Oil prices, factors that effects it,GDP

    The infrastructure industry is very important in fuelling the economy. But when it comes to such critical issues as pricing, the oil industry is about as transparent as the crude oil that it processes. The price that we pay for a litre of petrol has no relation whatsoever to what it costs to produce that for Oil Company. Before going to the depth of the topic let us first know about 'under-recovery.' Under-recovery is the difference between the price that the oil company would like to charge for say, petrol, based on its international traded price, and the price at which it supplies the fuel to pumps, excluding taxes. Decisions to increase or decrease retail prices of products such as petrol, diesel and cooking gas are made based on this concept.  

    It is a common perception that under recoveries is losses suffered by state run oil marketing companies; these losses are just 'notional 'and not actually incurred by the companies. But this is because the Government uses import parity basis to calculate under recoveries. For example in case of diesel, the fixed selling price of the diesel is compared to the amount the companies would have paid had they imported the diesel (this will include international price of diesel, custom duties, transportation costs and marketing costs and margins). However, the price thus arrived has nothing to do with the actual cost of producing diesel which will be lesser (considering domestic over capacity in petroleum products refining markets). The way whole thing is projected makes one feel that the Government is making net losses in oil marketing business so as to keep the fuel prices affordable. 

     The critical point to be noted is that under-recovery is not equal to loss for the oil companies because they oil companies import only raw materials in the refineries to produce various fuels like kerosene, petrol, cooking gas etc. The strange pricing policy that is unfavorable to consumers is adopted mainly due to two reasons. The first one is the Govt. encouraged investment in new domestic refineries. This policy was successful in India when it was short of refining capacity and had to import petroleum products. Now the scenario is entirely different with many leading players like Reliance, HP, Essar and many others in the field producing more products and exporting petrol and diesel.. This can be clearly noticed that from that statistics, with 206 million tones in 2010-11, only 154 million tones were demanded. This clearly shows that the policy should be revised and thus decreasing the prices. 

    The second reason is it is difficult to apply the cost-plus-margin approach to each and every product but we can use costing theory here. The scientific approach could mean a loss of protection to oil companies but the numbers show huge profits to the oil companies where the numbers won't dip too much for them if they adopt it.

   With prices of petroleum products raising high and with too much burden on consumers it is now time to reassess the policies. The Government also needs to reassess its taxation policy for petroleum products. Higher taxes on petrol are driving consumers to diesel vehicles which in turn is increasing the subsidy burden on the government.

     Conventional wisdom would suggest that an increase in global oil prices would hurt the oil importing countries and, perhaps, reduce their GDP growth rates — and have the opposite effect on oil exporters. But data for the last 15 years does not corroborate with that claim. The five-year rolling average for crude oil prices and growth rates of real GDP show that economic growth for the US, China, and India — three of the top ten oil consumers — did not suffer from rising oil prices. Nor did the economies of Saudi Arabia, Russia, and Mexico — three of the top ten oil producers across the globe, receive an unusual lift from such a trend. For instance, oil price increased at a higher rate in 2006 compared with 2005. Prices rose by 1.62 per cent in 2005 and 1.87 per cent in 2006. During this period, India's real growth rate in GDP also increased from 5.61 to 6.38 per cent. This only goes to prove that oil prices are just one among many variables which can affect a significant metric such as GDP.

"Digitalisation in India" : a complete essay !

Digitization has sneaked into every aspect of our life. The latest directive of TRAI for digitization of cable T.V is another initiative to bring the advances of technology to our door step.  By considering the factors like providing services, subscriber, the cable operator, industry structure and the industry challenges we can understand the present scenario and estimate the future consequences.

TV viewing services in India is currently provided mainly by three mediums Analogue Cable Services, Digital Cable Services and Digital DTH Services. Analogue cable services have been existing in India for more than two decades in India; however, analogue cable services have limited number of channels and do not have extra features and value added services. Digital DTH services in India have been started less than a decade back and are gaining popularity and acceptance in India mainly because of their superior picture and sound quality. The receptivity is much clearer and all the channels have the same reception quality. As both the signals are received at the same time, there are no issues with the synchronization of sound with video. This is a major constraint which subscribers tend to think over.

Through DTH which means Direct to Home Service, the recipient will receive the signals directly from the satellite on his Set Top Box. The viewer gets a wider range of channels to choose from which can be activated through packages. The picture quality is much superior and the sound is crystal clear. The viewers are also able to watch High Definition content which is set to make television viewing even more superlative. One can now watch his favorite sports action or travel or adventure series in high definition recording it and by replaying it. There is up to 5 times picture quality over normal or standard definition picture quality and the images carry 16: 9 aspect ratios.

