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Australian Group Chemicals
2007-08-06 13:14:00
The Indo-US nuclear deal is paving way for greater access to dual-use materials and technology by the Indian industry. So the government is burning midnight oil to introduce stricter export-control regime to prevent proliferation of such materials from India. In this context it would be interesting to know something about the Australian Group Chem ical s . I excerpt below for you, from an excellent article that appeared in today?s ET: This refers to the 63 chemicals that are identified by the Australia Group as chemical weapons precursors. Hence they need stricter licensing according to the signatories of this grouping. US is a participant in this group. India is not. The group members are signatories to the Chemical Weapons Convention, a treaty that binds nations to be transparent about the nature of chemicals produced by them. India has legislated a chemical weapons statute in line with this treaty. The Australia Group does not impose any legally binding obligati...

Relationship between CDS and sub-prime mortgage market woes
2007-08-03 13:48:00
Take a look at what I was asked in the shout-box: 2 Aug 07, 16:37 deepak: sir , can you state the relationship between cds (credit default swap) rates and subprime mkt (mortgage backed security) which are hiking now a days in europe and U.S due to subprime loan breakout. I am very happy to see a question like this being asked on our blog. It gives me great satisfaction that my readers are coming of age and are asking me questions which normally are expected of experts in the relevant field. Usually I come across such questions in specialized fora or symposiums held by specialists of the relevant area. Let?s be happy that we are all evolving into specialists in our own way. Here we go. But before I explore the actual link between the two, let?s take a quick recap (for the benefit of the still uninitiated) of the terms ? CDS and subprime mortage loans. US sub-prime mortgage market During the housing boom of the last five years, people with bad credit histories...
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Answers to shout-box queries ? 12
2007-08-01 12:40:00
I lost track somewhere and stashed away these questions for answering later. I am coming out with my replies today. 21 Jul 07, 08:35 unni: what is NRF and RLGP in economics? pls help sir I don?t know any RLGP. Perhaps you are referring to RLEGP. National Renewal Fund and RLEGP (Rural Landless Employment Guarantee Program) are government schemes for different purposes. The NRF was meant for retraining or re-skilling the employees who have taken voluntary retirement from the government or public sector undertakings. It was introduced sometime in 1992. The RLEGP scheme was in operation from 1998 budget or so. The name of the scheme says it all. It wants to guarantee employment to rural landless labourers. The intent is to ensure that they at least get gainful employment for about 100 days in a year. 20 Jul 07, 14:38 rehana: how do CII and FICCI fundamentally differ ( in aims ... objectives .. functions .. importance etc.)? Both are associations of the...
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Indian economy?s reform path
2007-07-31 13:29:00
If you were asked to tell something about the Indian economy?s reform path, you would I am sure, start with the 1990?s. But a noted economist like our present Deputy Chairman of the Planning Commission Mr. Montek Singh Ahluwalia would start elsewhere. Where precisely? See it in his own words, extracted from what appeared in today?s ET: ?Actually, during the early years of planning, we achieved a fairly decent rate of GDP growth, but as we entered the 1960s, performance slumped, food production fell, there were forex constraints and don?t forget, we had major wars with our neighbours. It was during this time that people started questioning the continuance of the socialist model of governance.? ?Come to think of it, the reform process actually started in the 1960s, when Mrs. Indira Gandhi supported the Green Revolution, which was carried out with the help of imported high quality seeds and fertilizers. But the winds of change became strong as the last decade started; profe...
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Why should movies be insured?
2007-07-29 11:41:00
Most of us think that cinema industry is a non-priority sector. Whoever is producing movies is betting his own money on them and if he loses, that?s alright; it is his loss. If he wins, he wins big and has hit a jackpot. But is such a stance reasonable? I don?t think so. The industry also provides lot of employment opportunities for millions of people all across India. Think of not just the producers of films, but the distributors, the cinema halls and the employees they hire to run the shows. Even think of the poster boys ? I mean, the wall poster fixing boys. This industry is one which provides employment across a cross section of our society. In addition to employment, we have to give due place for the artistic and literary talents that it nourishes and thus makes a positive contribution to the society at large. You would have heard about the calls for giving cinema also an ?industry status?. What could be the import of such a call? One that I came across today is,...
