The draft guidelines released on Thursday provided the much-needed clarity on General Anti-Avoidance Rules (GAAR) sought to be implemented by the Union Government(Click on graph)

GAAR: Reaching far and wide

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Car makers witnessed mixed sales, with diesel variants showing better growth.

Auto sale watch: A mixed bag

This refers to Shahid Javed Burki&rsquo;s article &ldquo;The last stand&rdquo; (July 2). It is indeed a good sign that the military in the Islamic world is pulling back from politics and that these countries are advancing towards democracy. This is spells good news for the global community as well. However, we need to be patient with this process; these countries are bound to face teething troubles since they are unaccustomed to a democratic set-up. Take, for example, our neighbour Pakistan that supposedly has a democracy. We are all aware of the hold its army still has on all major political decisions and policies. The day the army&rsquo;s role is confined to protecting Pakistan&rsquo;s borders will be the day when the country would have truly ushered in democracy. One can judge the democratisation process in the rest of the Islamic world on the same parameter.

Letters: True democracy

For both economic and political management of the European crisis, perceptions matter. Yet there is a degree of distance between the perception of what happened and what actually was agreed on at the recent summit of European leaders. On Friday afternoon, the Indian stock market went through a major rally on the back of a belief that the European problem was on the mend; oil prices, too, saw some movement that reflected the belief that commodity demand would now firm up. From that point of view, clearly, the summit was a short-term success. Whether or not Europe has in fact managed to help solve, or even mitigate, future problems with the euro zone is not as certain.

The Brussels compacts

The Reserve Bank of India has, according to reports, turned down the finance ministry&rsquo;s suggestion that electronic funds transfers, or e-transactions in general, be made free for bank customers. The main reason cited for this is that no product or service should be offered free, as then it would not be commercially viable and so would not be scaled up. This needs to be contested. Banks&rsquo; major sources of revenue, other than net interest income, are fees for different services and investments. While income from investment can be quite volatile, fee-based income like remittance charges tends to be stable and, therefore, desirable. There is no reason to argue that all these three revenue sources should always stand on their own feet and there should be no cross-subsidisation. In a year of market volatility, income from buying and selling of securities can be low or negative, leading to cross-subsidisation from other activities.

21st-century banking

Conventional wisdom has it that India&rsquo;s younger generation is likely to be less tolerant of corruption. But a sample survey conducted in Mumbai&rsquo;s private schools suggests that their views may be different. One of the questions students were asked was whether they would like to be Sachin Tendulkar or Anna Hazare. Teachers were distressed that student after student chose the cricketer over the anti-corruption crusader, reading into their choice an acceptance of corruption. Or maybe, by according Tendulkar the higher number of votes, the younger generation has indicated that it does not want to be associated with the current tamasha that passes for an anti-corruption campaign.

Tendulkar vs Hazare

The government of India does not have a finance minister any longer &mdash; at least, according to official and non-official on-line lists. For instance, a week after Pranab Mukherjee resigned as finance minister to stand for presidential elections, a click on the &quot;finance minister&quot; link on the official finance ministry website results in &quot;page not found&quot;. This despite the fact that the PMO announced that Prime Minister Manmohan Singh would hold the finance portfolio, immediately after Mukherjee resigned. On sarkaritel.com, a private initiative that serves as a gateway to the government, the council of ministers does not include the finance portfolio at all.

Where`s the FM?

I have developed cataract in my right eye and wanted to buy an additional health cover. But my agent cautioned me that no illness caused due to cataract would be covered under the new plan for the next three years.

General Insurance: Gaurav Garg

Despite the hype, it is widely agreed that MTV Coke Studio India, Coca Cola&rsquo;s music collaboration with music channel MTV, has been unable to outclass its Pakistani counterpart in terms of quality. Which is probably why it was surprising to see Madeleine Albright, US Secretary of State under President Clinton, sitting on a plush front-row couch along with Delhi&rsquo;s rich and famous at the launch of this year&rsquo;s edition, MTV Coke Studio 2. Albright once famously described Pakistan as an &ldquo;international migraine&rdquo;, so her presence at the Indian event was almost ironical. How did Albright, who remained expressionless throughout the programme, come to attend the event in the first place? Sources said she was on an independent visit to India; the event, sponsored by one of America&rsquo;s most iconic global corporations, merely coincided with that.

Power visit

Deepak Lal&rsquo;s interesting column &ldquo;Money matters&rdquo; (June 30) revisits the old controversy on the focus of monetary policy. Should it be money supply or interest rate? Traditionally, monetary policy has been expected to deal with the regulation of money supply, while credit policy has a bearing on terms and conditions for the issue of loans. They are two sides of the same coin. Ceteris paribus, the availability (influenced by money supply) and the cost of credit (interest rate) are inversely related. The article argues implicitly that money matters in stimulating economic activity. But, as we know, much of the money created by the US Fed in the recent past made a round trip to it in the context of risk aversion and avoidance of additional capital requirements on lending on the part of banks. Such hassles are absent in the safe-keeping of funds with the Fed. It is further made attractive by the interest of 25 basis points paid to banks on their entire cash reserves.

Letters: Money versus credit

Your edit &ldquo;Lessons from a letter&rdquo; (July 2) has pointed out the sorry state of the All India Tennis Association (AITA). Being a professional body, it should have known that the warring tennis players, Leander Paes and Mahesh Bhupathi, would have never agreed to play together. It is rather sad that Sania Mirza, the top-ranked female tennis player in India, had to write a letter to AITA to express her disappointment at being treated as &ldquo;bait&rdquo;. We hope AITA has learnt its lesson. This is also an opportunity for AITA to review its functioning and take more interest in promoting the game and other players. It needs to look beyond the big names in Indian tennis, and spot talented players and support them adequately.

