Politics & the Nation

 How many policy does a 'company' of police involve?

o About 90.
 Justice Srikrishna commission members
o Besides Justice Srikrishna, the panel comprises Ranbir Singh, vice-chancellor
of Delhi's National Law University; Abusaleh Shariff, senior research fellow,
International Food Policy Research Institute, Delhi; Ravinder Kaur, professor,
department of humanities and social sciences, Indian Institute of Technology-
Delhi; and Vinod K. Duggal, former Union home secretary.
 On sprucing up PF
o Take a look at this graphic which gives us findings from an interesting study
that was carried out.  Also look at the suggestions.

Finance & Economy

 India's R&D spend

o India's R&D spend as a proportion of GDP, at 0.7%, is one-fourth than that of
the US, less than half of China’s and lower than Brazil's.
o In 2009-10, as global corporate R&D expenditure dropped 3.5%, the R&D
spend of the top 100 Indian companies in terms of R&D expenditure rose
1.5%, keeping pace with their revenues.
 Is financing by MFIs really poverty alleviating?
o According to a recent survey conducted in Andhra Pradesh, households use
less than 2.5% of all micro-loans to start new businesses.  The survey reveals
that big-ticket items on the list of customers taking micro-loans are agricultural
inputs, repayment of old debt, health and ‘other consumption’. The customers
use the bulk of their borrowings to bridge temporary financing gaps rather
than create new businesses. While such uses can bring much-needed relief
in times of financial stress, they cannot lead to sustained reduction in poverty.
 Citibank caught in 400cr staff fraud at retail unit
o Citibank is caught in an estimated 400-crore fraud and forgery by staff at its
retail banking unit in Gurgaon, involving funds from wealthy individuals and
corporate clients.
o The fraud was discovered early this month when a customer told a
relationship manager that he had invested in a Citibank scheme that
promised high returns in a short period, when no such scheme existed.
o Nearly 40 clients, including some corporate treasuries, could be affected
because of the fraud, but their identities are not known. It is unclear whether
Citibank will compensate its clients for the losses.
o One or more employees at Citibank’s Gurgaon office are alleged to have
forged the letterhead of the bank to peddle a scheme—claimed to have been
approved by Citibank’s investment product committee regulator—to clients
that could yield high returns in a short span. The funds generated by selling
the product to some investment companies and individuals were transferred
to accounts of some brokers, who utilised the money for their transactions.
The people at Citibank involved in the process were supposedly paid bribes
by those brokers.

 China eyeing an oil entry in India

o China's largest government-owned energy firm, CNPC, has reportedly
approached state-run Oil & Natural Gas Corp (ONGC) to forge a
comprehensive agreement that could provide it access to India’s oil and gas
assets.
 o India, which allows 100% FDI in the oil and gas business, is extremely
cautious about China’s entry in certain sensitive sectors such as energy, ports
and telecommunications.
o If the government gives its go-ahead, CNPC and ONGC could collaborate in
several ventures in the country.
o The US Energy Information Administration (EIA) estimates India’s proven oil
reserves at about 5.6 billion barrels in January 2010, second largest in the
Asia-Pacific region after China.
o China, the world’s second-largest energy consumer after the US, is
aggressively looking for oil and gas assets abroad as its largest oil fields are
mature and production from them is on the decline.
o ONGC’s collaboration with cashrich CNPC will help the state-run explorer
finance major projects besides sourcing ultra-deepwater technology. The
partnership will also help ONGC in acquiring cheaper oil and gas assets
overseas by reducing stiff competition from CNPC and its arm PetroChina,
the world’s most valuable oil company.
o So far, Chinese firms have joint ventures with ONGC’s overseas arm, ONGC
Videsh, in foreign countries only such as Syria and Colombia.

