20.04.2011

Finance & Economy

• Should licensing period for telecom companies be halved?
• Here is a very good debate that is well worth our attention on the issue.  Interesting.
• First principle on FCNR accounts
• Banks allow non-resident Indians to open FCNR, or foreign currency nonresident accounts. An FCNR account is maintained only in term deposit. The account can be maintained only in pound sterling, US dollar, euro and the Japanese Yen. The deposit is accepted for a period not below six months and not above three years. Remittances from abroad are made in foreign currency, in which the account is desired to be maintained. The balances and the interest on this account are exempt from tax. The exchange rate risk is borne by the bank. Repayment of deposit and interest thereon are allowed to be repatriated without any loss due to exchange rate fluctuations for the depositor.
• Reflecting pension liabilities and profitability of state run banks
• State run banks reportedly are about to take about a Rs. 4,000 cr hit this fiscal with the RBI directing them to provide for the pension liabilities of their retired staffers in the balance sheet for FY10-11.
• Banks had made out a case to RBI to amortise the pension liabilities over the next five years to ease the strain on their books. But the regulator does not appear to be convinced by their argument and directed that lenders would have to set aside funds for their pension liabilities in one shot rather than spreading it out.
• In February, RBI allowed banks to amortise pension liabilities for serving employees over five years. However, in the same circular, the central bank stated that all amounts relating to retired employees need to be provided in 2010-11 itself.  Following this, IBA requested RBI to allow banks to amortise the pension liabilities of retired employees as well.
• While rejecting the proposal, RBI told the banks that the norms cannot be eased as in its view, banks should have anticipated the impact and were even aware of these liabilities during wage negotiations. The total pension liability for serving and retired employees was estimated at Rs. 20,000 crore. However, since money needs to be set aside for only those retired employees who had opted for the pension scheme, the impact on the bottomline could be much lower at around Rs. 4,000-4,500 crore.
• Lt. Governor of Puducherry to be questioned by ED
• The Prime Minister’s Office has cleared an Enforcement Directorate request to question Puducherry Lt Governor Iqbal Singh for facilitating issuance of passport to Pune-based businessman Hasan Ali Khan who faces charges of laundering black money.
• The file granting clearance will be sent to the President, who as the Lt Governor’s appointing authority will grant ED permission to question Singh. The questioning will take place in the Puducherry Raj Bhawan.
• Even as Singh faces questioning by ED in Puducherry, there are few indications of his impending resignation or removal over the Khan passport case. He has already clarified in a letter to Chidambaram that he had no links whatsoever with the Pune-based stud farm owner and had already recommended his case to the Ministry of External Affairs on the request of senior Congress leader Amalendu Pandey.
• Singh said that when he was a Rajya Sabha member from 1992 to 1998, on April 4, 1997, Bihar Congress leader Amalendu Pandey approached him for issuance of passport for someone from the Passport Office Patna on compassionate, health ground as the brother of person seeking passport was ill abroad and the presence of the applicant for looking after his brother was extremely essential.

International

• If the US's AAA rating is to be downgraded, what could happen?
• Take a look at expertspeak:
• Firstly, if the US loses its AAA rating it could prove to be the turning point in a loss of confidence that starts a debilitating move out of not only Treasuries but dollar assets. After all, the US won’t default on debts which it can erase with the flick of the switch on the printing press, but it may well inflate its way to making dollar holdings very bad investments.
• Secondly, the lack of alternatives means that a move out of Treasuries, if it ever came, would be hugely distorting for the rest of the world’s debt ecosystem. There simply aren’t enough “safe” alternatives.
• Thirdly, the most likely outcome is that the US enjoys a long, slow slide from being everyone’s favorite debt issuer and owner of the main reserve currency to something a whole lot less. After all, being free to borrow cheaply and almost without limit has hardly been an unalloyed blessing. This implies losing the AAA-rating, but maybe only for long enough to teach itself and the rest of the world not to be so dependent upon it.
• The transition from a uni-polar financial world to something with more checks and balances will be painful, but in the end beneficial.
• BTW the net external debt, a measure of US dependence on foreign creditors, is now at 300% of current account receipts, among the highest of any sovereign.

Pulitzer Prize

• Indian American Doctor wins Pulitzer prize
• Indian American cancer specialist Siddhartha Mukherjee has bagged a Pulitzer prize for his book “The Emperor of All Maladies: A Biography of Cancer”. Mukherjee won the prestigious prize in the general non-fiction category.
• The book has been described as “an elegant inquiry, at once clinical and personal, into the long history of an insidious disease that, despite treatment breakthroughs, still bedevils medical science”.  It is a warm, erudite and engaging book. The book is a panoramic history of the disease of cancer and its treatment that is infused with meticulous details.
• An assistant professor of medicine at Columbia University and a staff cancer physician at Columbia University Medical Center, Mukherjee had advocated a strong anti-smoking campaign and breast cancer screening to battle the growing incidence of the disease in India. Less than a month after it appeared, Mukherjee’s book, published in the US by Scribner, featured among “The 10 Best Books of 2010” in the New York Times Book Reviews Sunday, a rare feat for a work of non-fiction.
• Mukherjee, 40, grew up in New Delhi’s Safdarjung Enclave.
• A Rhodes Scholar, Mukherjee graduated from Stanford University, University of Oxford and from Harvard Medical School. He was a Fellow at the Dana Farber Cancer Institute and an attending physician at the Massachusetts General Hospital and the Harvard Medical School.
• Three eminent personalities of Indian origin have previously won a Pulitzer. They include Gobind Behari Lal for journalism in 1937, Jhumpa Lahiri for fiction (‘Interpreters of Maladies’) in 2000 and Geeta Anand in 2003 for her work on Pompe disease.

Language Lessons

• pere en fils
• to work in a traditional manner handed down from father to son
• eg: For many years, till these CDs surfaced, nobody was asking questions about the character of the Bhushan pere en fils.
• shibboleth: Noun
• A favourite saying of a sect or political group; A manner of speaking that is distinctive of a particular group of people

• double down: Noun
• It refers to a betting technique in blackjack.  When you double down on something or someone, it means you are willing to take risk on them.
• eg: The real question is whether Beijing is willing to double down on a nation whose balance sheet makes Italy look good.

• antsy: Adjective
• Nervous and unable to relax