09.01.2007

• EU Trade Commissioner
• Peter Mandelson
• FII direct stock exposure liable for capital gains tax
• The AAR (Authority for Advance Ruling) has ruled that FIIs investing directly in Indian stocks will have to pay a 10% short term capital gains tax. Their gains will not be treated as business income.
• What this ruling implies is that they can invest in shares but not trade in them.
• An advance ruling, though applies only to the applicant and the tax department, it has lot of persuasive value as other tax payers can quote this ruling.
• Hotel industry
• Globally, land costs in setting up new hotel ventures, account for 15 to 20% of the total project cost. In India, the real estate component in the total project cost has shot up to 50% compared to 25 to 30% a few years back, and this has driven them to set up luxury rather than budget hotels.
• Indian realty sector forecasts
• Indian realty sector is expected to grow from $12 bn in 2005 to $90 bn by 2015.
• Space tourism
• A US businessman, Denis Tito, a 59 year old ex-NASA employee, was the world’s first paying space tourist in 2001. He traveled to the orbiting space stations aboard a Russian Soyuz rocket. He spent a week in orbit.
• On September 18, 2006, Anousheh Ansari captured headlines around the world as the first female private space explorer. Anousheh earned a place in history as the fourth private explorer to visit space and the first astronaut of Iranian descent. She blasted off for an eight-day expedition aboard the International Space Station as part of the Expedition 14 crew of the Soyuz TMA-9, which included NASA astronaut Michael Lopez-Alegria and Russian cosmonaut Mikhail Tyurin.
• Indian semiconductor industry
• Is estimated to grow at 30% annually to generate revenues of over $43 bn and create more than 35 lakh jobs by 2015.
• Total consumption of electronic equipment would rise at 29.8% to $363 bn by 2015.
• India’s BPO industry
• Is of $7 bn size and is growing at a scorching 40% per annum.
• Vacation of spectrum by defence for civilian use
• Defence has already agreed to vacate 45 MHz of spectrum for civilian use this year. In addition it is also about to release another 30 MHz of spectrum. For this the Planning Commission has recommended adequate compensation to defence forces for enabling them to establish alternate channels for their use.
• As per estimates, the total cost of relocation for defence forces, including the installation and commissioning of new equipment would be between Rs. 5,500 crores to Rs. 7,000 crores.
• Oil usage
• World consumption of oil would hit 116 mbpd (million barrels per day) by 2030.
• In 2005, it was about 84 mbpd.
• Oil represented about 35% of the world’s energy mix in 2004 and is expected to account for around 33% by 2030.
• Many forecasters see a greater future role for biofuels, nuclear, wind and solar power, and for non-conventional oil extracted from tar sands in places such as Canada or from plentiful reserves of coal.
• Reverse mortgage on housing
• The NHB (National Housing Bank) has indicated that primary housing finance players may offer reverse mortgage loans at between 45% and 60% of the market value of a property.
• Reverse mortgage is a scheme specially designed for senior citizens with residential property to supplement their pension and other incomes without having to sell their homes.
• An argument for scrapping SLR altogether
• In its editorial in ET today, a case is made on the following lines for scrapping SLR altogether:
• Recent experience has shown no evidence that only government can invest in infrastructure or that it is any wiser or more efficient in such spending compared to the private sector.
• Hence the almost tax like impounding of the funds from the banking sector by way of SLR at artificially low rates of interest, can better be done away with.
• Total outstanding amounts in PPF
• According to RBI figures, the total outstanding amounts collected by way of PPF are at Rs. 14,695 crores at the end of April 2006.
• Stephen Hawking plans a trip to space
• The world renowned astrophysicist and author of the book “A Brief History of Time” will be taking a trip to space aboard Virgin Galactic service of Richard Branson sometime in 2009.
• The two hour sub-orbital trip is expected to cost about $200,000.
• Stephen Hawking suffers from a rare disease called amyotrophic lateral sclerosis.
• New stem cell source discovered
• Scientists in the US claim to have discovered a new source of stem cells in the amniotic fluid surrounding babies in the womb.
• Stem cells are the elementary cells that can develop into numerous types of cells in the human body. They can be used to form cells that replace those failing because of disease, accident or age.
• Smallest ‘nation’ for sale
• The tiny principality of Sealand, which began life as Roughs Tower in 1941, is a 550 square meter steel platform perched on two concrete towers 11 kilometers off the coast of Harwich, eastern England.
• It is a former World War II fort in the North Sea and was declared a state with its own self-proclaimed royal family.