Medicine & Health

 Is eradication of polio a good idea?

o Arthur Caplan, Professor of Bioethics and the Director of the Center for
Bioethics at the University of Pennsylvania in Philadelphia, while admitting
that the
o goal is a noble one, says that it is not the right one. The best that can be done
is to seek to control polio, and to hope that politics, economics, and ethics
allow us to get that far.  Those involved in efforts aimed at complete
eradication should rethink their goal, lest faith in the unattainable leads to
disaster.  Take a look at his reasons for it not being the right goal:
o For starters, the surveillance required to establish eradication is a huge
challenge. Political instability, wars and civil breakdown, and balky
governments sometimes make access nearly impossible in some parts of the
world. Moreover, it is not clear that all polio cases can be detected, because
some infected people do not show symptoms. And the challenge of ensuring
adequate surveillance appears insurmountable when one considers that polio
can suddenly reappear out of the blue in a so-called wild-type form.
o Chasing down the last cases of polio is very costly. Fragile health-care
infrastructure and community support are being strained by the eradication
effort, as government budgets and resources in poor countries are diverted
from more pressing local problems.
o In other parts of the world, the emergence of respect for a patient’s right to
refuse vaccines creates a difficult challenge for those seeking to eradicate
diseases such as polio. Vaccination rates in many parts of the United States
have fallen well below 90% for polio, meaning that the risk of an outbreak is
very high should a case be introduced. And, in an age of mass air travel, a
case in Tajikistan can be in Utah in a day.
o Finally, there is the ever-present possibility of bioterrorism. For this reason
alone, no trust should be placed in claims of eradication of diseases like polio.

International

 Can India race ahead China?  What could possibly slowdown China?
 o China is largely seen as having raced past India in the in the economic
sphere because of its authoritarian advantage.  Democracies don't permit
policy framework changes that quickly as can be implemented in authoritarian
systems.  Are there any reasons to suspect that the Chinese advantage will
not last longer?  Yes, says Professor Jagdish Bhagwati of Columbia
University.  Look at his reasoning:
o First, while authoritarianism can accelerate reforms, it can also be a serious
handicap. In a top-heavy system, growth paths can become unpredictable,
and thus subject to volatility.
o As growth accelerates, political aspirations are aroused. Will the Chinese
authorities respond to them with ever greater repression, as they have with
dissidents and Falun Gong, creating discord and disruption, or will they
accommodate new popular demands by moving to greater democracy?
o China’s authoritarian politics means that it cannot profit from the innovations
that depend on software, as that is an instrument through which dissent can
flourish and become subversive of total control. As one wit has observed, the
PC (personal computer) and the CP (Communist Party) do not go together.
o Finally, China’s growth must continue to depend on its exploitation of external
markets, which makes it vulnerable in a world that is increasingly making
democracy and human rights a central preoccupation. In such a world,
continued hassles and hiccups for Chinese exports can be confidently
expected.
o Economic factors also militate against Chinese prospects. China was clearly
able for many years to exploit a “reserve army of the unemployed” à la Karl
Marx – to grow rapidly without facing a labor-supply constraint, so that capital
accumulation would not run into diminishing returns. But now, given China’s
one-child policy and lack of adequate infrastructure (including housing) in
rapidly growing areas, labor is getting scarce and wages are rising.  In
economic jargon, the supply curve of labor was flat but is now sloping
upward, so that rapidly increasing demand for labor resulting from rapid
growth is driving up wages. That means that China is beginning to “rejoin the
human race” as capital accumulation meets scarcer labor and growth slows.
o By contrast, India has a far more abundant supply of labor, as well as a more
favorable demographic profile, so that, as India’s investment rate increases,
labor will not be a constraint. India will thus become the new China of the past
two decades.
o Besides, in contrast to China, where economic reforms were quicker and
more complete, India still has a way to go: privatization, labor-market reforms,
and opening up the retail sector to larger, more efficient operators are all
pending – and will give a further boost to India’s growth rate once they are
implemented.
 US to reintroduce estate duty
o America’s ‘death tax’, which was repealed in 2010, is set to be introduced in
the new year. Formally called the estate tax, it is levied on inheritance before
it is passed on from one generation to the next. The tax was introduced in
1916 and has been in force ever since. The brief window in 2010 was the only
exception.
o Under new laws being passed by the Obama administration, the first $5
million in value of any individual’s estate is tax-free, but all value above this
figure is taxed at 35%. The tax will kick in from January 1.
o However, tax experts feel that there are ways to minimize estate duty. They
suggest that NRIs could divest their properties in the US by gifting smaller
quantities rather than giving all at one go — gift tax is exempt up to $1 million.
This could reduce the amount of estate tax considerably.
o Most developed countries like the UK or France also have estate duty, in one
form or another.