When looking at the major economic crisis in the Republic of Cyprus involving the exposure of Cypriot banks to the Greek debt crisis, one is reminded of the Ahmedabad-based Madhavpura Mercantile Co-operative Bank (MMCB), which was closed down by the Reserve Bank of India in June 2012 when the outstanding loans were Rs 1,100 crore, of which Rs 800 crore pertained to a shares scam. On March 25, 2013, a €10 billion bailout was announced in return for Cyprus agreeing to close its second-largest bank, the Cyprus Popular Bank (also known as Laiki Bank). This would create a big problem for uninsured deposit holders. The restrictions on deposit operation include withdrawing only €3,000 in banknotes and spend of up to €5,000 a month on credit cards. It all boils down to protecting the interest of the deposit-holders for the uninsured portion. Some of the Indian co-operative banks in trouble were taken over by another bank, ensuring business continuance and protection of deposit holders. Will this happen to banks in Cyprus?

Testing times for Novartis

The Supreme Court’s recent judgment on Swiss drugmaker Novartis AG's attempt to win patent protection for its cancer drug Glivec has set a benchmark for many pending intellectual property disputes in India. Due to its massive population and continued growth, India has always remained a hot destination for investors globally. However, as far as essential commodities like medicines are concerned, affordable prices would be the criteria for capturing the market, as 25-30 per cent of the population is still below the poverty line.

The ruling would also result in reduced flow of foreign direct investment for research and development in India. Already Novartis has announced it will not invest in R&D in India. This is an opportunity for Indian entities to capture the market, as also make Indians proud of buying “Made in India” products.

Drowning in cost and time overrun

According to recent information placed before the Lok Sabha, the delay in 293 major projects in the country has resulted in cost overrun of over Rs 68,000 crore. The main reason for cost escalation is delay in completion, as observed mainly in infrastructure projects like road transport and highway. On the other hand, even as large parts of Maharashtra reel under drought, dams initiated as far back as 45 years ago are still works-in-progress. For example, the Warna irrigation project, approved in January 1967, remains incomplete due to land acquisition troubles and insufficient funds. Work completion deadlines have been extended several times and costs have inflated massively, sometimes threatening to drown the project itself. Are we lacking project management skills, or is there other hidden malaise such as funds leakage and so on?

Get in line to tackle water shortage

Today there is a real danger of war over basic necessities such as water. This is a challenging year for the country, especially in Maharashtra, due to low rains and ever-depleting water levels. Successful water management projects in Rajasthan have resulted in flowing rivers even during the summer, despite the low rainfall. Maharashtra still gets much more rainfall than Rajasthan. Rather than a year of low rainfall, the real problem facing the country is the failure to anticipate trouble well in advance. We should create awareness on responsible use of water and discourage practices that deplete our water resources such as cultivation of cash crops like sugarcane. It is interesting to note that the New Zealand Treasury recently forecast that the summer drought will knock 0.7 of a percentage point off annual economic growth, more than twice the 0.2 per cent to 0.3 per cent forecast by the Reserve Bank of New Zealand in its latest monetary policy statement on March 14.

— Deloitte

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