Buzzwords of 2012: GAAR to lobbying; Libor to fiscal cliff

PTI Posted: Dec 28, 2012 at 1340 hrs
New Delhi While the US economy awaits its \'fiscal cliff\' at the end of 2012, the world of business in India this year confronted with its own maze of buzzwords that included terms like GAAR, Coalgate, OFCDs and lobbying.

While the concerned companies were heard describing their losses as \'negative profit\', Vijay Mallya termed uncertain times at Kingfisher Airlines as a \'holding pattern\'. Gold was being called \'idle assets\' despite its long-standing status as one of the best performing investment products.

The global terms like \'fiscal cliff\' and \'Libor scandal\' also became quite popular in the country, although many were found wondering their real meanings and impact.

Coined by the US central banker, Federal Reserve Chairman Ben Bernanke, fiscal cliff refers to the economic scenario that the world\'s largest economy faces at the start of 2013 due to proposed spending cuts and tax hikes worth USD seven trillion, if the existing laws are not changed by the end of 2012.

On the other hand, the term \'Libor\' hogged the limelight after a scandal broke out about manipulation of the London Interbank Offered Rate (a benchmark reference rate used in both the UK and international financial markets) by traders and brokers at Swiss banking giant UBS, among others.

The Swiss banks also continued to make news because of the long-running allegations of their status as hoarders of black money, while probes in the US against at least three global banking giants, including UBS itself as also HSBC and Standard Chartered, revealed lapses in their outsourcing jobs to India.

Back home, the initial months of 2012 saw \'GAAR (General Anti Avoidanace) Rule\' and \'retrospective taxation\' creating a panic-like situation among the foreign investors and others, while \'Coalgate\' became a household term amid allegations of irregularities in coal allocation to various companies.

Also, the government\'s move to kick up the reform process and opening up of the \'FDI\' (Foreign Direct Investment) in certain sectors met with strong political opposition, while questions were also asked about feasibility of schemes like \'Direct Cash Transfer\'.

During the year, a purely economic term like \'OFCD\' also made much news after two Sahara group companies were asked to refund thousands of crores of rupees raised from an estimated three crore investors through their \'Optionally Fully Convertible Debentures\', which are a kind of bonds that can be converted into other securities.

Towards the end of the year, \'lobbying\' by US companies, including retail giant Wal- Mart, with their own lawmakers kicked up a political storm, as they were found garnerning support in their home country for pushing forward their business interest in India and elsewhere.

In the meantime, the government and policymakers back home were seen pushing for channelising more and more household savings into equity market, mutual funds and other financial instruments, rather than \'idle assets\' like gold.

The concern has been that money spent on buying gold gets locked, while investments in financial markets can be utilised for infrastructure building and other meaningful purposes.

At the same time, the power sector witnessed its worst ever \'grid failures\' as more than half of the country\'s population saw a blackout for two consecutive days.

In the stock market also, there were some small and one big instance of \'flash crash\', wiping out over a trillion rupee notional investor wealth within seconds.

Some Indian versions of \'Ponzi\' schemes also came to the fore in the form of suspected frauds through various multi-level marketing (MLM) operations and Collective Investment Schemes (CIS), including one where investors were asked to put their money towards rearing of goats to double and triple their investments.

In the banking space, the NPAs was the buzzword, while the companies making losses tried to give it a positive spin by calling them \'negative profits\', and fall in their business as \'negative growth\' rather than a simple \'decline\'.

For UB Group Chief Vijay Mallya, Kingfisher was working on a \'holding pattern\', when the airline was actually on the brink of being grounded. In aviation parlance, \'holding pattern\' is used to describe the multiple 360-degree turns made by the pilot while waiting to land his or her aircraft.

Despite their complex meanings, most of these terms and phrases became \'new normal\', which itself was coined a couple of years ago as a purely economic buzzword and has now been used in the name of a popular sitcom in the