RBI guidelines for new bank licences likely by Nov-end!The Reserve Bank today said Indians who have non-resident accounts in the country can now hold them in any currency which is fully convertible !Industry Ministry wants to retain flexible foreign equity rules!
In the wake of successive attacks on Team Anna members, the Centre has asked the Maharashtra government to ensure proper security of Anna Hazare, who is currently observing 'vow of silence'.
Irom Sharmila's supporters attacked in Delhi!
A group of unidentified people in Delhi Wednesday attacked the supporters of Manipuri activist Irom Sharmila Chanu, who is on hunger strike for repeal of the Armed Forces (Special Powers) Act (AFSPA) in the north-eastern state.
The incident took place near Kingsway Camp area of north Delhi at around 2:30 pm.
People from Save Sharmila Solidarity Campaign (SSSC), who are campaigning nationwide in Sharmila's support, were on a tour when they were attacked by a group that raised slogans of "Bharat Mata ki jai" and "Vande Mataram".
"We were taking out a caravan when some people came shouting slogans. They asked us to stop, and when we refused, they manhandled us and splashed black ink on our clothes," said Faisal Khan, coordinator of the Save Sharmila Jan Caravan.
He added that even after police was informed, no action was taken.
"The group first raised slogans against us. In Gandhian style, we started singing Gandhian songs; irked by this, the group attacked our people," said Khan.
As a part of the campaign, SSSC has organized a Srinagar to Imphal - Save Sharmila Jan Caravan covering 4,500 km across 10 states. The Caravan that started on Oct 16 from Srinagar reached Delhi Wednesday.
The AFSPA, in force in the northeast and Jammu and Kashmir, gives the armed forces legal immunity for their actions. Sharmila has been on fast for the last almost 11 years for repeal of the act.
Related:Strike at Maruti plant enters 13th day
Related:Negotiations to end Maruti strike break down
Striking workers of Maruti Suzuki raise slogans from inside the car factory compound as they attend a public meeting conducted outside the factory in Manesar, on Thursday, Oct. 13, 2011. Photo: AP
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Dr Montek Singh Ahluwalia (right), Deputy Chairman, Planning Commission, and Mr Mani Sankar Aiyar, Rajya Sabha MP, arriving to attend the V. Sankar Aiyar Memorial Lecture in Chennai on Wednesday. — Bijoy Ghosh
CHENNAI, OCT. 19:
The protests in the developed world against greedy corporates does not mean that the market economy is bad, says Dr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission.
Delivering the V. Sankar Aiyar memorial address at the Institute of Chartered Accountants of India here, Dr Ahluwalia said it would be a "great mistake" if India concluded that the market economy is a failure.
"We should avoid the temptation of thinking that because there is a loss of faith in the market economy in the industrialised countries, we should also change our minds (about market economy)," he said.
On the contrary, the reality is that the resort to market economy has made developing countries more competitive as a result of which they are able to penetrate the markets of the developed world. This, in turn, has resulted in loss of jobs in the developed world, leading to New York-like protests, Dr Ahluwalia said.
Dr Ahluwalia's address was preceded by the introductory remarks of Mr Mani Shankar Aiyar, Member of the Rajya Sabha, in the memory of whose father Dr Ahluwalia's speech was organised. In his introduction, Mr Aiyar lambasted the excessive focus on growth to the complete exclusion of attention on whether or not the benefits of growth reached the poor.
Responding to that averment, Dr Ahluwalia said while it was true that a lot needed to be done in reaching the benefits of growth to the poor, the situation was not as bad as Mr Aiyar made it out to be. He noted that while the growth figures emerge quarter after quarter, statistics relating to social development take years to come. The figures that are available today could be those that pertain to 2004.
"I feel a lot more is happening than the critics are allowing for," he said.
Keywords: Market Economy
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NEW DELHI, OCT. 19:
The Government is considering French auction method for disinvestment in select public sector undertakings. On the other hand, decision on the timing of ONGC follow-on public offer is expected to be taken soon. Also, the Government is confident of achieving Rs 40,000 crore target for the current year.
Keywords: French auction method, disinvestment in select PSUs
http://www.thehindubusinessline.com/industry-and-economy/economy/article2552323.ece
18 OCT, 2011, 05.23AM IST, ET BUREAU
NEW DELHI: Chief economic advisor Kaushik Basuhas said that part of the blame for the sustained highinflation in India must go to rising wages.
Basu believes that labour cost differences between the developed and labour-surplus countries such as India that have been in existence for a long time have now started narrowing which is feeding into higher prices within the country.
"The reason for inflationary pressures in India is that our labour costs are catching up with the rest of the world. The biggest inflation was seen in labour-intensive sectors and wages in India have been inflating faster than goods and services," he said at a panel discussion on sustaining growth and inclusiveness in Asian economies.
India has been reeling under high inflation for more than two years now. Headline wholesale price inflation in September was 9.72%, well above the Reserve Bank of India's comfort rage of 4%-5%. Basu insisted that cooperation in monetary policy and poverty reduction programmes must be encouraged between Asian nations.
Many economists have claimed that food subsidies have leaked out to neighbouring countries like Bangladesh due to the absence of regional cooperation, which creates arbitrage opportunities. Arvind Panagaryia, professor, Columbia University said: "Labour reforms, amongst other things, are necessary to encourage labour-intensive manufacturing activities which can generate employment and improve inclusiveness". Shankar Acharya, honorary professor ICRIER- a think tank, also seconded the importance of labour reforms. "Employment in the organised sector has remained stagnant for years due to stringent labour laws. Encouraging employment in the organised sector would certainly be a move towards better inclusiveness," he said.
In 2008, only 6% of the work force was employed in the organised sector as per the annual Economic Survey of India.
http://economictimes.indiatimes.com/news/economy/finance/rising-wages-feeding-inflation-says-kaushik-basu/articleshow/10396192.cms
Reserve Bank is likely to come out with guidelines on allowing new private banks by November end, Financial Services Secretary D K Mittal said today.
In the wake of successive attacks on Team Anna members, the Centre has asked the Maharashtra government to ensure proper security of Anna Hazare, who is currently observing 'vow of silence'.
The Reserve Bank today said Indians who have non-resident accounts in the country can now hold them in any currency which is fully convertible.
The move is likely to help NRIs/Persons of India Origin as it will give them more options in the holding of accounts, and lessen the risk from fluctuations in major currencies.
Earlier, FCNR(B) account holders were allowed to hold accounts in only certain currencies such as the Pound Sterling, US dollar, Japanese yen, euro, Canadian dollar and Australian dollar.
"...it has been decided that Authorised Dealer banks in India may be permitted to accept Foreign Currency (Non- Resident) Account (Banks) deposits in any permitted currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency which is freely convertible," RBI said in a notification.
