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Banking on mergers

Asking healthy banks to take over weak banks appears to be the strategy to handle the bad loans crisis.
Baroda + Dena + Vijaya = 3 largest bank
Dena Bank is under Reserve Bank of India’s prompt corrective action framework.
Forced mergers such as the current one make little business sense.
Weaker banks tend to be a drag on strong banks operations.
They are also unlikely to solve the bad loan crisis that has gripped the banking system as a whole.
Make sure: that the new born is not weaker.
Imp: merger fallout is managed prudently

identifying synergies and exploiting scale efficiencies
There is no denying the fact that there are too many public sector banks in India; given this, consolidation is a good idea in principle.
4 perspectives 1. Economy’s credit needs 2. Capital requirements 3. Business sense 4. Minority shareholders’ interest
Primary reason for the current bad loan crisis: bad governance in public sector banks.
Despite Jaitley’s assurance of job protection, getting staffers to pull together will need special attention.

Celestial misfit

2006 International Astronomical Union (IAU) removed Pluto’s planetary status.
The meeting defined three conditions for a celestial object to be called a planet:

It must orbit the sun
It should be massive enough to acquire an approximately spherical shape
It has to ‘clear its orbit’ , that is, be the object that exerts the maximum gravitational pull within its orbit

Owing to this third property, if an object ventures close to a planet’s orbit, it will either collide with it and be accreted, or be ejected out.
However, Pluto is affected by Neptune’s gravity.
It also shares its orbit with the frozen objects in the Kuiper belt.
Based on this, the IAU deemed that Pluto did not ‘clear its orbit’. Dwarf planets, on the other hand, need only satisfy the first two conditions.
Pluto’s orbit is different from the orbits of the other planets.
The larger planets travel around the Sun in an oval-shaped orbit.
Pluto’s orbit is more of a stretched-out oblong.

The other planet’s orbits are level with the Sun. Pluto’s is tilted.
Pluto is not able to clear its orbit as the other planets so it is considered to be a dwarf planet.
However, Pluto is affected by Neptune’s gravity. It also shares its orbit with the frozen objects in the Kuiper belt.
In a paper published in the journal Icarus, stakeholders point out that the only work in history that used this rule to classify planets was an article by William Herschel in 1802.
If Pluto were to be re-designated a planet, many more complications would arise.
For one thing, Charon, Pluto’s moon, is much too large to be called a satellite. Judging by this, the Charon-Pluto system should then rightly be called a binary planet system.
Recent research shows that both the Kuiper Belt and the Oort cloud, a shell of objects that surrounds the entire solar system far beyond the Kuiper belt, contain objects that can then be called planets, thereby complicating the issue.

Ten years on, in uncharted waters

The crisis of 2007 had multiple causes.
Villains of the crisis.

➢ Global macroeconomic imbalances

➢ A loose monetary policy in the U.S.

➢ The housing bubble in the U.S.

➢ A bloated financial sector,

➢ A flawed belief in efficient markets,

➢ Greedy bankers,

➢ Incompetent rating agencies

Banks were allowed extraordinarily high levels of debt in relation to equity capital.
Banks in the advanced economies moved away from the business of making loans to investing their funds instead in complex assets called “securitised” assets.
As housing prices started falling and the securitised assets lost value, it translated into enormous losses for banks.
These losses eroded bank capital and created panic among those who had lent funds to banks.
These failures were not confined to the U.S. They infected banks in Europe and some in Asia as well.
Various political consequences have unfolded: the Eurozone crisis, Brexit, the rise of nationalism and anti-immigrant policies, the Trump phenomenon in the U.S. and the return of protectionism.
Financial institutions are a big source of political funding.
The key driver of the recession in the U.S. was the rise in household debt and the consequent drop in household consumption.
In the years following the crisis, private debt has fallen but government debt and corporate debt have risen.
From time to time, the U.S. unleashes a flood of dollars at low rates. The world laps up the cheap finance. Then, the U.S. raises interest rates.
India has not suffered much on account of the financial crisis.
Growth has slowed down to 7% but that is in line with the trend rate over the past two decades.
Several prudent policies have helped. India has not embraced full capital account convertibility.
It has kept short-term foreign borrowings within stringent limits.
India did not open up to foreign banks despite pressure from the U.S. and the international agencies.
Foreign banks retreated from overseas markets following the crisis, causing a severe credit crunch in places such as Eastern Europe.
India escaped this fate.
Economists are free to draw their lessons from financial crises but the world is ultimately shaped by political and business interests, not by economists.

The pointlessness of hashtags

- One of the main things that the 21st century will be known for is the formation of what Bruns and Burgess call “ad hoc issue publics” or the formation of selective channels centred on a particular topic.
- #s have become a popular, swift and efficient way of marshalling and deploying public opinion.
- Recently, two hashtags became popular in India — UrbanNaxal and MeTooUrbanNaxal.
- “MeTooUrbanNaxal”, to express solidarity with those charged with being Naxal sympathisers.
- Identify the pointlessness of wars of rhetoric, especially when the wars are spearheaded by people with an inadequate and casual understanding of ground realities.
- To be a committed Naxal is to have the wherewithal to battle the state not ideologically but also physically.

