Global shares and other riskier assets rose on Tuesday amid hopes of a US budget compromise that will stop a &lsquo;fiscal cliff&rsquo; of automatic tax hikes and spending cuts

    The sentiment got strengthened after US President Barack Obama softened his stance, lowering his demand for new tax revenue by $200 billion, and offered to increase taxes starting from incomes of $400,000 rather than $250,000&nbsp;
    &nbsp;
    Investors hope putting off the $600 billion of &lsquo;fiscal

Rising sentiment 

Business Standard

The mid-quarter monetary policy review comes with no surprises, as the general consensus was RBI would maintain status quo on the repo rate and the CRR.

Review comes with no surprises: Keki M Mistry

First, the good news. India&rsquo;s economy does not defy the laws of macroeconomics. With the economy growing below its potential for a year, it is heartening to see that producer pricing power is finally getting squeezed, manifested in the declining momentum of core inflation over the last few months.

Getting our priorities right: Sajjid Chinoy

Apropos the report &ldquo;Provisioning norms to hit profitability of NBFCs&rdquo; (December 14), the Reserve Bank of India has, at different points in time, promised a level playing field between banks and non-banking financial companies (NBFCs). But it has made no effort to recommend to the government that the recovery mechanism of the Debt Recovery Tribunal, for faster adjudication of NBFC claims against borrowers, be extended to all registered NBFCs. At present, the mechanism covers only notified NBFCs.

Letters: Adjudicating NBFC claims

The Union Cabinet has approved what appears to be a major turn towards, in effect, a 21st-century industrial policy. The approval of &ldquo;modified SIPS&rdquo; &ndash; where SIPS stands for Special Incentive Package Scheme &ndash; is expected to cost Rs 20,000 crore in the years to 2017, according to the Department of Electronics and Information Technology&rsquo;s plan.

Picking a winner

Retail investors shunned the Bharti Infratel initial public offering (IPO). Thirteen blue-blooded investment bankers marketed the issue in India and abroad; while institutions responded overwhelmingly, only 19 per cent of the shares reserved for small investors were bid for. There are several theories to account for this poor response. One blames the promoters&rsquo; track record &mdash; how 10 years ago the Bharti group unceremoniously delisted one of its companies without regard for small investors. Other theories claim poor business prospects for the company and steep pricing. A third set says retail investors lack confidence.

Draining out money

Rural Development Minister and senior Congressman Jairam Ramesh was briefing reporters at the party headquarters on the roll-out of the direct benefits transfer scheme, for which he is playing a pivotal role, and was attempting to switch from English to Hindi with seeming ease. All was well till he referred to the government&rsquo;s flagship programmes as &ldquo;dhwajvahini&rdquo; schemes. To that, Congress media chairperson Janardhan Dwivedi, who is referred to as Panditji in Congress circles for his chaste Hindi and because he is a teacher, corrected him mid-sentence. It is &ldquo;dhwaj vahi&rdquo;, he said, not &ldquo;vahini&rdquo; (which means army).

Flagging the error

For Ramesh, a non-Hindi speaker, the faux pas did not end there. He went on to say the scheme&rsquo;s slogan, &ldquo;Aapka paisa, aapke haath&rdquo; was an apt &ldquo;political slogan&rdquo; for the Congress &mdash; much to Dwivedi&rsquo;s embarrassment because the party has been at pains to portray the scheme as a social welfare initiative and not a political one. So, Dwivedi was forced to interrupt again to explain, &ldquo;You are aware of the limitations of Rameshji&rsquo;s language [Hindi] skills. He intended to say it is not a political slogan. It is the opposition that paints it as such&rdquo;, to which a sheepish Ramesh could only smile weakly.

Money for nothing

Real estate prices in India may be headed into the stratosphere, but those with money to burn can now turn to foreign shores. A tiny advertisement placed in an inside page of Monday&rsquo;s The Times of India says a 173-room Marriot hotel is available in the ultra-prime location of Times Square, New York. The price: just Rs 490 crore.

Timing it right

This refers to A K Bhattacharya&rsquo;s column &ldquo;Retail FDI battle isn&rsquo;t over yet&rdquo; (New Delhi Diary, December 12). The writer notes that &ldquo;a debate in Parliament has led to a vote on an issue that was hitherto considered to be well within the government&rsquo;s executive powers and, therefore, not requiring fresh legislative sanction&rdquo;. My understanding is that the vote in Parliament was a sanction by the legislature, but not a legislative sanction. Like a girl who is a friend does not become a girlfriend, a sanction by the legislature does not become legislative sanction. The expression &ldquo;legislative sanction&rdquo; means making a law. In this case, there was no law made. It is not about the semantics, but of substantive importance to differentiate between the two concepts.

Letters: Not a 'legislative sanction'

This refers to the editorial &ldquo;A history of neglect&rdquo; (December 16). It talks about one of the most important responsibilities of Parliament &mdash; dynamic and well-conceived legislation. As the wording of Section 66A of the Information Technology Act shows, a poorly drafted law engenders indiscriminate administrative action and avoidable judicial intervention. Still, even now, Parliament devotes little time to deliberate and bring cumulative judgment to precipitate an Act of law that meets three tests (courtesy: Pratap Bhanu Mehta) &mdash; it integrates the procedure with the objective of legislation, imbibes procedural clarity such as thorough illustrations and explanations, and incorporates resource requirements for its effective implementation. A hurriedly passed law will never ensure these.

