Decoding market exuberance
Pre-election ---> Market +ve in hope that the elections will bring changes in economy
After election ----> This optimism does not last long after the elections
Same thing happening this time and it is being called Modi rally and it is believed that this rally would be sustained as the new government will revive the investment.
But there are are questions on such assumptions:
1. Even if a government led by Mr. Narendra Modi is formed it might still be hobbled by coalition politics. Nor is it certain that even if the new government has the necessary political support, it will decide to undertake, and will be able to implement, those measures that the markets expect.
2. Credit Suisse, one of the very few global researchers that has taken a contrarian view, points out that the Central government by itself cannot revive the investment cycle. Only about one-fourth of the infrastructure projects are bogged down due to the Centre’s inaction. The rest are “constrained by overcapacity, balance-sheets or state governments”.
A more sustained rally will depend on the economic fundamentals improving. At present, the economy is struggling with
1. weak demand,
2. high corporate debt,
3. a near-collapse in private investment, and
4. a massive bad loan problem for banks.
Article is about whether the model code of conduct should be made statutory or not. Currently it is voluntary.
Points in favor of making it statutory:
1. Parliamentary Standing Committee on Law and Justice - most of the stipulations of the MCC are already contained in various laws (IPC, RPA) and are therefore enforceable. Since most of its provisions are enforceable, the remaining stipulations in the MCC should also be accorded statutory backing.
2. It would create a level playing field and increase the efficacy of the poll process.
Points against:
1. Needless litigations
2. That would inevitably circumscribe the role and functions of the EC.
Foolowing information can be useful :
Parliamentary Committee makes a pointed reference to its dissatisfaction with the existing legal remedy. This pertains to the absence of a procedure of immediate appeal where the nominations of candidates are rejected by returning officers. The decisions of the latter can, under the current system, only be challenged in the High Courts after the announcement of election results. This is an area where, in view of the Constitutional authority invested in the EC, with quasi-judicial powers, political parties could work out an amicable resolution.
In the end author suggests - "It would be fair to say that, with a growing number of political parties and candidates in the fray, there is greater need for impartial oversight of the electoral process today than a few decades ago. A stronger EC would therefore best serve the larger purposes of the conduct of free and fair elections. "
Reserve Bank eases foreign portfolio investment norms
The Reserve Bank of India, on Tuesday, simplified foreign portfolio investment norms by putting in place an easier registration process and operating framework with an aim to attract inflows.
“The portfolio investor registered in accordance with the Securities and Exchange Board of India (SEBI) guidelines shall be called Registered Foreign Portfolio Investor (RFPI),” the RBI said in a notification.
The existing portfolio investor class, namely, Foreign Institutional Investor (FII) and Qualified Foreign Investor (QFI) registered with SEBI shall be subsumed under RFPI, it said.
So RFPI = QFI + FII
New scheme
The guidelines for Portfolio Investment Scheme for FII and QFI have since been reviewed, and it has been decided to put in place a framework for investments under a new scheme called Foreign Portfolio Investment Scheme, it said.
RFPI may
1. purchase and sell shares and convertible debentures of Indian companies through a registered broker on recognised stock exchanges in India
2. as well as purchase shares and convertible debentures, which are offered to public in terms of relevant SEBI guidelines, it said.
3. These entities would be eligible to invest in government securities and corporate debt, subject to limits specified by the RBI and SEBI from time to time, it added.
4. would be permitted to trade in all exchange-traded derivative contracts on the stock exchanges, subject to the position limits as specified by SEBI from time to time.
However, it said, all investments made by that FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit.
The RBI said such investors
“RFPI may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic government securities, as collateral to the recognised stock exchanges for their transactions in cash as well as derivative segment of the market,” it said.
Govt. employees to get e-mail accounts
Five million government employees will now be given e-mail accounts and it will be mandatory for them to use the same for all official communications while the use of external service providers will be prohibited for all official purposes to ensure secure access and usage of data, the Centre told the Delhi High Court on Tuesday.
The Department of Electronics and Information Technology has told the Court in an affidavit that “The Policy on Acceptable Use of IT Resources of Government of India lays down the guidelines with respect to use of all Information Technology resources. This would apply to all IT resources, owned or leased by Government of India, and services accessible on or through them. The objective of this policy is to ensure proper access and usage of Government of India’s IT resources by all its users and protect the Information and Communications Technology infrastructure of the Government from any misuse.”
The affidavit has been filed in response to a PIL filed by former BJP leader K. G. Govindacharya through advocate Virag Gupta raising a series of issues relating to operation of websites, tax being paid by them, their use by children below 18 years and also highlighted that the government officials usually use Gmail accounts, whose servers are outside India, and transfer the official data through them is violative of the Public Records Act.
Jamaat-e-Islami to stand trial for war crimes
Jamaat-e-Islami, the party which had opposed Bangladesh independence and collaborated with the Pakistan army, is to stand trial for committing crimes against humanity in 1971.
According to Abdul Hannan Khan, coordinator of the Investigating Agency of the country’s International Crimes Tribunal (ICT), seven charges, including genocide, will be pressed against the party and its affiliates for their role during the liberation war.
The probe committee’s decision was announced on the day when Bangladesh was observing its historic ‘Black Night,’ commemorating the Pakistan army’s infamous ‘Operation Search Light,’ the beginning of the genocide on unarmed civilians in Dhaka on March 25, 1971.
A Telangana moment up north
Japanese architect wins top Pritzker award
Japanese architect Shigeru Ban, who uses cardboard tubes to make temporary housing for victims of natural disasters and refugees fleeing violence, has won his field's highest honour, the Pritzker Architecture Prize.
Award sponsor The Hyatt Foundation said Monday that it had chosen the 56-year-old architect as its 2014 laureate.
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