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Beyond
the fiasco in Unit Trust of India |
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A dark cloud hovers over the
financial markets. The fiasco in the Unit Trust of India (UTI),
nervousness in the capital market, doubts on the solvency of
key financial institutions, integrity of market participants,
dithering over policy initiatives, all of these have rudely
shaken the trust and confidence, which it has taken years to
nurse. |
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EAVESDROPPER:
Weak bank week
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It was weak banks week at North
Block. Finance secretary Ajit Kumar initiated the process of
stock taking and finding out solutions for the problems of weak
banks by summoning the chairman and senior officials of the
Uco Bank on Monday. The spate of meetings with officials of
weak banks continued throughout the week ending with Punjab
and Sind Bank on Friday. |
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ON
THE OTHER HAND: Slowdown
sickness |
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The
Supreme Court’s observation that it is the government’s responsibility
to ensure that the overflowing stocks of foodgrains in the FCI
godowns reach the starving people has come at an appropriate
time. The country is sitting at present on 61 million tonnes
of wheat and rice which is 37 million tonnes more than the buffer
norm of 24 million tonnes. |
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Towards
major reform |
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Lack of reform in legal infrastructure
is a major constraint on GDP growth. Obsessed with exchange
rates, fiscal deficits and tariffs, the first flush of reforms
ignored institutional constraints |
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FDI
stuck in faultlines
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The
Union commerce ministry’s latest report says that actual realisation
from foreign direct investment (FDI) fell to 47 per cent in
the first four months of the current year, down from 59.5 per
cent in 1999 and 52.2 per cent in 2000. What is worse, the government
has done precious little to halt the declining ratio that was
in evidence in recent years. |
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VIEWPOINT:
Winning the battle, losing the war in the global trading
arena |
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After 50 years of patient progress
and some hard negotiations, the international community has
achieved its objective of a rules-based multilateral trading
system. The World Trade Organisation (WTO) was established in
the year 1995. But the question remains, is it enough to ensure
a free and fair trade regime? The answer is ‘No’. |
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Hopes
of an agricultural growth-led economic recovery may not fructify
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WITH the rain
gods smiling yet again, hopes of an economic recovery led by
agriculture growth is fast gaining currency among the country’s
think-tank. A 6.3 per cent growth in gross domestic product
(GDP), led by an impressive 9 per cent growth in agricultural
output is just one of the forecasts made recently by the Centre
for Monitoring Indian Economy (CMIE). |
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TAKING
STOCK: Capital
markets require a pep-up dose without further delay
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The decision of the regulatory
authorities to ban trading in deferral products from July 2,
2001, like Automated Lending and Borrowing Mechanism, Borrowing
and Lending Securities Scheme and Modified Carry Forward System,
and to introduce compulsory rolling settlement in respect of
414 scrips that are the most active and account for over 90
per cent of market capitalisation, was a knee-jerk reaction
to stock market developments in the first half of March 2001.
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RANDOM
SHOT: Kashmir
and the prisoners’ dilemma |
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The
Indo-Pak stand-off can be usefully analysed by the Game Theory
which economists call “the prisoners’ dilemma”. Two suspects,
Ram and Shyam, are being interrogated by the police separately.
Each one is pressured to confess and is told that the other
is already doing so. If both hold out they will receive a routine
sentence of one year each. |
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