"The Committee to Review the Facilities for Individuals under Foriegn Exchange Management Act, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency," RBI said.
RBI also said that any citizen who was earlier residing in a foreign country can own or transfer property or other assets in that nation if it was acquired during the time of his residence there.
"... a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India," RBI said.
In a clarification issued by it regarding repatriation of income and sale proceeds of assets held abroad by NRIs who have returned to India permanently, RBI said an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme.
The apex bank said that clarifications are as per relevant sections of the Foreign Exchange Management Act of 1999.
"RBI is actively working on the guidelines...and is likely to come out with the final licencing norms by November," he told reporters on the sidelines of theEconomic Editors conference here.
The RBI had in August released the draft guidelines on allowing industrial houses to promote banks.
As per the draft norms, private sector entities or groups owned and controlled by Indian promoters, with diversified ownership, sound credentials and integrity, and having successful track record of at least 10 years, would be eligible to promote banks.
Earlier this week some Members of Parliament (MPs) had expressed reservations at a meeting of Standing Committee over the RBI's proposal to grant banking licences to industrial houses arguing that it would not promote financial inclusion.
The draft norms on bank licences have pegged the minimum required capital for promoting bank at Rs 500 crore and restrict foreign shareholding at 49 per cent for the first five years.
On implementation of the Shyamala Gopinath committee report on small savings scheme, Economic Affairs Secretary R Gopalan said,"final decision will be taken shortly."
The Committee had suggested that the returns on small savings scheme be aligned the market rates and post office savings scheme interest rate be raised to 4 per cent.
According to government estimates, small savings during the first quarter (April-June) of the current fiscal declined by Rs 26,542 crore. They had increased by Rs 13,250 crore in the same period last year.
In a U-turn of sorts, the Industry Ministry has opined that an Indian promoter can issue equity to foreign investor with an inbuilt option to treat it like debt and withdraw at a pre-determined date.
The Department of Industrial Policy and Promotion (DIPP) made changes in FDI rules on September 30, stating clearly that if a non-resident is given a choice to convert the equity into a debt,the rules of external commercial borrowings must be followed.
But, after sensing that the move has not gone down well with the overseas investors and the Indian promoters seeking foreign funds, the DIPP has changed its views, as evident from its letter to the Finance Ministry.
The DIPP wants the Finance Ministry to advise the Reserve Bank of India (RBI) not to notify the September 30 FDI rule in this regard.
DIPP said it was at the instance of the RBI that the stringent provision for overseas equity was included in the foreign direct investment policy.
However, "We have received feedback from a number of stakeholders ...stating it could have negative fallout, particularly for the SME (small and medium enterprises) sector.." it said.
The changes, if brought into force by RBI, would have affected raising of resources stake sale to the private equity (PE) funds, which buy into the small Indian companies expecting high yields after they grow and get listed. But, the PE players want to retain an exit route, known in the market parlance as the "put option".
But the trend did not go well with the RBI which felt it would add to the country's external debt.
In the wake of apprehensions that the equity inflows could be hit, the DIPP said that the issue needs to be "revisited urgently. In the circumstances, it is requested that RBI may kindly be advised not to notify the provision for the present and maintain status quo until we arrive at a suitable formulation after consultation".
The Reserve Bank of India (RBI) is widely expected to deliver one final interest rate increase at its policy review next week and then pause until the end of the fiscal year in March, a Reuters poll of 30 economists showed.
Of those polled, 17 expect the Reserve Bank of India to increase the key lending rate by 25 basis points on Oct. 25, while 13 expect it to hold the rate.
The median forecast is roughly in line with estimates in a smaller poll conducted immediately after the RBI raised rates in mid-September and indicated more was to follow. Since then, global and domestic indicators have pointed to weakening economic conditions.
A rate increase in India would be the 13th in 19 months and would take the repo rate to 8.50 percent.
India's inflation barely budged in September at 9.7 percent, staying above 9 percent for the 10th straight month, driven by higher fuel and power prices.
"While clearly there are signs that globally the situation is extremely uncertain and there is some amount of headwind on domestic growth, the RBI has been very forthright in maintaining that it wants to control inflation," said Sujan Hajra, chief economist atAnand Rathi Securities.
"From that perspective, inflation control will remain RBI's key objective."
While other central banks are easing monetary policy or considering doing so, the RBI has been among most aggressive globally and is reluctant to press the pause button yet amid sticky inflation. For a take a look on other central banks see:
The RBI last week reiterated that controlling inflation remains a priority.
"We are aware that some central banks in Asia and some outside Asia have reversed...Those circumstances are quite different from ours," RBI Governor Duvvuri Subbarao had said last week.
Worries over the slowdown in advanced economies and slowing growth at home is expected to prompt the RBI to pause in its tightening cycle after October, analysts said.
The median estimate for the repo rate at end-June 2012 is 25 basis points lower at 8.25 percent, compared with the mid-September snap poll.
Of 23 respondents, 18 said the RBI's monetary tightening thus far has been appropriate, while four said less aggressive tightening is needed, and one called for a more aggressive stance.
You've got to love when the words of a mere comedian can become the conventional wisdom of the President of the United States. If you missed it today, President Obama gave a sympathetic comparison between the Tea Party and Occupy Wall Street movements in aninterview with ABC News correspondent Jake Tapper. If the comparison didn't sound earth-shatteringly novel that's because it was a recycled idea that Daily Show host Jon Stewart tookmainstream on October 5. Take a look at the two quotations:
President Obama, October 18: "I understand the frustrations being expressed in those protests. In some ways, they're not that different from some of the protests that we saw coming from the Tea Party. Both on the left and the right, I think people feel separated from their government."
Jon Stewart, October 5: "I don't get it. Here's a group of Americans disenchanted, railing against big government bailouts, angry because they played by the rules ... If this thing turns into throwing trash cans into Starbucks windows, nobody's going to be down with that. We all love Starbucks. But these protesters, how are they not like the Tea Party? ... Aren't these folks real citizens with real problems? Aren't they also speaking for America?"
http://www.theatlantic.com/politics/archive/2011/10/on-occupy-wall-street-obama-echoes-jon-stewart/246973/
India received FDI of USD 19.24 billion in fiscal 2010-11.
27 SEP, 2011, 02.38AM IST,
Global mobility has become a key catalyst of the Indian economy, both due to an increase in Indian outbounds looking to attain international experience and a rise in "returning Indians", given the recession in the west and opportunities back home.
However, such movements bring with them issues like the future state of Indian investments once an individual stays out of India long enough to become a 'non-resident Indian', or the question of overseas assets held by returning Indians once they resettle in India.
