Today's Hot Stories - April 23, 2014
10 Headlines for Today(1) Stop personal attacks on Modi: Jaitley
(2) Kejriwal slams Modi, Rahul for “massive poll spending”
(3) Cries of anguish as S Korea ferry toll reaches 130
(4) Surgical protection plan from Bajaj Allianz
(5) Crocin Advance in short supply
(6) Nokia-Microsoft deal to be completed soon
(7) Hockey: Men’s team loses, but women chalk up win
(8) Tennis: Wawrinka tops Federer, wins Monte Carlo
(9) Races: Blushing Romeo poised for hat-trick
(10) Ban sought on junk food in schools
5 Stories for Today
(1) Supreme Court charts course for safe roads
(2) US vows more sanctions on Russia unless tensions ease in Ukraine
(3) Set to enter big league, Bandhan to bank on core competence
(4) Valeant, Ackman jointly bid $47 billion for Botox company
(5) Cheap labour and competitiveness
(1) Supreme Court charts course for safe roads
Indian roads have proved to be giant killers demanding immediate attention and remedial action, the Supreme Court observed on Tuesday and appointed a panel to suggest measures to prevent road accidents and to ensure accountability.
Justice K.S. Radhakrishnan, who retires as Supreme Court judge on May 14 will be part of this panel along with S. Sundar, Former Transport Secretary and Dr. Nishi Mittal, formerly HoD, Traffic Engineering and Safety (TES).
A Bench of Chief Justice P. Sathasivam and Justices Ranjan Gogoi and N.V. Ramana, gave this direction acting on a public interest writ petition (PIL) filed by renowned orthopaedician Dr. S. Rajasekaran.
The bench quoted figures furnished by the Ministry of Road Transport and Highways (MoRTH) in the volume “Road Accidents in India 2010” highlighting the extent of increase of road accidents and fatal cases between 1970-2010.
It is reported that road traffic accidents in 2010 numbered 4,30,654 resulting in 1,26,896 deaths and serious injuries 4,66,600 that includes amputation of limbs. One serious road accident in the country occurs every minute; and one person dies in a road traffic accident every 4 minutes.
In his judgment Justice Gogoi said: “Road traffic accidents have the potential of being one of the largest challenges to orderly human existence necessitating immediate and urgent intervention.
“Regular maintenance of all highways and roads both by the Central and the State governments, in order to make the same traffic worthy, is the minimum that the citizens of this country can expect and are entitled to.
“We hardly need to emphasis that it is the duty of the Central and the State Governments to ensure the availability of safe roads worthy of traffic.”
The Bench asked the three-member panel to submit a report to the apex court after receipt of reports from Centre and States on the status of implementation and enforcement of various road safety laws.
Source: The Economic Times
(2) US vows more sanctions on Russia unless tensions ease in Ukraine
US secretary of state John Kerry told Russian foreign minister Sergei Lavrov in a telephone call on Tuesday that Washington would impose more sanctions on Russia if tensions did not de-escalate in eastern Ukraine, a senior US official said.
The official said Kerry talked to both Lavrov and Ukrainian Prime Minister Arseny Yatseniuk.
"With foreign minister Lavrov, the secretary expressed deep concern over the lack of positive Russian steps to de-escalate, cited mounting evidence that separatists continue to increase the number of buildings under occupation and take journalists and other civilians captive," he said.
"He urged Russia to tone down escalatory rhetoric, engage diplomatically in the east with the OSCE and Ukrainian government, and issue public statements calling for those occupying buildings to disarm and stand down in exchange for amnesty," he added.
The official said Kerry also reiterated that the absence of measurable progress on implementing last week's Geneva agreement would result in increased sanctions on Russia.
In Moscow, the Russian Foreign Ministry said Lavrov had told Kerry that Ukraine must take urgent steps to implement the Geneva agreement aimed at defusing the Ukraine crisis.
