Rice has seen strong price pressure this year, with delayed rain and a 16% rise in minimum support price. The kharif crop accounts for 80% of the annual output; monsoon shortfall has led to official kharif estimates at 6.5% less than last year&rsquo;s output, and sowing is lagging even in the rabi season. Yet, as on December 1, the Food Corporation of India&rsquo;s rice stocks stood at 30.6 million tonnes, a decadal high.

Indicus price monitor

Business Standard

Reserve Bank of India deputy governor H R Khan made an interesting &ldquo;confession&rdquo; at a capital markets summit in Mumbai.

Public private non-partnership

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

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

As this year comes to an end, a series of StatsGurus will look at how 2012 has treated India in a year of growth slowdown and galloping inflation. As Table 1 shows, consumer inflation is just refusing to moderate. Wholesale price inflation, on the other hand, has distinctly turned downwards in the recent past.

StatsGuru-17-December-12

It&rsquo;s been a tough year for home buyers, as well as builders. With property prices continuing to hold steady or even rising for most of the year, the middle and even upper middle class have found themselves out of the market. But there are initial signs of correction. According to data from the National Housing Bank, in the July-September quarter, prices of residential property fell in 10 of 19 cities.

It's time to cut real estate prices

This refers to the editorial &ldquo;A growing distance&rdquo; (December 14). Instances of the finance ministry&rsquo;s attempt to act as a super regulator over all regulatory bodies in the financial sector are becoming increasingly common. This will destabilise the equilibrium deftly built by eminent individuals who headed the finance ministry and the Reserve Bank of India (RBI) in the formative years of financial regulation in India (there were few regulators in the financial sector, almost till the reform days), and consciously maintained by their successors till the recent past.

Letters: Super regulator

This refers to Subir Roy&rsquo;s column &ldquo;Creating wealth at the bottom&rdquo; (Offbeat, December 15). There are many such success stories of prompt repayments, but thanks to a state government&rsquo;s (read Andhra Pradesh) initiative, one single legislation completely killed microfinance institutions (MFIs). Although the government&rsquo;s objective to step in to help small borrowers from the high rate of interest being charged by MFIs was laudable, it made a mess of its efforts, and ultimately the small borrowers are again at the mercy of rural finance sharks.

Letters: Wealth at the bottom?

This refers to Mihir S Sharma&rsquo;s article &ldquo;Unpacking the Modi hype&rdquo; (December 14). Both pro- and anti-Modi camps vehemently present different statistics that suit their respective cases. As the wisecrack goes, statistics hide more than they reveal. Moreover, numbers compiled by various government departments and organisations have to be taken with a fistful of salt &mdash; given the delay and blunders that one frequently encounters. It is said the proof of the pudding is in eating it. If the people of Gujarat are happy with Modi, no statistics will matter to them.

Letters: Statistics don't matter

M B Rajesh, a member of Parliament from the Communist Party of India (Marxist), is pleased with soccer player Lionel Messi&rsquo;s 86 goal-scoring record for Barcelona. He believes Messi has faith in the ideologies of Left, just like him.

Left foot forward

Cola wars in winters? Battle-hardened marketers may dismiss the idea, since this is traditionally the lean season for soft drink sales. But then, the age-old competition between Coke and Pepsi has not always followed convention. Thus, in a pre-emptive strike, Coca-Cola India may unleash its latest brand ambassador for Thums Up, Salman Khan, this December, to coincide with the release of Khan&rsquo;s movie Dabangg 2. The timing appears even more interesting because Pepsi recently won the title rights for the next five years of the Indian Premier League 20-20 tournament, which kicks off in the summer of 2013, at the height of the traditional cola war time. Media space sellers and the advertising fraternity certainly won&rsquo;t complain if there is a prequel to that war this winter.

Winter fizz

He may not have spent years serving the food ministry as its minister but that has not stopped K V Thomas, Union minister of state for food, consumer affairs and public distribution, from publishing his thoughts. The professor-minister is all set to release a book on the food sector titled For The Grains, a compilation of his speeches in the course of his stint as food minister, on Monday. The book launch is doubly significant because it will be attended by his counterpart in agriculture Sharad Pawar, who was India&rsquo;s food minister before Thomas took over, and has often clashed with him over policy issues.

By the book

Every Monday, Business Standard analyses one family&rsquo;s finances and suggests a suitable way forward(Click on graphic)

Case study

In the F&amp;O segment, you can take a much higher exposure than the capital that you put in. For example, for Rs 2 lakh of capital, you can take an exposure worth Rs 10-20 lakh of shares. But in the cash market, you can buy shares for only Rs 2 lakh. So, when the market does tank, the losses you can make are much bigger than the capital invested in the F&amp;O segment.

Tipping point

Investing in the stock markets depends on many factors, not index levels alone. Primarily, it is your age, stage, risk profile and time horizon that matter most. Equities have historically delivered superior returns, albeit with interim volatility. If you are up to that, then only should you consider investing in equities. More, despite indices rising, there are a lot of quality stocks available at attractive valuations, which could be bought into. Please understand that time in the market is more important than timing the market. Therefore, if you are a long-term investor, it should not bother you whether the indices are at a particular level, as long as you find value in the stocks you buy, since it is very difficult to predict whether indices will rise or see a correction in the near future.

Investing: Rishi Nathany 

It is possible that Bahujan Samaj Party chief Mayawati may have forgotten a famous speech by B R Ambedkar about the &ldquo;grammar of anarchy&rdquo; when, in an outburst last Wednesday, she berated Vice-President and Rajya Sabha Chairman Hamid Ansari. That is ironical since that speech, by a man assiduously commemorated otherwise, referred to constitutional democracy and the need to jettison the politics of the street.

Anarchy in Parliament 

The meeting of the Union Cabinet last Thursday was, by the standards of the United Progressive Alliance (UPA) government at least, quite effective. In what Rural Development Minister Jairam Ramesh has called the UPA&rsquo;s &ldquo;slog overs&rdquo;, several policy changes were announced, and proposed laws cleared. Perhaps the most important was the approval of the long-awaited changes to India&rsquo;s colonial-era land acquisition law.

A necessary compromise

One of the consequences of a government that has a paralysingly slow reaction time to major developments is that some issues of importance to the public are not discussed in Parliament through regular debates on government-sponsored legislation, or as part of Question Hour. Towards the end of last week, much attention focused on one such case in the Rajya Sabha, where a Private Member&rsquo;s Bill seeking amendment to the controversial Information Technology Act was debated.

A history of neglect 

Mamata Banerjee was unapologetic &ndash; basically about everything &ndash; at the annual general meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci). &ldquo;I come from a poor family. So I speak a little broken English, a little broken Urdu, a little broken Hindi,&rdquo; she said. Pashchim Banga, she said, was eagerly awaiting investment... if offered unlimited opportunity to develop an African Safari, a mini Switzerland and Goa of the east (Sundarbans, Darjeeling and Digha, respectively). But she said the Reserve Bank (RBI) just won&rsquo;t let West Bengal develop. &ldquo;Everything we earn, RBI takes away. What is this RBI? I have empty vessels. What can empty vessels do?&rdquo; she asked, referring to Bengal&rsquo;s fiscal situation.

Business Standard

Business Standard

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