Sports Promotion through Ajay Maken’s Sports Bill

Various sports are being promoted by various regimes since ages. The question of transparency and accountability is also not new either. The misuse of technical innovations in pharmaceutical sector for new drugs is visible in various sport competitions. The desire to win has passed all barriers of ethics and real spirit of sportsmanship. Also, reforms have been impeded by politicization of sports in India where most of the sports committees are headed by the politicians who have very little experience in that area and who understand very little about the need of sports persons.

Union Minister of sports and youth affairs, Ajay Maken prepared a draft National Sports (Development) Bill 2011 aka sports bill with the aim to bring transparency and accountability in the functioning of National Sports Federations(NSF). He dint anticipate that the sailing of this bill will be tough through the cabinet and thought to pass the bill in this monsoon session only. However, the presence of various cabinet ministers who are heading various sports committees at national and regional level made it difficult for the cabinet to decide in this bill’s favour. However, the support of Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee saved the day for Ajay Maken by giving him another opportunity to redraft the bill after accommodating the suggestions given by his cabinet colleagues.

The question arises as to what made it difficult for this bill to get cabinet approval? Which clauses of this bill faced opposition and why? Is government serious about reforming the sports? Can various ministers think beyond their vested interests and promote accountability and transparency in sports?

A closer look at the clauses of this bill will bring forth the reasons behind the opposition of this bill. There is the age limit suggested in this bill for heading any sports committee in India. The age limit is set at 70 years that is not met by most of the cabinet ministers who are heading national and state level committees as on today. This bill seeks to restrict the tenure of any office bearer to maximum 12 years i.e. 3 terms and this bill will make it compulsory for sports federations to reserve 25% of seats to sportspersons in the controlling committee/board. Also, this bill seeks to bring Board of Control for Cricket in India(BCCI) under the purview of Right to Information Act(RTI). The cabinet ministers who are opposing this bill include Minister of New and Renewable Energy Farooq Abdullah who is heading the cricket association of J&K, Sharad Pawar who is President of ICC, Praful Patel who heads ‘All India Football Federation’, C.P. Joshi who heads Rajasthan Cricket Association, Arun Jaitley who heads New Delhi & District cricket association.

The passing of this bill will show the exit door to many of the cabinet ministers from sports federations and this is the cause of concern for them. The enforcement of vested interests of senior ministers is restricting the badly needed reforms in sports. Even after the support of Prime Minister and Finance Minister, Ajay Maken’s bill has faced tough times to get the nod of the cabinet that made it difficult for this bill to pass in the monsoon session of 2011. This raises serious questions about the intention of the politicians to look beyond their vested self-interest and reform National Sports Federations. The poor performance of these federations can be attributed to the stubbornness of politicians to change their mind set and restricting sportspersons from taking part in the decision making independently which can change the face of the sporting bodies in the country.

To conclude, the sports can be promoted only if it can be detached from the politics and give way to deserving candidates in the sports federations who understand the sport and are enthusiastic about it beyond their vested interests. The sports federations should be accountable to public, parliament etc. and transparent in its functioning.

Dirty scams, still Manmohan an intellectual?

Scams are not new in India. they find mention in all historical transcripts including Arthashastra of kautilya in Chandragupta Maurya era whereby some spy were spread in the territory to detect it and punish the guilty. What if spy themselves become corrupt and indulge in undesired activities? Then it becomes king’s duty to devise ways to keep an eye on them as well otherwise they can make the society corrupt.

United Progressive Alliance(UPA)-II was shrouded with scams one after another and bigger than previous one. Some of the major scams include 2G scam, Adarsh society scam, CWG scam etc etc and the count goes on. The king of all scams was 2G scam where the exchequer has lost Rs 1,76,000 crore as estimated by Comptroller & Auditor General(C&AG) of India. In all these scams very high rank ministers and MPs, who were chosen by public as their representative, were involved. Also, the departments directly under the Prime Minister have also not been spared from these mishappenings. This raises serious question about the leadership of the Prime Minister, Dr. Manmohan Singh. Was he unaware about these happenings? If yes, what role Prime Minister will play if he is unaware of activities of his cabinet colleagues? If not, why dint he make efforts to prevent these scams? What were the constraints which restricted him to turn a blind eye on these scams?

