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Has the Track been cleared …….for Policy Decisions, A Must for Economic Growth & Development

The counting of ballots and consequent declaration of results of Assembly General Elections 2012 held in five states of India on March 06, 2012 completed an important event in the process of Governance. Simultaneously, it also emphasized the importance of concept of Federalism for modern day democracy. On the other side of these developments, an increasing demand world over could be seen, India included, to incorporate or bring about a transformational change in the context to the ‘Governance’ issue.

It seems to be an apt time for revisiting to ensure that ‘Democracy’ as a system of governance adheres to its core attributes and the ‘Institutions’ erected to ensure its real spirit are capable of not alone performing the task, but also of representing the diversity, culture and socioeconomic issues and facets of the people, who have adopted such a system of governance.

It’s being expected by all concerned, that with culmination of Assembly General Elections 2012 of five states, functioning of Union Government would turn more efficient. Union government may now get free from the clutches of ‘Policy – Paralysis’ or ‘Stymied Decision Making Process’, which seemed to have become integral process of decision making by Union Government in Financial Year 2011 – 2012.    

Numerous issues of urgent importance, which were supposed to have been approved or rejected, are still there in cupboards of ministries, either awaiting their turn for being tabled in parliament, or are there in roll back mode awaiting the creation of elusive ‘consensus’. The post Assembly General Elections 2012 picture may not be pleasant to ruling coalition as Union Government, but it has certainly succeeded in putting an end to chaos, confusion or dilemmas born out of various presumptions and  self-fulfilling interests of a number of political parties.

The words, such as ‘Urgent’, ’Important’, ’Immediate’, ’Today ’and ‘Top Priority’ etc. have turned meaningless when seen in context of number of issues to be tabled, discussed and cleared or rejected by both the houses of Parliament, and also in the context of quantum of delay that has already occurred. Some issues out of them may be put, for purpose of illustration, as ‘FDI in Retail Sector’, ‘Direct Tax Reforms’, ‘Entry of Foreign Equity in Indian Airlines Industry’, ‘Issue of 4G Spectrum’, ‘Issue of Telangana’, ‘Creation of NCTC’, ‘Proposal on RPF’, ‘Issue of Inflation in Food Items’, ‘Deregulation of Prices of Petroleum Products’, ‘Land Leasing Bill or even Land Reforms Bills’, ‘Transforming Education in to Business’ and many more of the similar type.

The comments on issues are knowingly being avoided, as every single issue is important and also a subject matter to be covered in numerous articles, debates and deliberations. Certainly the same will be done, but the purpose here was to highlight the important issues pending approval of the parliament and also the evolution of Indian Political System and Governance as on date.

 

Always Yours —– As Usual —— Saurabh Singh

New World Order Imminent!- Anyone For A Game Of Ping Pong?

This vedio has been uploaded for my learned audiences, fans, students and scholars and rest others, who wish to understand issue of New World Order. I would top up the same by a commentry on Asian Environment Soon. Hope you find some value in it.Always Your—– As Usual — Saurabh Singh

Vodpod videos no longer available.

 

Barak Obama and Economic Crisis

Vodpod videos no longer available.

 

War amongst two Organs of same Body: Did Somebody Say Cannibalization: Is it Suicidal?

Market regulator SEBI has barred 14 private life insurance companies from selling unit-linked insurance plans without its approval, giving a fresh twist to the turf war between SEBI and insurance watchdog IRDA.

“We expect some companies to move the court” said the CEO of a life company. “It is unfortunate that this dispute has been allowed to reach this stage. It is time for the finance ministry to intervene” he added.

In an order signed by Prashant Sharn, wholetime director, SEBI, said, “I hereby direct the entities mentioned in this order not to issue any offer document, advertisement, brochure soliciting money from investors or raise money from investors by way of new and/or additional subscription for any product (including ULIPSs) having an investment component in the nature of mutual funds, till they obtain the requisite certificate of registration from SEBI.”

The 14 companies mentioned in this order include Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.

