Different Strokes

Thanks to MamataNewspaper edits seem to be unanimous in their support of the TRAI's recommendation of a massive rise in rentals. TRAI, th...

Thanks to Mamata

Newspaper edits seem to be unanimous in their support of the TRAI8217;s recommendation of a massive rise in rentals. TRAI, they say, met people across the country at open-house sessions before fixing the rentals. But TRAI was apparently not listening to consumer groups. At the Mumbai session, virtually every speaker argued against the hike including political parties. Local calls should certainly be cost based, but not on the basis of the bloated cost of an over-staffed monopoly service provider. Also, TRAI8217;s logic of reducing rates to raise call traffic has not been applied to local calls. If charges are based on line costs, how come you pay more, and not less for every call above 500?

How lobbies work

Last week, corporate Mumbai went into howls of laughter at a business papers8217; outraged observations on How lobbies work8217;. Since the newspaper has a tiny circulation, photocopiers worked overtime to allow everybody to read what they thought would be the most authoritative andinside account of how lobbing works in India. The contents were a disappointment. The article said nothing on how the most powerful lobbyists in Delhi operate to transfer bureaucrats, fix raw material duties or takeover blue chip firms. It did not even have current material such as how benzene, a petrochemical feed stock has a 25 per cent duty even though the entire user industry was rendered uncompetitive. Instead, the paper is outraged about the fixing of a high floor of 302 for hot rolled coils. It read like the agenda for the opposition8217;s debate on corruption charges against the government.

The magic of March 18

AT least two important actions have been put off until March 18. The first is the restructuring and bailout of UTI smartly left out of the Budget speech and the second is the bailout package for the steel industry which has been referred to an expert committee. Why March 18 you wonder? Is it astrologically auspicious? No silly. It is only the day Parliament closes.

So allpotentially controversial actions are simply postponed until parliamentarians are back in their constituencies.

Price vs dividend

A big mutual fund recently increased its holding in IDBI. The logic: at a price of around Rs 34, IDBI just has to be a good buy because it is bound to maintain dividend at 40 per cent, which at the market price would make it one of the highest pay outs. The confidence of the fund manager stems from a close understanding of what dictates institutions8217; dividend policies. Sounds savvy? A market operator merely sniggered and said, what happens if the price itself falls by Rs 4 the gains are wiped off in a jiffy. Sure enough, the price was about Rs 30 at the end of the week, while the Sensex was up 700 points. With IFCI also on the brink of touching par value, we hope that the alarm bells are jangling at North Block.

Change the rules

ONE would have thought that SEBI8217;s findings about gross manipulations by broker directors on the BSE governing board, would havemade it inclined towards superseding the board. No such thing. Far from becoming vary about the influence of broker directors, SEBI last week amended a crucial rule to permit a brokers8217; nominees one who operates another broker8217;s card and holds a power of attorney for all decisions to contest elections to the governing board. The decision is aimed at enabling one particular broker to get on to the board. Why should it surprise anyone then that SEBI seems unwilling to punish the exchange for the manipulative hushing up of the June payment crises?

Author8217;s e-mail: suchetadalalyahoo.com