Investments are regulated by the Indian exchange control laws, which are set out under the Foreign Exchange Management Act (FEMA), whose approving authority is the RBI. The FEMA broadly covers all matters related to investment avenues such as investment in immovable property, foreign exchange, bank deposits, government bonds, investment in shares, units, securities, and foreign direct investment in India, and has a wide network of notifications and circulars, elucidating permissible avenues for each category of individual.
The residential status under FEMA is the basis of applicability of permissible avenues and this status is determined on the basis of the intention of the person, as also the number of days spent in India in the prior year concerned (there is a current threshold of 182 days).
The analysis of who qualifies as a resident or a non-resident Indian (NRI) is a fact-specific exercise. Transactions of residents in foreign exchange such as investment abroad are being liberalised at a very fast pace. India is still not close to full capital account convertibility, though returning Indians do enjoy certain concessions in relation to existing overseas assets. Some of the key benefits for this category of individuals are:
Foreign currency, foreign security or immovable property acquired, held or owned by an individual while he/she was abroad, or inherited from a person who was a resident outside India, can be continued to be owned even after his/her return to India for permanent settlement. There is no specific provision on movable assets like jewellery, motorcar and personal household effects.
Income earned on overseas assets needs to be repatriated to India. Credit to a resident foreign currency (RFC) account, which is an account free from all restrictions regarding utilisation of foreign currency balances, may also be considered and analysed. As regards the million-dollar question of maintaining overseas bank accounts, technically, a returning NRI would require the RBI's approval to maintain bank accounts abroad. Another important "to-do" for returning Indians is the redesignation of bank accounts once they settle in India and thus become 'residents'.
The bankers would typically do this once an application, along with, relevant proof of the Indian employment is submitted. For the category of Indians attaining the status of NRI on account of moving out of the country for overseas assignments or employment, a burning question is the maintenance or continuity of their erstwhile investments in India. The investment opportunities available to such NRIs are endless.
Some of them are: NRIs can freely invest in government securities, UTI, National Saving Certificates, shares and mutual funds. They are permitted to invest in the FDI scheme on a repatriation basis in equity shares/CCPS/CCDs of an Indian company. They are also permitted to make portfolio investments.
NRI, who is a citizen of India, is permitted to acquire any immovable property (residential/commercial) in India other than agricultural land/plantation/farm house. The purchase can be done out of funds remitted to India through normal banking channels or funds held in certain types of accounts in India. Loans can be taken from authorised dealers or from the Indian employer for purchase of accommodation. NRI can freely invest in any partnership or proprietorship firm (not engaged in agriculture/plantation/real estate) on a non-repatriable basis. The sale or transfer of shares and debentures to Indian residents is permissible.
Sale or transfer of any residential/commercial property in India is permitted subject to certain exceptions. An amount of $1 million per year from such sale can be remitted outside India from a nonresident ordinary account.
With the low return rates in the west, the Indian market is indeed booming and investment opportunities galore. Before venturing out, an important caution point is to keep bankers in the loop, especially for transactions out of foreign exchange, as they are the gate-keepers to the Reserve Bank of India.
http://economictimes.indiatimes.com/news/nri/nri-investments/nris-returning-to-india-investment-opportunities-available-are-manifold/articleshow/10133134.cms
18 OCT, 2011, 05.12AM IST, DEEPSHIKHA SIKARWAR & DHEERAJ TIWARI,ET BUREAU
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NEW DELHI: A miffed finance ministry is set to take the unusual step of specifying certain targets forState Bank of India (SBI) in the middle of the year, as it seeks visible improvement across several parameters in the performance of the country's largest bank.
A finance ministry official said there was a view within the ministry that instead of focusing on improving its operational performance, the SBI management was using the recent credit rating downgrade by rating agency Moody's, as an opportunity to wrest more funds for itself from the government. The government owns a 59% stake in SBI.
Moody's had earlier this month brought down SBI's credit rating to 'D+' from 'C-', citing it low Tier -I capital ratio and deteriorating asset quality as the reason for the downgrade. A 'C' rating denotes "adequate intrinsic financial strength", while a 'D' rating denotes "modest intrinsic financial strength, potentially requiring some outside support at times". After the downgrade, SBI chairman Pratip Chaudhuri had told the media that the bank needed at least Rs 3,000-Rs 10,000 crore capital in the current year.
The finance ministry, on its part has agreed to infuse Rs 3,000 crore in the bank by December and has also said it will provide more funds only after intense examination of the bank's funding requirement and Tier I capital adequacy ratio at the end of the financial year, as the government is under pressure to keep its expenditure under control.
For now, the finance ministry is putting pressure on India's largest lender to focus on performance. "We have asked them (SBI management) to improve their performance. We will send a formal communique to the bank over the next few days giving specific outcomes that we expect it to meet in the coming months," said a senior ministry official.
The official did not specify what these desired 'outcomes' would be, but a reduction in non-performing loans is expected to defiits nitely figure in the list. An SBI official said all state-run banks sign 'Statements of Intent' on annual goals with the finance ministry and added that he was unable to understand what further improvements were being demanded. "If they are setting new goals for SBI alone then it is a matter of concern for us," he said, requesting anonymity. The official said the finance ministry was aware that the bank's Tier I capital adequacy ratio had gone down because of the provisions made for loan losses in 2010-2011.
"The provisions made were as per RBI mandate and the finance ministry was aware of the decisions," he said, adding that like all state-run banks, SBI's board also has a government nominee. The bank had made a massive provision of Rs 17,071 crore in 2010-11 against Rs 9,155 crore in the year before, which resulted in its profits plummeting 99% and the Tier-1 capital adequacy ratio dropping to 7.8%, less than the minimum 8% threshold set by the government. Capital adequacy ratio is a measure of bank's ability to absorb losses from lending before its depositors take a hit. Higher it is the better protection there is for depositors.
Despite the bad loans write-off last year, SBI's gross non-performing loans rose to Rs 27,768 crore at the end of June 2011 from Rs 25,326 crore at the end of March 2011, an increase of almost 10% in a single quarter. Gross non-performing loans are now 3.5% of gross assets, among the highest in the industry. Experts believe that SBI did the right thing by making the required provision in its financial statement but caution that it might have to make more provisions if its non-performing loans continue to rise.
"SBI would have to follow all the provisioning norms as per the governance model and those got reflected in the applicable period," said KPMG executive director Ravi Trivedi. "SBI will have to make more provisions if its non-performing assets continue to rise. It is true for all banks but the demand in case of SBI will be much higher," said managing director CNI Research, Kishor Ostwal.
http://economictimes.indiatimes.com/news/economy/finance/Finmin-tells-SBI-to-focus-on-improving-its-operational-performance/articleshow/10396117.cms
18 OCT, 2011, 12.19AM IST, SHRUTI CHOUDHURY,ET BUREAU
FDI deals with debt options likely to stage a comeback; ban could hurt dollar inflows
NEW DELHI: A fortnight ago, the government had shut the door to foreign direct investment deals it felt were debt masquerading as equity. It's now rethinking the move, fearing it could backfire and dry up inbound flow at a time business sentiments are low and growth is under pressure.
