a BBC documentary which alleged widespread incidents of child molestation at his ashram threatened to sully his image. Fortunately for him and his ashram, the controversies died down and a number of social service activities,such as free treatment to the poor through his hospitals, the education provided by his network of schools and colleges, ensured a steady growth in followers. The poor and the wealthy in India were now joined by western celebrities such as Hollywood actress Goldie Hawn, Sarah Ferguson and Hard Rock Cafe founder Issac Tigrett, who sold his iconic restaurant chain and invested the fortune in Baba’s social activities.
- Ironically, the fame and fortune built up by Baba, could now prove problematic as he has died without announcing a successor to his Sri Sathya Sai Central Trust. Speculation has mounted in recent weeks that there will be bitter fight to control the fortune and that the government may step in to take over and run the trust.
- In an attempt to calm such fears, the trust issued a four-page release last week detailing how it receives money and listing the names of its trustees. All the institutions are controlled and run by the central trust which has six members, including Baba as the founding trustee. In addition, the council of management of the trust has four advisors.
- Dispelling rumours of any differences within the trust, the trustees who had a meeting with the governor,the chief minister and other state authorities on Sunday, assured the government that no interference was required and that the trust’s activities will continue normally without any impediment.
- The AP government has already said that it is not interested in taking over the affairs of the trust, which means that the trustees and other important followers will decide on the successor and the future course of action.
- Is Civil society's participation in law-making enshrined in the Constitution?
- If it is, then why question Lokpal Bill drafters? This is the question that is posed by Pradeep Mehta in his article today in reaction to the articles that appeared in the Press arguing about how the law making process is being taken away from Parliament et al.
- World over, including India, the civil society is engaged in law-making, which only enriches the tapestry of a participatory democracy.
- Drafting a law is the duty of the executive either suo moto or under an international treaty obligation or when Parliament directs it. This is done through a consultative process to get views of all sections. It is the organised civil society that inputs in the process sometimes as part of a committee or through memoranda and/or hearings. Mass movements, like the one launched by Hazare, too work as catalysts and input providers. The civil society typically comprises of business chambers, trade unions, professional associations and non-government non-profit organisations (NGOs). On all economic legislations, whether new or amendments, often all the four actively participate in the formulation depending on their interest. Business chambers are best endowed in advocacy but the others, including NGOs, are also able to make their views heard. Indeed, it is the legislature that takes the final call, and that process cannot be usurped by any other process, except in cases where international treaty obligations reduce the space, like WTO agreements or UN conventions. In fact, the parliamentary standing committee system practised in India and other countries invite views of the civil society and citizens on Bills that come up for discussion before being sent back to the House for being adopted. The process does not end there, as the government keeps the power of notifying the law in full or parts, depending on the influence of the vested interests.
- Take a look at Article 51A of the Constitution. It says that the fundamental duties of citizens as, inter alia, to develop scientific temper, humanism and the spirit of inquiry and reform; and to strive towards excellence in all spheres of individual and collective activity so that the nation rises to higher levels of endeavour and achievement. This is the article which enshrines the participation of civil society in the law making process of the country.
Finance & Economy- GHMC and OSRT
- Read this op-ed by Sameer Sharma in full. Worth a read.
- It explains how GHMC (Greater Hyderabad Municipal Corporation) has successfully deployed the ubiquitous mobile phone cameras as a tool for improving efficiency of the municipal workers. They have come up with an innovative usage of the cameras for creating an off-site raltime data (OSRT) for the purpose.
- Some research stats btw that will be of interest to us:
- Jensen, an economist from Harvard University, has found that access to mobile phones had increased fishermen’s profits in Kerala by 8% and brought down consumer prices by 4%. Additionally, studies by Leonard Waverman (London Business School) and Christine Zhen-Wei Qiang (World Bank) have found that a 10% increase in mobile phone adoption in developing countries increases GDP growth by 0.8%.
- On boosting manufacture in India
- This is a very good article that has some concrete ideas on the subject. Well worth our attention. Some excerpts for us:
- To boost manufacturing, two policy areas deserve attention, in addition to infrastructure, skills and the ease of doing business — restricted FDI in retail and undirected government procurement.
- The condition of value addition within India for FDI in multi-brand retail can act as a fairly effective instrument for giving a push to globally-competitive manufacturing.
- Public procurement is the other lever that can be used selectively in strategic areas to create manufacturing capability. One instance where this approach is being tried is the bulk tender for super critical thermal power plants by NTPC with the condition that the successful bidders should do manufacturing in India.
- Another example is the solar mission. The guidelines stipulate that in the first year modules and in the second year, modules and cells should be made in India for plants being put up by private developers.
- The policy of defence offsets is another policy instrument for leveraging government procurement.
- There have, of course, been enormous benefits from global competitive tendering and this should continue to be the norm.
- The one area where we have surely missed the bus in leveraging our humungous business potential to nurture local manufacturing is telecom sector.
- The status of Casinos in India
- While Sikkim and Goa permit gambling and casinos, union territory of Daman plans to have casinos soon. Sikkim has one casino and has issued letter of intent for one more. Goa has seven offshore casinos operating on vessels and more than a dozen onshore casinos housed in the numerous five-star resorts.