In a recent interview, Dr. Manmohan Singh has cited the reason of coalition compulsion. Will any responsible leader allow anything wrong to happen in the veil of coalition party politics?

Dr. Manmohan singh is very highly qualified economist and he was the finance minister at the time of liberalization and privatization of Indian economy 1991. Liberalisation and privatization of Indian economy has produced fruitful results with increasing GDP since then. However bigger question is whether it was his decision i.e. choice among many alternatives that lead to this liberalization. If we turn the pages of history of 2 dacades ago, we will find that at that time also it was not the decision solely taken by the then government however it was the compulsion of government of India to protect it from sovereign default where India were having reserve worth only 1 week of imports and the balance of payment situation was very weak. Again during the recent UPA-II term where Dr. Manmohan Singh is Prime Minister, his hands are tied because of indecisiveness that has led to so many scams surfacing one after another. The corruption today is prevalent in all spheres of life, however it is duty of organization head to keep a check on this by various means and checks & balances in which Dr. Manmohan Singh certainly failed. In a democracy like India where people choose representatives to carve out a bright future for them and make policy accordingly, the representatives i.e. MPs and Ministers are serving their vested interests only and wasting tax payer’s hard earned money. This depicts serious failure of the leadership in protecting the common interest of public for which the leader has been appointed by them. Even after the various scams have been brought to light, no serious preventive action has been initiated. The person who was considered one of the most intellectual to handle this job has certainly failed to live upto the expectations of the people who have voted him to serve that post considering, among other things, his capabilities and decision making skills.

A Few Personal Financial Planning Tips

After the US housing bubble and following economic collapse, personal finance has now become the motto for all. These days, everyone is trying to get hold of their finances, which they had ignored earlier. Financial planning wraps a greater aspect of your life. From investment to home purchase to personal budgeting to enrolling in debt relief programs, you always need to have a plan. While planning things related to personal finances, most people overlook the basics, which is obviously a huge blunder. However, if you desire to work in a disciplined way and plans accordingly, you can certainly achieve your goals with excellence.

Max Out Your 401(k)

If you have a 401(k), or any other kind of workplace retirement plan, take as much benefit from it as you can. The amount you pour into your retirement account comes out of your paycheck earlier than the IRS taxes it. If you contribute towards your retirement account (which is a tax-deferred retirement account) to the fullest, you can also lessen your taxable income and pay less annual tax.

Fund an IRA

If your employer does not provide you with a 401(k) retirement account, you can contribute towards an Individual Retirement Account (IRA). However, you have to qualify for an IRA. There are two types of IRAs for the employees- a Roth and a traditional IRA. In a traditional IRA, contributions are often tax-deductible. The transactions and incomes within the traditional IRA have no tax consequence but withdrawals at retirement are taxed as income. While in Roth IRA, contributions are made of after-tax assets. The transactions in a Roth IRA have no tax consequences, and withdrawals are usually tax-free.

Be Smart About the Mortgage

Unless you are debt free and have an emergency fund that is equal to your three to six months’ expenses, you should not even think of taking out a mortgage. If you opt one, make sure to restrict your payments to not more than 25% of you monthly income.

Be Practical with Your Debt

If you have decided to pay off your debts, try to pay more than the minimum towards your credit cards. If you don’t, it will take more time to shed off the debts, and further more money will drain out as interest. Think of a $10,000 balance on an 11% interest rate, where the minimum monthly payment is $250. If you just pay the required, you will pay off the balance in 50 months. However, if you just add up an extra $100 each month, the number of months gets reduced to 33 and you further save a valuable $846 as interest.

Author bio:

Shannen Doherty is a financial writer .She has completed her post graduation in finance. She writes on various topics on finance like personal finance, debt settlement, debt consolidation as well as on personal bankruptcy.

Reality Test of Capitalism, is it worth protecting?

Capitalism is at the forefront of developed western economies and it has led to privatization in almost all facets of life. The main determining forces of capitalism are the market forces with little control of state in market affairs. The basic notion behind it is that market forces are intelligent and self regulating. It is thought that various competing firms in the market will keep check and balances on each other and will in turn help the customers in getting technologically advance product at reasonable price. However, oligopolistic nature of many industries contradicts this basic tenet of capitalism. In any capitalistic country, private interests are served, in collusion with the political forces. Capitalism penetrated deeper after the breakdown of socialistic structures of economies like USSR. However, the questions that require further analysis are which form of government in a state is realistic i.e. socialistic or capitalistic? Where to draw boundaries between its implementation? Can same rules apply to various countries across the world? What are the historical evidences in support or against any of the form of state?

