Urban Inflation

Combined inflation for urban and rural areas increased, marginally, to 5.69% in January 2016, from 5.61% in December 2015. Inflation in urban areas increased to 4.81% in January, from 4.73% in December. Food inflation in urban areas increased marginally to 6.23% in January from 6.05% in December. In urban areas, prices of vegetables increased by 7.22% since last year. Inflation related to fuel & power increased to 3.09%, in January from 2.65% in December. Inflation for housing increased to 5.20%. Inflation for clothing hovered around 4%; for miscellaneous items, it increased to 3% in January from 2.91% in December.


Round-tripping of Money?
Iread with great interest “PK’s Romp through India’s Financial Sector” (issue dated 18 February 2016) by Sucheta Dalal. I have been teaching accounting and financial analysis at the Indian Institute of Management (Bengaluru) and I find your article relevant for my teaching and research.
A bizarre feature of banking regulation is the regulator’s mollycoddling of banks, public sector banks and private sector banks. For example, the Reserve Bank of India (RBI) allows banks the option of recognising banks to recover fraud losses in not more than four instalments. Also, RBI allows banks to recognise arrears of wages resulting from wage settlements, in instalments. 
I now understand that RBI is considering allowing banks to take the foreign currency translation reserve (FCTR), to profit & loss account. FCTR is an unrealised reserve that can be taken to profit & loss only on the disposal of a foreign operation. Incidentally, a few banks have done this already and some others are now seeking the regulator’s permission to do so. I have found that FCTR has been taken to the statement of profit & loss using the subterfuge of round-tripping of money. 
The disclosure in the statement of profit & loss is also poor and the reader will not know that the profit transferred from FCTR is unrealised.
R Narayanaswamy, by email 



Kudos to the founder-trustee duo Sucheta Dalal and Debashis Basu for having taken Moneylife Foundation (MLF) and its many citizen-centric activities to a new height in the past six years. Through its flagship media arm, Moneylife magazine, it has spread not only financial and social awareness amongst all strata of society, but with an E-paper and newsletter, MLF has reached out to almost a million readers.
Moneylife brought a smile to thousands of harassed people by offering them a platform to provide free advice and guidance on any problem. Moneylife magazine is not only a personal finance magazine. It has also spread its wings to the nagging problems of society whether it is a legal, housing, insurance, investment, rail safety, consumer guidance, taxation, RTI, civic issues, senior–citizen- or woman-centric help, etc. It has a panel of experts and activists in each field who hold free advisory workshops at the MLF premises. 
Besides, giving unbiased information and educative articles fairly and transparently through Moneylife, MLF also holds seminars, workshops, expert lecture sessions on burning topics, from time to time. These are held not only in Mumbai but also throughout the country including college premises to train the gen-NEXT to successfully manage their own finangeneral public public at large is invited and motivated to attend in huge numbers. I think, no other media house has, so far, spread its roots to benefit all sections of the society with an altruistic view. MLF can be a catalyst for other media sensitising them to the woes of a common man engulfed with various financial, personal and social problems.
One can read about MLF’s activities and statistical achievements of the past, including the thought-provoking, frank and landmark expert seminars on each past anniversary on its website. To celebrate its sixth anniversary, on 6 February 2016, MLF had arranged an eye-opening presentation by two bureaucrats—one retired and the other one serving (RK Sinha and Dr Praveen Gedam), who presented their own illuminating model of good governance, while dealing with the subject of “Transforming India from Within”. It was a roaring success and the credit goes to the untiring dedication of MLF team led by Sucheta Dalal and Debashis Basu.
MLF, please keep up the tempo of spreading the light of awareness.
Mohan Siroya, by email



This is with regard to “Buying Stocks of Debt-laden Companies” by R Balakrishnan. This brings back memories of 1993, when I was an inexperienced young man. My broker was urging me to buy Hotel Leela at around Rs23.00. Back then also, something did not sound right and I stayed away. After 22 long years, it’s gone nowhere.
Abhijit Joshi, online comment


