A senior government nominee director on the boards of Raju companies after the Satyam-Maytas scam in 2009 recalled how he suggested recording proceedings of board on tape

A scam and a tape recorder

Business Standard

The Rangarajan Committee on the production-sharing contract (PSC) mechanism in the petroleum industry has recommended major changes, which would alter the parameters of exploration and production (E&P) and have a major knock-on effect on consumers in the fertiliser, power, transport and household sectors. The committee recommends all domestic gas prices be linked to an averaged price that takes into account the landed price of Indian liquefied natural gas imports, the customs-cleared price of LNG imports into Japan (JCC) and prices at major international trading points. The pricing would be equal for all consumers, though gas would be allocated on a priority basis to the power and fertiliser industries. The formula would apply only to new contracts and would, at current rates, hike Indian gas prices to about $8.1 per mmBtu (million metric British thermal units), from $4.2 per mmBtu.

A first step forward

Why was the slogan for the government&rsquo;s cash transfer scheme modified from &ldquo;aapka paisa, aapke haath&rdquo; to the more mundane direct benefit transfer, or DBT? Pure functionalism, Finance Minister P Chidambaram explained at a press conference. &ldquo;Aapka paisa, aapke haath&rdquo; connected better with the people, he said, and was set to be used on political platforms, but in government terminology, DBT was more apt.

Apnaa DBT?

It is not common for a state unit president of a party to be replaced overnight. But in December, the abrupt replacement of Prabhat Jha as the Bharatiya Janata Party (BJP) chief of Madhya Pradesh with Narendra Tomar has sent alarm bells ringing in the BJP. Jha said at a public meeting &ndash; in the presence of Chief Minister Shivraj Singh Chouhan &ndash; that the decision to remove him &ldquo;was kept as secret as Pokharan nuclear test that the nation conducted under the leadership of Prime Minister Atal Bihari Vajpayee&rdquo;.

A clandestine affair

A senior party leader went to meet Congress President Sonia Gandhi to complain about the man who was heading the party in his state. After she had heard the litany of complaints, Gandhi held her head in her hands. &ldquo;We have a region called Sicily. Have you heard of the Sicilian mafia?&rdquo; she asked. &ldquo;Madam, the Sicilian mafia could learn a thing or two from him,&rdquo; replied the leader.

The real mafia

Equity and equity-linked issuances by Indian companies raised $14.9 billion from 101 new issues last year, a 72 per cent rise compared to 2011(Click on graphics)
&nbsp;

Equity issuances in 2012

Reports of the impending &lsquo;fiscal cliff&rsquo;, which spooked businesses and financial markets, did little to dampen spending by shoppers in the US this holiday season.

US shoppers shrug off budget debate

The February 2012 issue of Bloomberg Markets magazine has the annual rankings of the world's richest hedge funds. The list of 100 comprise the list of best-performing hedge funds managing $1 billion or more. The rankings are based on data compiled by Bloomberg specialist Anibal Arrascue and information supplied by hedge-fund research firms, hedge funds and investors.

Top-performing hedge funds

Urjit Patel, the deputy governor designate of the Reserve Bank of India, is set to head the monetary policy department. In his new role, the 49-year-old might have to do some nuancing of his views. In his writings, Patel has been a heavy critic of RBI&rsquo;s performance in dealing with inflation.

Will Mr Patel change his views?

&ldquo;In a society in which women were culturally brainwashed into believing that they are inferior to men, mindsets do not allow for voluntary nomination of women on corporate boards.

Should the government mandate women directors on corporate boards?

Policy makers in India are justifiably rattled by the soaring gold demand, which has pushed the current account deficit in the second quarter of 2012-13 to a record 5.4 per cent of gross domestic product. Gold is the biggest contributor to imports after crude oil, widening the country&rsquo;s trade and current account deficits. In the absence of adequate foreign capital flows, it also raises questions about India&rsquo;s foreign exchange reserves buffer and its external vulnerability.

Solving the gold riddle 

Last year, United Progressive Alliance Chairperson Sonia Gandhi&rsquo;s son-in-law Robert Vadra made famous the phrase &ldquo;Mango people in Banana Republic&rdquo;. This year, the words &ldquo;dented and painted&rdquo; used in such controversial circumstances by President Pranab Mukherjee&rsquo;s son Abhijit Mukherjee have become the latest favourite. A finance ministry official asked about possible changes in tax structure in the Budget 2013 said, &ldquo;There will just be some denting and painting.&rdquo; Many of his colleagues are now often heard using this phrase in various contexts.

Budget, dented & painted

The finance ministry may have gone out of bounds for reporters and other visitors owing to Budget preparations, but there are some guests that often visit the North Block without any gate pass or permission. After a hiatus of some years, monkeys are back in the building, which has become something of a permanent residence for rats, cats and pigeons. Over the last few days, rhesus monkeys have been spotted fearlessly roaming the corridors of North Block in hoards. They certainly ease the job of the Intelligence Bureau personnel in keeping outsiders in abeyance from access to the Budget-making exercise.

