Financial Daily
from THE HINDU group of publications

Tuesday, May 08, 2001





Banking and Finance
Interest rates: Senior citizens dilemma
AS the single largest borrower, the Centre seems determined to bring down the interest rates on small savings, provident funds and bank deposits, affecting investors' post-retirement savings plans.

Corporate governance: How not to misgovern
THE IMPORTANCE of corporate governance lies in its contribution both to business prosperity and to accountability. But the emphasis on accountability has tended to obscure a board's first responsibility -- to enhance the prosperity of the business over t ime. Business prosperity cannot be commanded -- people, teamwork, leadership, entrepreneurial value, experience and skills are what really produce prosperity. Accountability, by contrast, does require appropriate rules and regulations, in which disclosur es are the most important elements. Good governance ensures that the constituencies (that is, stakeholders) are taken fully into account with respect to their relevant interest concerning the company's business and activity.

Credit Policy
Full credit to an unfazed RBI
THE Reserve Bank of India is in no doubt about continuing with the financial sector reforms and methods of tackling market issues. The RBI, and its latest Credit Policy, has been well-restrained vis-a-vis the recent crises involving the stock market and the banking sector. It is encouraging that it still continues to endorse the need for the growth of banks' financial support to the capital market.

Vacillating SEBI
THE SEBI DECISION to keep the ban on short sales till July 2 does not come as a surprise. It appears that the regulator's actions all revolve around that date when rolling settlement is to be introduced for the 140 A group shares listed on the BSE.

Food & Dairy Products
New spin on spider silk
MAHATMA Gandhi made goat's milk famous in a land of holy cows. He took it daily, as an alternative to cow's milk, compelled as he was by a bout of dysentery in 1918, though he had vowed to abjure animal products. Little would he have imagined then that g oat's milk at the turn of the century would claim credit for becoming the raw material for medical sutures and fishing lines. Yet, that is the new spin the bio-engineers are putting on goat's milk: Spider silk, whose elasticity and strength have been hel d in awe by scientists for centuries, will be now made from goat's milk.

Information Technology
US slowdown hard on Indian software
LATEST information from the US seems to suggest that its economic `slowdown' is more serious than what was thought of earlier. For instance, it is now confirmed the US economy actually grew by only 1.1 per cent in Q4 of 2000 (the lowest in more than five years) contradicting the earlier projections of around 1.75 per cent, prompting the Fed Chairman, Mr Alan Greenspan, to comment that the US could get into a recession. Even as companies announce job cuts, the number of profit warnings from companies -- especially tech companies -- is increasing.

Powell's flawed gift of prophecy
POLITICAL correctness is a confection least calculated to promote moral disquiet and political disorder. It calms the troubled conscience, stills the restive mind and seeks soothingly to chasten the citizenry into a common shape. It is a late 20th centur y sedative that invests the platitude with near-divine insight.

US-China-India: On a new course
THE collision between a Chinese fighter aircraft and a lumbering American E-3 spy plane has opened an interesting chapter for India. It is too much to say that the incident is an indication of the return of the Cold War. For, there is no other superpower other than the US though only Beijing is capable of looking Washington in the eye. The Russian might is a thing of the past and the Americans are justifiably concerned about the Chinese ambition to be counted as a superpower. Although the aircraft-colli sion incident is closed for the time being with the return of the crew American which was detained for 11 days on the Hainan Island -- where the spy plane had made an emergency landing -- the US is not likely to forget it so easily.

CPI(M)'s economic activism -- Moulding a growth model in Kerala
IN INVESTMENT-starved Kerala, the report on an innovative financial and technical tie-up with a foreign company for a major project in the State with enormous employment potential ought to grab headlines. That it need not was proved early this month when a matter-of-fact dispatch from Kuala Lumpur about a deal being snapped up by a Kannur-based cooperative, Rubco, with a consortium of Korean and European companies, was tucked away in the inside business page of a couple of language newspapers. The mains tream English papers did not even take note of it.

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