This is with regard to “Sovereign Gold Bonds: What the Pricing Shows” by Raj Pradhan. Sovereign Gold Bond Scheme is a part of government borrowing. It appears that it will be cost-effective for the government and that it will be a wise option for fresh investors, who have a craze for the yellow metal. The government and RBI will have to make the Gold Monetisation Scheme popular among institutions and religious bodies that have an unspecified huge stock of gold. Bringing the stock into the mainstream will benefit them in the long run and, at this stage, it will be a service to the nation. Their contribution will reduce the cost of gold imports. There are, however, vested interests that will try to dampen the present enthusiasm of RBI and the government.  
MG Warrier, online comment



This is with regard to “Plummeting confidence in the government's ability to tackle PSB bad loans” by Sucheta Dalal. The banking system is in a mess and is struggling to find ways and means to get out of the festering problem of non-performing loans generated continuously due to lack of professionalism and political interference in its management. The so-called autonomy has been elusive and the public sector banks survive because of Budgetary support and subsidy provided by the depositors and other stake-holders, particularly good borrowers. The economy, which is dependent on the banks for its growth, is the worst sufferer; the losses it suffers on a recurring basis are beyond calculation. However, the problem faced by banks gets glossed over and no serious attempt has been made to introduce a lasting solution to make them healthy and self-dependent for their survival. The solution to the menace of bad debts of banks lies within the banks and the borrowers themselves by introducing a self-correcting mechanism to liquidate the bad debts with the fines levied from bad borrowers and banks for their acts of undisciplined way of conducting the credit portfolio right from the sanction of loans to their liquidation. The problem of bad debts is definitely not an insurmountable one. But it requires willingness and guts on the part of the authorities to discipline the borrowers and banks without fear or favour. This autonomy is essential for the banks and the otherwise competent RBI to carry out their functions professionally.
Gopalakrishnan TV, online comment


This is with regard to “Beaten Down Stocks”. One key learning for me was that to rely only on high RoCE (return on capital employed) may not work. For example, Mphasis and GMDC had respectable RoCE; however, the price did not move up for five years. I think one also needs to pay close attention to the underlying business, its future prospects and its drivers.
Chetan Chhabria



This is with regard to “Stock Manipulation: Dynacons Technologies”. The company has been taken over by Dr A Govil, promoter of Ducon group, USA (http://www.ducon.com/) and the market is betting on the promoter to do something good with the Indian company. The stock is way overpriced for sure; but, at least, there is some rationale for it, unlike so many non-descript stocks that have been rigged to nonsensical levels in this bull run.
Bosco Menezes


This is with regard to “Governance and transformation from within the system can change the lives of citizens”. Shailesh Gandhi’s question is valid and timely. If a digitally-enabled method has been shown to work in a government department, why can’t it be implemented in similar departments across the country? The smart city project has earmarked crores of rupees for digital technology. So, there is ample money available for such initiatives. Information about improving governance of temples is very heartening. Maybe, Maharashtra could foster a competition among temples to get ISO certification.
Meenal Mamdani 


‘Spotlight’ Gets Investigative Journalism Right

Unlike many films about reporters, “Spotlight” accurately depicts the frustrations and joys of breaking a big story, from the drudgery of spreadsheets to the electric thrill of revelatory interviews


There's a moment in almost every movie when people in the audience who really know the line of work depicted on screen cry out in frustration and say: "Oh, come on!" "Absurd." "Never happens."


Over the decades, Hollywood screenwriters have taken liberties with every imaginable profession and craft, from doctors to lawyers to spies to police detectives. Rocky Balboa survives punches that would decapitate an ordinary boxer. The car chases in The Bourne Identity defy physics. John McClane, the hard-boiled cop in the Die Hard series, displays a supernatural ability to evade bullets.


Journalism movies have had their share of utterly improbable moments. In the 1994 film "The Paper," the city editor of a New York City tabloid gets into a fist fight with his female boss as he tries to stop the presses. (Not a great career move.) More recently, the first season of HBO's television series The Newsroom showed a producer landing a series of astounding scoops in the first hours after the explosion of the Deepwater Horizon. The reporter's information came from miraculously well-placed sources 2013 a sister who worked at Halliburton and a close friend who happened to be a junior BP executive attending all the key crisis meetings.


