Must Know topics for GD/PI.

[Shaurya]

Disinvestment

Sale of assets or subsidy of any public sector undertaking (PSU) to private sector players.



Privatization

Transfer of ownership from public to private sector.



->Whereas disinvestment is partial sell-off & extent of Govt. holdings is only diluted not finished.

Privatization is complete sell-off.



Reasons behind govt. pumping in money in industry:-

Pre 1991 the views & objectives of govt. were to

• self reliance in each sector of economy
• creating economic employment
• protection of consumer interests

Points in Favour of Disinvestment

• Better efficiency in working, means industry could cater to customer need in a much better way.
• Freeing up of public wealth which is at risk, use to raise finance for development
• Wider distribution of wealth – by making shares open to retail investors.
• More choices for consumers [The King] – gets more value for money bcoz of stiff competition rates decline.
• Reduces debt.
• Brings accountability.

Points against Favour of Disinvestment

• Might bring present cash but also is a sacrifice of future returns that profit making PSU offer (especially NAVRATNA enterprises)
• If govt. does not want to risk public money they should exit fully.
• No guarantees that private sectors would infuse new capital.
• The notion that release of govt. owned administrative manpower could be used for social causes is absurd bcoz social sector development are anyways not hindered by non availability of human capital.

[Shaurya]

Opening-Up of Real Estate Sector to foreign investors by Increasing FDI limits in construction



ADVANTAGES

• Access to world class construction, speedier technology.
• More end consumer buying than speculation buying.
• Unprecedented development, infrastructure would be forced to evolve.
• Associated industry would immensely benefit.
• Less bureaucracy
• Less black money as foreign investors would like to keep their record clean.

DISANVANTAGES

• Land prices would shoot up in the short term though would stabilize in 2-3 years.

[prasunc]

Nice work Shaurya.
Looking at this thread after a long time and ur contributuions are fantastic.
Keep going buddy.

Regards

[silverangel]

Hey People - Few points are jotted below of the said topic. For complete article visit
http://www.networkideas.org/featart/...inese_Yuan.htm

KUSHAGRA


DOLLAR Vs YUAN OR Undervalued Yuan

- The dollar is on the decline, with its value having fallen by around 30 per cent
relative to other major currencies since 2002 and by close to 20 per cent in
trade-weighted terms.
- the balance of payments deficit amounting to 5.5 per cent of GDP and the fiscal
deficit to 4.2 per cent of GDP. With savings rates close to zero on average,
private spending is high in the US. But a large part of the demand this
generates spills over into the international market given the lack of
competitiveness of US producers.
- These deficits have not proved a problem because of capital inflows, including
in the form of investment of surpluses accumulated by foreign governments and
central banks in dollar denominated financial assets. The problem recently has
been that both private wealthholders and foreign governments have begun to
fear that the unsustainable value of the dollar spells a decline in the currency
that could sharply erode the value of their assets. The resulting rearrangement
of their portfolio away from dollar assets in favour of other currencies is what
explains the dollar's decline.
- All this makes the dollar's decline a problem for the rest of the world as well,
especially countries in Europe and in Asia, like China, that are heavily
dependent on the US market. Dollar depreciation increases the dollar value of
their exports to the US and undermines their competitiveness and recessionary
trends in the US would squeeze an important market for their exports.
- If China makes Yuan flexible - appreciate - more imports, less exports, large
capital inflows, more reserves, would make Yuan even higher and thus
destabalising and weakening the autonomy of monetary policy.
- China not happy - Li Ruoggo - Governor, Peoples Bank of China to US - dont blame
world for ur own problems - Savings in China 40%, in US 2% - so save more -
More wages in US to workers for less productive jobs - correct this -
discrimination in exports to China
- But China may succumb to pressure - US too important - 33% of Chinas
economy made of exports of which 37% goes to US

[silverangel]