Recent communications within the government indicate the specific clause that barred a foreign investor from selling back shares in an Indian firm to its joint venture partner here may be dropped. Indian promoters sell 'put options' to attract foreign strategic investors, thus giving them the 'right' to sell back shares if the company fails to fulfil conditions like stock exchange listing or an agreed internal rate of return. The practice never went down well with the Reserve Bank of India(RBI), which felt such fund flows would increase the country's short-term debt.
On September 30, the Department of Industrial Policy and Promotion (Dipp), under the ministry of commerce and industry, amended the rules to put all instruments with inbuilt options outside the ambit of FDI. The policy came under attack from offshore investors, particularly private equity players, as eight out of 10 FDI deals have underlying options. Calling them 'debt' would mean the deals would have to fulfil stringent rules that applied to foreign debt.
The department, which issued the FDI circular, was quick to sense the mood. It's learnt that in a letter dated October 5 - less than a week after the circular - the Dipp urged the Department of Economic Affairs(DEA), also under the ministry of finance, to review the particular clause related to options in FDI. "We have also asked RBI to maintain status quo until all the departments concerned arrive at a unanimous revision of the clause," a senior Dipp official told ET.
"As far as Dipp is concerned, this provision can be done away with completely as the feedback we have received has been very negative," said the official. Significantly, the industry ministry has also sought to distance itself from the new rule, saying it was inserted at the behest of the Reserve Bank and DEA.
"This is definitely a welcome move," said Akash Gupt, executive director at PricewaterhouseCoopers.
The changed clause is an impediment to both joint venture as well as private equity investment. As exit rights are a key to any foreign investment, revision of the clause will remove all uncertainties," Gupt added.
The central bank thinks that FDI with options are arbitrage flows, with foreign investors borrowing cheap dollar in international money markets to buy debt or quasidebt Indian securities promising a higher return. It feels that FDI should be plain-vanilla risk equity that should not receive the protection of debt.
The new policy is based on similar understanding. According to the policy, "Only equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares, with no in-built options of any type, would qualify as eligible instruments for FDI."
Classifying such FDI as foreign debt or external commercial borrowing would also cap the fund-raising capacity of local firms. Earlier, as the RBI opposed such deals, companies tried to overcome the hurdle by signing a separate agreement on the option sale, without making it a part of the shareholder agreement.
The new policy has put an end to this. Those opposing the new policy argue that India should take steps to attract capital amid a slowdown in foreign portfolio investments and widening current account deficit.
Dhanteras, Diwali & Investments
With prices rising, does buying gold make sense this Dhanteras?
From gold coins, gold jewellery to ETFs, people in India are predictably flocking to gold in this festive season.
India's first F1 race
Formula 1: With Noida track India up to speed with world's best
We hope that we will be able to repair the damage the country's reputation suffered during CWG said Jaypee founder Jaiprakash Gaur.
http://economictimes.indiatimes.com/news/economy/policy/fdi-deals-with-debt-options-likely-to-stage-a-comeback-ban-could-hurt-dollar-inflows/articleshow/10394073.cms
19 OCT, 2011, 03.37AM IST, DHEERAJ TIWARI,ET BUREAU
NEW DELHI: Backed by a strong endorsement from the prime minister's office, the department of public enterprises has shot off a letter to all ministries asking them to prepare comprehensive proposals to either revive or close down sick state-run companies under their charge.
The government has already put three sick public sector enterprises on the block and is looking to get rid of some more, as they have become big financial drag on resources.
"If there is clarity from the administrative ministry on the viability and proposed action plan, then we can proceed with either revival or closure," a government official told ET.
The prime minister's office was roped in as such efforts have not made much process earlier because the administrative ministries have been reluctant to let go of companies under their control.
"Closure of some companies have been pending since decades because of no affirmative action," the official said, requesting anonymity. The government had no option but to pump more funds into them, in many cases just to pay salaries.
So far, the government has approved 40 cases of revival which would require funding of around 24,000 crore.
The heavy industries minister Praful Patel had earlier said that the government will have to take a 'fundamental call' about those companies which cannot be turned around. The finance ministry has also expressed concern over continuing government support to sick units which have become totally unviable and backed the proposal.
There are 38 state enterprises which have been in losses during the last three years.
The administrative ministries will now need to prepare a comprehensive package for the loss making enterprises and put up the case for cabinet approval within fourth months after approval by the Board of Reconstruction for Public Sector Enterprises or BRPSE, said an official with the ministry of heavy industries. "The administrative ministry will further need to share the information with BRPSE two weeks in advance, so as to seek views of all stakeholders," he said.
Stake sale in Scooters India has been approved but no further action has been taken due to upcoming UP elections. Similarly, stake sale in sick enterprises West Bengal-based Tyre Corporation and Andhra Pradesh-based HMT Bearings has been pending since long.
18 OCT, 2011, 05.20AM IST, ET BUREAU
NEW DELHI: Finance Minister Pranab Mukherjee has said that growth in Asia must stay intact as it is crucial to the global economy, which is facing a crisis due to sovereign debt problems in the eurozone.
"Despite sustained high growth, Asia is not on auto pilot mode and would require careful steering and direction," Mukherjee said at conference organised jointly by the Asian Development Bank (ADB) and the finance ministry in the capital. Asia, led by China and India, contributes close to 50% of the world's GDP growth.
Mukherjee said it was important that the continent grew in a "more responsible and more inclusive manner". "Sustaining high growth is equally important," Mukherjee said cautioning that spurts in growth followed by stagnation will not deliver the desired results.
It was thus vital for Asian economies to transform their growth from being resource driven to high-skill and productivity driven, he said. The finance minister appeared confident that India would maintain a growth of 8.5 to 9% in the medium to longterm, though the country is not expected to cross 8% in the current fiscal year as per various forecasts.
"We need to be alert and respond to challenges in a timely manner as we make efforts to achieve our potential as a young and fast-growing nation," Mukherjee said.
High inflation and concerns over fiscal imbalances have raised doubts over India's growth in the current year. Speaking at the forum on realising the Asian century, ADB president Haruhiko Kuroda also supported Mukherjee on moving away from resource-driven growth.
"The biggest challenge is moving from resource-driven growth dependent on cheap labour and resources to growth based on high productivity and innovation," Kuroda said, adding that Asian countries would have to focus on domestic growth to get out of middleincome trap.
