With greater awareness and use of note-sorting machines, banks are reporting more cases of fake notes in circulation. However, reporting of cases of counterfeit notes by banks is still below expectations. The Reserve Bank of India (RBI) has now said failure to report such cases might lead to penal action.

RBI demands full reporting of fake currency notes

Business Standard

Successive repo rate cuts by the Reserve Bank of India (RBI) have not been effective in containing inflation, and the Cash Reserve Ratio (CRR) is a "waste" for the economy. On Tuesday's inflation is cost push and not demand-pull. Trying to address that with higher interest rates might not be very effective. Being an incurable optimist, I had expected a 50 bps repo cut.

BS Jury

A higher provisioning requirement for restructured standard loan accounts is likely to dent banks&rsquo; profit further in the current quarter. This would give them little scope to pare lending rates.

Higher provisioning to dent banks' profits

Industry has reacted strongly to the Reserve Bank of India (RBI) not changing policy rates despite lower industrial production, slow credit growth and dwindling investments.

Industry feels let down

At one level, the ongoing tussle between the Delhi Metro Rail Corporation (DMRC) and the Anil Ambani-controlled Delhi Airport Metro Express Pvt Ltd (DAMEPL) may confirm the misgivings of those who think public-private partnerships (PPPs) are a risky way of bridging the infrastructure gap. At another level, it could hold valuable lessons for government agencies in how not to implement PPP projects. The airport metro link collaboration was something of a showcase.

Lessons in failure

Homes in Delhi, Mumbai and Kolkata that had analogue cable television went blank last night. The Madras High Court has given the residents of Chennai, where only 62 per cent of connections have been digitised, time till November 5 to switch over to the digital system or face a similar blackout. The latest reports suggest that digitisation has been near universal in Mumbai and 95 per cent in Delhi.

Definitely digital

Pali, the ancient Indian language associated with the Buddha&rsquo;s teachings, may have lost its practical use a long time ago, but aspirants to the Indian civil services swear by it because it is a high-scoring paper. Now, a high-level committee set up to propose reforms in the civil services exam wants &ldquo;Literature of the Pali language&rdquo; out of the list of papers that candidates can take, unless he or she had it as a subject in graduation. The Union Public Service Commission, or UPSC &ndash; the organisation responsible for civil services exams &ndash; has supported the expert committee&rsquo;s view. It&rsquo;s up to the government now to take a decision &mdash; but, as with all things cultural in India, the matter isn&rsquo;t that straightforward. There are supposedly religious sentiments attached to the archaic language that Opposition politicians might raise. Besides, many would-be bureaucrats might be disappointed, if this paper is struck off the list.

Un-Pali-table truth

The finance ministry may be drawing up plans to earn Rs 30,000 crore from disinvestment, but a key Cabinet minister has just sent out a signal that the government may not be the kind of promoter retail shareholders would like. Referring to a court case against Coal India by minority shareholder The Children&rsquo;s Investment (TCI), a journalist asked Union Coal Minister Sriprakash Jaiswal how the government proposed to defend itself. TCI&rsquo;s grievance was that the binding supply agreements Coal India was forced to sign with power producers in February under government pressure was against shareholders&rsquo; interest. Jaiswal&rsquo;s reply was to suggest TCI&rsquo;s management read the 10th and 25th clauses of the shareholders&rsquo; agreement, which clearly suggest the interest of the Government of India may clash with the interest of shareholders.

Clash of interests

Till August this year, the government had barely managed to spend 28 per cent of the Plan expenditure budgeted for 2012-13. Indications are that much of this amount may be unspent at the end of the year. At a time when the finance ministry is finding it difficult to make ends meet, the unspent funds may prove a blessing in disguise.

Non-spending power

This refers to M J Antony&rsquo;s column &ldquo;Babus in black robes&rdquo; (Out of Court, October 31). The writer rightly supports the Supreme Court&rsquo;s view that the information commissions should include a judicial member. This would not only bring objectivity in deciding the need for disclosure of information, but be particularly helpful when the information sought is administratively or politically inconvenient, even if otherwise useful in the public domain. Generally, such information is denied by government officers under the cloak of confidentiality and public interest. Besides, the current practice of packing the information commissions with obliging bureaucrats tends to constrain the scope of information sharing, much against the spirit of the Right to Information Act. In getting judges on board, the court has given a more precise and specific interpretation to the legislated requirement.

Letters: Judicial intervention

Apropos the edit &ldquo;Steady as it goes&rdquo; (October 31), the Reserve Bank of India (RBI) has once again preferred not to tinker with the key policy rates, but reduce the cash reserve ratio another 25 basis points to infuse more liquidity into the banking system. Consequently, banks will be left with more lendable funds and earn interest.

Letters: Cautious optimism

This refers to A K Bhattacharya&rsquo;s column &ldquo;Tasks for Pawan Bansal&rdquo; (New Delhi Diary, October 30). The Indian Railways were left financially weak at the mercy of a Trinamool Congress minister. Fortunately, we now have a minister who realises the damage done to the finances. The Indian Railways have to modernise management practices and review their employee recruitment policy (often twisted by political bosses to recruit more staff). Also, the government could consider doing away with the Railway Budget. This could help raise more funds and result in far better audit compliances.

