Recently, Sebi approved proposals to regulate alternate investment funds. These have addressed many aspects that the industry has been lobbying for, says Mumbai-based law firm Nishith Desai Associates. An analysis of the impact of the regulation on different categories of funds.

In full flow

Business Standard

What are the things one should check before investing in a mutual fund scheme? In the case of stocks, it is said one should check the company's management or corporate governance.

Investing: Rishi Nathany

At a press conference to clarify a news item on a World Bank report saying a National Highways Authority official had been bribed, Road Transport Minister C P Joshi looked visibly irritated. This was not, as many thought, because of the news of corruption in a key agency under his ministry but the suggestion that he had not taken action on it. Responding to persistent questions from a journalist, he lost his cool and almost shouted, &ldquo;Do not think that we have acted only when the report appeared in a newspaper? Do not take credit for that&hellip; I can show documents to prove that we acted on the report much earlier....

Man of action

In democratic India, the state rarely leaves anything to chance, including provisions for government staffers on election duty. So for the upcoming Municipal Corporation of Delhi election, the state election commission had specified in 2007 the numbers and sizes of tables, chairs, glass tumblers and even earthen pots (&ldquo;with lids&rdquo;) for drinking water. Strangely, there are no specifications of what kind of drinking water should be provided. An RTI response reveals that these pots are filled with drinking water supplied by Delhi Jal Board. Given the questionable quality of this water, staff on election duty must be truly heroic if they choose to drink it.

In the drink

This refers to the report &ldquo;Yields soar to 4-month high at first govt bond auction of FY13&rdquo; (April 4). The situation could have been avoided. As on March 23, 2012, the central government had a balance of Rs 665.29 billion crore with the Reserve Bank of India (RBI). I know that often the government&rsquo;s balance in RBI is at the minimum of Rs 100 crore at the beginning of the financial year. Redemptions of old loans worth Rs 26,890 crore were expected on April 4. The central government had deposits in commercial banks also &ndash; Rs 73,438 crore &ndash; as on the last Friday of March 2009. They would have gone up since then. RBI has enhanced the ways and means advances (WMA) to the Centre to Rs 50,000 crore from April to June this year on which the government could have drawn. There was really no need for the government to enter the market in the latest instance.

Letters: Government borrowing

Apropos Sunil Sethi&rsquo;s article &ldquo;Off-key and off-queue&rdquo; (March 31), contrary to the author, I had a great experience at the Passport Seva Kendra (PSK). I had been deferring applying for the renewal of my passport and was dreading the process of getting hold of the manifold documents, filling forms and queuing up at the office. However, the no-objection certificate issued by my PSU employer was about to expire and so I had to get down to business.

Letters: A good experience at PSK

I am going abroad for 14 months on an assignment. During that tenure, I am giving my house on rent to a couple.

General Insurance: Gaurav Garg

The defence ministry has revised its offset policy, which requires any foreign company that wins an order of Rs 300 crore or more to plough 30 per cent of the business back to India. Apart from other changes, it will allow foreign companies to get offset credits of three times the value of the technology transferred to India. Thus, a foreign company can meet its offset obligation by transferring technology worth 10 per cent of the order. With defence purchases expected to range from $75 billion (Rs 3.8 lakh crore) to $100 billion (Rs 5 lakh crore) over the next seven years, it is suggested that much technology could thus be transferred to Indian companies.

Trading secrets

When the production of pulses touched a record 18.2 million tonnes in 2010-11, substantially outstripping the historic 14 to 15 million tonne output level, it was trumpeted officially as a sustainable uptrend. However, this optimism has been shaken already, with 2011-12 output likely to drop by about a million tonnes. Clearly, the previous year&rsquo;s harvest was an exception, a response to an unprecedented price spike which saw dal being sold at close to Rs 100 a kg. However, farmers&rsquo; hopes of a reasonable share of the price bonanza were dashed as the higher production, coupled with duty-free imports, brought down post-harvest mandi prices to levels below the minimum support price (MSP) fixed by the government. Even today, prices are lower than the MSP in many key pulse-producing states. Evidently, the fixing of an MSP for pulses is meaningless without an effective organised price support mechanism of the kind in place for wheat and rice.

Pulses slowing down

The issue of 2G spectrum auctions has been so fraught with legal implications and court cases that it has become a source of mild humour within the industry. Recently, the Telecom Regulatory Authority of India (Trai) held an open session with industry ahead of finalising its consultation paper on the issue. As is customary in such sessions, Trai put up a set of questions for various stakeholders to answer. When it came to CDMA operators&rsquo; lobby Association of Unified Telecom Service Providers of India to respond, its representative pointed out that some of the questions did not relate to 2G auctions and could, he added with mock severity, attract contempt of court. Replying in the same tone, Trai Chairman J S Sarma pointed out that the representative had answered those questions, so he, too, could attract the same penalty, drawing much laughter from the audience.

Humour on call

To get to the logic underlying the new regulatory regime outlined by the Securities and Exchange Board of India (Sebi) for market infrastructure institutions (MIIs) like stock exchanges, depositories and clearing corporations, it is necessary to understand what kind of animal the regulator considers them to be. They are hybrids &mdash; neither government departments nor private firms, but commercial enterprises discharging important regulatory functions. Hence stock exchanges should be able to attract capital by listing, and pay shareholders something. No cap on payout, that&rsquo;s too statist, suggests Sebi, but please pay 25 per cent of profits to a settlement guarantee fund. Thus, Sebi has deviated from some of the specific recommendations of the committee headed by Bimal Jalan but accepted the spirit behind them &mdash; and Mr Jalan appears quite pleased.