HOPE THIS IS HELPFUL ..... KUSHAGRA




Capital Accountant Convertibility: Right road for India, but best with speed-breakers The government is slowly but surely making the rupee freely convertible. Indian companies can now make foreign investments, and Indians can make foreign remittance up to $25,000 per year and invest abroad no questions asked. This is fine as long as the rupee is rising and the Indian investor has no incentive to remit his capital abroad. Convertibility will enable India conquer the world economy by making foreign investments. The Indian businessman has to be given the freedom to invest in other countries. However, convertibility can become a bother if the economy is on a downslide. It will then become possible for investors both Indian and foreign to exit the rupee and the currency could take a tumble a la the Argentine peso or the Thai baht. A small crisis can assume grand proportions. India should secure the gains of convertibility while avoiding its dangers. The balance of gain and loss will depend critically on the US economy. Till recently, technological innovations, such as personal computers, genetically-modified seeds, developments in software, and Internet application and telecommunications happened in the US every five years or so. Companies that pioneered such innovations such saw their share prices rising. This led to the flow of world capital into the US stock market which, in turn, led to increased demand for dollars. The dollar rose and as a reflection the rupee fell. The price of one dollar was Rs 15 in 1991 and Rs 49 two years ago. It was profitable for Indian businessmen to send their capital to the US in that situation. They got huge dividends from the profits of companies in which they had invested. They would also benefit from the rising value of the dollar. Say, an Indian investor purchased one Microsoft share in 1991 for $1 or Rs 15. The same share valued at $1 would have got him Rs 49 because the value of the dollar had risen. Had the rupee been made convertible then, there was a great possibility of Indian investors sending their money to the US. For long, agencies such as the IMF have been asking the New Delhi to make the rupee fully convertible. India rightly resisted that pressure because that would have led to flight of capital. The US would have gained by getting the money. Convertibility has led to crises in East Asia, Korea, Russia, Turkey, Mexico, Brazil and Argentina. All these countries succumbed to the pressures by the US-based agencies to make their currencies convertible. They were told that this would help bring foreign capital to their shores. But the real objective was that the US would get the capital from these countries for its consumption and investment. . The situation has changed dramatically since. Technological innovations in the US are in a limbo. American companies are under pressure. They are unable to pay high wages because of the pressures of globalisation. They are transferring their businesses even core activities like research to India. Outsourcing is becoming all-pervasive. The pressure on American companies is pulling down the value of their shares. Global investors are selling their dollar-denominated securities and buying the yen, euro and even the Indian rupee. World capital is ready to fly out of the US. The dollar is falling and correspondingly the rupee is rising. The dollar was selling for Rs 49 two years ago. Today it is available for Rs 45. The dollar's sun is setting. Why would an Indian invest his money in the US in this situation? On the contrary, it is becoming profitable for the US investor to invest in India. It will be the fitness of things to make the rupee fully convertible to benefit from the situation. It is profitable for the Indian investor to keep his money in India because the rupee is rising. Indian companies have now acquired the ability to face global competition. The government should encourage Indian companies to invest abroad to conquer the world economy. The situation till recently was that Indian capital was taking off to the US illegally. The US companies were taking loans from the American banks, which were lending money deposited with them by Indian investors. Now the tables have turned. Foreign investors are investing their money on the Bombay Stock Exchange. But there is at the same time need for constant vigil. For the circumstances can change any time. The rupee may decline and the dollar rise. India should keep options open such that is not difficult to impose restrictions if the currency conditions turn adverse. Sans careful monitoring of the inflows and their end-use, India could be inviting trouble like the East Asian and Latin American countries. (Bharat Jhunjhunwala, a freelance writer, bharatj@nda.vsnl.net.in in Hindu Business Line dated 30/3/04).