Capitalism v/s Socialism

Socialism postulates that all resources should be in hands of some central authority or state which can distribute it equally among the citizens of the country and everyone can prosper. However, capitalism gives more power to market forces and assumes that in longer term people would be the main focus of the organization and this will lead to competition that will increase efficiency of the organization which will ultimately benefit the customers. However, both these theories have their limitations in real life. Indian politicians pursued socialistic policies after independence and took control of all major industries by nationalization process. The public sector units were created especially in sectors where huge capital investment is required like steel etc. it was promoted so that wealth redistribution can be done by the government for the upliftment of the weaker section of the country. However, this goal could not be realized and several state-run companies burdened with losses due to their internal deficiencies. Indian Government was forced to privatize and liberalise its economy in 1991 to avert the serious balance of payment crisis. After 1991, the growth of the country has multiplied. The red tapism and license raj regime, that abetted the corruption, reduced with the liberalization and opening up of Indian economy and more capital flowed in the country resulting in high growth and employment.

The failure of socialist policies can be gauged from the breakdown of USSR and forced liberalization of Indian economy due to adverse circumstances. However recent crisis in 2008 has depicted the failure of capitalist economies which are grappling with recession and are in stage of entering into double dip recession. The important point to note is that it is the implementation of policies that is the essence i.e. policies which are good in books can turn ugly if not implemented intelligently and shrewdly.

US economy entered into the recession due to economic bubble that burst suddenly with the main culprit being the realty sector. This bubble burst was caused by adverse monetary instance taken by US federal reserve by increasing interest rates to unsustainable level and lead to process of default by purchaser of property because of high pressure of increasing Equated Monthly Installments(EMIs). Further fall of lehmen brothers aggravated the impact and destroyed the market sentiments. US federal subsequently announced two rounds of quantitative easing which provided boost to the American economy, though for a short period. Further, recently European economies also felt the crisis starting from Greece which was on the verge of default due to excessive borrowing and inability to serve it by the government. That threatened the unity of European Union as this was going to spread to other countries like Spain and Italy which are big countries and European Union can’t afford to let them default. In this process European Union provided two stimuli to Greece both amounting to nearly USD 110 each. Now again US economy is in trouble with fear of double dip recession that is looming large around the country. This again has been caused by excessive spending by Americans beyond their means or income i.e. they consumed goods on the credit provided by big organizations and beyond their paying capacity.

Capitalism is the main determining factors for the above situation. We have recently seen that S&P has downgraded the American bonds from most coveted AAA rating to AA+ rating. Also, US were on the verge of default and it was saved at the last moment by passing a bill to increase the debt ceiling by USD 2.4 trillion. If US would have defaulted, that could have been catastrophic for the world economies because (i) various economies have kept in their reserve US dollars and with the fall of US their position would get impacted due to dollar decline. The highest affected country would be China which hold maximum reserve of US dollars, (ii) most of the economies are interlinked in this globalised world and they are dependent on each other to some extent and (iii) investor sentiments would have been at all time low causing flight of capital from the world market which cause slowdown in investment and in turn slowdown in growth of the country.

While raising the US debt ceiling, a condition was imposed by opposition republicans to not to increase the tax while demanded for the reduction of expenditure that can only be done by reduction in socialistic welfare spending including healthcare spending by the US government. This particular instance of opposition was keeping in mind the private interest of various big corporate and at the same time if spending by government is reduced at this time economy will further go deep into the crisis.

If we look at the facts of impact of capitalistic policy of the government, (i) the tax rate on rich has reduced from 29% in 1980 to 22.5% in 2005, (ii) top 1% of population of US have equal wealth as bottom 90% of the population, (iii) during the crisis, the big corporate were bailed out by the tax payer’s money. The interests of only some section of society are being served by the capitalistic policy of the government.

However, I will again emphasis the fact that it is the implementation of any policy that decides its fortune not only theoretical soundness of the policy. We have examples of some sectors in India like telecom where consumers have benefited with the increased number of firms leading to increased competition.