A few months back, SEBI had questioned individual life companies why they were selling investment products without its approval. Companies had responded individually that insurance laws permit them to offer an investment component within a life insurance policy. They also said that they were regulated by SEBI who had cleared all these products. The life companies were supported by the market regulator, who reiterated the stand taken by life companies.

In its final order SEBI said, “I find that the entities by their own admission have stated that there are two components of ULIPSs – an insurance component where the risk on the life insurance portion vests with the insurer and the investment component where the risk lies with the investor. This establishes conclusively that ULIPSs are a combination product and the investment component need to be registered with and regulated by SEBI”

SEBI’s order has implications not only for the life insurance companies but also for their promoters who have sunk in over Rs 26,000 crore in the form paid up capital. According to analyst reports, a significant portion of the value of various companies including, ICICI Bank, Aditya Birla Nuvo, SBI Life and Bajaj Fin serve. Most of the business written by these companies is through ULIPSs. If these companies are barred from selling ULIPSs, their valuations are likely to be hit.

Atul Surana , Certified Financial Planner and MD of Catalyst Financial Planning, says, “Anybody will understand one clear partial stand of SEBI which has not included LIC’s name in the list of life insurance companies selling ULIPSs. Secondly, this sounds much like a war between IRDA and SEBI who are bent on proving their authorities. These two regulators could have sorted out the issue on regulatory process first and then issued the order!”

So far as the order’s negative implications are concerned, experts say that while they broadly agree with the concerns of the regulator, it is also important to look at some possible negative implications of this move.

For instance, this process of another regulatory approval might take away the sheen from these products. Insurance companies may not be inclined.  The Securities and Exchange Board of India’s latest order on ULIPSs is expected to have far-reaching implications for the concerned life insurance companies as well as investors. SEBI has issued a directive to all private life insurance companies not to issue any offer document or advertisement soliciting money from investors for a ULIPS or any product having an investment part in the nature of mutual funds, till they approve of the same.

This directive is the latest in a series of initiatives taken by the market regulator to put an end to all unfair market practices and make the process of investments simple, fair and cost efficient for an investor. While the immediate fallout will be negative for all the 14 private life insurance companies as ULIPSs form a major part of the new business written by these companies in the recent past, yet some financial experts feel that this is a welcome step as it puts an end to the unfair practice of pushing life insurance policies as investment products to gullible investors.

“In the current market practice investors end up paying very high charges for the investment part of these policies and are usually not aware of the expenses they are paying. This is because unlike a normal share or mutual fund investment there are usually a myriad of charges in a ULIPS product hidden behind numerous provisions and clauses which are sometimes not easy to comprehend even by insurance professionals,” says Ashish Kapur, CEO, Invest Shoppe India Ltd, adding, “hence common investors have very little chance of ever getting an accurate picture of the costs they are incurring on these insurance and investment combination products.”

Still all is not well with the SEBI order as it is believed to have some partiality besides having some negative implications to offer these products if the regulations are very tough and costly to comply with.

FRIENDLY FIRE: EXPECTED NUMBER OF CASUALTIES

SEBI’s order asking 14 insurance companies to stop selling unit-linked insurance plans has turned into full-fledged regulatory battle with the Insurance Regulatory and Development Authority issuing its own order directing the 14 companies to continue selling ULIPSs.

“After due consultation with the members of the consultative committee all the 14 insurance companies which are mentioned in the order of SEBI are directed to note that notwithstanding the said order of the SEBI, they shall continue to carry out insurance business as usual including offering, marketing and servicing ULIPSs in accordance with the Insurance Act 1938” IRDA said in a late evening order on Saturday signed by chairman J Harinarayan.

In the order IRDA observed that SEBI’s order would upset financial stability, jeorpardise policy holders interest and was prejudicial to the interest of insurers. The 14 companies mentioned in this order include; Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.

“The IRDA Act `99 is specifically enacted to provide for an authority to protect the interests of holders of insurance policies, to regulate, promote and ensure the orderly growth of the insurance industry” IRDA said. The insurance industry was greatly relieved by IRDA’s order. “It is now between the regulators who have to settle this among themselves” said a senior industry official.