Letters: Modernise railways

CAT is known for its out of box thinking and works as a filter to get the best mind in the country at one place. If CAT goes global, the country will be able to attract more foreign intellectual students and help the co students to understand the culture of students around the globe.

Student's corner

On the eve of the Cabinet reshuffle last week, a Union Cabinet minister who was tipped to be promoted to a more powerful ministry, was preparing for his bigger role. The agenda for his first day in his new office was almost finalised and a speech was prepared. More than this minister, however, his likely successor in the ministry was excited about the prospects of being elevated to Cabinet rank and went to the extent of sharing the news with the local press in her southern constituency.

Talked down

In Indian politics, there are no permanent enemies, only permanent interests, to paraphrase Lord Palmerston. Nobody appears to be following this maxim more enthusiastically than B S Yeddyurappa, who had lost his chief ministership on corruption charges. The former Karnataka chief minister has been threatening to quit the Bharatiya Janata Party for some time as a result, but may be able to put his threats into practice only now. According to people in the know, he may be cosying up to one of his chief tormentors during his chief ministership, B Sreeramulu, to achieve this. Sreeramulu, and his business partner G Janardhana Reddy, had given Yeddyurappa a torrid time and even nearly brought down his government before his own party forced him to quit.

No enemy is forever

Preparations are in full swing for the first global investors&rsquo; meet in Chhattisgarh. To make the event a gala show, the state&rsquo;s Industry Minister Rajesh Munat has taken command. But he is uneasy for an unusual reason: officials handling the show never seemed to report a single problem. For the last 10 days, the minister has made it a routine to visit the venue of the meet in Naya Raipur &ndash; the new state capital &ndash; to monitor preparations, sometimes three times a day. Each time, official assure him that everything&rsquo;s fine. If he points to something he thinks won&rsquo;t work, he is instantly assured it will be fixed. This &ldquo;Yes, Minister&rdquo; attitude and seeming efficiency made Munat so uneasy that he finally felt constrained to actually complain about it at one of the meetings with officials.

Uneasy about efficiency

The unceremonious and humiliating dumping of Jaipal Reddy proves that Manmohan Singh would like to promote corruption, rather than taming the monster. One would believe that the removal was prompted by a corporate major, who has been unhappy with Reddy, for certain actions he took that went against its interests.

Letters: Corporate pressure

The steep fall in the performance and drop in production of natural gas from the KG-D6 gas block off the Andhra coast has resulted in a loss of opportunities for the country, and is a matter of grave concern. Several chemical and power projects in Andhra Pradesh, which were implemented based on the estimated gas output from the basin, are now idling &mdash; causing loss of several thousand crores of rupees of investment.

Letters: 'Take over KG-D6'

One wonders whether the cut in the cash reserve ratio (CRR) by the Reserve Bank of India is going to make any material change in the existing credit situation. In the quarterly review of developments, the central bank stated that the current credit slowdown largely indicates tepid demand conditions and distinctively lower credit expansion by public sector and foreign banks, partly reflecting their risk-aversion. Are the tepid demand conditions due to high interest rates, in which case a reduction thereof would have helped? The agriculture and export sectors are protected from interest rate changes due to subventions provided to banks by government. It is the industrial and service sectors that are mainly affected by changes. The big companies have been able to tap the commercial paper market on a large scale recently due to a fall in interest rates, besides accessing bank credit. It is the small and medium industries that have problems of credit, if one goes by anecdotal evidence.

Letters: No CRR cut impact

The decision to refarm spectrum in the 900 MHz wavelength has huge implications for the telecom industry, and it further complicates the forthcoming 2G auctions in the 1800 MHz band. The Empowered Group of Ministers (EGoM) will have to consider the modalities and logistics carefully, since several issues are yet to be clarified. The physical logic for refarming appears to be strong: signals on low-frequency bands like 900 MHz propagate longer distances and penetrate obstacles better. Hence, 900 MHz is better suited to high-end data services, such as 3G. The existing 900 MHz licences for 2G GSM services expire from November 2014 to 2016. Operators will need to buy spectrum as licences expire, and it will clearly cost a lot more than a decade ago.

Spectrum refarming muddle 

One of the positive consequences of the recent focus on the dealings between companies owned by Robert Vadra and the real estate giant DLF is that the unregulated nature of the Haryana land market has become a topic of discussion. Mr Vadra&rsquo;s companies&rsquo; purchases of additional land and apartments were funded from the windfall gains that accrued after a 3.5 acre plot of land in Manesar received a conversion of land use notification from the Haryana government, which greatly increased its market value. It was evident immediately &ndash; and even more so after the civil servant Ashok Khemka was transferred from his position as director general for consolidation of holdings in Haryana&rsquo;s revenue department &ndash; that the windfall gain Mr Vadra received following the change of land use notification was not unique.

Business Standard

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