Skip to main content

Posts

Showing posts from January, 2012

Signalling confusion?

Date : January 30, 2012 The Reserve Bank of India's third quarter review of monetary policy was devoid of major surprises. The only change in monetary policy instruments — a cut in the Cash Reserve Ratio (CRR) by 0.50 percentage point to 5.5 per cent — was largely expected. The move will release Rs.32,000 crore of funds impounded from banks, almost immediately. The key policy interest rate, the repo rate, remains unchanged at 8.5 per cent. Consequently, the reverse repo stays at 7.5 per cent and the marginal standing facility at 9.5 per cent. A cut in the repo rate would have more definitely indicated a downward shift in the monetary stance but the RBI has argued that the CRR reduction is the best it could do under the prevailing circumstances and ought to be interpreted as a signal for a softer monetary policy regime. According to the RBI, the CRR is a policy instrument with liquidity dimension. Its reduction will bring down the cost of money for banks and have a...

India signs international tax treaty

Date : January 30, 2012 In yet another move to get information about black money stashed away abroad, India has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, a multilateral agreement that promotes international cooperation while respecting the rights of taxpayers. This will send a strong signal that India and the other 31 signatory countries have joined hands to ensure that individuals and multinational enterprises pay the right amount of tax, at the right time and in the right place. The Convention provides for administrative cooperation among the parties in the assessment and collection of taxes, with a view to combating tax avoidance and evasion, according to a statement by the Organisation for Economic Cooperation and Development (OECD) here. With taxpayers increasingly operating on a global basis, tax authorities are moving from bilateral to multilateral cooperation and from exchange of information on request to other forms of co...

Counterfeit Notes

Counterfeit notes that are not easily identified sometimes drives us into tight corners. Not all of us have the ‘currency knowledge’ to find the difference, which can be known only after minute scrutiny. Here is how you can recognize it: See if the note is crisp and thin. The notes are printed on optical fiber paper. Fake notes are printed on thick paper make of bamboo pulp. If it is a Xeroxed note the colour and print look faded. Look for the ‘Intaglio” on the denomination i.e.1000,500,100,50 20 ,10 or 5 ( the embossed print that enables the blind to touch and know the denomination of the currency). The chemical’omran’ is used to print in ‘Intaglio’ which looks bright. Intaglio will be missing in counterfeit notes. Look at the note against the light, for the fine and shining ‘security band’on the right side of ‘Intaglio’ look for the faint water mark For a genuine currency note, the number panel will be regular and when scrutinized against ultra violet rays,the letters printed ...

Bank Rates

Bank Rate Bank rate is the rate at which RBI lends to the commercial banks and other financial intermediaries. Bank rates imply a long term outlook on the interest rates and are an outcome of a long term monetary policy. It is the bank rate based on which the commercial banks decide the lending rates to the customers. Hence, any change in the bank rates have direct bearing on the lending rates to the customers. This does not require Security Deposit. Repo Rate (RR) The rate at which Reserve Bank lends money to Banks. Bank borrows money from Banks by submitting securities. submitting securities is a requisite for Repurchase Transaction (Repo transaction). Reverse Repo Rate (RRR) The rate at which Reserve Bank borrows money from Banks. Usually Both the rates are increased or decreased by same basis points.  When Repo rate is increased, borrowing money from RBI gets costlier for Banks and hence Banks increases  lending interest rate. This decreases lo...

Military Coup

A military coup (d'etat) is an organized action by the armed forces of a country meant to overthrow and replace its government. It can be successful (the former government is replaced by a new one controlled by the military) or not (the government stays in power), it can be temporary (the military relinquishes power quickly) or permanent (the military remains in control for lengthy periods of time), bloody or bloodless.  It is different from a revolution, since a coup is a top-down action, controlled and generated from an existing structure of the state against another, rather than a bottom-up action of rebellion against the whole government coming from non-governament actors (as in the case of a revolution), as is different from a civil war (where two factions, typically a governmental and non-governmental actor fight for power in a bloody war for lengthy periods), since a coup can be both non-bloody and short in duration (such as the successful Thai coup of 2006).

Choking off free speech on the web

What makes SOPA and PIPA especially toxic is the threat they pose to all dimensions of a website's existence - physical presence, findability and revenue stream. With 4.5 million signatures on a Google petition and one million messages sent to the United States Congress via the Electronic Frontier Foundation (EFF) in a single day, January 18, advocates of a free Internet have mounted a determined bid to stall new legislation that can chill free speech. The global chorus against two Bills that are winding their way through the American legal system is growing. The two draft laws in the U.S. House of Representatives and Senate, now known around the world by the acronyms SOPA and PIPA (for Stop Online Piracy Act and Protect IP Act), have raised a storm on the Internet. They are seen as updated versions of the “Combating Online Infringements and Counterfeits Act” (COICA) which could not make progress in the Senate earlier. In a small victory for opponents, key movers of the Bil...

Single Transferable Vote System (The Hare System)

This is a voting system which is designed to achieve proportional representation thorough preferential voting. Under STV, an elector’s vote is initially allocated to his/her most preferred candidate, and then after the candidate is either elected or eliminated, any surplus or unused vote are transferred to according to voter’s stated preference. The system minimizes “wasted” votes, provides approximately proportional representation, and enables votes to be explicitly cast for individual candidates rather than for closed party lists. It achieves this by using multi-seat constituencies (voting district) and by transferring votes to other eligible candidates that would otherwise wasted on sure losers and sure winners. Voting: In STV each voter ranks the list of candidates in order of preference. In other words, the voter places a “1” beside their most preferred candidate, a “2” beside their second preferred candidate, and so on. The ballot paper submitted by the voters therefore c...

Election of President

How are votes calculated for Presidential Election? President of India is elected by Electoral College . Composition: The college is made up of the following: Elected members of the Rajya Sabha Elected members of the Lok Sabha Elected members of the State Legislative Assembly Elected members of each Union Territory possessing Assembly President Election in India involves proportional representation from respective states. The number of votes assigned to a voter from a state assembly is decided as follows: In other words, value is number of thousand of votes represented by him. Thus indirectly, the entire population casts vote. Suppose we have a fictitious nation and it has following two states: St ate No. of Assembly Seats Population Vote Value of each MLA Total vote from State Bihar 40 10000000 250 10000 Chandigarh 5 100000 20 100 For Bihar, Since ...