In a letter to top AP administrators, he said the move is essential to stop land scams from happening
Former Union finance and power secretary, EAS Sarma, has written to top Andhra Pradesh administrators, asking for implementation of Section IV of the Right to Information Act, which talks of voluntary disclosure of information by public authorities. The move, he argues, is essential to stop land scams from happening.
“I request the government to ensure that the various authorities dealing with the public lands make an open disclosure of all such lands with immediate effect, stating the location, the extent under encroachment, if any, and the names of the encroachers, the alienations made if any and the name of the beneficiary with the details of the relevant orders and the rates at which such alienations have been made, auctions made with the details of the auction prices and so on. I am sure that if these details are made public, there will be a healthy public debate and the instances in which there is loss to the public exchequer and the illegal gratification received by those in authority will come to light,” he wrote.
Mr Sarma has also asked the government to issue instructions to this effect to all authorities concerned, including municipalities and panchayats. He said that the most possible reason for this reluctance to disclose information is to shield the corrupt acts that had enabled some people to hoard public wealth and resources in collusion with the people in power.
“If the public comes to know of such information, as for example, details of the public lands available with the public authorities, the purpose for which they are required to be used and the encroachments or alienations that have taken place unauthorisedly, the concerned officials are apprehensive of a public debate that could expose their misdeeds. Similarly, the authorities are reluctant to disclose suo motu the concessions, subsidies, grants, etc, given to beneficiaries under different schemes as any such transparency could expose the corruption that is associated with each scheme,” Mr Sarma said.
He said that on many occasions, RTI activists were intimidated or stonewalled when they filed petitions seeking ‘inconvenient’ details.
“I request the government to fall in line with Section IV and the restrictions on exemptions in Section VIII and instruct all public authorities in the state to make a suo motu public disclosure of all information that has the public interest angle and all such information that cannot be denied to the legislature,” he wrote.
Based on a new price-discovery mechanism, followed for the first time in MCX listing, the shares finally opened normal trade on the BSE at Rs1,387—a premium of 34% and went on to gain further ground to a high of Rs1,420
Mumbai: Becoming the first Indian exchange to get listed, the country’s largest commodity bourse Multi Commodity Exchange (MCX) today made a smart debut in the stock market and began trading with a significant premium of over 34% cent on the Bombay Stock Exchange (BSE), reports PTI.
After a record-breaking investor demand for shares in its initial public offer (IPO) late last month, MCX saw robust buying interest in its debut trade on the stock market this morning and saw its price soaring past Rs1,400 level within minutes of listing.
In the pre-open bidding, the shares attracted a premium of over 40% from its IPO price of Rs1,032 a share and touched a high of Rs1,450.
Based on a new price-discovery mechanism, followed for the first time in MCX listing, the shares finally opened normal trade on the BSE at Rs1,387—a premium of 34% and went on to gain further ground to a high of Rs1,420.
On the National Stock Exchange (NSE), the shares opened at Rs1,408 and touched a high of Rs1,428.25 by 1015 hours.
After becoming the first Indian exchange to come out with an IPO, and also the first public offer of the year 2012, MCX also became the first company to list under the new Securities and Exchange Board of India (SEBI) rules introducing pre-open bidding in the first-day trade of stocks listing after IPOs.
Under the new guidelines, announced by SEBI on 20th January, a pre-open bidding is conducted for one hour between 9 am to 10 am, pursuant to which an equilibrium price is discovered.
Thereafter, a price band of 20% is imposed for the listing day trade.
These measures were adopted by SEBI to check wild price fluctuations in the listing day trade, as many stocks in the past have seen movements of even 100% or more on their first day of trade.
Although MCX had offered to list its shares on the BSE alone, another stock exchange NSE in a late night circular on 7th March said that it was also admitted MCX shares for trading on its platform.
MCX had previously said that it would first observe the volumes on BSE for some time and then decide about NSE.
However, NSE has not pro-actively offered to list MCX shares on its platform. Regulations allow an exchange to add a stock in the list of “securities permitted to trade category” even if a company has not applied itself.
However, the move has come as a surprise as both NSE and the MCX founders (FTIL group) have been at the loggerheads for many years now over various issues, including direct competition in some business areas.
Some market experts said that MCX shares were expected to create strong volumes in the secondary market, given the demand worth Rs36,000 crore for its IPO worth about Rs650 crore, and NSE might not have wanted to lose the volumes to its rival BSE.
A listing ceremony was held at the BSE here to mark MCX’s debut in the stock market. MCX vice-chairman Jignesh Shah and CEO Lamon Rutten were among those present for the ceremony.
MCX’s promoter company Financial Technologies India (FTIL) is already listed on the BSE and NSE.
Post its listing, MCX has got lakhs of retail investors on its list of shareholders, unlike other privately-held exchanges where majority shares are owned by a few foreign and private entities.
Experts believe that the robust demand for MCX IPO and then an impressive listing could also lead to other exchanges getting listed and help revive the overall primary market.
The IPO got over-subscribed more than 54 times with bids worth about Rs36,000 crore, as against the targeted proceeds of up to Rs663 crore through sale of 64.27 lakh shares.
Out of this, over nine lakh shares were sold to 12 anchor investors for about Rs96 crore, a day prior to the beginning of the three-day bidding for shares in the IPO on 22nd February.
The bidding for the remaining 55 lakh shares is estimated to have fetched about Rs567 crore.
MCX had set a price band of Rs 860-Rs1,032 per share for the IPO, and the final price was fixed at the top end (Rs1,032) given the strong demand witnessed for the offer. The anchor investors were also allocated shares at the same price.
