Companies & Sectors
Cabinet to soon take proposal to hike insurance FDI

Finance Minister Chidambaram is keen on getting Cabinet approval on raising FDI cap in insurance sector and it should soon go to the Cabinet


New Delhi: The Union Cabinet is likely to soon take up the proposal of hiking foreign investment limit in the insurance sector in India to 49%, from 26% at present, reports PTI.


"The Finance Minister is keen on getting Cabinet approval on raising FDI cap in insurance sector. It should go to the Cabinet soon," a source said.


Foreign Direct Investment (FDI) in the insurance sector is capped at 26%. With the government taking policy reform initiatives earlier this month, especially allowing FDI in multi-brand retail and aviation sectors, there are expectation that the limit in the insurance sector may also be raised.


The government, sources said, is assessing political implications of the move.


Earlier this week, Insurance Regulatory and Development Authority (IRDA) Chairman J Hari Narayan had said that the industry needs big investments for growth in the coming years and will welcome hike in FDI cap.


The government had taken a couple of reform decisions in the past couple of weeks to pep up investment climate. But the decision led to political uncertainty with Trinamool Congress, a key ally of the UPA, quitting the government.


Following pressure from key allies, the government in May this year had postponed a decision on raising the FDI limit in the insurance sector to 49%.


The Insurance Bill, which was tabled in Rajya Sabha in 2008, proposed to increase the FDI limit in the insurance sector to 49%, but Parliamentary Standing Committee on Finance wanted it to be retained at the current level of 26%.


SEBI imposes Rs12 lakh fine on two for synchronised trade in Era Construction

Both Ghelani and Rathod executed synchronised trades in the scrip of Era Construction and indulged in creation of artificial volume in 2004

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has imposed a total penalty of Rs12 lakh on two entities for alleged fraudulent trading in the shares of erstwhile Era Constructions, reports PTI.
"...impose a penalty of Rs 2 lakh on Vijay Rathod...impose a penalty of Rs 10 lakh on Tejash Ghelani," Securities and Exchange Board of India (SEBI) said in two separate orders.
It further said that monetary penalties were imposed "... for the violation of the provisions of regulations... of SEBI (prohibition of fraudulent and unfair trade practices relating to securities market)  Regulations, 2003," the regulator said today.
Probe carried out by SEBI observed a spurt in price and volume in the scrip of Era Constructions (India) Ltd during the period from 17 March 2004 to 12 November 2004.
Subsequently, the company has changed its name to Era Infra Engineering Ltd in 2008.
"...noticee (Ghelani and Rathod) had executed synchronised trades in the scrip of Era and indulged in creation of artificial volume during the investigation period," SEBI said in its orders.
SEBI noted that Ghelani carried out synchronised trades for a volume of 4.67 lakh shares with a total value of Rs2.92 crore, while Rathod was indulged in synchronised trades for a 1.03 lakh scrips with a valuation of Rs66.25 lakh.
The regulator said the two entities had carried out numerous trades in Era Constructions' scrip on a daily basis for several trading days and the traded quantities were also high.
The fact that such transactions took place repeatedly over a period of time reinstates the non-genuine nature of such trades.


UNSC reforms: Illogical and self practices by vested interests

We need to question the criteria for the status of being a permanent member of the UNSC. If any set of rules is made, India would surely meet with the requirements

Once again, India is making the valiant attempt to become a permanent member of the United Nations Security Council (UNSC). And this time, through the aegis of the BRIC where G-4 (India, Brazil, Germany and Japan) are trying to push for UNSC reforms.
It may be recalled when the world leaders met, some five years ago, they agreed that the composition of the UNSC must be reformed to recognize the world’s needs and changed circumstances, since the establishment of the UN almost 70 years ago.
This move is taking place on the sidelines of the 67th UN General Assembly session that is in progress. They are now trying to reiterate the urgent need to change the composition of the UNSC, once again, based on the contributions made by countries to maintain international peace and security and the increased representation of developing countries in both permanent and non-permanent categories, to reflect the “geopolitical realities” of today.  
These are great ideals and sound nice, but in reality, we are overlooking a few fundamental changes that have actually taken place.
In the Bretton Woods Conference, the world at large accepted that USA, UK, France, Russia and China (Taiwan or Formosa) should be the permanent members of the Security Council with veto powers.  However, in one sweep of the pen, Richard Nixon, the US President dumped Taiwan and had it replaced by China. This was accepted by the members of the
UN without question, because it “was common sense to accept and recognize the voice of some 600 million people” China represented.
Couple of decades later, when the European Union came into existence, which includes UK and France, in the same principle of China replacing Taiwan, Europe ought to have occupied the permanent seat in the UNSC in lieu of UK and France, who ought to have ‘surrendered’ or ‘lost’ their permanent status—just as Russia replaced USSR in the Security Council. The one seat vacant in the big five ought to have gone to a country like India. Alas, this did not happen then, because of the vested interests of western powers did not dwell on the subject in any manner or form in the UN.
Every attempt that India made, supported by USSR (Russia later) was vetoed by China for its own reasons of security, jealousy and inherent enmity, prompted by Pakistan, its ally.
Now the question is what are the criteria for such a status of being a permanent member of the UNSC? If any set of rules are made, India would surely meet with the requirements except that it would not be a so-called ‘global power” having gone to war with other nations. In fact, India is one of the very few nations in the world that has not gone to war over any other country for more than 1,000 years!
It is time the UN itself needs to set up a high-profile committee of international jurists, legal experts and intellectuals to study and amend its Constitution to accommodate the changing world situation.  It may also question if UNSC is needed in the first place; and if so, what are the criteria that must be fulfilled before a country can become a permanent veto wielding power. 
Will it be based on economic or military strength? Or just the population? Or peace and industrial progress? Or a world divided by geographical status of five continents or into major religious denominations? In the interim period, should UK and France be replaced by Europe? Should a country like India, representing 20% of the global population be left out because China can exercise a veto?
It is time the UN reviews the whole situation and takes practical steps to correct the anomalies that have crept in.




5 years ago

When World Heart Day gets submerged in purified sunflower oil, it is soothing to find that Moneylife finds space for covering issues like this. The election of India as a non-permanent member of the UNSC this time was with a massive support from the UN members, with 187 votes out of 192, and now, all BRIC countries namely, Brazil, Russia, India and China are represented on the UNSC. India taking advantage of the present status and its better rapport with major powers represented on the UN, thinking beyond India’s own permanent membership on the UNSC, should take the present opportunity to play the lead role to reform and democratize the UN. The world body invented veto power to enable powerful nations to protect their self-interests when majority forms a cartel and work in collusion to cause damage to individual nations. As the circumstances have changed, in the interest of infusing credibility in the functioning of the world body, India along with like-minded nations should persuade the UN, to think in terms of evolving some rational and acceptable norms for exercise of veto power, if the five nations vested with veto power are not immediately willing to part with the veto power they have been enjoying for long. As most of the world leaders talk democracy these days, it should not be difficult for United Nations to move towards democratic functioning. Its funding and membership should also reflect the size of GDP and population respectively of member nations.

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