He warned that the task was not easy and the political leadership had an important role to play, pointing to several Asian and Latin American nations that have fallen into the middleincome trap. Kuroda said to realise the Asian century, nations would have to be taken nationally, regionally and globally. "Of course, Asia's vast diversity means actions must be country specific. Generally, however, each country's national agenda should give high priority to inclusion and elimination of inequalities of opportunities," he said.
By 2050, Asia faces two growth scenarios, he said, one in which it accounts for about half of the global GDP, with per capita income rising to the current level of Europe and another in which Asia's per capita income remains at barely half of its potential. Philippines secretary for finance, Cesar V Purisima, said, "We need to develop our domestic market. We can no longer rely on the West to grow."
Mukherjee also called for cooperation in energy within the region. "Asia would have to ensure energy security by utilising all available sources of energy, including fossil fuels and renewable resources, in an efficient and sustainable manner."
http://economictimes.indiatimes.com/news/economy/policy/asia-still-not-on-autopilot-needs-to-be-steered-fm/articleshow/10396172.cms
19 OCT, 2011, 10.07AM IST, PARTHA SINHA,TNN
After several years, the rates being offered by states to borrow from the market have shot up beyond 9%, bond market dealers said. Even during the months soon after the collapse of Lehman Brothers in September 2008, state governments paid about 8.25-8.55% to borrow from the market.
The rise in rates is mainly because states, witnessing low inflows from the centre's small savings corpus, are being forced to borrow more from the market. As per rules, 75% of the total small savings mobilizations are given to the states while the centre gets to keep the balance 25%. This year collections through this channel witnessed a sharp decline as rates of interest in bank fixed deposits (FDs) rose much above the rates offered in small savings instruments like schemes offered by the post offices and National Savings Certificate.
As per the recent government data, between April and August 2011, investors, mainly retail investors who prefer small savings instruments because they offer tax advantages, had taken out nearly Rs 5,500 crore from these schemes. Compared to this, investors had parked over Rs 25,000 crore in small savings schemes in the same period of 2010.
In Tuesday's auction, cut off yields for Maharashtra (which borrowed Rs 2,000 crore) and Tamil Nadu (Rs 600 crore) were 9.09% while for Haryana (Rs 500 crore), it was at 9.03%, RBI data showed.
http://economictimes.indiatimes.com/news/economy/finance/state-governments-paying-higher-rates-to-borrow-money-from-the-market/articleshow/10411786.cms
Hillary Clinton in Kabul to push Afghan reconciliation
KABUL: US Secretary of State Hillary Rodham Clinton is in Afghanistan on an unannounced visit aimed at encouraging the country's wary leadership to keep up Taliban reconciliation efforts as theObama administration presses ahead with troop withdrawal plans.
Clinton arrived in Kabul late Wednesday and will see President Hamid Karzai, other top Afghan officials and civic leaders on Thursday. Her trip comes as Karzai has expressed frustration with attempts to woo Taliban fighters away from the insurgency amid increasing attacks by the Taliban-allied, Pakistan-based Haqqani network.
The US sees a political settlement with the Taliban as key to ending the war and is pushing Karzai to lead and expand a reconciliation drive, although the Taliban has indicated no public interest in such a deal. A secret US effort to spark negotiations earlier this year angered Karzai.
At the same time, the goal of reconciling fighters who renounce al-Qaida, violence and embrace Afghanistan's constitution was dealt a major blow with the assassination last month of elder statesman Burhanuddin Rabbani, who was leading Karzai's outreach. Rabbani was killed when he greeted a suicide bomber posing as a Taliban emissary bearing a reconciliation message.
Karzai has cited the killing as a reason why peace efforts are futile. He lamented recently that although he wants to continue, neighboring Pakistan should be in the lead since the Taliban high command lives there. In addition, spectacular attacks _ like one last month on the US Embassy compound and the headquarters of the US-led NATO forces in Kabul _ by the Haqqani network have dented enthusiasm for the push.
Over the weekend, militants tried but failed to blast their way into an American base in eastern Afghanistan, striking before dawn with rocket-propelled grenades and a car bomb. The Taliban claimed responsibility for the attack in a text message sent to The Associated Press.
NATO says such spectacular strikes, many of them perpetrated by the Haqqani network, are actually down from past years. But assassinations have increased 60 percent for the same period with 131 people killed so far this year.
In addition to reconciliation, Clinton will also be pressing the Afghans on reaching a security agreement that will govern US-Afghanistan relations after American troops leave. The US plans to bring most forces home by 2015 and intends withdraw the 33,000 additional troops that President Barack Obama sent to Afghanistan in late 2009 by the end of the fighting season in 2012, 10,000 of them by the end of this year.
The US hopes to have the security agreement ready before an international conference on Afghanistan's future in early December.
Empowered Group of Ministers meet tomorrow on agri export policy: Sharad Pawar
The Empowered Group of Ministers (EGoM) on food is scheduled to meet tomorrow to discuss the overall export policy and prices of farm items such as sugar and onion, Agriculture MinisterSharad Pawar said today.
"The EGoM meeting is scheduled for tomorrow and the subject is about price of some of the foodgrains items, policy towards exports. They have not mentioned in particular about sugar or onion," Pawar told reporters on the sidelines of the Economic Editors' Conference here.
"There is no specific proposal or note from the Food Ministry. I think there will be a general discussion. Probably, the EGoM may suggest the Food Ministry to come up with specific proposals in the next meeting," he said
He said the government's decision on exports should not "distort international prices".
On sugar front, Pawar said there is "scope for exports" as production would be higher than demand in 2011-12 marketing year (October-September). However, he favoured exports in tranches of small quantities, saying "too much quantity should not be allowed so that global prices decline".
"I think exports in one-go will create a problem. Farmers will not get the better price and it will affect the international market. I don't want to take any decision which will affect the global market".
The minister observed that whenever India enters the global market to export, prices fall and when the country decides to import, the global prices increases.
With estimates of bumper sugar production, the industry has been demanding that the government should allow exports of about four million tonnes of sweetener in the 2011-12.
In the 2010-11 marketing year, the government had allowed exports of 2.6 million tonnes, out of which 1.5 million tonnes was permitted in three equal tranches.
Sugar production of India, the world's second largest producer and biggest consumer, is estimated at 24.6 million tonnes in 2011-12, according to food ministry's projection.
However, the industry has pegged the output at 26 million tonnes as against the domestic demand of 22 million tonne.
Besides sugar, the onion farmers in the major producing states of Maharashtra and Karnataka are demanding that minimum export price ( MEP) of onion should be cut from the current USD 475/tonne to boost exports and check falling domestic prices.
Pawar said that he has received demand for some sort of export assistance to boost onion shipments.
In September, the government had allowed export of wheat and non-basmati rice under the open general licence category in view of bumper production and crunch of storage space.
