Sunday, May 13, 2012

Duty Free Quota Free


The European Union (EU) and members of the African, Caribbean and Pacific (ACP) group have been negotiating Economic Partnership Agreements (EPAs) for the past five years. At the end of 2007, 35 ACP states signed interim EPAs under which the EU will remove all tariffs and quotas on its ACP imports, an initiative known as duty-free and quota-free access (DFQF). This Project Briefing asks what would fully implemented DFQF be worth to ACP members and what might it mean for Europe's other import suppliers, consumers and domestic producers of competing goods? It examines only one aspect of EPAs, which are controversial.

Fiscal Drag


Definition of 'Fiscal Drag '
Fiscal drag is an economics term referring to a situation where a government's net fiscal position (equal to its spending less any taxation) does not meet the net savings goals of the private economy. This can result in deflationary pressure attributed to either lack of state spending or to excess taxation.


One cause of fiscal drag is the consequence of expanding economies with progressive taxation. In general, individuals are forced into higher tax brackets as their income rises. The greater tax burden can lead to less consumer spending. For the individuals pushed into a higher tax bracket, the proportion of income as tax has increased, resulting in fiscal drag.


Investopedia explains 'Fiscal Drag '
Fiscal drag is essential a drag or damper on the economy caused by lack of spending or excessive taxation. As increased taxation slows the demand for goods and services, fiscal drag results. Fiscal drag is a natural economic stabilizer, however, since it tends to keep demand stable and the economy from overheating.


Because it is an economic stabilizer, fiscal drag can influence economic equality among citizens of the same region.


Read more: http://www.investopedia.com/terms/f/fiscal-drag.asp#ixzz1ukbgXVVB

Thursday, May 10, 2012

System of Rice Intensification



The System of Rice Intensification (SRI) is a methodology aimed at increasing the yield of rice produced in farming. It was developed in 1983 by the French Jesuit Father Henri de LaulaniƩ in Madagascar.[1] However full testing of the system did not occur until some years later. The productivity of SRI is under debate between supporters and critics of the system.


Assembly of the practices that culminated in SRI began in the 1960s based on Fr. de Laulanie's observations. Principles included applying a minimum quantity of water and the individual transplanting of very young seedlings in a square pattern.[1]


SRI concepts and practices have continued to evolve as they are being adapted to rain-fed (unirrigated) conditions and with transplanting being superseded by direct-seeding sometimes. The central principles of SRI according to Cornell University are:[2]


- rice field soils should be kept moist rather than continuously saturated, minimizing anaerobic conditions, as this improves root growth and supports the growth and diversity of aerobic soil organisms;
- rice plants should be planted singly and spaced optimally widely to permit more growth of roots and canopy and to keep all leaves photosynthetically active; and
- rice seedlings should be transplanted when young, less than 15 days old with just two leaves, quickly, shallow and carefully, to avoid trauma to roots and to minimize transplant shock.


MV Nair Committe recommendations


Banks' exposure to priority sector loans may be retained at 40%, reports CNBC-TV18’s Gopika Gopakumar. The RBI committee under the current Union Bank Chairman MV Nair has come out with their recommendations on lending to priority sector. It has reviewed the existing guidelines on lending to priority sector categories including agriculture, MSME and export.


What do they recommend?
> Priority sector targets for public sector and private sector banks could be retained at the current level of 40% of the net credit to the sector.
> It has recommended severe changes should be made to exposure of foreign banks. Foreign banks’ priority sector target should be upped from 32% to 40%. However, this could put pressure on foreign banks to increase their lending to priority sector categories including agriculture and export sectors.
> RBI had been a little cautious of a bank lending to NBFCs, but the committee has recommended that 5% of bank's credit to NBFCs could be classified priority sector. Lending to gold companies will not be classified as priority sector.
> Securitized loans could also be classified under the priority sector. This will remove the pressure on banks and NBFCs while lending to these sectors. It would come as a relief for banks and NBFCs.
> Special treatment should be given to small and marginal farmers and housing loans below Rs 2 lakhs should be classified under priority sector.