Simian security

This refers to the report &ldquo;Is Chidambaram&rsquo;s plan to create big banks feasible?&rdquo; (December 28). In the 2008 global financial crisis, biggies like Lehman Brothers and Bear Sterns &ndash; which suffered huge losses and even faced bankruptcy &ndash; were investment banks dependent on deposit-taking banks, and not deposit-taking banks themselves. Most big deposit-taking banks (such as Citibank and J P Morgan) in Britain and the US survived. On the other hand, roughly over 165 small banks failed in the US in 2008-09. Overall, the impact of the global recession was not as severe on deposit-taking banks as on non-deposit-taking banks in the West. Big banks can give big loans, harness big deposits and attract capital-infusion easily (Industrial and Commercial Bank of China had the largest initial public offering in the world).

Letters: Banking on consolidation

This refers to the editorial &ldquo;A long-overdue raise&rdquo; (January 3). You have rightly advocated an immediate increase in diesel prices. But in the light of the current political situation, that would be a huge step. However, even a small step like levying an additional duty on diesel-driven cars and sports utility vehicles is not being taken by the Central government. Both the ruling United Progressive Alliance (UPA) and the opposition parties, particularly the Bharatiya Janata Party (BJP), have shown scant regard for implementing a long-term policy on commodity taxation and fixing prices of petroleum products. Since crude price is beyond the government&rsquo;s control, the only logical step is to put in place a rational policy on taxation of all petroleum products. The BJP leaders have conveniently left it to the UPA to toy with different approaches &mdash; most of which are haphazard.

Letters: Is a diesel price hike viable?

This refers to the report &ldquo;Company law roadblock hits tax-free bonds&rdquo; (December 27). The article fears that big corporate houses are wary of investing huge sums in tax-free bonds offered by various (state-owned) infrastructure companies owing to the possible breach of provisions of Section 372A of the Companies Act, 1956. However, there is some misapprehension in interpreting the provisions of the Section as far as the applicability of the minimum benchmark limit for lending rates is concerned. Sub-section (1) of Section 372A deals with three kinds of investments that may possibly be made by a company: (a) giving loans; (b) giving guarantee or providing security; and (c) investing by way of subscription, purchase or otherwise in securities. Currently, subscription to tax-free infrastructure bonds cannot be regarded as a &ldquo;loan&rdquo; granted by a company, nor as a guarantee or security provided. It would, unarguably, be an investment by the company in securities.

Letters: Misplaced argument

After taking almost two years for the Nifty to touch the psychological mark of 6,000 again, the question traders are asking is, will the index hold above this level? Technical analysts say it can if the Nifty holds above 5,850-5,900. The stocks that could lead the rally, if any, in the coming months, could be last year&rsquo;s laggards

2013-the year of The Tortoises?

The cheer of the new year was darkened by news that India&rsquo;s public finances continue to be in dire straits. The deficit of government spending over revenue has already reached over 80 per cent of budgeted levels. The clear indication is that the Budget target of a fiscal deficit at 5.1 per cent of gross domestic product, or the finance minister&rsquo;s &ldquo;revised&rdquo; target presented in the fiscal consolidation road map a few months ago, of 5.3 per cent of GDP, is out of reach.

A long-overdue raise

The Union Cabinet&rsquo;s decision to raise the minimum support price (MSP) of wheat by five per cent for the current rabi season defies logic in several respects. For one, the effective increase of Rs 65 per quintal conforms neither to the recommendation of the Commission for Agricultural Costs and Prices (CACP), which wanted the MSP to be frozen at last year&rsquo;s level, nor to the agriculture ministry&rsquo;s suggestion, which favoured a step-up of Rs 100 a quintal. The announcement&rsquo;s timing, too, is questionable &mdash; the bulk of the wheat crop has already been planted. With the policy of open-ended grain procurement being unchanged, the government is likely to once again end up mopping up the bulk of the market arrivals of wheat in the post-harvest peak marketing season, needlessly swelling its grain reserves, starving the open market of adequate supplies and pushing up wheat prices despite surplus production and record inventories.

Time to reform wheat

For Chhattisgarh&rsquo;s Tourism Minister Brijmohan Agrawal, the new year got off to an unpropitious start. The minister planned to ring in 2013 in elaborate style with relatives and close friends in Mainpat &mdash; an idyllic hill station known as the Shimla of Chhattisgarh. As the minister and his entourage left for Mainpat, he came in for a scathing attack from state opposition parties. Most of the state&rsquo;s political leaders had opted to cancel new year&rsquo;s celebrations to mourn the death of the Delhi gang-rape victim, so his rather insensitive decision to celebrate became the source of much anger. Although Agrawal was left with no option but to cancel his year-end revelries and return to Raipur, the minister&rsquo;s media in-charge couldn&rsquo;t resist turning the event into a publicity stunt. He released a series of photographs showing Agrawal returning to Raipur by train.

Backtracked publicity

Inaugurations and keynote addresses can be a way of settling scores, senior corporate lawyer O P Vaish told an audience at a conference on the new companies Bill at which he was doing both. He recalled an incident when he as an organiser settled scores with a minister. The minister was fine with inaugurating the event but not very comfortable about making a speech. Vaish had assured him that there would be a prepared speech, he just had to read it. Recalling the incident, Vaish said, &ldquo;The first two pages of the speech talked about the environment, how it was in bad shape and so on. At the end of the second page, there was a line saying &lsquo;I want to highlight six points that we need to do to make this better&rsquo;. When the minister turned the page, it was blank. The minister looked at me. &lsquo;You are on your own, sir,&rsquo; I told him. Now, you guys have put me in a similar situation,&rdquo; the octogenarian told his laughing audience.

Business Standard

Business Standard

Page 792 - Business Standard