Anna Hazare hits out at Rahul Gandhi over Sarpanch meeting controversy
RALEGAN SIDDHI: Anna Hazare on Wednesday hit out at Rahul Gandhi for not meeting the Sarpanch from his native village--an issue that has been clouded in controversy--and said he approved his decision not to meet the Congress leader even if given an appointment.
Hazare, who is observing 'maun vrat'(vow of silence), said in a written statement that the decision by the Sarpanch and his team was taken out of "self respect" though he had nothing personal against anybody.
The sarpanch of Ralegaon Siddhi Jaisingh Rao Mapari, Hazare's personal secretary Suresh Pathare and Ramdas Ugale had come to New Delhi on Tuesday to meet Gandhi but no meeting took place as they reportedly had not sought an appointment.
The anti-corruption crusader said his aides and the Sarpanch have told him that they will not meet Rahul now.
"The Sarpanch won't meet Rahul even if he gives appointment," Hazare said in the statement.
Upset over not getting an appointment with Rahul, the team decided to return home from Delhi yesterday saying now even if they get an appointment, the village will decide whether to meet the Congress leader or not.
Congress P T Thomas, who had interacted with them and had reportedly fixed the much-talked about meeting, however apologised for the "communication gap" that led to the confusion.
Hazare said the Sarpanch got a call from Thomas asking them to come to Delhi on October 17 for a meeting with Rahul the next day.
"They sought my permission and I approved the visit," the Gandhian said.
"We have come here after being told that we have an appointment with Rahul Gandhi on October 18 at 9 am. We came here believing the words of the MP. Now the MP says there was a communication gap. We are returning home.
"We have said in our letter seeking appointment with Gandhi that we want to meet him as suggested by the MP. We were contacted by Thomas' office several times. Even Rahul Gandhi's office called the sarpanch several times," Pathare told reporters in New Delhi yesterday.
Mapari said the team has been humiliated and will not meet Rahul Gandhi.
Anti-corruption campaign can't be apolitical: Kejriwal
October 19, 2011
First Published: 21:58 IST(19/10/2011)
Last Updated: 22:00 IST(19/10/2011)
In an interview with a news channel, Team Anna member Arvind Kejriwal, said that their campaign against anti-corruption is not against any particular party but if the center fails to pass a law by the winter session the Gandhian will start another campaign in UP.
Replying to a
question on allegations that anti-graft movement is gradually turning into a political movement, Kejriwal said any anti-corruption campaign cannot be apolitical. However he added that they are not against any particular political party but all that they want is a strong Lokpal Bill. He asserted, "We are not anti-Congress."
"We want a strong Jan Lokpal Bill and for this we have to follow the path of peace and non-violence as some persons are trying to physically disturb the Team," Arvind Kejriwal on Wednesday told reporters here.
"The attack on me is by those who favour corruption and those who termed Anna Hazare as dictator and released a CD for character assassination of Prashant and Shanti Bhushan," the social activist said.
On Rajendra Singh and Rajgopal leaving the Team, Kejriwal said they were not attending the Anna Team meetings and were not aware of its activities.
"We will talk on the issue later," he said.
Team Anna did not have affiliation with any political party but it had asked the people not to vote for the Congress to pressurise it for bringing the Jan Lokpal Bill, Kejriwal said.
http://www.hindustantimes.com/Anti-corruption-campaign-can-t-be-apolitical-Kejriwal/Article1-759210.aspx
Setback for Jaya, SC rejects plea in DA case
Press Trust Of India
New Delhi, October 19, 2011
First Published: 15:51 IST(19/10/2011)
Last Updated: 22:07 IST(19/10/2011)
Tamil Nadu chief minister J Jayalalithaa was on Wednesday directed by the Supreme Court to appear in a Bangalore trial court on Thursday in a disproportionate assets case against her after Karnataka assured the apex court of her security.
Rejecting the AIADMK chief's
plea to defer her hearing on the ground that the Karnataka government had failed to provide sufficient security, a bench of justices Dalveer Bhandari and Dipak Misra asked Jayalalithaa to appear in the Bangalore court as scheduled.
The apex court's order came after Karnataka's chief secretary and its director general of police both filed affidavits assuring the apex court of foolproof security measures in tune with her Z plus status and NSG cover.
The trial of the disproportionate assets case, allegedly involving accumulation of assets worth over Rs 66 crore by her between 1991 and 1996, was shifted earlier to Bangalore by the apex court on her fears that she might be denied a fair trial in Tamil Nadu due to state's erstwhile DMK government, which she had accused of implicating her in false cases.
When senior counsel Mukul Rohtagi persisted with his apprehensions over her safety, the bench remarked, "You are public figure. How can you remain away from people?"
The bench also turned down Jayalalithaa's plea to at least shift the venue of her trial closer to the airport.
"What more do you want? The helipad has been prepared. Once the hearing is over, fly back home," the bench observed.
Jayalalithaa's counsel had earlier contended that venue of the trial court being 65 km away from the airport, her safety and security may be rendered more vulnerable.
The apex court, however, was assured by both Karnataka government's counsel Anita Shenoy and Additional Solicitor General P P Malhotra that adequate security measures have been taken to protect Jayalalithaa.
But despite their assurances, Rohtagi submitted that the chief minister was "under a threat perception" and hence sought deferrment of the hearing by at least a few days.
He, however, failed to convince the apex court which said, "Please be reasonable. We are also concerned about the security. After these affidavits and the Supreme Court's directions, there cannot be any fears."
The apex court reiterated that the state shall provide adequate security to Jayalalithaa from the time of her arrival till her departure to Tamil Nadu.
The Karnataka chief secretary and its police chief, earlier, in sworn affidavits faxed from Bangalore to the Supreme Court registry, explained the various steps taken by the state to provide security to Jayalalithaa right from her arrival till her departure.
The affidavits also said the state has no problem in ensuring security as it has been regularly ensuring the same to various national and international dignitaries visiting the state.
The affidavits also contradicted Jayalalithaa's claim that no prior intimation was provided to her either about the security arrangements or the venue for hearing.
The affidavits said Karnataka was in constant touch with the Tamil Nadu's State Intelligence Bureau since September 24 on the issue.
http://www.hindustantimes.com/Setback-for-Jaya--SC-rejects-plea-in-DA-case/Article1-759054.aspx
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Judge rejects her plea for change of venue
The Special Court trying disproportionate assets case against Tamil Nadu Chief Minister Jayalalithaa on Wednesday rejected her plea to change the temporary venue for recording of her statement.
Judge B.M. Mallijarjunaiah refused to modify the order of fixing the Gandhi Bhavan, near Central Prison at Parappana Agrahara, as the temporary venue of the Special Court for the purpose of recording her statement in view of security requirement. She had claimed that the venue was not suitable for her appearance as it was under renovation and no proper arrangement was made at the venue.