With Indian TV market 3rd largest in the world with 146 million households it takes some time to digitize the TV connections. This is the reason why Govt. has ordered to digitize in four phases. The government on its part has been rational on its part by introducing the digitization in phased manner.

• Phase-I : In four metros by December 31, 2011
• Phase-II :  In all cities having a population of over one million, by December 31, 2012
• Phase-III : In all other urban areas (municipal corporations/ municipalities) by December 31, 2013
• Phase-IV : In the rest of India by December 31, 2013

 The government is also furthering its cause of connecting every village with broadband through this digital revolution. The increase in competition between the broadcasters will invariably lead to viewers getting more out of their rupee paid. The users are also set to gain from the fact that digitization enables a more interactive T.V viewing, piggy backing of other value added services like the broadband though the cable network. But the shortage of set top boxes and the issue of hike in the monthly subscription fee by many cable operators brought in a little bitterness to this whole exercise.

Industry structure

The distribution side of the value chain remains highly fragmented - though market structure changing rapidly with a thrust on consolidation. The cable and satellite television market in India had emerged in the 1990s and has since then experienced a strong growth in terms of number of subscribers having grown from mere 400,000 in 1992 to around 90 million today, representing a CAGR of 35 percent for the last 18 years. The channels seen on TV (pay channels or free to air, FTA, channels) are created by different broadcasters and transmitted from satellite to receiving stations (head-ends) owned by MSOs. The MSOs in turn re-transmit these signals through cables to the LCOs (Local Cable Operators), who have their own last mile cable network to individual homes.

Industry challenges

Under-reporting of subscriber base by LCOs (Local Cable Operators) leading to inequitable distribution of value : In the absence of an addressable system, the subscription revenue transaction among the broadcasters, MSOs, and LCOs is currently undertaken either on a fixed-fee basis or on the basis of a negotiated subscriber base. Considering the strong bargaining power enjoyed by LCOs who own the last mile, the distribution of subscription revenue in effect remains heavily skewed in their favour. As per the industry estimates, LCOs declare only around 15 percent of their paid connectivity to MSOs and broadcasters. This not only deprives the MSOs and broadcasters of their fair share of value, but also results in service tax leakage for the government. The lack of trust and transparency in the business models of the industry has also led to frequent disputes between stakeholders and increased litigation incidences.

Non-standard pricing and local monopoly status of LCOs leading to sub-optimal customer service: In a market survey commissioned by TRAI, it had observed that the average monthly cable bill for a subscriber varied widely from Rs. 149 in Kochi to Rs. 322 in Shillong, even though services being provided did not warrant such variation. Apart from this, there are instances where the cable charges are increased by LCOs for a locality arbitrarily. These shortcomings are the natural fallout of the local monopoly status enjoyed by most LCOs and small MSOs who are able to avert competition and thus prevent free market forces to keep prices under check.

Capacity constraints in analog cable stifling growth of new channels and introduction of technologically advanced content: The number of television channels in India has grown at a rapid pace from two in 1992 to 120 in 2003 to around 600 at present. Arrival of a plethora of new channels in the Indian television space in the backdrop of limited bandwidth of the analog cable system, results in allocation of prime frequencies by MSOs to channels offering higher carriage (or placement) fee. Limited capacity, coupled with the absence of an addressable system, has also resulted in limited availability of subscription-driven niche content such as science, golf as well as technologically advanced content like high-definition (HD) channels. This trend is further fed by the inordinate dependence of broadcasters' revenues on advertising(less on subscription) impacting niche content offerings since focus tends to shift on advertisement friendly genres.

Since digitization would bring about full addressability, it would eliminate the menace of under-reporting of subscriber base by LCOs. This will aid increase in subscription revenues for broadcasters. Further, the increased capacity of digital distribution channel is likely to spur greater investments by broadcasters toward niche, targeted and HD content and lead to diversification of their revenue streams. The carriage costs paid by broadcasters to distributors, which currently remain high in view of the limited bandwidth of analog cable, may decrease post digitization. This is all about digitalization in India.

Neo-natal deaths in India !