To conclude, both socialistic and capitalistic policies have final aim to serve the public interest and their welfare despite difference in their ideologies. Each country has unique situation and that country has to choose the realistic policy between two or mixed economy. However, if the policies are not implemented keeping in mind their true essence, it will lead to failure of state machinery at some point of time.

Travails of Jan Lokpal Bill

Jan Lokpal bill was first drafted in 1968 and it was introduced in monsoon session of parliament 11^th time in 2011. Jan Lokpal bill has proposed to create an independed institution that will deal with the corruption related cases, it will have the investigative power and can award sentence to the guilty in form of imprisonment and monetary compensation to comlainant.  At the centre, a body called ‘Lokpal’ will be formed and at the state level ‘Lokyukta’ will be formed. The guilty will be punished in maximum two years from the start of the case. This bill will help in reducing(not removing) the corruption from various spheres of our daily life. Even after repeated introduction of this bill in parliament, it could not pass in last 40 years due to various reasons. The social activists team led by Anna Hazare again highlighted it in April, 2011 by going on indefinite fast and the Government , subsequently, appointed a drafting committee consiting of government officials, social activist Anna Hazar,  RTI activist Arvind kejriwal and eminent lawyers. Though drafting committee was formed for fruitful discussion however differences occurred during the process on various issues. Finally, two separate copies of Bill were prepared, one by government (introduced in parliament) and other by Anna Hazare and Team (which was neglected by government officials). There were various differences in the two bills and the major differences are as pointed below:

1. Inclusion of Prime Minister,Judiciary and Group A government officers,under LokPal – Anna hazare team is in favour of inclusion while government’s bill has excluded them from Lokpal’s purview. For judiciary, however, government has proposed to pass a separate bill named ‘ Judicial Accountability Bill’.
2. Conduct of MPs in the parliament – As per constitution, the conduct of MPs within the parliament can not be contested outside or it is not justiciable outside. Anna’s bill want the conduct of MPs within parliament can be held accountable and can be investigated  by Lokpal committee.
3. Penalty on violating citizen’s charter act – Anna hazare has suggested the penalty for any official found violating the citizen’s charter act i.e. if any public servent is asking bribe or delaying the processing of things like passport, ration card etc, then that official has to bear the penalty of the delay by compensating the complainant  through salary cut and that official may get improsonment.
4. False, frivolous and vaxatious complaint – The govt’s bill propose the improsonment of complainant for minimum 2 years as well as compensation to the accused. While Anna says this will restrict the public from coming forward and also, the punishment for accused found involved in corruption starts with only minimum 6 months of imprisonment.
5. No funding autonomy – Government in the proposed bill has left the lokpal on the mercy of the finance ministry for the funding instead of its own requirements.
6. Merging of anti corruption wing of CBI – Anna’s team has proposed to merge the anti corruption wing of CBI into Lokpal however government has refused to do so.

 

Due to all these differences, Anna hazare again started his fast from 16^th august in New Delhi to persuade the government to enforce a strong and strict Jan lokpal bill. The government tried various ways to dissuade & defame team Anna and all its effors were in vain. Many renowned personalities termed it as ‘unconstitutional’ however they were silent on alternate methods for the civil society to put forward its case against the weak lokpal bill that government introduced in the parliament. This bill has raised various questions on the credibility of the current government. The government has finally agreed to debate on the three demands (only three left after the compromise during 11 days of fast). The bill still has many short comings and loopholes. The bigger question is – will this compromised bill help in reducing corruption or  it will create an institution like many others which are ineffective and only draining the tax payer’s money?

Reform in Wholesale Price Index

Wholesale Price Index (WPI) is used to measure the inflation in the economy and this is based on the price movement of the basket of goods. The base year of current WPI is 1993-94. This basket of goods was decided more than a decade back. A lot of change in consumption patter has happened in last decade or so however India is still using the outdated version of WPI to measure inflation. This is the reason that only about 16-20% of the goods’ prices change each time because rest of the goods present in the basket are almost not in use.

In recent times there was a situation when Inflation based on WPI was in negative territory while Consumer price index (which is calculated on monthly basis) was hovering in double digits. The prices were going northwards while WPI was going negative. This created the difficulty in true picture of the economy and also created trouble  for RBI while taking monetary policy decisions.