Defining stock exchanges

Summer internships are important for management students as it is the first exposure of students to the corporate world. It also helps the students to gain the knowledge which may be linked with theoretical one.

Students' corner

Many, including those keen to benefit from investments in resource-rich Myanmar, may be celebrating the victory of Aung San Suu Kyi and her National League for Democracy (NLD) party in the recent parliamentary elections. The NLD won 43 of the 44 seats it contested; only the wilfully blind would have predicted anything less, if the hordes who risked brutal treatment by security forces to openly support her all these years were anything to go by.

After the landslide

Wednesday&rsquo;s report in The Indian Express of events that purportedly occurred on the night of January 16-17, 2012, throws open many questions that deserve answers. The newspaper says that central intelligence agencies told the government that two military units, one of mechanised infantry based at Hisar and another of paratroopers based at Agra, were moving towards New Delhi. This was on the very day that civil-military relations had hit a new low, with the army chief, General V K Singh, petitioning the Supreme Court on the matter of his date of birth. According to the report, New Delhi responded by putting little-known procedures into effect &mdash; lookouts, status checks, traffic slowdowns. The prime minister was apparently informed, and the defence secretary flew back from Malaysia. The government&rsquo;s stated position now is that these were justifiable movements for training purposes &mdash; to test reaction times in the fog that blankets the North Indian plains.

In the January fog

Although the higher-ups at the Unique Identification Authority of India (UIDAI)  will probably deny any such theory vehemently, the ground-level officers implementing the ambitious Aadhar scheme in Jharkhand can&rsquo;t help but wonder about why certain districts have been selected for the UID pilot projects. Not only is R S Sharma, the mission director and director general of UIDAI, a former principle secretary of Jharkhand, but two of the pilot projects have been launched in politically-important districts: one is Chandil, part of the Jharkhand Chief Minister Arjun Munda&rsquo;s constituency, and the other is Hazaribagh, BJP heavyweight Yashwant Sinha&rsquo;s home turf.

Aadhar's celeb identification

Corporate CEOs zealously guard their leisure hours, but it is not a practice politicians should follow, Finance Minister Pranab Mukherjee told officials by way of apology for calling them on a Sunday for a pre-Budget meeting. To make his point, he related an incident between Karpoori Thakur, chief minister of Bihar in the seventies, and Russi Modi, then head of Tata Steel. During one of his two brief tenures as chief minister, Thakur called Mody in the evening. Being after office hours, Mody was not available, so Thakur left a message and Mody only returned the call the next morning. Thakur took a dig at Mody, saying corporate chiefs were lucky, they had time to rest and go to clubs and enjoy life, unlike politicians. Mody, who was rarely lost for words, responded promptly. That was only to be expected, he pointed out, because politicians are around for three, four, maybe five years whereas he, Mody, would be around for 40 years.

Why CEOs maximise leisure

Social networking site Facebook has driven the CEO of a global engineering and aerospace major in India to despair. Many youngsters who join the firm, he says, find it impossible to work in a sanitised environment that is, for security reasons, not connected to the Internet. One 20-year-old newcomer quit the firm because he was worried that his friend might post a suicide note on Facebook. &ldquo;How will I be able to save him?&rdquo; he told the CEO.

Facing facts

Dinesh Mohan rightly emphasises that the public road system of transportation are any day cheaper and simpler to build, easier to use and more environment-friendly. Of course, we cannot negate the benefits of the metro altogether, rather we should have a  structure that combines different modes of transport to solve traffic issues. Though long-distance connectivity that encompasses multiple means like road trams, buses and so on has been given adequate importance, smaller structures like a lane for cyclists have been ignored.

Letters: ...with multiple means

This refers to the Lunch with BS with Dinesh Mohan (&ldquo;One for the road,&rdquo; April 3). It has been mentioned in the article that the research institute, Research Designs and Standards Organisation (RDSO), under the railway ministry employs some 20 people. This statement is so off the mark that one wonders about the veracity of other observations made by the transport expert. RDSO is a 60-year-old organisation that employs about 2,700 people. Last year alone, it completed no less than 45 research and design projects based on extensive background study and trials (see Annual Report Indian Railways 2010-11). Publication record of research work is of lesser relevance compared to actual implementation and execution of research-based findings, as any transport specialist in the country would  insist. Hence comparisons with China and Brazil in this context are meaningless.

Letters: Managing congestion

Dinesh Mohan&rsquo;s views on the Bus Rapid Transit (BRT) corridor were interesting to read. However, one wonders how commuting within urban spaces may be impacted with the onset of the digital age and revolution in information technology. By the middle of this decade, we may have more people working from home and, thus, may see a reduction in traffic owing to &ldquo;office-goers&rdquo;. Would it be sensible, then, to build rapid transit corridors, flyovers or metro systems? Instead of mindlessly aping the West, we need to have a futuristic outlook to solving transportation and traffic issues, at least in urban areas.

Business Standard

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