The U.S. official said Kerry had told Yatseniuk that Kiev must take important steps as well to de-escalate tensions, "including progress on amnesty legislation, steps toward broadening the national dialogue on constitutional reform to include representatives of all regions and close coordination with the OSCE monitoring mission."
Washington has said it would decide "in days" on additional sanctions if Russia does not take steps to implement the agreement.
Source: The Times of India
(3) Set to enter big league, Bandhan to bank on core competence
Having recently bagged a licence from the RBI to commence banking operations, Bandhan Financial Services’ is no minor feat.
With a loan book of about Rs.6,000 crore, Bandhan today has a network of 2,016 branches — about 45% of these are in unbanked rural areas of the country.
The country’s largest microfinance institution, however, traces its humble roots to Bagnan in Howrah district where Chandra Shekhar Ghosh started its operations 12 years ago.
Some 55 km from Kolkata, Bagnan is quietly celebrating Bandhan’s success. “Our customers, who are mostly women, are very happy and excited that we bagged a banking licence. They are saying that after we launch the operations, they can come to our branches and avail full-fledged banking services. It means a lot to them,” says Tapas Paul, branch manager at Bandhan’s Nuntia branch in Bagnan.
Paul, 29, has been with the MFI major for the last six years. He is feeling more secure now as he would be absorbed in the banking operations. “Earlier, friends and relatives were not very convinced of the nature of my job as most of our customers are women,” says Paul.
On a hot and humid afternoon, the other six people in the office, all credit officers, are busy with their group registers. Each credit officer looks after 3-4 groups and every group consists of about 30 women to whom the microfinance company lends.
“We have got a highly motivated workforce. Every credit officer knows this area like the back of his hand. We have day-to-day interaction with each of our customers,” says Paul. According to him, this connect would help the upcoming bank to provide better services to customers.
“Women with low literacy levels in this semi-urban area hesitate to walk into a bank branch even if they are financially self-sufficient. We will be a different bank altogether,” he says.
Bhaskar Sen, chairman of ICC National Expert Committee on Banking, Finance & Insurance, feels Bandhan, with its huge branch network in unbanked rural areas and more than 54 lakh customers , will surely help in financial inclusion of women.
Sen is a former chairman and managing director of United Bank of India.
“Apart from lending to women customers, it can now help them in small savings where mainstream banks could not reach so far. Moreover, it makes sense for women in the unbanked regions to have a bank account of their own as women are more astute savers than men,” he says.
Earlier, talking to FE, Bandhan CMD Ghosh had said that, as a full-fledged bank, it would focus on tapping the large unbanked population as well as deal with existing customers in unbanked rural areas.
Alok Prasad, CEO of MFI Industry body MFIN, says loans to low-income households have been Bandhan’s core competence and there still exist many such households that are unserved or underserved by mainstream banks. Prasad says apart from focussing on its existing customers, Bandhan could also tap the upper-end of the lower-income group, going forward.
According to him, as a full-fledged bank, Bandhan will, however, face a lot of challenges. Former SBI chairman Pratip Chaudhuri agrees. He says Bandhan, as a bank, has to ‘scale up’ its value of finance. “It has to go for high-value credit. As a mainstream bank, low-value credit will not help Bandhan break even, going forward,” says Chaudhuri. As an MFI, Bandhan’s current loan size is Rs 10,000.
Source: The Indian Express
(4) Valeant, Ackman jointly bid $47 billion for Botox company
The offer, if successful, would bring together two mid-sized pharmaceutical companies with expertise in skincare and eyecare products, and is highly unusual as activist investors typically buy stakes and then agitate for strategic change. Ackman's Pershing Square Capital Management, Allergan's largest shareholder with a 9.7% stake, disclosed in a filing on Monday that it is supporting the bid.
Valeant offered to pay $48.30 a share in cash and 0.83 of its common share for each Allergan share, valuing Allergan at $152.88 a share — a premium of over 7% to the company's closing price on Monday. The offer is 31% higher than Allergan's stock price on April 10, the day before Pershing's ownership reached 5%.