The first ever public offer by an Indian exchange has also emerged as the most successful IPO in about four years.
In terms of demand from retail investors, the MCX IPO is said to have surpassed all previous records, as the shares reserved for the retail shareholders were over-subscribed nearly 24 times—higher than any major public offer so far.
Overall, it got subscribed 54.13 times with the highest over-subscription level since Anil Ambani-led Reliance group’s R-Power IPO in January 2008 that was subscribed 73 times.
The previous highly successful IPO was of state-run Coal India in October 2010, which got subscribed 15 times overall, but the retail portion was subscribed only about two times.
The share sale in another public sector behemoth ONGC through a one-day auction recently got subscribed only about 98% only after state-run insurer LIC is said to have pitched a large majority of bids.
The promoters FTIL currently hold 31.2% in MCX, which would come down to about 26% after the IPO.
FTIL, SBI, Bank of Baroda, GLF Financials Fund, Alexandra Mauritius, Corporation Bank and ICICI Lombard General Insurance were the investors divesting part of their holdings in MCX through the IPO.
A recent report by the New York State comptroller highlights how Wall Street pay has hardly reduced. America remains a highly financialised economy
A report by the Office of the State Comptroller of New York (OSC) highlighted the crucial role of the financial sector and its relative importance to New York City and America. According to the report, “the securities industry in New York City accounted for 23.5% of all wages paid in the private sector despite accounting for only 5.3% of all private sector jobs”. It further added, “The average salary (including cash bonuses) in the securities industry in New York City grew by 16% to $361,180 in 2010, which was 5.5 times higher than the average salary in the rest of the private sector ($66,110). Data is not yet available for 2011.” (http://www.osc.state.ny.us/osdc/rpt12-2012.pdf)
The financial sector in America, specifically New York City, seems to be alive and kicking, even after the sub-prime crisis of 2007-08. The fact that salaries have increased have shown how the economy is in the grip of finance and its ancillary services. Pay in key sectors like manufacturing and other services have been relegated to the background. This phenomenon is called ‘financialisation’ which according to Wikipedia is “the increasing dominance of the finance industry in the sum total of economic activity, of financial controllers in the management of corporations, of financial assets among total assets, of marketised securities and particularly equities among financial assets, of the stock market as a market for corporate control in determining corporate strategies, and of fluctuations in the stock market as a determinant of business cycles”. One can see from the chart below that the finance sector has been “financialising” the rest of the US economy.
The share of the gross domestic product (GDP) of finance, in value terms, has doubled from 10.5% in 1947 to 20.7% in 2010. This came at an expense of manufacturing which declined from 25.6% in 1947 to 11.7% in 2010, a decline of more than half.
What value does finance really add to an economy? Recent financial “innovations” and cheap money have combined to cause multiple booms and busts. If at all, the increase in financialisation has only added to the risk and volatility of the financial world which has affected the real world. The output generated by the financial sector is an illusion. What more is how the salaries of the financial sector seem to support this, as explained below.
What is pertinent is that the profits of Wall Street firms have declined and despite this the salaries has increased. The above graph indicates that profits have declined by more than half, from $27.6 billion to $13.5 billion. Thomas P DiNapoli, the comptroller of New York adds, “The increase (in salary) reflects higher staffing levels than one year earlier, even though the industry has begun to shed jobs and an increase in base pay in response to regulatory changes that discourage large cash bonuses.” The large bonuses were attracting negative publicity from all quarters, especially while other private sectors were shedding jobs. OSC forecasts that profits are unlikely to reach $18 billion for the entire year, one-third less than in 2010.
The above chart clearly indicates widening of the salary base between the securities industry, which is the heart of the finance industry, and the rest. To illustrate this disparity further, the below chart indicates how much bonuses have been dished out to Wall Street employees.
One can see that it peaked in 2007, prior to the sub-prime crisis, at a whopping $1,77,830 before declining to $1,21,150 dollars in 2011. The fact that the bonuses dished out to Wall Street employees alone (we’re talking about bonuses alone, not salary!) is still greater than the average salary of the private sector pay speaks volumes of the burgeoning finance industry.
According to Mr DiNapoli, “The industry earned a record $61.4 billion in 2009 with the benefit of federal assistance after losing a record total of $53.9 billion over the course of 2007 and 2008.” The financial sector should have declined in importance after the market crash of 2008 but actually grew in stature after the Target Asset Relief Programme (TARP) to bail out the Wall Street firms. Under TARP United States taxpayers’ money has gone into the pockets of the bankers who nearly killed the economy. This very bailout has cemented the importance of the value-destructive finance industry instead of reducing it.
The OSC report further adds, “Securities-related activities accounted for 14% of New York State’s tax revenues and almost 7% of New York City’s.“ So, in short, if revenues, profits, bonuses decline, the tax revenue will fall further, putting New York City’s finances in a precarious position that mirrors the bankruptcy of the city in 1970s. The fact that the entire city and state depends on one single industry is a testament of the importance of finance to the state, regardless of its real utility to the economy.
Finance, given its astronomical income levels, attracts talent from all quarters, even away from more economical useful ones such as agriculture and manufacturing. According to Robert Shiller, professor of economics from Yale University and author of best-seller Irrational Exuberance, cited in a recent piece in Bloomberg, “positions in certain finance-related fields often offer more than the usual temptation to be less than honest—because finance is a profession that offers, at least to the lucky few, astronomically high incomes.