Economic Definitions - Inflation/Poverty/Demographics

Skewflation:
When there is a price rise of one or a small group of commodities over a sustained period of time it is called Skewflation. ‘Skewflation’ is a relatively new term.

Demographic dividend:
Demographic dividend occurs when the proportion of working people in the total population is high because this indicates that more people have the potential to be productive and contribute to growth of the economy.

Methodology for estimating BPL:
The methodology of estimating poverty and the identification of BPL households have been a matter of debate. Two committees under the chairmanship of Prof. Suresh D. Tendulkar and Dr. N.C. Saxena have submitted their reports on methodology for estimation of poverty and methodology for conducting BPL census in rural areas, respectively. Further, an Expert Group under the chairmanship of Prof. S.R. Hasim has been set up to recommend methodology for identification of BPL families in urban areas.

Economic Definition - Headline inflation

Headline inflation reflects the rate of change in prices of all goods and services in an economy over a period of time.

In India, headline inflation is measured through the Wholesale Price Index (WPI) – which consists of 676 commodities. We do not include services in the WPI in India. It is measured on year-on-year basis i.e., rate of change in price level in a given month vis a vis corresponding month of last year. This is also known as point to point inflation.

In India, there are three main components in WPI:

1. Primary Articles (weight: 20.12%)
2. Fuel & Power (weight: 14.91%)
3. Manufactured Products (weight: 64.97).

Economic Definition - Rupee denominated debt

Rupee denominated debt refers to that part of India’s total external debt that is denominated in the Rupee.

In contrast to foreign currency denominated external debt, in case of rupee denominated debt the currency risk (the risk arising from appreciation or depreciation of the nominal exchange rate) is borne by the creditor and not by the borrower. The contractual liability is settled in foreign currency. Accordingly, the borrower always pays back the foreign currency equivalent of the rupee denomination valued at the spot exchange rate prevailing at that point in time. Thus, if the domestic currency appreciates vis-à-vis the foreign currency, the creditor stands to gain vis-à-vis the borrower since he receives more dollars per unit of Rupee.

Economic Definitions - SLR

The Statutory Liquidity Ratio (SLR) is a measure under which all Scheduled Commercial Banks in India must maintain an amount in one of the following forms as a percentage of their total Net Demand and Time Liabilities (NDTL)

[i] Cash.
[ii] Gold; or
[iii] Investments in un-encumbered Instruments that include;

(a) Treasury-Bills of the Government of India.
(b) Dated securities including those issued by the Government of India from time to time under the market borrowings programme and the Market Stabilization Scheme (MSS).
(c) State Development Loans (SDLs) issued by State Governments under their market borrowings programme.
(d) Other instruments as notified by the RBI.

Traditionally the amount to be held thus was stipulated to be no lower than 25 percent and not exceeding 40 percent of the bank’s total DTL. However, effective from January, 2007 the floor of 25 percent on the SLR was removed following an amendment of the Banking Regulation Act, 1949.

As of August, 2011 the SLR stands at 24 percent.

Committees and Commissions

Plantation Sector – N Rangachary Committee

NK Singh Committee – FDI limit in Insurance sector

Tarapore Committee – Fuller Capital Account Convertiblity

RA Mashelkar panel – Patent Laws

Deepak Parekh committee – Long term investment in Infrastructure

R Radhakrishnan Committee – Appointed on Farmers Indebtedness

The Saxena committee – One of its mandates was to investigate the proposed diversion of nearly 660 ha of forest land (Niyamgiri Hills, Lanjigarh) in the Kalahandi and Rayagada districts of Orissa for bauxite mining

Baseline - III

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Baselines - II

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Baseline - I

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Gone in 16 seconds

Here is a link from the other blog that I maintain at The India Story.

This article is about Rajat Gupta.

The Stuxnet Virus

Reports of a complicated virus that hit Iran's nuclear facilities surfaced in 2010. It was so complicated that a team at Symantec spent a month analysing it and still felt that it might be missing something. The usual time for the team was a couple of days!!!

This virus, soon dubbed the Stuxnet Virus, used a “zero-day” exploit to spread. Zero-days are the most dangerous of weapons in a Hacker's arsenal. They exploit vulnerabilities in software that are yet unknown to the software maker or antivirus vendors. And they are not easy to put together. Not only does it require a high level of programming skill but it takes a lot of patience to find the weakenesses and exploit them. Because of this out of more than 12 million pieces of malware that antivirus researchers discover each year, fewer than a dozen use a zero-day exploit.

This article takes an in-depth look at the episode. And here is the Timeline.
Why talk about this event that is almost a year old now? Well, there are reports of a New Stuxnet worm that is targetting companies in Europe. This could get interesting.