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Indian economy?s reform path
2007-07-28 09:57:00
If you were asked to tell something about the Indian economy?s reform path, you would I am sure, start with the 1990?s. But a noted economist like our present Deputy Chairman of the Planning Commission Mr. Montek Singh Ahluwalia would start elsewhere. Where precisely? See it in his own words, extracted from what appeared in today?s ET: ?Actually, during the early years of planning, we achieved a fairly decent rate of GDP growth, but as we entered the 1960s, performance slumped, food production fell, there were forex constraints and don?t forget, we had major wars with our neighbours. It was during this time that people started questioning the continuance of the socialist model of governance.? ?Come to think of it, the reform process actually started in the 1960s, when Mrs. Indira Gandhi supported the Green Revolution, which was carried out with the help of imported high quality seeds and fertilizers. But the winds of change became strong as the last decade started; profe...
More About: Economy , Reform , Indian Economy , Path

Mashelkar Report controversy
2007-07-27 19:48:00
Though we have noted about this in our Indian Current Affairs blog as it was developing, it is time to consolidate all what we know at one place to have a backgrounder in the issue for reference. You can?t get a better backgrounder on how or why the Committee came to be constituted, from anywhere other than the report itself. Let?s take a look at the opening paragraphs of the report: ?The Patents (Amendment) Bill, 2005, introduced in the Parliament in March, 2005 with the objective of making the Patents Act compatible with India?s international obligations, particularly under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) had the benefit of detailed discussion in both the Houses. During the debate, the issues regarding patentability of micro-organisms and the definition of 'pharmaceutical substance' to mean ?a new chemical entity (NCE)? or ?new medical entity (NME)? were raised. The Commerce and Industry Minister then assured t...
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Consequences of WTO talks (Doha round) falling through
2007-07-25 18:36:00
This is an article written by a UN Under Secretary General. It is a must read for all of you. Take a look at it here. The WESS 2007 (World Economic and Social Survey, an annual publication by UNESCAP) underlines two types of costs ? direct and indirect ? consequent to the failure of WTO talks. Direct costs refer to the net gains from trade liberalization that would no longer materialize. Estimates put the loss of income at about $100 bn. Indirect costs are more diverse. They include: a long-term erosion in multilateralism and its non-discriminatory rules which have provided a stable anchor and rising trade-driven prosperity to the world for more than 60 years. It could also spell the beginnings of a reversal of economic reforms back to protectionism and trade favouritism, and the mergence of new political divides which could ultimately threaten peace and security. Failure of the Doha round would lead to a proliferation of bilateral and regional trade deals. Al...
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About ADR, GDR, IDR and also SLR
2007-07-25 09:34:00
Today I give you answers to two of the shout-box queries that were asked a couple of days ago. Incidentally what a rhyming in the naming? 19 Jul 07, 15:17 rishi raj: What is ADR,GDR,IDR ?What is the basic role they play in economy ? ADR: American Depository Receipts GDR: Global Depository Receipts IDR: Indian Depository Receipts Say if an Indian company wants to mobilize capital from abroad, can it do it? Even a novice will instantaneously come up with an answer like ?NO?. We have too many controls which will not allow raising of capital abroad easily. This is what we ?perceive.? As we are liberalizing our economy, raising of capital from outside the country is slowly enabled by the government. ADRs and GDRs are the result of such liberalization. What happens in these ADRs and GDRs is that an Indian corporate can deposit its stock (shares) with a foreign depository (foreign host country equivalents to our own NSDL and CSDL) and raise money from foreign pu...
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What is PL 480?
2007-07-24 12:47:00
It is a food assistance programme of the US government. Food assistance is given to other countries ? either on government to government basis or on people to people basis. U.S. support for overseas food aid was formalized in the Agricultural Trade Development and assistance Act of 1954, also known as P.L. 480 Food for Peace. The basic legislation, establishes the U.S. policy of using the country's abundant agricultural resources and food processing capabilities to enhance food security in the developing world. It has its own strategic and humanitarian concerns behind it.The PL in PL 480 stands for Public Law. This food aid program is comprised of a number of ?titles?. Each title has different objectives and provides agricultural assistance to countries at different levels of economic development. Title I of the P.L. 480 program is administered by US Department of Agriculture (USDA) and Title II is administered by the US Agency for International Development (USAID). Nothing muc...

