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Indian Current Affairs 25.09.2010

Indian Current Affairs 25.09.2010

Indian Current Affairs  25.09.2010 Politics & the Nation
  • The story of slow but sure death of the quarry workers
    • Take a look at this story
      which tells us how the poverty stricken quarry workers in Rajasthan are
      dying a slow but sure death.  What are your suggestions with regard to
      tackling this problem?
  • Celebrations cut short, extra 1% EPF interest to be taxed
    • The
      government’s surprise gift for workers isn’t much of a gift after all.
      The labour ministry has hiked the employees’ provident fund, or EPF,
      rate to 9.5%, but a finance ministry notification says that anything in
      excess of 8.5% will be taxed.  This is because, even before the EPF
      board met to declare the higher rate, the CBDT (Central Board of Direct
      Taxes) had notified a tax-free PF rate of 8.5% for 2010-11 -- effectie
      from September, 1.  This means that the 9.5% provident fund return would
      be tax-free from April to August, but taxable thereafter.
    • This
      is an unprecedented situation that is witnessed.  Historically, the
      tax-free PF rate notified by the income tax department has never been
      lower than the EPF rate declared for the year.
    • Implementing
      tax deduction by the EPFO and the company-run trusts is sure to pose
      lot of problems.  For instances they will find it hard to calculate the
      tax liability on 1% PF income for seven months, as they don't have the
      appropriate systems in place to do so.
    • The
      labour ministry is, however, confident that the tax department will
      renotify the higher rate, as otherwise a lot of contentious issues will
      come up.
  • Cabinet agrees for giving statutory powers to UIDAI
    • The
      government on Friday cleared the decks for the formation of a statutory
      body to be christened — National Identification Authority of India
      (NIAI), in order to give collection of data for allocating unique id
      numbers, a legal sanction. The approval by the cabinet paves way for
      introduction of the NIAI Bill 2010, in winter session of the Parliament.
    • The
      legal sanction is for collection of private data of citizens and makes
      it difficult to challenge in a court of law. The sanction is needed as
      the government plans to allocate the first set of numbers to citizens in
      a few weeks in Maharashtra. In 2009, the Unique Identification
      Authority of India (UIDAI) had already made it clear that an Act of
      Parliament will set it up as a statutory body. But, already many NGOs
      are planning to challenge the proposed Bill.
    • Once
      passed, the NIAI Act 2010 will contain a prescription against
      collecting any other information than the information permitted, with
      specific prohibitions against collection of information regarding
      religion, race, ethnicity and caste. It will also contain penal
      provisions against persons employed by, or associated directly or
      indirectly with, the data repository, registrars, enrolling agencies and
      other service providers for failing to comply with the directions
      issued under the Act.
  • A
    very good comment made in the context of Sonia and Rahul realizing the
    importance of protecting the rights of the displaced and poorer sections
    of society
    • You
      might be, by now, aware of the way Rahul has been conducting himself.
       He championed the cause of the Dalits in the Dalit hinterland -- UP.
       Then he took up the cause of the displaced tribals in Orissa and
      congratulated them saying that they won the battle against Vedanta.  
    • It is in this backdrop that the following comment made by CP Bhambhri in today's op-ed deserves to be appreciated:
    • “There
      is no disconnect between social welfare market economics of Europe and
      their economic growth trajectory because every social class and group,
      on the basis of historical experience of industrialisation, has come to
      realise that a politics that seek to primarily uphold working class
      interests has to be guided by a pragmatic definition of enlightened
      self-interest. Hence, European welfare capital is not at all guided by
      any ideology of socialism because experience has shown that
      non-ideological pragmatism is a good guide to diffuse social conflicts
      which arise if the labouring classes are neglected and they are not
      provided with social security.”
    • Sonia and Rahul seem to have realized that what is possible in Europe, cannot be impossible in India.
Finance & Economy
  • SEBI boss slams steep IPO pricing
    • Market
      regulator CB Bhave (SEBI Chairman) charged investment bankers with
      fleecing investors by pricing initial public offers (IPOs) at
      astronomical valuations, leading to investor anguish when the market
      tide turns.
    • Steep
      pricing could enrich bankers and companies, but persistence of the
      practice could demoralise investors, damaging capital markets, he said
      in what may be the first regulator comment on share-sale pricing since
      the abolition of the Controller of Capital Issues in 1992.
    • The
      underperformance of the BSE IPO index—it gained 14.5% in the last 12
      months, when the benchmark Sensex rose 19.45%—reflects the Sebi