Gandhi Bhavan is a building, situated in front of the Central Prison, where trial of the some of the sensational criminal cases were held due to security reasons in the recent past.
The Special Court rejected her plea after the Supreme Court rejected her complaint that the Karnataka government has not made adequate security for her appearance and to defer the recording of statement to November last week.
This order has paved the way for recording of her statement under Section 313 of the Indian Penal Code in the case booked against her almost 14 years ago, in 1997. She is appearing before the Special Court in Bangalore for the first time since the case was transferred to Bangalore in 2003.
The allegation against her is that she acquired assets worth about Rs. 66 crore disproportionate to her known sources of income during her tenure as Chief Minister between 1991 and 1996. The trial of the case was held for some time in a Chennai court.
However, the Supreme Court in 2003 transferred the trial of case to Bangalore while holding that fair trial was not possible in Chennai while holding that the accused and the prosecution were in hand in glove after she assumed office of Chief Minister during her earlier term. The case was transferred following a petition by DMK leader K. Anbazhagan.
After trial commenced in Bangalore, the proceedings were held up for a few years following legal battle over the issue of clubbing the two disproportionate assets cases, which finally ended with prosecution withdrawing one of them. The biggest task in the case was translation of thousands of pages of documents to English from Tamil.
Recently, Jayalalithaa approached Supreme Court seeking exemption from personal appearance for recording of statement but her plea was rejected and the Supreme Court fixed October 20 for her appearance.
Keywords: disproportionate assets case
http://www.thehindu.com/news/national/article2552473.ece
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PTIArvind Kejriwal, one of the key members of Team Anna, at a public meeting organised as part of the anti-corruption campaign, in Lucknow on Tuesday. At right is Jitendra Pathak of Jalaun district, who hurled a chappal at Mr. Kejriwal and was overpowered.
'Team Anna will ensure defeat of Congress in U.P. Assembly poll if strong Jan Lokpal Bill is not passed in winter session'
A flutter was created at a rally organised by India Against Corruption here on Tuesday, when a sandal was thrown at the chief guest, Arvind Kejriwal, as he alighted from his car and moved towards the dais. The sandal-thrower, identified as Jitendra Pathak from Jalaun district, was overpowered by IAC activists. Police intervention saved the situation from deteriorating.
Pathak, aged 40, was taken by the police to a temple near the venue, Jhule Lal Park, on the banks of the Gomti and detained. The meeting had begun by then. Later, he was whisked away amidst tight security.
Even as IAC termed the incident an attempt to divert attention and derail the movement against corruption, 'Team Anna' warned the UPA government that if a strong Jan Lokpal Bill was not passed in the winter session of Parliament, it would ensure the defeat of the Congress in next year's Uttar Pradesh Assembly elections.
Mr. Kejriwal, a prominent member of Team Anna's core committee, said Anna Hazare himself would come to Uttar Pradesh and appeal to the people to ensure that the Congress met the same fate that befell it in the Hisar by-election.
Addressing the gathering, Mr. Kejriwal referred to the Prime Minister's letter to Mr. Hazare in which he assured the social activist that a strong Jan Lokpal Bill would be brought in the winter session of Parliament. It had been decided to wait till the winter session, he said. "However, if the UPA government fails to live up to its assurance, it will be ensured that not a single vote is cast in favour of the Congress in the U.P. Assembly polls," Mr. Kejriwal said.
Denying that the anti-corruption movement had assumed the form of an agitation against the Congress, Mr. Kejriwal said that since the Congress was in power at the Centre it alone could bring in a strong Jan Lokpal Bill. "If the Bill is passed, the protest would be withdrawn," the social activist added.
In a specific reference to Uttar Pradesh, Mr. Kejriwal said a strong Jan Lokpal Bill was needed to curb corruption on the part of Chief Minister Mayawati, Samajwadi Party leader Mulayam Singh and the Bharatiya Janata Party.
Keywords: Team Anna, Arvind Kejriwal, chappal attack
http://www.thehindu.com/news/national/article2549028.ece
NEW DELHI, October 19, 2011
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The HInduFinance Minister Pranab Mukharjee alongwith MoS for Finance Namo Narayan Meena during the inaugural session of the Economic Editor's Conference in New Delhi on Wednesday. Photo: R.V. Moorthy
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Social activist Anna Hazare along with his supporters during his fast over the Lokpal Bill, in New Delhi, on August 24. Photo : Rajeev Bhatt
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PTIWorkers shout slogans as they strike work at Maruti Suzuki's Manesar plant. File photo
Workers at the country's largest car-maker Maruti Suzuki India's Manesar plant continued their strike for the 13th day today after negotiations with the company management broke down yesterday.
Workers at Suzuki Powertrain India Ltd (SPIL) and Suzuki Motorcycle India Pvt Ltd (SMIPL) had also gone on strike from October 7 in support of their colleagues at Maruti Suzuki India (MSI) and are continuing their stir.
"The situation remains the same as yesterday. The strike is continuing, but we will continue partial production at the plant," a company spokesperson told PTI.
Meanwhile, shares of the company were trading 0.52 per cent up at Rs. 1,058 apiece in the morning on the BSE.
On Tuesday, talks between the management and striking workers at the Manesar plant of MSI, brokered by the Haryana government, broke down. Officials of the Haryana Labour Department held talks with workers of MSI as well as those of SPIL and their respective managements.
While the company alleged its workers were maintaining an adamant attitude, the workers denied taking a rigid stand and blamed the management for adopting pressure tactics to end the stir.
The company claimed to have rolled out 350 cars from the Manesar plant on Tuesday, the first time since October 7, when the labourers struck work. MSI's Gurgaon plant also manufactured 1,750 vehicles.
Keywords: Maruti workers strike, Manesar plant, Manesar strike
NEW DELHI, October 18, 2011
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Talks between the management and workers on strike at the Manesar plant of Maruti Suzuki India, that were brokered by the Haryana government, have broken down.
Officials of Haryana labour department held talks with workers of Maruti Suzuki India (MSI) and Suzuki Powertrain India Ltd (SPIL), as well as their managements during the day, but a solution to end the stir remained elusive.
"The local administration and the management made best efforts to resolve through dialogues with the striking workers. However, the workers maintained an adamant attitude, due to which the issues could not be resolved," a company spokesperson said.
Workers, however, denied taking a rigid stand and blamed the management for adopting pressure tactics to end the stir.
Shiv Kumar, the Secretary of the unrecognised Maruti Suzuki Employees Union (MSEU), alleged that the workers are being harassed by the management in collusion with the State labour department officials.
"Today we were called for talks at 10 am at Gurgaon while the timing for internal inquiry against us by the management was kept at 11:30 am at Manesar. We can't be at two places at the same time," Mr. Kumar said.