01.01.2007

• Centre may halve hardware excise
• As against a total taxation for IT and electronic products in China of 17%, in India this taxation level is about 20% and 30%.
• Hence the Centre is considering reducing the excise duties on IT and electronics hardware
• IT industry readies a war chest of $3.7 billion for mergers and acquisitions
• In the first 10 months of 2006, the IT industry had entered into M&A deals worth $2.05 billion when compared with $1.3 billion during the previous year.
• Paswan takes on pharmas with cost-based pricing
• The Union Minister for Chemicals and Fertilizers has proposed to control the prices of 354 essential medicines by going into their cost of production.
• Currently, one-fourth of the Rs. 23,000 crore domestic pharmaceutical market is controlled.
• Investments in infrastructure
• Of the estimated $320 billion funding requirement for infrastructure in the 11^th plan, about 20% is estimated to come from the private sector.
• Global potential of Indian tipple
• Many countries of the world are known for their distinctive liquors. Mexico has its Tequila, Jamaica has rum, Britain has Scotch whiskies, America has its bourbon, Russia has vodka, France is famous for its champagne and cognac, Italy has its grappa and Japan has sake.
• In contrast India has its indigenous drinks such as Feni of Goa in addition to toddy and arrack. Feni is made from cashew fruit or palm toddy. India’s strength in the rum category is believed to be unassailable, as molasses, the basic ingredient of rum, is available in plenty in the country.
• R&D expenditure in the country
• According to IACC (Indo American Chamber of Commerce) the R&D expenditure in the country has reached $8.4 billion in 2005 and is growing at a CAGR of about 30%.
• IT market to log 21.5% growth this year
• India’s domestic IT market including hardware, software and services is expected to touch Rs. 62,456 crores.
• The number of broadband users in the country is expected to touch 3.5 million by June 2007 and 5 million by the end of 2007.
• Difference between pre-launch and soft-launch in real estate
• Raising money from public for projects which are yet to get regulatory approval in the form of license and clearances is called pre-launch. In the case of soft-launch, the move follows only after receiving all the necessary approvals.
• Uranium exploration may be opened up in the country
• The government is set to open up production of uranium exploration and mining.
• India’s annual production of uranium is about 1,334 tonnes.
• Uranium deposit in Jaduguda (Jharkhand) was discovered in 1951 with the help of Associated Drilling Company of London.
• Beard of the Year Award
• Monty Panesar, England’s first Sikh spinner has been awarded this year’s award.
• Why is the quality of our institutions important? And how does it decline?
• If we are serious about becoming a global economic power, we need to focus on our soft infrastructure. By soft infrastructure we mean the entire gamut of governance, probity in public life, quality education and healthcare, gender, caste and communal equalities etc.
• As this is an area where we fair badly, this infrastructure can be improved only through an improvement in the quality of our institutions.
• When growth is more concentrated at the upper ends of the income spectrum (as it most definitely has been so far in India), there is the distinct possibility of the rich opting out of the public system and turning to private sector to get essential services (for example, gated communities with private policing, private generators for power, private schools for their children’s education etc.). The danger with this is that the normal pressures for improving the provision of public goods that one would ordinarily expect from higher incomes become noticeably absent. That is why the quality of institutions declines.
• Joseph Stiglitz, the 2001 winner of Nobel Prize for economics on intellectual property rights regime
• What is needed is an intellectual property regime that helps narrow the knowledge gap that separates developed from less developed countries – not one which reduces access to knowledge and denies access to life-saving medicines, but which, at the same time, provides little incentive for research in diseases that plague the developing countries.
• Disruptive power of technology
• K.V. Kamath, the CEO of ICICI Bank says that no where is the disruptive power of technology more evident than in the fact that the proportion of transactions in branches decreased from over 90% in 2000 to less than 25% in 2006. All because people have taken in a big way to technology driven transaction methods like ATMs, internet, phone banking and call centres.
• Romania and Bulgaria join EU today
• With the joining of these two countries, the strength of the EU rises to 27 and 493 million people.