Citizens' Issues
No stay on Kudankulam plant, SC agrees to examine its safety

While refusing a stay on the fuel loading at KNPP, the apex court said public safer is of prime importance and people living in the vicinity of the plant should know if their lives would be protected

New Delhi: The Supreme Court on Thursday refused to stay loading of fuel for nuclear power plant at Kudankulam but agreed to examine the risk associated to the project, saying safety of people living in its vicinity is of prime concern, reports PTI.
"Public safety is of prime importance. There are poor people living in the vicinity of the plant and they should know that their life would be protected," a bench of justices KS Radhakrishanan and Deepak Misra said while posting the matter for hearing on 20th September.
The bench, which refused to stay the fuel loading after the centre assured the court that commissioning of the plant will take place at least two months, said it would go through the judgements of the Madras High Court and hear the matter.
"We are neither against the plant nor the petitioner but we want to see that recommendations of the Atomic Energy Regulatory Board (AERB) on the safety measures have been implemented," the bench said.
The Centre was represented in full strength with Attorney General GE Vahanvati, Solicitor General Rohinton Nariman and Additional Solicitor General Mohan Parasaran vociferously opposing the plea for staying fuel loading.
The Centre said the plant is "completely safe". Since all the recommendations made by the Board cannot be put in place in one go, it would be implemented in due course within six months to two years, it said.
The court was hearing an appeal by social activist G Sundarrajan against the High Court's decision refusing to impose any restraint against the plant.


Indian consumers cut consumption as they lose confidence in future income

Sluggish job growth means that consumers are likely to downtrade in their consumption. If so, will consumer products companies continue to sport high valuations?  

The urban job squeeze is the biggest problem for marketing managers to increase sales in consumer products in India, says Espirito Santo Securities in its latest market update report. The lack of inclusive growth in the economy poses a structural risk to consumption, which includes spending on low ticket items. At current levels the brokerage firm observes that consumer stocks are priced to perfection and do not discount the brewing storm. The firm has recently turned bearish on the sector overall, and after the recent run-up.


Hit by global economic woes, policy paralysis and a series of political scandals, India is facing one of its worst periods of growth and unemployment, as noted by recent ASSOCHAM surveys on 32 sectors, says Espirito Santo Securities. Hiring has dropped by 20% in Q1FY13 versus Q4FY12; the financial sector that was immune to the 2008 financial crises is now very vulnerable to non-performing assets and hiring in other sunrise sectors are at levels insufficient to absorb the supply of fresh graduates coming into the work force, observes Espirito Santo Securities 

FICCI’s survey suggests a drop in the business confidence index from 60.3 in Q4FY12 to 51.8 in Q1FY13. Indian consumers have become progressively more pessimistic about future prospects over the last two years (as inferred from RBI consumer confidence surveys), following negative real wage inflation (based on an analysis of BSE-200 companies) and a plunge in hiring. The market update report sees risks to overall consumption from: (a) further job losses, (b) delayed hiring in IT and financial services and (c) prolonged job search period post redundancies. 


According to FICCI, the waiting period to find a job has increased from two to three months to 9-10 months, with people also settling for relatively junior positions. Slowing GDP growth, a poor monsoon and sustained inflationary pressure could provide the catalyst to temporarily reverse the virtuous consumption cycle that India has benefitted from in the past decade, i.e. as consumers lose confidence in future income, they decrease consumption. The market update report has highlighted structural risk to consumption and downgraded the consumer sector 

Espirito argues that the negative real wage inflation of BSE-200 companies’ employees and the plunge in the Monster listing primarily reflect urban populations. This is distressing as the majority of sales for the FMCG sector are generated in urban markets. Investors have chosen to hide in the consumer sector and trades are getting crowded. Downtrading in essentials and prolonged delays in discretionary spending will lead companies to take price cuts and increase advertising and sales promotion (A&P), thus affecting the bottomline. The imminent slowdown in the consumer sector may result in ‘defensive sector’ losing its crown, according to Espirito Santo Securities 

The analysts opine that in times of continued uncertainty and concern around corporate governance, investors are playing it safe and focusing on a narrow list of companies in the consumer sector, and flow into those names is causing P/E (price-to-earnings ratio) expansion, rather than an expectation of increases in earnings or any underlying change in the industry to merit a major expansion in the multiple.


Further, according to the analysts, the BSE FMCG index has outperformed the broader market by about 17% YTD (year-to-date), despite starting the year on already high multiples (consensus 12-month forward P/E of 24.6 times). Several companies (like Emami and Godrej Consumer Products) have been top performers, and the P/E rerating has meant the stocks have outperformed the market.


Large cash market main driver of corruption: RBI

If the cash component in the society goes down, it will help solve a lot of problems like the rampant corruption, monetary policy transmission issues and cash management for banks at the operational level, feels the central bank

Mumbai: Stating that the circulation of a large amount of cash in the economy leads to many problems, including corruption, Reserve Bank of India (RBI) Deputy Governor HR Khan on Thursday said the central bank is focused on bringing down the cash component in the economy, reports PTI.
"We want that we should move towards a less cash society. There is a need for the predominant cash in the society to go down," Khan told reporters at the sidelines of a Punjab & Maharashtra Cooperative (PMC) Bank event.
He said if the cash component in the society goes down, it will help solve a lot of problems like the rampant corruption, monetary policy transmission issues and cash management for banks at the operational level.
At present, the amount of cash circulating in the system is up to 14% of the gross domestic product (GDP), which makes the country one of the highest markets that has cash circulation, he said, stressing on the need to bring down the ratio.
Only Japan has such high levels of cash, he said, without giving a target on the ratio.
The remarks come at a time when there is a widespread angst in the society over rampant corruption, with repeated reports from the statutory auditor on alleged corruption only doubting the credibility of the government.
Khan said implementation of information and communication technology (ICT) solutions like mobile and online banking, core banking and electronic fund transfers can help bring down the reliance on cash.
Both the government and the RBI are taking efforts to bring down usage of cash, Khan said, citing the case of compulsory use of electronic fund transfers for all transactions above Rs25,000 adopted by the government. 
Asked if such a move, which is expected late in the night today (IST) will push up the commodity prices, he said, "that risk is always there." 
Meanwhile, Khan said the RBI will soon be implementing the suggestions of the Malegam committee on cooperative banks, once "legislative issues" around it get solved.




5 years ago

Perhaps, this is a vicious circle. Use of huge quantities of high denomination notes (Rs500 and Rs1000) may have a link with corrupt practices. Unaccounted payments in real estate deals are mostly in cash. But, there is no magic wand with law enforcers or regulators to prevent such practices, unless there is a political will to handle this. There are measures which could be tried, but such expensive and harsh measures may have credibility implications. Retaining cash beyond a level required for say, three days’ expenses, where banking services are easily accessible should be discouraged through incentives/disincentives. But, there was a time when BEST alone had lakhs of rupees in coins which banks were not able to accept as they did not have staff to count and accept the coins. Still, it is a welcome change that there is an open discussion on the issue.

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