Weekly News8th Nov to 14th Nov 2010

India, creator of US jobs President Obama comes to India at a time when the US

economy’s inability to create jobs on the scale required to bring unemployment down has acquired a sharp political edge, and it showed in the President’s speeches in Mumbai.

The $10 billion worth of deals signed between Indian and American firms shortly before the President’s arrival would create 48,000 jobs in the US, said Mr Obama.

For five decades after Independence, Indians looked up to the rest of the world for aid, technology and capital. Now, the world looks upon India as a dynamic creator of jobs and income opportunities, as a force for global progress and peace. President Obama’s words reflect the new reality, not the platitudes of a cultured guest.

8th Nov, 2010

Countervailing China While President Obama did not name China, he

made it very clear that the US values India more. The US, as the world’s sole superpower — which has

treaties with and bases in key east Asian countries — is a dominant strategic actor in the region. Now, the US wants India to become a key strategic actor in the region as well.

President Obama drew attention to the bipartisan support in the US for strengthening ties with India , making it clear that if there are domestic political objections to the partnership he is holding out, it would be only from India.

The US seeks partnership with China, too, of course.

9th Nov, 2010

Gold hit an all-time high of $1400 per ounce as continued global uncertainty coupled with abundant liquidity pushed demand for the metal ever higher in global markets.

In tandem, the price of gold in the domestic market hovered at close to Rs 20,000 per 10 gm on the spot market with futures at Rs 20,101, suggesting the price would go up further. Clearly, this is one commodity for which Indians have an insatiable appetite and the high global price has done nothing to curb domestic demand.

Gold, silver and palladium holdings in exchange-traded funds are at record levels.

10th Nov, 2010

Fascination with gold: A periodic, but passing, fad

SKS wilts under pressure, wrong move to cap interest rates

SKS Microfinance , the first publicly-listed microfinance company, has set a wrong precedent by capping interest rates on loans to the poor. A cap, 24% in this case, is a discretionary instrument.

The company has clearly wilted under pressure to lower interest rates — for the second time in one month — after the Andhra Pradesh government issued an Ordinance to check malpractices.

Regulations are needed to check malpractices and MFIs that use strong arm tactics to recover loans must be punished.

A cap is not the answer to lower interest rates. It will only dampen the supply of microfinance and force the poor to turn to money lenders.

11th Nov, 2010

Time the PM showed who is Raja It doesn’t matter whether the Comptroller and Auditor

General (CAG) is the right body (perhaps it is not) to look into possible policy flaws that cost the exchequer dear in 2G spectrum allocation.

The final report of the CAG nails the communications and information technology minister A Raja squarely and in a manner that makes his continuance in the Union Cabinet untenable. The CAG report is a damning indictment of the minister’s role in the controversy.

It details how eligibility criteria , the department of telecom’s (DoT) own guidelines and the concerns of both the finance ministry and officials in the DoT were repeatedly overlooked.

Now is the time the Prime Minister showed who is the Raja!

12th Nov, 2010

Unreasonable demand The reported strike call yet again by the All India Motor

Transport Congress (AIMTC), which represents over six million truck and lorry owners nationally, is doubly unfortunate. Its demand that three-axle vehicles be charged the same road toll as two-axle ones has no merit.

Tolls, after all, are really borne by consignees and, ultimately , consumers. So, truckers have no basis for such a complaint; tolls anyway are meant to expand and maintain the road network, and so, it is very much in the interest of truck owners.

The system of toll collection expressly needs modernising on our roads. We need an IT-enabled radio frequency identification (RFID) technology road-tolling system so that motorists pay electronically without having to repeatedly stop at toll booths.

13th Nov, 2010