- There is no law anywhere in the country that regulates casino culture. In the absence of that, the activity is regulated through executive orders that create uncertainty. Though Sikkim government had enacted a law in 2008, it has to amend it in line with the deficiencies pointed out by FATF (Financial Action Task Force) that recently reviewed India’s money laundering laws.
- In what may bring to an end the legal uncertainty around casinos, the centre has asked states to put in place a clear and transparent regulatory framework for gambling and other gaming activities.
- The centre has told the states that the legislative framework should provide for a regulator or a commission too. The regulator would also be empowered to issue licences to casinos.
- The centre is keen that the legal framework is put in place at the earliest. The urgency to implement comes after the Financial Action Task Force (FATF), a global agency to monitor illicit flows, pointed to the uncertainty regarding regulation of casinos.
- The FATF had pointed out that the current regulations did not provide for the statutory fit and proper tests for owners, operators and managers of casinos. Doubts have also been expressed about the authorities, in current situation, to enforce compliance with antimoney laundering rules.
- Companies use LLPs as tax smokescreen
- Corporates are masking their true identities to jump regulatory hurdles and form holding entities that help them lower their tax burden.
- Promoters of at least 30 companies have formed limited liability partnerships (LLPs) by suppressing the information that the newly-floated LLPs would serve as group investment companies — a disclosure that would have called for a no-objection certificate from the Reserve Bank of India (RBI). Instead, they have tweaked the object clause to claim that the LLPs are into businesses like consultancy and broking — a simple manipulation that quickens clearance from the registrar of companies (RoC), the final authority that approves the formation of an LLP.
- In 2008, Indian businessmen were allowed to form LLPs, an internationally followed tax-efficient structure that is spared of dividend distribution tax and minimum alternative tax (MAT) on gains from sale of shares. Though the new law was aimed at making life easier for smaller businesses and such ventures as law and audit firms, there was nothing to prevent business houses from converting their investment companies into LLPs.
- But when businesses houses applied for such conversion, the RoC insisted on a noobjection certificate from the central bank. Most companies hit a wall as RBI was unwilling to comply with their requests. The banking regulator is keen to monitor corporate investment firms just as it keeps an eye on non-banking finance companies. And allowing them to transform into LLPs would mean losing control over these firms.
- Now, corporates have found a way out. An entity that claims to be carrying out consultancy is not required to approach RBI. Since its business is unrelated to activities like share investment, banking, insurance and finance, it can directly approach RoC. An entity that attains LLP status by falsely declaring consultancy as its main business activity is subsequently capitalised by the partners to buy out the shares that is held by the original group investment companies.
- However, the possibility of RBI coming out with new rules to stop LLPs from bypassing it is not being ruled out, more so, given its intentions to monitor investment companies. A year ago, RBI announced new rules which meant that group holding companies and investment firms would have to get themselves registered with RBI, fulfil certain criteria and share information on a regular basis. Amid corporate lobbying, the rules were later diluted to an extent to exclude investment companies which do not raise funds. But finance professionals said that even the diluted rules would cover a significant number of companies.
International- India to export petro products to Pakistan
- The thaw in relations between India and Pakistan, which started with cricket diplomacy at Mohali last month, could soon see India exporting petroleum products to its neighbour.
- India, which has surplus refining capacity, has agreed to export fuels such as petrol and diesel to Pakistan to help the neighbouring country meet its fuel shortfall and open up a new market for large refineries of Reliance Industries, Essar Oil and a new unit in which the LN Mittal Group is a co-promoter.
- India imports about three quarters of the oil it consumes, but its refining capacity has expanded rapidly, making it a key player in the international market. Exports of refined products have risen to 51 million tonnes in 2009-10 from 746,000 tonnes in 1999-2000 according to government data.
- Commerce secretaries of the two sides are meeting in Islamabad on April 27-28 to renew trade ties between the two countries, which have been at a standstill since November 2008 after the Mumbai terrorist attack. The acrimonious relations between the two neighbours eased last month when Prime Minister Manmohan Singh and his Pakistani counterpart Yusuf Raza Gilani watched the India-Pakistan World Cup semi-final together at Mohali. The two countries have fought three wars since both attained independence in 1947, besides a major skirmish in Kargil between May and July 1999.
- Indian officials said increased trade inter-dependence would force the two nations to keep friendly relations, and India was in a position to meet Pakistan’s fuel demand. Pakistan has about 12-milliontonne refining capacity, which meets only half of its annual requirements, while India exports about 25% of its 185-million-tonne refining capacity.
- Talks between India and Pakistan to start trade of petroleum products were initiated in 2005 by the then oil minister, Mani Shankar Aiyar, who favoured diesel supply to the neighbour. India had exported some petrochemicals such as PTA and LOBS to Pakistan through the sea route.
Language Lessons- nary: Adjective
- (used with singular count nouns) colloquial for 'not a' or 'not one' or 'never a'
- eg: So there is nary a protest here at special rules for VIPs …
- curmudgeonly: Adjective
- Brusque and surly and forbidding
- eg: "his curmudgeonly temper"
- cogitate: Verb
- Consider carefully and deeply; reflect upon; turn over in one's mind; Use or exercise the mind or one's power of reason in order to make inferences, decisions, or arrive at a solution or judgments
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