SEBI’s order has more far reaching implications than a press release or a circular. Since the order has been issued under Section 34(i) (a) and (b) of the insurance Act. IRDA has said that in the year `08-09 ULIPS policies involving a total premium of Rs 90,645 cr were in force. In fiscal `09-10 upto February 16.7 lakh policies have been sold with a premium of Rs 44,611crores. “It is also observed that the 14 insurance companies have an equity capital of Rs 16,281cr as on March 2009” IRDA said.

The insurance regulator said that observance of SEBI’s order would cause the stoppage of all renewals of insurance policies already invested by the insuring public may result in forced premature surrender of insurance policies causing substantial loss to the policyholders and to the insurers. “The effective stoppage of the sale of the products would cause a complete drying up of revenue flows to the insurance companies which could disrupt the payment of benefits on maturity, on death and on other admissible claims, putting the policyholder and the general public to irreparable financial loss. The financial position of the insurers will be seriously jeopardized thus destabilizing the market and upsetting financial stability” IRDA said.

IRDA IS FIRST TO BLOW CONCH – DIN’T YOU HEAR THE WAR CRY

SEBI’s order asking 14 insurance companies to stop selling unit-linked insurance plans has turned into full-fledged regulatory battle with the Insurance Regulatory and Development Authority issuing its own order directing the 14 companies to continue selling ULIPSs.

“After due consultation with the members of the consultative committee all the 14 insurance companies which are mentioned in the order of SEBI are directed to note that notwithstanding the said order of the SEBI, they shall continue to carry out insurance business as usual including offering, marketing and servicing ULIPSs in accordance with the Insurance Act 1938” IRDA said in a late evening order on Saturday signed by chairman J Harinarayan.

In the order IRDA observed that SEBI’s order would upset financial stability, jeorpardise policy holders interest and was prejudicial to the interest of insurers. The 14 companies mentioned in this order include; Aegon Religare, Aviva, Bajaj Allianz Life Insurance, Bharti AXA, Birla Sun Life, HDFC Standard Life, ICICI Prudential, ING Vyasa Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India, Reliance Life, SBI Life, TATA AIG Life.


“The IRDA Act `99 is specifically enacted to provide for an authority to protect the interests of holders of insurance policies, to regulate, promote and ensure the orderly growth of the insurance industry” IRDA said. The insurance industry was greatly relieved by IRDA’s order. “It is now between the regulators who have to settle this among themselves” said a senior industry official.

SEBI’s order has more far reaching implications than a press release or a circular. Since the order has been issued under Section 34(i) (a) and (b) of the insurance Act. IRDA has said that in the year `08-09 ULIPS policies involving a total premium of Rs 90,645 cr were in force. In fiscal `09-10 up to February 16.7 lakh policies have been sold with a premium of Rs 44,611crores. “It is also observed that the 14 insurance companies have an equity capital of Rs 16,281cr as on March 2009” IRDA said.

The insurance regulator said that observance of SEBI’s order would cause the stoppage of all renewals of insurance policies already invested by the insuring public may result in forced premature surrender of insurance policies causing substantial loss to the policyholders and to the insurers. “The effective stoppage of the sale of the products would cause a complete drying up of revenue flows to the insurance companies which could disrupt the payment of benefits on maturity, on death and on other admissible claims, putting the policyholder and the general public to irreparable financial loss. The financial position of the insurers will be seriously jeopardized thus destabilizing the market and upsetting financial stability” IRDA said.

POLICE DECIDES TO TURN SPECTOR

The finance ministry today kept a safe distance from the ongoing row between market regulator SEBI and insurance watchdog IRDA over ULIPs, saying the two regulators have to resolve the issue.

“It’s a matter between regulators; so they have to decide,” finance secretary Ashok Chawla told when sought his comments on yesterday’s SEBI decision to ban 14 life insurers from raising any more money from the unit-linked insurance plans (ULIPs) in which a portion of the premium amount is invested in stock markets, a move opposed by the insurance regulator.