Letters: Play the game 

A massive 30 per cent deficiency in the monsoon rainfall in June, coupled with an anticipated low precipitation in September, may add to the government&rsquo;s difficulties in achieving its growth and fiscal deficit targets. Agriculture may not be the only victim of poor rainfall. Its contribution to gross domestic product (GDP) may have dipped to mere 15 per cent but it still sustains the livelihood of over half of India&rsquo;s population. Rural income has, in recent years, been seen to impact the demand for two-wheelers and numerous other white goods, which contribute revenue to the exchequer. On top of that, if the government has to increase its spending on job creation and other drought-relief measures, which seems quite likely, the fiscal deficit will further worsen. Equally worrisome are the prospects of further food inflation, which is already in double digits.

30 per cent below

I work with a private firm and earn Rs 34,000 per month.

Investing:  Paras Adenwala 

Barely a week after London-based Barclays Bank Plc was fined a record &pound;290 million (Rs 2,500 crore), for allegedly participating in the fixing of the London Interbank Offered Rate, or Libor, by regulators in the US and the UK, its chairman Marcus Agius and outspoken CEO Robert Diamond have finally resigned, though Mr Agius will still run the bank at least till a new chief executive is chosen.

The Libor saga

The controversy over IIT admissions may have thrown coaching institutes out of gear, but the head of one such establishment in Mumbai says the process is easy to understand if it is equated with making a roti. &ldquo;Since the IITs are rotis, you first need flour, salt and water. Flour, which earlier used to be the entrance test to sieve applications, is represented by the Class XII board exam marks. Salt is the entrance examination, and water, as always, is the coaching institutes that binds all of them together to make rotis &mdash; or, in other words, to get into an IIT.

Making an IIT roti 

Your edit &ldquo;Towns without water&rdquo; (July 2) highlights the poor condition of water supply in cities. Municipal corporations across cities pay little attention to planning, management and maintenance of water supply. Every monsoon, flood waters inundate low-lying areas along the Yamuna river bank in Delhi. Instead of spending crores of rupees on the damage caused consequently, efforts should be made to construct underground reservoirs in the city or in nearby areas for storing flood water. Countries such as Israel are effectively using this method to meet their water needs. There&rsquo;s no reason why we shouldn&rsquo;t.

Letters: Managing water

This refers to Vrishti Beniwal&rsquo;s erudite article &ldquo;Can the Centre solve states&rsquo; debt crises?&rdquo; (The Beat, June 28). I must congratulate the author for marshalling a lot of facts and figures on the issue of West Bengal&rsquo;s demand for a moratorium on interest payments. However, I do not agree with the logic that the government cannot take a decision on the issue because it primarily comes under the Finance Commission&rsquo;s domain. Though the decision on whether or not relief should be given to a state normally falls within the Finance Commission&rsquo; jurisdiction, the government has the right to exercise its authority. It can indeed take a call on matters that it delegates to a subordinate body. And the government had rightly done so in the case of Punjab &ndash; without the Finance Commission&rsquo;s recommendation &ndash; to help the state combat terrorism.

Letters: An undue demand?

Agatha Sangma can heave a sigh of relief. Her job as minister of state for rural development in the UPA government and membership of the Nationalist Congress Party (NCP) are safe, at least for now. Until her father Purno Sangma filed his nomination for the presidential election, all eyes in the party were on Agatha to see if she would accompany her father. Doing so would have been a breach of party discipline since Sangma senior was running for president as the BJP candidate and the NCP had declared its support for UPA nominee Pranab Mukherjee. Also, the NCP could not afford to embarrass itself further on account of the father-daughter duo. As it is, the party had turned a blind eye to the fact that the senior Sangma was using his daughter&rsquo;s official residence to launch his presidential campaign against the UPA candidate. So when Agatha started openly supporting her father, the NCP issued her an ultimatum.

In the name of the father

Businessmen may not always be familiar with politicians and technocrats in government but propriety demands that, at the very least, they be briefed on those they invite to their events. But two top bosses of Coca Cola, Muhtar Kent, global CEO, and Atul Singh, India chief, obviously did not think it necessary to inform themselves of the names or designations of their guests at the launch of season 2 of Coke Studio. Thus, in his welcome speech Singh referred to Nandan Nilekani as the &ldquo;UID minister&rdquo;. But his faux pas was surpassed by Kent, who introduced the chief guest, Delhi Chief Minister Sheila Dixit, as &ldquo;the first minister Sheila&rdquo;. At this, the murmurs in the audience pretty much drowned out the rest of Kent&rsquo;s speech.

Unique identification

German philosopher Friedrich Nietzsche had said: There are no facts, only interpretations. This seems to apply to the situation today when there is talk of India&rsquo;s economy being in a phase of stagflation.

Is India moving towards a stagflation-like situation?

The committee formed by the human resource development ministry to examine objections to political science textbooks issued by the National Council of Educational Research and Training (NCERT) has submitted its 39-page report, which has come in for predictable criticism. The Thorat committee recommended that 21 cartoons be deleted and some other changes be made to the textbooks for next year. The report will now be examined by NCERT&rsquo;s textbook-monitoring committee. This transparent process of review and consultation should set at rest concerns, loudly expressed earlier, that the &ldquo;political class&rdquo; wished to stifle academic voices by exercising raw power to short-circuit institutional channels.

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