Letters: Rules of law

Launched on November 3, 1999, ICICI Prudential Balanced Fund is an equity-oriented hybrid fund with average assets under management (AUM) of Rs 344.23 crore as of September 2012. Unlike the category, whose assets have decreased by close to 2% over the past year, the fund&rsquo;s AUM has grown by nearly 20%. The fund has been ranked CRISIL Fund Rank 1 (top 10 percentile of the CRISIL Mutual Fund Rankings) in the past quarter and in the top 30 percentile since March 2011. Yogesh Bhatt (since February 2012) and Avnish Jain (since January 2011) manage the equity and the debt portion of the fund, respectively.

Fund Pick: ICICI Prudential Balanced Fund

The lack of consensus on a new International Telecommunication Regulations (ITRs) treaty at the recent world conference in Dubai centred on key differences in attitudes to internet governance. India was one of about 80 countries that refused to sign the new ITRs, which would have given national governments more control. At present, the internet runs on centralised addressing administered by a California-based NGO, the Internet Corporation for Assigned Names and Numbers, or ICANN. It manages the Domain Name System, assigning DNS names and Internet Protocol (IP) addresses to all websites, and is funded by the US Department of Commerce, a legacy of the internet&rsquo;s origins as a US defence research project in the 1960s. Given the US&rsquo; strong constitutional free speech commitment, it is difficult to prevent content being placed online. The current architecture doesn&rsquo;t merely enable free information exchange.

Keeping the internet free

The Reserve Bank of India (RBI) released its mid-quarter monetary policy review on Tuesday and, as was widely expected, it kept the policy rates unchanged. The repo rate under the liquidity adjustment facility for banks will remain eight per cent, and the cash reserve ratio (CRR) will remain 4.25 per cent of their net demand and time liabilities. Whatever small expectations had been raised following a moderation in wholesale price inflation in November &ndash; which reached its lowest level in months at 7.24 per cent &ndash; were dashed. It is true that consumer price inflation, driven by primary goods prices, remains high at 9.9 per cent, much higher than in comparable economies &mdash; the RBI has shifted emphasis recently from tracking &ldquo;core&rdquo; inflation to tracking consumer prices.

No support

In T N Ninan&rsquo;s column &ldquo;Learn from Singapore&rdquo; (Weekend Ruminations, December 15), the writer recommends appreciating the honest taxpayer. That can be done. But we need to follow Singapore&rsquo;s example in the same way. We need to create awareness, make procedures to collect tax at source as far as possible, and find new ways to encourage tax payment. In India, people are attracted to lucky draw contests.

Letters: Reward taxpayers

This refers to the report &ldquo;Ministry for inclusion of affordable housing in infra list&rdquo; (December 7). It&rsquo;s an open secret that builders and developers pay heavy bribes to various government agencies to procure multiple permissions and licences. That automatically escalates the housing cost for buyers. Moreover, builders take 20 to 30 per cent of the cost in cash. Since buyers do not get any loan entitlement on the cash component, this is a problem for home-loan seekers. It is in this context that the government wants a rate cut so that banks can reduce the interest rate on loans but on the other hand, the government has increased service and value-added taxes. Similarly, state governments have increased stamp duty and registration charges on sale agreement.

Letters: A home of your own

The argument that foreign direct investment (FDI) in retail would lead to job losses is not justified. Every big change in India is usually preceded by an uproar. When computerisation was introduced, banking unions were outraged. But computerisation added new jobs in the sector thanks to large-scale businesses and the need for computer specialists.

Letters: FDI effects

A Twitter post might have once landed him in trouble but that has not stopped Union Minister of State for Human Resource Development Shashi Tharoor from highlighting the benefits of the medium. At a recent function to launch a book written by Food Minister K V Thomas, Tharoor was highlighting an anomaly in the labour market in his home state of Kerala. An advertisement was posted on Twitter for two sets of jobs, he said, one for coconut pickers and the other for software engineers. Such is the shortage of farm labour in the state, he added, that the coconut picker was offered a higher salary than the software engineer.

Wanted: coconut pickers

Unlike in the previous years, the cover of the government&rsquo;s Mid-Year Economic Analysis booklet had a line graph showing how inflation and the repo rate have moved. The graph clearly indicated that though inflation had shown some signs of moderation, interest rates remained high.

Graphic explanation

Former Chief Economic Advisor and current World Bank Chief Economist Kaushik Basu wouldn&rsquo;t have thought his new job could come in for strong criticism back home. But that&rsquo;s exactly what happened at a session he was moderating at the Delhi Economics Conclave last week. When the floor was thrown open for questions, a man from the audience launched into a diatribe against multilateral institutions.

Business Standard

Business Standard

Page 800 - Business Standard

Rising sentiment

Review comes with no surprises: Keki M Mistry

Getting our priorities right: Sajjid Chinoy

Letters: Adjudicating NBFC claims

Picking a winner

Draining out money

Flagging the error

Money for nothing

Timing it right

Letters: Not a 'legislative sanction'

Letters: Rules of law

Fund Pick: ICICI Prudential Balanced Fund

Keeping the internet free

No support

Letters: Reward taxpayers

Letters: A home of your own

Letters: FDI effects

Wanted: coconut pickers

Graphic explanation

Poor fielding