It is a mere disaster for a country which boasts its  indigenous development in the field of  Science and technology, a mark on the country's image which has seventh largest defence budget in the world.
According to the statistics in the "State of the World's Mothers" report released by Save the Children recently have showed that the neo-natal death rate in India is the highest amongst the other nations in the world. Also shockingly, the huge gap between India and the other countries following it shows how much India should improve in taking proper careof its young ones.Over three lakh newborns in India die on the very first day of their birth. Despite 33% drop in  Neo-natal Mortal Rate (NMR) in 2009 from 1990s and 62% percent decline in 2012 still India has highest share in the world. Poor health and hygenity of the mother, no proper equipment in the labour room, un-trained personnel attending the delivery,female foeticide are the causes of neo-natal deaths.

 Tremendous gain can be achieved by preventing childhood marriages as teenage pregnancy greatly contributes to 1st day deaths. Poor mothers living conditions in rural areas are another at risk-group that needs undivided focus. If poor health before and during pregnancy is already a big risk factor, lack of good medical care during delivery exacerbates it. This brings to the spotlight the need to have a greater percentage of the institutional deliveries.  The personnel attending to deliveries should be properly trained and hence making them fully proficient in labour-room protocols.Equipping labour rooms with essential medicines, equipments and electricity is also a prevention measure. By having a check on the above things and counselling the families and mothers reagding hygenity before, during and after pregnancy will show a drastic improvement in the reduction of neo-natal deaths.

Interlinking of Rivers in India - pros and cons - essay for Civil Services/Groups aspirants

India's economy is mainly dependent on agriculture. Three-fourths of India's economy is dependent on agriculture. 67% of land is covered under agriculture. With more land covered under agriculture and based on the facts and figures of productivity of the food grains required, the question that arises is "will India's water bodies fill up,especially in the southern India where water bodies are rain-fed ?"

The ultimate irrigation potential of the country has been assessed at 140 million hectares - 76 million hectares from surface water and 64 million hectares from ground water. The fact that has bearing on both agricultural productivity and overall food grain production is that the utilization rate of 89.4% till the end of 1999-2000. However, agriculture has been dealt a blow because of declining public investment in agriculture in the recent past and the lack of any initiative to increase irrigated area.

Though India is endowed with land and water resources, shortage is beginning to be felt. Our large water resources are exhausting rapidly too. But with a rapidly growing population, as the figures above reveal and increased urbanization and industrialization  the shortage of water has now begun to be felt across the country and is, in some cases, rather critical.

The ILR Programme is aimed at linking different surplus rivers with water-deficient rivers so that the excess water from the surplus region is tapped. The benefits are increased irrigation intensity, water availability for drinking and industrial purposes and tackling drought and floods. Annual food grain production is estimated at 200 million tonnes and an increasing population has pushed the need for more production. The ILR programme has been planned at the intra- and inter-basin levels and expected to provide additional irrigation in about 35 million hectares and boost power generation to 30,000 MW. The canals built would also boost water-ways for navigation,reducing the pressure on road/rail transport and be cost-effective. According to an estimate by WHO, economic losses due to floods and droughts during 1990-2001 stood at $4,604 million. This ILR programme has been estimated to help increase access to safe drinking water which is at present 92% in urban  and 86% in rural of the population have access to safe water supply.

The major objections for ILR programme are ecological constraints, environment problems due to large changes in the river systems, funding, corruption,bid to companies etc. With the identification of the needs of water-scarce areas and finding area-specific answers, the project starts by looking at map of India and then deciding that rivers should be linked  This adds nearly 30 projects involving 80 dams  and is a major ecological constraint. The second major objection is rehabilitation of people. It is very difficult and many will object rehabilitation since they get habituated with the place living from many years. The ILR Programme is expected require nearly 5,60,000 crores within four years and the political constraints will be the main constraint in India. Also, environmental experts are worried about the soil health and river health which may show adverse effect on the Earth.

Why NO wrestling in 2020 Olympics ?

Wrestling, an Olympic sport since the first Games in ancient Greece, looks set to be dropped after the International Olympic Committee (IOC) voted to remove it from the programme for 2020. The IOC executive board decided to retain modern pentathlon the event considered most at risk and remove wrestling instead from its list of 25 core sports. Women’s wrestling was added to the Olympics at the 2004 Athens Games. The sport which featured 344 athletes’ competing in 11 medal events in free style and seven in Greco-Roman at last year’s London Olympics will now join seven other sports in applying for inclusion in 2020. The others are a combined bid from base-ball and soft-ball, karate, squash, roller sports, sport climbing, wake boarding and wushu. They will be vying for a single opening in 2020.

