Pesky calls: TRAI, telcos working together to end the menace

Within a month of TRAI’s regulation curbing unsolicited calls and SMSes came out, telemarketers seem to have found a way of reaching mobile subscribers by using servers located outside the country to send such unwanted commercial communication

New Delhi: The Telecom Regulatory Authority of India (TRAI) and service providers are now working together to find a solution to the problem of telemarketers using international websites to send pesky calls and SMSes—a menace which has resurfaced within weeks of a blanket ban on them, reports PTI.

Within a month of TRAI’s regulation curbing unsolicited calls and SMSes came out, telemarketers seem to have found a way of reaching mobile subscribers by using servers located outside the country to send such unwanted commercial communication.

According to the Cellular Operators Association of India’s director general Rajan S Mathews, telemarketers have started sending messages from servers located outside India which does not fall under the purview of TRAI.

“TRAI is concerned, it is looking into the matter as to how it can curb this (the new method adopted by telemarketing companies). We do not want the customer to suffer and we as an industry are working with TRAI to find the best possible solution,” Mr Mathews said.

“It is difficult to monitor messages sent through servers outside, but we will find a way out, he added.

TRAI has already penalised 15 telemarketers till date and issued notices to 900 individuals for violating the norms. Subscription of 90 people have also been disconnected.

TRAI’s regulation, which came into effect on 27th September, says that if an unsolicited commercial communication (UCC) originates from a subscriber who is not registered with the regulator as a telemarketer, the service provider shall issue a disconnection notice to that subscriber.

It further says the phone shall be disconnected if the subscriber continues to send such communications.

In case of violation of regulation by registered telemarketers, TRAI has recommended penalty ranging between Rs25,000 to Rs2.5 lakh for a violation.

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Chief economic adviser supports setting up sovereign fund using forex reserves

The RBI, however, has been expressing reservations on setting up a sovereign wealth fund. The central bank wants the government to set up a sovereign wealth fund from the budget and not out of forex reserves

New Delhi: Supporting the industry ministry’s proposal to set up a sovereign wealth fund to finance infrastructure projects, chief economic adviser Kaushik Basu on Monday said India can use a part of its large foreign exchange reserves to create the fund, reports PTI.

“If a small part of our forex reserves is used to set up a sovereign wealth fund and deployed strategically, this can yield steady long-run returns and at the same time enhance India’s policy role in the world,” Mr Basu told PTI.

Sovereign wealth funds have existed for a long time, though they got this name only six or seven years ago.

Recently, the industry ministry in a discussion paper suggested that India should consider setting up a sovereign wealth fund to finance infrastructure which would require an investment of $1 trillion in the next five years.

The paper recommends that government should use a part of its foreign exchange reserves to set up the sovereign wealth fund as has been done by countries like China, Korea and Singapore.

Mr Basu said sovereign wealth funds could be set up under the control of either the government or the Reserve Bank of India (RBI).

“A sovereign wealth fund does not necessarily mean money moved from the RBI to the government,” he said.

Mr Basu said, “The returns from the first $15 or $20 billion set aside for this can be enormous.”

India has one of the biggest foreign currency reserves in the world at $320 billion. It is, however, far less than $3.2 trillion held by China and $1 trillion by Japan.

The RBI, however, has been expressing reservations on setting up a sovereign wealth fund. The central bank wants the government to set up a sovereign wealth fund from the budget and not out of forex reserves.

Citing example of Singapore, Mr Basu said, “There are countries with relatively small foreign exchange holdings that have operated very successful sovereign wealth funds.”

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RBI policies aggravating manufacturing sector problems: Barclays

“Conditions for Indian manufacturing have perhaps worsened, given the RBI’s prolonged tight monetary policy and the lack of liquidity in the banking sector,” Barclays Capital Research said in its ‘Emerging Markets Research’

New Delhi: Blaming supply constraints for rising cost of manufactured items, Barclays Capital on Monday said the Reserve Bank of India’s prolonged tight monetary policy has only aggravated the problem for the manufacturing sector, reports PTI.

“Conditions for Indian manufacturing have perhaps worsened, given the RBI’s prolonged tight monetary policy and the lack of liquidity in the banking sector.

In a way, Indian policy makers seem to be fighting structural inflation, mostly with cyclical tools such as hiking interest rates,” Barclays Capital Research said in its ‘Emerging Markets Research’.

It further said: “Supply constraints keep manufacturing prices elevated. Most of the manufacturing sector while enjoying the benefits of steady and rising demand, often faces disproportionate problems in scaling up supply due to persistent infrastructure bottlenecks.”

Manufactured items, which have a share of over 65% in Wholesale Price Index (WPI), have reported inflation of over 6% since February this year and has been one of the major contributors of the current high inflationary pressures.

Core inflation stood at 7.69% in September this year.

The RBI had earlier warned that prices of manufactured items are likely to remain high on account of volatile global commodity prices.

The central bank has hiked its key policy rates 13 times, totalling 350 basis points since March 2010, to curb inflation.

Corporate India has blamed the repeated rate hikes, which have increased the cost of borrowing, for hindering fresh investments and resultant slowdown in industrial growth.

Economic growth in April-June stood at 7.7%, the lowest in six quarters. Growth in industrial production also fell to a mere 4.1% in August.

Barclays said that legal and procedural impediments often present additional burdens as in the case of recent incidences of disputes over land acquisition in various parts of the country, and contribute to a widening in the demand-supply gap in the manufacturing sector.

“As a result, we think manufacturing inflation should be seen as a structural problem, rather than a cyclical issue.

“Indeed, over the past four years, inflation has often been labelled as structural, but on the fiscal front, which could help alleviate capacity constraints, little success has been achieved,” Barclays said.

Pointing to the RBI’s policy of monetary tightening as means of combating inflationary pressure, the report said that the central bank’s measures had in fact contributed to the problem of demand-supply mismatch.

“However, the RBI has typically focused on managing the near-term inflation even when it explicitly flags capacity constraints as a key reason for rising manufacturing inflation,” it said.

According to Barclays, the changing nature of India’s industrial sector means that the cycle of commodity prices generates inflationary pressures more quickly nowadays than in earlier times.

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