4th April

Glimmer of hope

The article talks about the positives that have come up on the eve of London Summit 2009 o G-20 nations and also points to the two most important issues that remained to be discussed at such an important forum.

Some said the summit was new Bretton Woods but the truth is it is nowhere near to the 1944 epoch-making conference that gave the world its present financial architecture. However, the summit could be placed as a worthy successor. Although the much hyped $1.1 trillion fund is not a reality presently, but the immediate increase in the IMF funds of $250 billion to the present level of the same would definitely help to stir up some global economic trade and provide some fuel to the capital-starved countries. Also significant is the agreement on broad principles of financial regulations and supervision, reforming multilateral institutions, preventing protectionism, crackdown on tax heavens etc. Establishment of Financial Stability Board, as a successor to Financial Stability Forum, with representation from all G-20 countries to oversee global financial system and establish early warning system is another positive. 

However, the forum failed to address the two most important issues with respect to the present crisis and to prevent its recurrence: role of USD as international reserve currency and global imbalances. Although the issues cannot be resolved easily but avoiding them is an open invitation to another crisis itself.

Spurt in gas output

The article calls for a proactive effort in designing a proper market for the Gas sector as the newly operational KG basin is set to double the gas output for the country.

The GoM has set the price for Krishna-Godavari (KG) basin gas with an objective to better allocate the resources for underdeveloped gas sector as well as determine the reasonable scarcity value. The initial price works out to be $4.2 per mmbtu, which after taxes and levies, reaches $5.34-5.87 per mmbtu depending upon the location. Although the price is considerably high compared to $4/mmbtu for Henry Hub (HH) in US, the fluctuations would be considerably low in India as compared to HH which are market determined prices. In this recession it is no surprise that gas prices are low for HH. The market in India is yet to see the vigor owing to underdeveloped supply, storage and distribution infrastructure. For India, it is time to intensify efficient price discovery for gas. While GoM prices would be valid for five years, mechanism to market determine the price of gas in both spot and futures ought to follow. A good infrastructure and a network of pipelines would help multiple gas producers and suppliers. Reliable logistics hubs would help efficient trading, price discovery and exchange-determined gas prices. 

What is needed is a proactive market design for the gas sector which is all set to pay us rich dividends for the coming decades owing to more then trillion cubic meters of gas reserves and extensive deposits of gas hydrates as well.

Dutt plays multiple roles

The article talks about the latest election drama going on in the Samajwadi Party theatre with Sanjay Dutt playing the protagonist. 

First he came to Lucknow as an SP candidate to contest LS elections but SC banned him on the grounds that a convict cannot contest elections. To its reply Sanjay openly claimed on NDTV to have carried out a sting operation on a Union Cabinet Minister who told him that he would not be allowed to contest elections till he is with SP. He was accompanied by SP leader Amar Singh. Dutt didn’t felt feared at all while carrying the operation, the reason he believes to be his acting background. He also didn’t fear going to jail since he knew that he was right. He told about the distressful life his father spent with Congress and the foul language used by Shiv Sena candidate Sanjay Nirupam who was inducted by Congress. This episode says a lot about the various roles Sanjay is playing in his real life as well. A politician who says he’s an actor and does a journalistic sting operation on a Union Cabinet Minister while claiming that he is also a loyal son, caring brother and a faithful friend. 

Amar Singh too, at the same time, has bypassed best of the Bollywood directors in extracting an award winning performance from the super star.