Answers to some shout-box queries – 9
2007-07-02 13:13:00
21 Jun 07, 23:20 Vasudev: Sir, can u throw a light on the GO 610 in Andhra Pradesh regarding Telangana!!! This is proving to be one of the most contentious issues in Andhra Pradesh today. It is a pretty simple issue which is complicated by local politics. It is possible that what I write here may raise the hackles of many others. Nevertheless, let me give it a try. The seeds for
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Answers to some shout-box queries – 8
2007-06-30 10:04:00
26 Jun 07, 15:33 rishi: Sir can you tell me how the share prices for a company goes up and down ?? Let me try to list out some things that take a share’s price up or down: Technically speaking it is pure demand supply equation.Inherent strength of a company’s fundamentals leads to demand and hence the price goes up. If the demand comes down the price will come
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Answers to some shout-box queries – 7
2007-06-29 11:06:00
27 Jun 07, 12:38 manisha: recently i read a news on govt. intends to buy the RBI stake in SBI. What is purpose after ths sir There is an apparent conflict of interest for the RBI. It cannot own a bank while being a regulator for the banking sector. That is why based on Narasimham committee’s recommendations, the Government decided to take ownership of the SBI from RBI. 27 Jun 07,
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Answers to some shout-box queries – 6
2007-06-28 09:05:00
On 20th June Sridhar was asking me about how Dutch Disease raises exchange rate. What is the process behind the rise or decline of exchange rates. A few months back the $ rate was around Rs. 45. Now it has declined to about Rs. 40. How does it depend on the economy? Dutch disease doesn’t lead to a rising rupee. A rising rupee leads to the Dutch disease. The rise of the rupee will
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Consequences of the East Asian Currency Crisis
2007-06-27 10:56:00
The crisis had significant macro-level effects, including sharp reductions in values of currencies, stock markets, and other asset prices of several Asian countries. Many businesses collapsed, and as a consequence, millions of people fell below the poverty line in 1997-1998. Indonesia, South Korea and Thailand were the countries most affected by the crisis. The economic crisis also led to
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East Asian Currency Crisis of 1997-98
2007-06-26 12:38:00
Sreenadh: Hi Sir, Tell sth about The East Asian financial crisis and what caused it? In the wake of the rising rupee and a weakening dollar, there appears to be renewed interest in the East Asian Financial crisis that happened nearly a decade ago and what lessons the world could have learned from it. Because the subject is quite complex, I prefer to write in a two parts. Here we go with the
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Answers to some shout-box queries -5
2007-06-24 07:11:00
19 Jun 07, 22:43 Sreenadh: Sir, what's the brouhaha over natural gas pricing?and dispute between Reliance Bros Reliance Industries Limited has discovered lot of natural gas off the East Coast in K-G Basin. Krishna-Godavari basin. The discovery amounts to about 14 tcf – trillion cubic feet. The Reliance brothers parted their ways after this discovery. So, as part of the settlement the
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Answers to some shout-box queries -4
2007-06-23 09:56:00
18 Jun 07, 09:30 vinod: Sir..what is the difference in the working of SHCIL and SEBI? There is a lot of difference. SEBI is a regulator while SHCIL is not. The latter is just a custodian of stocks in demat form. SHCIL can’t regulate the markets in any way. It is a mere custodian. SEBI lays down the rules and regulations governing the market. Its regulations have an impact on the
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Answers to some shout-box queries -3
2007-06-16 11:39:00
Here are answers to some more of your shout-box queries. vinod: What is the implication of nationalisation of venezuela's oil companies in the global oil prices? What I foresee is a temporary spike in the prices. US (which sources most of the Venezeulan oil) will always find a quick substitute. This may lead to a temporary spike in international markets. But before it could do much
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About IIP
2007-06-15 11:21:00
Index of Industrial Production is a figure that is doled out every month by the CSO (Central Statistical Organization) of the MOSPI – Ministry of Statistics and Program Implementation at the Centre. It gives us the growth rates recorded in each of the industrial activities of the economy. It is measured in three different ways. IIP-Sectoral gives figures about Mining, Manufacturing,