      chairman’s charges. Furthermore, a price performance study by CARE
      Research, a unit of rating company CARE, showed that 62% of the 116 IPOs
      between August 2007 and August 2010 are trading lower than their sale
      price while 35% are ruling higher.
  • Government turns cautious in gauranteeing loans of PSUs
    • The
      government came out with a policy shift in respect of its gaurantees to
      the loans advanced by bankers to the PSUs.  This is reportedly done
      with a view to ensure two things -- one to discourage laxity in loan
      appraisals by the bankers and two to ensure that the lenders do bear
      some risk in advancing loans to PSUs.
    • This
      is a marked shift from the earlier policy where the entire loan was
      guaranteed. The new policy on government guarantees says the state will
      back only 70-90% of the loan amount in some cases, leaving the lender to
      bear the balance risk.
    • In
      the case of default on such a partially-guaranteed loan, the borrower
      will also have to first negotiate with the lender for the unguaranteed
      part. It could then approach the government to settle the balance
      amount.
    • The
      immediate fallout of the new rules will be that despite the credit
      enhancement provided through government guarantees, such loans will be
      priced higher because of the partial risk that will stay with the
      lender.
    • The
      government had committed to keeping such guarantees in check by putting
      a limit of 0.5% of GDP in any financial year in the fiscal discipline
      act, or the Fiscal Responsibility and Budget Management Rules, 2004.
    • At
      the end of fiscal 2007-08 the total outstanding central government
      guarantee was Rs. 1,04,872 crore, 2.2% of GDP. The bulk of these relate
      to those given to international financial institutions for funding local
      lenders.
    • The tighter rules will help free up guarantees where they may be needed more.
    • It
      went on to suggest that instead of a 0.5% annual ceiling, the
      government should put a cap of 5% of GDP on the guarantee outstanding at
      the end of every year.
    • The
      reduced level of government guarantee will have the desired effect of
      forcing public sectors to use the public-private partnership mode more
      for financing projects.
  • Govt names WDRA chief; FMC may lose turf war
    • Putting
      to rest a simmering dispute between the commodity futures market
      regulator and the food department, the government has appointed Dinesh
      Rai, a retired IAS officer, as chairman of Warehousing Development &
      Regulatory Authority (WDRA). The regulator is being set up to develop a
      negotiable warehouse receipt (NWR) system for agri commodities.
    • Soon
      after Parliament passed the WDRA Act in 2007, Forward Markets
      Commission held that since its jurisdiction extended from the execution
      of a trade on exchanges to the settlement of a futures contract, it
      should be notified as the WDRA authority.
    • However,
      the food department was in favour of having a separate regulator for
      monitoring warehousing and had been scouting for a whole-time chairman
      and two members to sit on the board of WDRA. In the absence of an
      independent regulator for warehousing, FMC has been regulating over 1.5
      million tonne of warehousing capacity.
  • A
    very good editorial comment on the reported move of the government to
    raise the ceiling for investment in government and corporate bonds by
    foreign funds
    • Take a look at this comment here.  Well worth a reading.
International
  • Petrobras offers the largest share sale ever
    • Petroleo
      Brasileiro, the state-controlled oil company, raised as much as 120.4
      billion reais ($70 billion) from the Brazilian government and other
      investors in the world’s largest share sale as it seeks cash to develop
      offshore fields. Petrobras, based in Rio de Janeiro, sold 2.4 billion
      common shares for 29.65 reais each and priced 1.87 billion preferred
      stock at 26.30 reais apiece.
Arts & Literature
  • Jnanpith for Kurup, Akhlaq Shahryar
    • Eminent
      Malayalam litterateur ONV Kurup and noted Urdu poet Akhlaq Khan
      Shahryar have been chosen for the Jnanpith Award for the year 2007 and
      2008, respectively, for their contribution to literature.
    • The
      recipients for the country’s highest literary honour were announced on
      Friday after a meeting of Jnanpith Selection Board chaired by noted
      Oriya writer and Jnanpith award winner Sitakant Mahapatra.
    • Born
      in 1931 in Kerala’s Kollam district, Kurup is a leading voice among the
      contemporary Malayalam poets who has reinvented the narrative
      transition of Malayalam poetry. Born in 1936 in a Muslim Rajput family
      in Bareilly district, Shahryar shaped himself as an “intellectual poet”,
      whose poetry strongly expresses an “ideological noncommitment”.
Language lessons
  • epiphany: Noun
    • A moment of sudden understanding or revelation; A divine manifestation
    • eg:
      During the Cold War, one bumper sticker used by peace activists read:
      “Nuclear weapons: May they rust in peace.” We need a similar epiphany for the malcontents of the information age.
  • snifter: Noun
    • A globular glass with a small top; used for serving brandy




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17 Jan, 2021, 05:17:39 AM