The SEBI decision was taken after the market regulator had sent notices to these companies asking them as to explain why they did not take its permission to launch these schemes.

Insurance regulator IRDA is understood to have stated in its reply that regulation of ULIPs by IRDA is well-laid down and that it does not agree with SEBI contention that insurers need a certificate of registration from the market regulator for dealing in ULIPs.

The issue was also taken up at the meeting of the inter-regulatory body, the High Level Coordination Committee (HLCC). It was decided at the meeting that the two regulators should settle the issue between themselves.

Chawla said the SEBI and IRDA have not so far been able to come to any resolution. “So, SEBI has taken a legal process. He was going to be silent spectator to see the fire power of both Regulators.

 

Always Yours   — As Usual — Saurabh Singh, India

[Thanks are expressed for too many peple]

President Obama Slipped But not Much

President Obama’s ratings on foreign policy have slipped, but not as much as in other areas

Foreign and Military Policy

Leery from the start about President Barack Obama’s military and foreign-policy experience, Americans still retain some of that skepticism about their president as the nation’s commander in chief one year into his term.

Yet after a year of bruising economic problems and domestic-policy debates, foreign policy actually has emerged as an area of comparative strength for Mr. Obama. By a 50%-to-37% margin, those surveyed in the new Wall Street Journal/NBC News poll give him a positive rating for his handling of foreign policy, higher than his overall job rating and his rating for handling the economy.

Moreover, the 13-point positive differential between the share who approve and the share who disapprove of his handling of foreign policy is the most positive reading in his job appraisal. By contrast, he enjoys just a five-point positive differential on his overall job approval and a six-point negative gap between approval and disapproval on his handling of the economy.

Safety a Priority

Perhaps because of the attempted Christmas Day bombing of an American airliner, national security is climbing Americans’ priority list. In the new survey, national security and terrorism jumped to second on the list of voters’ concerns, with 17% citing that area as a top priority for the government, behind only job creation and economic growth. In the summer, only 11% called national security a top priority, behind job creation, the deficit and government spending and health care.

Some 56% now say they are either very or fairly worried that the U.S. will experience another major terrorist attack, up from 42% in October.

Views of Mr. Obama’s handling of terrorism are split down the middle, with 45% approving of his handling, essentially even with the 44% who disapprove.

In addition to new terror scares, Mr. Obama’s first year in office has seen the drawdown of U.S. forces from Iraq and the commitment of tens of thousands of troops to Afghanistan, both issues central to candidate Obama’s foreign-policy promises. Mr. Obama also won the Nobel Peace Prize and engaged in international travel designed explicitly to raise the nation’s popularity in the world.

White House senior adviser David Axelrod divided Mr. Obama’s first-year mission into three parts: stabilizing the economy; securing the president’s domestic priorities, which he believes will strengthen the nation’s economic future; and restoring U.S. standing in the world, along with international cooperation on issues from terrorism to Afghanistan.

Of those three, the foreign-policy component has been arguably the most successful, Mr. Alexrod maintained.

“It’s been a very productive year in terms of foreign policy,” Mr. Axelrod said in an interview.

Sharp Divisions

Still, in one critical area of foreign policy—as commander in chief of the armed forces—Americans rate the young president lower than they rate him as a person and an overall leader.

As Mr. Obama campaigned for president, he struggled to portray himself as the leader of the military. Running against a Vietnam war hero, Sen. John McCain, candidate Obama convinced only a third of Americans that he would be a good commander in chief in June 2008.

That figure soared amid the optimism that greeted his inauguration, when 55% said he would be a good or very good commander in chief.

After a year in the White House, Mr. Obama readings have dipped somewhat. Now, 49% give him a good rating as the commander in chief—compared with 72% who felt positively about the First Family, 64% who felt good about the president as a person and 54% who felt positively about Mr. Obama as a leader.

Gender, racial and ethnic backgrounds shaped opinions sharply. Only 42% of men felt positively about Mr. Obama as commander in chief, 38% of whites and 39% of those from small-town or rural areas. In contrast, 86% of African-Americans and 59% of Hispanics gave him positive mark

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