Source: Hindustan Times
(5) Cheap labour and competitiveness
For years now China has been the world’s manufacturing powerhouse, leveraging its cheap labour and much else to dominate global trade in general and developing country exports in particular. But, of late, talk that China has reached the Lewis turning point, when it runs out of access to a cheap labour reserve at a near constant real wage has gained currency. This, it argued, could undermine its competitiveness in a range of products, making way for new suppliers exploiting the benefit of a cheap labour force.
According to A Deutsche Bank study quoted by the Financial Times: “Since China’s WTO accession in 2001, real wages paid in the manufacturing sector have risen by almost 200% in USD-terms, surpassing Thailand and closing the gap with the Philippines. Strikingly, Chinese wages continued to move ahead in 2009-11, even as regional peers felt the dampening impact of the global recession.”
Is this China story true? And if so would India be among the countries that benefit? International comparisons of unit labour costs are difficult to come by, but some numbers are available from a few sources. This discussion is based on estimates made by the Bureau of Labour Statistics (BLS) of the US government. Despite the difficulty involved in generating comparable numbers the BLS has (till recently) routinely put out figures on unit labour costs in different countries as part of its International Labour Comparison programme. China and India were not part of the regular programme, but the BLS conducted special studies of labour compensation in these countries, being careful to underscore the dangers of comparing data that are different in terms of method, coverage and reliability across countries.
A special BLS study on India found that labour compensation (including pay for time worked, directly-paid benefits (excluding payment in kind), social insurance expenditures, and labour-related taxes) in India’s organised manufacturing sector had risen over the last decade from 0.68 (Rs.29.43) an hour in 1999 to $1.46 (or Rs.66.84) in 2010 (Chart 1). The rise among production workers (as opposed to all employees) has been lower from $0.53 (Rs.22.68) to $0.92 (Rs.41.87) per hour.
However, what matters from the point of view of competitiveness is not just compensation but unit labour costs in a common currency, which depends on compensation, productivity and the exchange rate. During this period, improved access to technology post-liberalisation had resulted in a sharp increase in productivity in many industries, reflected in a rise in value added per worker in the Indian organised manufacturing sector. This was also the time when the rupee was depreciating, excepting for 2007-08 when a capital inflow surge resulted in an appreciation of the currency. So all told India’s competitive position was improving considerably. This comes through in the comparison of average hourly labour compensation costs in India and elsewhere (Chart 2), which shows that India compares favourably with most competing countries excepting the Philippines.
How was China, which is the country all aspiring developing country exporters are seeking to at least partially displace, faring in this period? As Chart 3 shows, measured as a percentage of US compensation costs, while China was recording a lower level of compensation costs when compared with India (though the two were close to each other), matters had changed significantly by 2009 with Chinese compensation costs racing ahead.
There are several aspects of the Chinese experience that need to be taken note of. To start with, there has been a sharp increase in the average hourly compensation costs of manufacturing employees in China (in US dollar terms) after 2005. The figure had doubled over 2005 to 2009. This meant that though compensation costs in China were much lower than in many other locations, they did increase the competitiveness of countries like Ind1a.
All that said, however, the evidence is as yet disappointing. India’s share of the world’s exports of goods and services measured in current US dollars on a balance of payments basis stood at 1.2 per cent in 2005 and 2 per cent in 2012 according to World Bank statistics. That performance is better than that of Brazil’s, whose export share rose from 1.0 to 1.3, but way short of China’s, whose share rose from 6 to 9.7 per cent.
Given the evidence on labour compensation costs, conventionally seen as an important determinant of competitiveness, this differential in performance calls for an explanation. Possibly, a host of other factors such infrastructural constraints and the willing of business to target competitive global markets make for the difference.
Source: The Hindu
Disclaimer: All news stories and content sourced from freely available material on the internet. All sources are acknowledged.
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