To overcome this, Government is working on new measure of WPI where they have increased the basket of goods from current 435 to 850. The typewriters etc, which are not in much use, have been replaced by digital camera, mobile phone, laptop etc which constitute a significant proportion of the consumption basket. There is increase in food and primary articles that will determine the index so that RBI can take more realistic and more informed decisions. The new WPI will be calculated on monthly basis intead of weekly at present. However, the food and primary article index will be calculated on weekly basis also. The base year will be changed to 2004-05 and it is going to be implemented from 14th Nov onwards.

The new index will show more true picture of the economy that will aid Reserve Bank of India while taking monetary policy decisions. The deadline to implement the new index is coming closer. Though implementation of reformed WPI is very wise decision, only time can tell its true implications.

Bharti-MTN deal

Bharti – MTN deal is in limelight from quite some time. The talks have again revived after an ealier failed attempt. As per this deal Bharti will acquire 49% stake in MTN and in return, MTN will acquire 36% stake of Bharti Airtel. The deal is estimated to be worth $23 bn. This deal is win win situation for both the companies. This deal will help in fulfilling the ambition of Bharti to become global player as well as the synergies will lead to various benefits like cost sharing and reduction, more control over prices, increased reach to various geographies. The mobile subscriber will reach to around 200 mn combined.

However this deal is facing roadblocks time to time. GDRs have been used in big way in this deal. Also SEBI has eased norms with respect to GDRs i.e. GDR holders now also have voting rights similar to the equity shareholders. The major issue is of duel listing of the companies which will lead to capital account convertibility that is not allowed in India. The discussion for capital account convertibility is going on from years however no conclusion has reached yet as this was the major reason for the south asian crisis in 1997-98 and before allowing capital convertibility, a country must have very sound financial infrastructure.

RBI, Finance ministry etc are not ready to allow dual listing of companies which is the major demand for the completion of this deals. Lets wait and watch to see what the management of MTN and Bharti decide to overcome this roadblock.

Book: Derivatives

The emergence of the market for derivative products, most notably forwards, futures and options, can be traced back to the willingness of risk-averse economic agents to guard themselves against uncertainties arising out of fluctuations in asset prices. By their very nature, the financial markets are marked by a very high degree of volatility. Through the use of derivative products, it is possible to partially or fully transfer price risks by locking–in asset prices. As instruments of risk management, these generally do not influence the fluctuations in the underlying asset prices. However, by locking-in asset prices, derivative products minimize the impact of fluctuations in asset prices on the profitability and cash flow situation of risk-averse investors.

To read more download e-book from

http://www.4shared.com/file/129315594/486de06a/Derivatives_NCDEX.html

REASON IN FLUCTUATION OF EXCHANGE RATE

Exchange rate means value of one currency in term of other. For instance 1 USD = INR. This is dollar – rupee exchange rates and indicates the value of Indian rupees per unit of dollar. But this exchange rate does not stable. Basically fluctuation is caused by demand and supply of the currency. The demand and supply generally affected by country’s trade and its macroeconomic policies. The following reason is responsible for fluctuating in exchange rate:

 

1. INTEREST RATE:

When interest rate in home country is higher than other country, more foreign investor will attract to invest in home country to make capital gain. In this case demand for home country will increase and may be cause to appreciate.

 

1. MONEY SUPPLY AND INFLATION:

At the time central bank of country will print more money, the supply of money will increase in the market. Resulted purchasing power of customer also will increase and resulted it will invite inflation situation. And as we know in inflation time home country’s currency value will be weak and may be causes depreciate.

 

1. BALANCE OF TRADE:

When in country’s balance of payment the export is greater than import we call there is surplus. Normally it has seen the country which face the surplus there currency value increase than country which make deficit. In surplus trade country’s foreign reserve increase.

 

1. ECONOMIC GROWTH:

High economy and fastest growing economy country push FII from weak economy and developing countries. In this case they will sell their currency (weak economy) and buy the other currency (strong economy). In this case if country’s currency will face more supply and less demand value of currency will fall.

 

1. FOREIGN DEBT:

many developing and under developing borrowed the fund from international bank like IMF, world bank and ADB etc. but this is unplanned borrowing . At current time it adds in balance of payment but if we talk about future its obligation to pay the fund with interest rate. And therefore it has seen the country which has taken more borrowed fund their value depreciates in future.

Contributed by –
Brijesh Mishra,
BMS, Mumbai University

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