[silverangel]

THE PROGRAMME

• After the Gulf War and liberation of Kuwait, a UN Secretary-General’s team determined that the Iraqi people faced a humanitarian catastrophe, including epidemic and famine, if life-support needs were not rapidly met.
• The United States introduced UN Security Council Resolutions 706 and 712 in August and September of 1991.
• These resolutions eased sanctions on the sale of oil, imposed in response to Iraq’s invasion of Kuwait, by allowing Iraq to sell a certain amount of oil and use proceeds to meet the humanitarian needs of its people. Iraq refused to cooperate and made no sales under 706 and 712, and refused to discuss alternate arrangements.
• Instead, Iraq in effect held its own people hostage. It demanded that the UN Security Council lift all sanctions unconditionally. It simultaneously refused to cooperate with efforts to rid Iraq of weapons of mass destruction, a key precondition set by the UN for ending sanctions. The Iraqi strategy was a duplicitous effort to blame the international community for the suffering of its people, and thereby force the UN to end sanctions without ensuring that Iraq relinquish its weapons of mass destruction programs.
• UN Security Council Resolution 986, which passed in April 1995, established the current Oil-for-Food Program, to further facilitate the delivery of humanitarian relief to the Iraqi people. Iraqi intransigence, however, delayed implementation of the program until December 1996.
• Oil-for-Food has steadily expanded over the years, lifting the limit on the amount of oil that could be sold and expanding the range of goods that can be purchased. In May 2002, the United States led an initiative to streamline UN procedures for the export of goods into Iraq under the Program. This authorized the export of all goods, except those prohibited under the arms embargo or contained on a list of “dual-use” items that could have military or weapons of mass destruction applications. Items on this list, the so-called “Goods Review List,” are subject to special review procedures.
• In spite of Iraqi subversion, Oil-for-Food has been a dramatic success. $25 billion in humanitarian supplies and equipment have been delivered to Iraq, and another $10 billion is in the pipeline. Caloric intake has doubled, and communicable diseases have declined significantly among the Iraqi population. The transportation, agriculture, and electricity sectors have also been rehabilitated. In his November 2002 Report to the Security Council on the Oil-for-Food Program, the UN Secretary-General observed that “the program has made and continues to make a major difference in the lives of ordinary Iraqis.”
• More could be done, if Saddam Hussein would fully cooperate with the UN, both in the Oil-for-Food Program and in disarmament. Instead, the Iraqi government continues to exploit the Program. It has withheld sales from the market for political reasons and continues to smuggle oil out illegally – both of which deprive the Program of revenue. The Iraqi regime continues to divert dual-use items from humanitarian needs to military programs. All exports of military items to Iraq continue to be barred by UN Security Council resolutions.

THE SCAM

• Saddam Hussein under the nose of UN started withdrawing sum from this programme for funding his military ambitions, apparently by bribing few UN officials
• In 1996 (when the programme started), Iraqi annual spend on Defence was a mere $10 million. This blew to $350 million in the year 2002 (making Bush doubt Saddam's proliferation of WMD and thus attack on Iraq)

THE KUSHAGRA

[silverangel]

If anyone can summarise YUKOS TAKEOVER BY STATE please do so here.

KUSHAGRA

[prasunc]

Hey Silverangel..kudos to u for those informative posts.

Some more burning topics we can look at (some pretty obvious ) :
1) Indian Budget...adv/disadv.
2) Kyoto protocol.
3) Iran Pipeline ... a risky venture.
4) Confidence building measures with Pak.
5) Indo-pal cricket series...Dalai Lama, Ahd venue and other controversies.
6) Bihar election situation. (Other states may not be that interesting!).

Regards

[Saurabh Paharia]

Hello
Can any 1 tell the common topics For GD

[rmbt]

Originally Posted by Saurabh Paharia

Hello
Can any 1 tell the common topics For GD

Welcome to PG..

Please use search to locate the relevant threads, continue here:
http://www.pagalguy.com/forum/prep-r...ics-gd-pi.html (Must Know topics for GD/PI.)

All the best.

PS: Avoid reviving old dead threads.