And there is no doubt in my mind that the Maoist movement in India is a product of India’s imbalanced development policies that have heightened exploitation and deprivation of the most vulnerable groups by big capital, and sheer political and economic neglect of the marginalised.
In short, while one can understand the reasons why the poor take up arms against the state, and, one can rationalise why the state thinks it should respond with disproportionate force, none of this makes either the Maoists’ violence or the state’s violence in the region morally defensible.
Both hashtags promote a useless debate where not everyone is arguing about the same facts or they are not arguing about facts at all.

‘India’s challenge will be fighting non-communicable diseases’

Thirty-five years ago, it [private health care] was never considered as a doable model. It was just the charitable and government sectors that were providing health care.
However, India, which did have medical institutions on a par with the best in the world, fell back because of lack of upgradation of infrastructure for over 30 years.
At that point, hospitals were not allowed funding from banks.
It was later, under Rajiv Gandhi’s premiership, that relaxations came in for hospitals to be funded like any other trade. He also granted tax allowances for health insurance. All this helped us and the industry.
Apollo was the first to bring to India international hospital accreditation and certification with Joint Commission International (JCI), and we also helped create the Indian version — the National Accreditation Board for Hospitals and Healthcare Providers.
Today, there are 32 hospitals in India with JCI accreditation and 480 NABH-accredited hospitals. Prathap C. Reddy Chairman: Apollo Hospital
In 2017, the size of the Indian health-care sector was estimated at $160 billion, and is projected to grow to $372 billion by 2023.
The hospital sector alone was worth $62 billion in 2017, and is expected to grow to $133 billion by 2023, with the private sector accounting for about 74%.
There are around 40-45 million admissions per year in private hospitals in India.
The biggest challenge for India is going to be the imminent explosion of non-communicable diseases (NCDs) — they are going to kill.
We are the cancer capital of the world, the stroke capital, heart disease capital of the world… We don’t need these medals.
There is a World Economic Forum study that says the world will spend $30 trillion by that time [2030] and India’s share of that would be $4.8 trillion. Here, we are battling to raise the health allocation to at least 3% of the GDP from about 1.5%.
Today, over 3.5 lakh persons from over 150 countries visit India every year for treatment.
We need new hospital beds; now, for instance, we have 1.1 beds per 1,000 people, while the global average is 2.7 and the WHO recommendation is 3.5.

Important News

- U.S., China step up trade war, slap tit-for-tat tariffs
- Around 5,000 American items are expected to face the new measures, including aircraft, soya bean oil, smoked beef, coffee and flour, according to a provisional list released last month.
- The Chinese Ministry of Commerce said in a statement that Washington’s decision to levy fresh tariffs was “deeply regrettable.”
- The 2 largest economies might be hurtling towards a prolonged trade war that could impact the world economy.
- Class X girl gang-raped at boarding school
- A Class 10 girl was gang-raped allegedly by fellow students at a boarding school at Sahaspur in district. The incident was kept under wraps by the school authorities for over two weeks, the police said.
- Nine people — four students accused of committing the crime and five members of the school staff including its director, principal and administrative officer — have been arrested, Additional Director-General of Police (Law and Order) Ashok Kumar said.
- Jalandhar bishop seeks bail from Kerala HC
- accused of raping a nun
- India targets slight increase in 2018-19 foodgrain output
- Despite patchy rainfall in some parts, the Agriculture Ministry has set a foodgrain production target of 285.2 million tonnes for 2018-19, a marginal increase from the previous year’s harvest of 284.8 million tonnes.
- Rainfall deficit during the current monsoon season is now at 10%, according to the Indian Meteorological Department.
- ISRO to tap small cities for innovations
- The Indian Space Research Organisation (ISRO) launched a space technology incubation centre in Tripura capital Agartala on Tuesday. It is the first of six such centres planned nationally to build capacity in new locations.

More such space research activities will be splashed in a big way across small cities to tap their talent and include them in the space footprint, ISRO Chairman K. Sivan, said.
“We want to go to locations that have a good presence of academia and industry but do not have activities related to space. The centres will bring out prototypes and innovations for ISRO in electronics, propulsion and others. We will buy the innovations back if we can use them in our programmes,” Dr. Sivan said.
Modi gifts his constituency projects worth ₹550 crore
UAE court clears Michel’s extradition
A United Arab Emirates court has allowed the extradition of alleged British middleman Christian Michel, wanted by Indian investigating agencies in connection with the ₹3,700- crore AgustaWestland VVIP chopper deal case.
Every 5 seconds, a child under 15 dies around the world: UN
An estimated 6.3 million children under 15 years of age died in 2017, or one every five seconds, mostly of preventable causes, according to the new mortality estimates released by UNICEF, the World Health Organization (WHO), the United Nations Population Division and the World Bank Group on Tuesday.
Also, a baby born in sub-Saharan Africa or in South Asia was nine times more likely to die in the first month than a baby born in a high-income country. And progress towards saving newborns has been slower than for children under five years of age since 1990.