Though this decision is not final and another round of discussions and voting will be done in September this year let us look at the in-depth analysis of why wrestling have become doubtful according to veteran observers of the Games. The IOC program commission report analyzed more than three dozen criteria, including television ratings, ticket sales, anti-doping policy and global participation and popularity. Olympic-style wrestling, with its amateur roots and absence of visibility except during the Games, does not have superstars with widespread international acclaim like Lionel Messi in soccer, Kobe Bryant in basketball, Tiger Woods in golf and Usain Bolt in track. And in the United States, the popularity of Olympic-style wrestling is surpassed by the staged bombast of professional wrestling. With no official rankings or recommendations contained in the report, the final decision by the 15-member board was also subject to political, emotional and sentimental factors.

In recent years, the I.O.C. has expressed concern about the growing size of the Summer Games and has wanted to cap the number of athletes at about 10,500. It has also said that it wants to attract younger viewers to the international television audience. On Tuesday, the committee said in a statement that it wanted to ensure that it remained “relevant to sports fans of all generations.” The I.O.C. may have also grown frustrated that Greco-Roman wrestling did not include women, experts said. Women began participating in freestyle wrestling at the 2004 Athens Games. 

Many argue that politics, too, play an inevitable role in the workings of the I.O.C. Among the sports surviving the voting was modern pentathlon which was also threatened, and less popular internationally than wrestling. But modern pentathlon was invented by Baron Pierre de Coubertin, the founder of the modern Games. And it is supported by Juan Antonio Samaranch Jr., son of a former I.O.C. president and a member of its executive board. 

Sources say that it was a very close vote between wrestling and modern pentathlon may be one or two votes separating them.  In its race with the modern pentathlon which combines fencing, horse-riding, swimming, running and shooting the five skills required of a 19^th century cavalry officer. The sport’s governing body has been lobbying hard to protect its Olympic status and the efforts apparently paid off and told that it was a process of renewing and renovating the program for the Olympics.

Crime and Politics

The present scenario shows that the crime and politics are like two sides of a coin. When we take out the history of a politician it is shocking to observe that more than one-third of MLA's and MP's have at least one charge sheet for  criminal charges including murder, rape, kidnapping and extortion in the police station.  According to an article in Washingtonpost the percentage of candidates facing criminal charges has risen from 28 percent to 35 percent since state elections were last held in 2007, despite a nationwide campaign against corruption last year. At least 30 candidates are incarcerated.

Criminals and strongmen have long been a feature of Indian politics. Their ill-gotten wealth provides easy campaign cash, and they often control constituencies with strong caste or religious loyalties. Indian police are kept under tight political control, and are prevented from taking on politically-connected gangsters.Indian cops have been known to file false cases against opponents of the ruling dispensation. The courts move slowly against those who are charged.

Now the actual question comes..why are people with criminal backgrounds  attracted to politics ? Are they overcome by the desire to serve people ? No absolutely not, they enter the legislature because their status as lawmakers will shield them from the law and help them multiply their wealth.Today we see people joining politics of India to make sure the criminal cases against them get dropped or not proceeded with.

The sole solution of it is in the general elections let us demand that no party should give a ticket to those facing criminal charges. We need popular agitations to prevent criminalisation of politics. A change in Indian judicial rule is needed, cases against corrupt Indian politicians should be heard before all other cases, and like in normal case should be treated separately, followed by a quick and prompt verdict. This move can help in many ways, as it will induce many corrupt ones to resign. It will definitely take some years to bring a difference in the system as many fields are inter-linked. But somewhere this process should be initialized.

India calling for Flag meeting at LOC - a good and strong move

The main headline in the recent issues of newspapers is the death of Indian soldiers at LOC. It is a high time in the border area as the bilateral relations among India and Pakistan are being strained in the due course of 4-5 years. While talking tough, India suggesting a flag meeting at the LOC with Pak to sort out the issues is a good move. Killing of soldiers and mutilating their bodies is barbaric.

A point that must be discussed is that the recent skirmishes between the armies of India and Pakistan have evolved a lot of emotional responses. At the time when war between two countries is real, New Delhi has displayed maturity by suggesting a flag meeting. Any full-fledged confrontation will cause incalculable damage to both the neighbours heavily and will bring immense pressure on the countries already struggling with insurgency and adverse economic growth.

No doubt, efforts at peace are important but to display calibrated aggressiveness on the premediated attacks by Pak is the need of the hour. Already India released proof regarding the killing to the Pak army. It released pictures of landmines allegedly planted on the Indian side of the LOC by the Pak troops.

To protect our nation's self-respect and to safeguard its people an immediate reaction is required. Peace efforts with the hostile neighbour will be meaningful only if it is made to understand that the reaction from India will be swift and more punitive.