Answers to some shout-box queries
2007-06-14 18:38:00
Ritu Chauhan was asking me yesterday through email as to why is car racing called Grand Prix? In fact the word Grand Prix is applied to many other contests. Not just car races. Though we tend to associate it most with Formula 1 racing. You would be surprised to know that it is associated with as diverse a list as: music, cinema, volleyball, horse racing, dressage, videogames etc. Wait a
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Answers to some of the shout-box queries
2007-06-13 09:09:00
vinod: What is SLP? A special leave petition is filed by an aggrieved party (with a High Court order) before the Supreme Court, only on the special leave granted by the High Court. If the High Court while passing its orders, does not grant that leave, the aggrieved party cannot approach the Supreme Court with an SLP. Instead it has to go with a Civil Appeal. This will take longer to get
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Strategic Petroleum Reserves
2007-06-12 12:00:00
What are strategic reserves of oil? Do we have any plans afoot on this front? The crude oil prices are again soaring. Rumours of an imminent attack on Iran by the US are also doing rounds. In such a situation, if and when such an attack happens, our country which is heavily dependent on oil imports will be adversely affected. Do you remember that we consume about 2.5 mn barrels of crude
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Climate change without sacrificing growth
2007-06-11 12:23:00
We all know that it is the US’ obstinacy alone, which has been the reason for the failure of the world countries in agreeing for the extension of Kyoto protocol or in coming out with a new protocol, on facing the challenges of climate change. The US has been using India as its crutch for inaction on the global climate change front. Look at these figures: India has 400 mn people who are
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Curing the reservation system
2007-06-10 08:09:00
In today’s ET I found a very good article written by Mythili Bhusnurmath on the subject. While suggesting that unless all political parties come together and work out a solution that addresses genuine deprivation regardless of caste, creed or religion, it is only a matter of time before we see a repeat of the anger of castes clamouring for downward mobility in the social pecking order to
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Israel Palestinian Conflict
2007-06-06 13:27:00
It is one of those issues for which the world community has not been able to find a solution over decades. I would dare say that civilizations have fought over this issue, though they would have called it with a different name during their respective heydays. As you would have by now noticed, while relying heavily on Wikipedia, I would also chip in with my own perspectives, edits and
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Doha round of WTO talks
2007-06-05 12:52:00
Recently I was asked to explain the recent issues relating to Doha Round of WTO talks and how it will affect the global trade. Well, I excerpt below what the Wikipedia says (interspersed with some of my own observations) about the subject. You will get a thorough background about the Doha round with the information from Wikipedia. Then I follow it up with the latest happenings that have

BSE Sensex and NSE S&P CNX Nifty
2007-06-04 09:51:00
SENSEX is a scientifically designed and globally accepted construction and review methodology. First compiled in 1986, SENSEX is a basket of 30 constituent stocks representing a sample of large, liquid and representative companies. The base year of SENSEX is 1978-79 and the base value is 100. The index is widely reported in both domestic and international markets through print as well as
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How should I prepare for 2007 Mains GS paper?
2007-06-03 17:03:00
In my piece on preparing for GS, I spoke more about the ‘lifestyle’ part of the preparation for GS. In this piece I will be giving you a ‘model’ method of preparation for GS in 2007. Gather all the relevant material required. Well, what is the ‘relevant’ material here? My recommendation goes like this:Essential: <!--[if !supportLists]-->
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Preparing for the Mains GS Paper
2007-06-01 13:53:00
The piece I wrote about preparation for the Civil Services exam in general is very well received. I am now asked to say something about the preparation for the GS Mains paper. Here I go. First the caveat emptor: What I say here is said keeping the most common denominator in mind. Exceptions can always be found on the +ve and –ve sides. If you belong to the exceptions, you are responsible
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