All of this makes "Spotlight," the film based on the Boston Globe's investigation of the Catholic Church, a remarkable achievement. The movie, which has been nominated for six Academy Awards including best picture, vividly captures the mix of frustration, drudgery and excitement that goes into every great investigative story. Where liberties were taken, and there were a few, they are in line with the realities of the news business.


One of the most credible aspects of the movie is the cluelessness with which the reporters begin their quest. As is often the case, the Globe's group of reporters, known as the "Spotlight" Team, have no idea of the size and scope of what they're trying to examine. At first, they stumble around, lacking the most basic information about how the church bureaucracy worked.


The notion of pedophile priests was not new. Newspapers from Dallas to Portland had done deeply reported stories on individual cases. Boston itself had just witnessed the criminal trial of a particularly notorious priest, Father John J. Geoghan. Initially, senior editors at the Globe are not even persuaded there was a story worth chasing.


As the film briefly acknowledges, the Globe was behind the Boston Phoenix, a respected alternative weekly, in covering the subject for local readers. Kristen Lombardi, a reporter for the Phoenix, had already written a series of stories implicating Cardinal Bernard Law, the leader of Boston's archdiocese, in allowing Geoghan to remain in daily contact with children for three decades.


"Spotlight" opens with the arrival of Marty Baron, a veteran journalist who took over at the Globe after a stint as editor of the Miami Herald. As investigative reporters know well, Florida is a reporters' paradise, lousy with graft, corruption and colorful characters. The state's public records laws are decisively tilted toward openness. When a Globe columnist covering the Geoghan trial wrote that "the truth may never be known," Baron sat down with the head of the "Spotlight" team, Walter "Robby" Robinson, and asked him to take a fresh look at the issue.


The editor suggested filing a lawsuit to force release of records the Catholic Church had submitted under court seal. Such suits were unheard of in Massachusetts. Liev Schreiber, the actor who portrays Baron, captures the true life editor's white-hot focus and intensity, so much so that long-time colleagues were taken aback by the resemblance.


The movie accurately depicts the team's key early breakthrough. The reporters figured out that priests who had "acted out" with children were often listed in the diocese's phone book as on leave. They obtained years of directories and pored through thousands of entries to create a database, using the then-remarkable new technology known as a computer spreadsheet. With artful editing and a stirring score, director Tom McCarthy made this excruciatingly boring work an inspiring event, which in a way it was.


Another turning point came when Sacha Pfeiffer, the Globe reporter played by Rachel McAdams, knocks on the door of a priest who off-handedly acknowledges that he has abused children. (He asserts, bizarrely, that his conduct was not improper because he was not sexually aroused.) The reporter is clearly flustered and unprepared for this admission and she rushes through the interview before a woman at the house can slam the door. The practice of "door stopping" is routine for investigative journalists; nearly all such encounters end in failure. But the few attempts that succeed deliver an adrenalin kick unlike anything in reporting.


Fascinatingly, one of the more compelling scenes about journalism in the movie was invented by Tom McCarthy and Josh Singer, the screenwriters who worked closely with the reporters and editors involved the story.


It comes late in the film, after the "Spotlight" team has figured out that scores of Boston-area priests had abused children. Eric MacLeish, a lawyer for the victims, angrily tells Robinson that he sent the Globe a list of 20 priests "and you buried it." Soon after, the reporters come across a story that ran deep inside the Globe's metro section when Robinson was in charge of local coverage.


The writers came across the buried story when they interviewed MacLeish as part of their research for the film. They seized on it as the perfect way to illustrate the Globe's earlier failures to investigate an important local institution. The conversation between MacLeish and Robinson is fictional. But the sentiments portrayed in the movie are real. "It happened on my watch and I'll go to confession on it," the Robinson told Entertainment Weekly. "Like any journalist who's been around this long, I've made my share of mistakes."


In investigative reporting, of course, nearly all great stories are screamingly obvious in retrospect. The reporting and documents the Globe obtained through its lawsuit proved that Church leaders had knowingly shuffled around pedophile priests from parish to parish. Geoghan turned out to be a piece of a much, much larger story, one that has rippled across the United States and the world over the past 15 years. Baron has pointed out that the movie is not a stenographic record of how the investigation unfolded. But it gets the big things right, providing a compelling picture of how great reporters break big stories.


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