He said even the second round of talks for the day was scheduled at 6 pm while the inquiry was still on.
"We could not attend the second round of talks. So we requested for adjustment of the timings, but they have not listened to it" he said.
Keywords: Maruti workers strike, Manesar plant
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Amid volatile commodity prices and a sluggish global economy, Finance Minister Pranab Mukherjee on Wednesday said meeting the 4.6 per cent fiscal deficit target for FY'12 will be a "great challenge".
"With the crude prices remaining where they are, it will be a great challenge to maintain the fiscal deficit numbers at 4.6 per cent this year. However, we will make strenuous attempts to keep the fiscal deficit at around these numbers," he said while addressing the Economic Editors conference here.
Mr. Mukherjee said the government would be closely monitoring revenue and expenditure trends and take steps as deemed appropriate.
The government proposes to bring the fiscal deficit down to 4.6 per cent of the Gross Domestic Product (GDP) during 2011-12 from 4.7 per cent in the previous fiscal.
"The fiscal policy stance for 2011-12 remained broadly on the consolidation track, complementing the monetary policy stance," the Finance Minister said.
Government finances have come under stress due to lower than expected revenue realisation, mainly from disinvestment.
Although half of the fiscal is over, the government has only raised Rs 1,144 crore from a stake sale in Power Finance Corporation (PFC). The government had set an ambitious disinvestment target of Rs 40,000 crore for the current fiscal.
The Income Tax Department has already decided to raise the direct tax collection target for the current fiscal by Rs 53,000 crore to Rs 5.85 lakh crore.
Mr. Mukherjee further said, "There could be a potential upside in revenue collection in the current fiscal."
He said the government was able to bring down the fiscal deficit to 4.7 per cent in 2010-11 from the originally planned 5.5 per cent on account of inflows from the 3G auctions, but said a similar situation is not expected this year.
He said one of the largest fiscal corrections was achieved in the 2010-11 fiscal, when the fiscal deficit/GDP ratio declined to 4.7 per cent from a level of 6.4 per cent in 2009-10.
"The compression in fiscal deficit must be seen in the light of huge inflows last year on account of telecom spectrum auctions and which is not going to be repeated this year," Mr. Mukherjee said.
In order to meet its expenditure requirements in the second half of the fiscal, the government had last month decided to borrow Rs 52,800 crore more from the market, over-and-above the Rs 4.17 lakh crore budget plan for the fiscal.
According to government estimates, small savings during the first quarter (April—June) of the current fiscal declined by Rs 26,542 crore. They had increased by Rs 13,250 crore in the same period last year.
Keywords: fiscal deficit
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APIMF president Christine Lagarde speaks to the media during a press conference in Paris on Saturday.
The finance chiefs of the world's leading economies opened the door Saturday for the International Monetary Fund to play a bigger role in fighting the euro zone's escalating debt troubles.
The Group of 20 rich and developing nations asked the IMF to propose ways that it could help stop countries under severe market pressure from toppling into a full-blown crisis with potential global repercussions.
The move appeared aimed at Italy and Spain, the euro zone's third and fourth largest economies, which have seen their funding costs spike amid growing worries over the currency union's stability. The rest of Europe cannot afford to bail out Spain or Italy should they run out of money.
Until now, the IMF has funded about a third of the bailouts of Greece, Ireland and Portugal, but helping the euro zone to stem contagion beyond those countries would require a broader use of resources that would go far beyond the fund's traditional role of providing rescue loans to cash-strapped governments.
But while acknowledging that the IMF has a role to play in containing the continent's debt problems, G-20 ministers made clear Saturday that Europe must first come up with its own solutions.
"Of course, even though the world has a big stake in Europe doing this effectively, Europe itself has the strongest interest," U.S. Treasury Secretary Timothy Geithner told reporters after a two-day meeting of G-20 finance ministers and central bank governors in Paris.
"I think they've come to recognize that, if you under do it, it's going to be more expensive."
Euro zone ministers sketched out a plan to their counterparts on Saturday and have promised that it will restore confidence in Europe and its banks when they unveil it next weekend.
At their Oct. 23 summit in Brussels, European leaders are expected to sign off on a scheme to maximize the impact of their 440 billion ($600 billion) bailout fund, a plan to recapitalize banks across the continent to ensure they can withstand worsening market turmoil, and a second bailout for Greece.
Part of an effort to shore up shaky countries on the continent may include a bigger role for the IMF, too.
"What has been asked of us is instruments that are more flexible, more short term, that allow countries in good economic health but in difficulty to resist," the IMF's managing director Christine Lagarde said.
She said G-20 leaders would consider the new tools at their summit in Cannes, France, early next month.
The IMF's investigation of new instruments reflects the extent to which the euro zone's debt crisis has affected the rest of the global economy.
"We heard loud and clear that the emerging markets in particular were very concerned about the risk of contagion from advanced economies to emerging markets and to low-income countries," Ms. Lagarde said.
The G-20 also committed to making sure that the IMF has the resources it needs to stabilize the world economy, indicating that an increase in its funding was possible. But there is resistance to such a move.
Mr. Geithner, for instance, stressed that the IMF, with $390 billion on hand, didn't need any more funding, although he said the IMF should continue to play its important role in containing the turmoil.
"That is a very, very substantial amount of financial firepower," he said. After Europe unveils its plan, "if there's a case for more use of the IMF's existing resources, we'd be supportive of that."
In discussing the requested list of tools, Ms. Lagarde said the IMF's efforts would focus on "short-term liquidity instruments available to what we call the 'non-consenting' victims of the economic crisis."
She gave the example of precautionary credit lines the IMF offered to several countries after the collapse of U.S. investment bank Lehman Brothers in 2008, and said the new tools could go in a similar direction.
Precautionary credit lines are linked to fewer conditions than traditional IMF rescue loans that come only in return for radical economic reforms and painful budget cuts. That's why they would be aimed at countries that are fundamentally in decent health, but suffering from increased risk-adversity among investors.
Such flexible short-term loans could help Italy and Spain if they had to come up with billions of euros to recapitalize their banks, also reassuring private investors that they will get their money back.
Keywords: International Monetary Fund, IMF role, G20 Finance Ministers, euro zone, Christine Lagarde
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Seeking enhanced economic engagement with India, war-ravaged Afghanistan on Wednesday asked the Indian industrial houses to invest in sectors such as mining and manufacturing and construction activities.
Speaking at the CII organised Indian Global Summit on MSMEs 2011 here, visiting Afghanistan Trade and Industry Minister Anwar Ul Haq Ahady said there were huge opportunities for Indian small and medium enterprises (SMEs) in the South Asian country. "We are eager to attract Indian investments and form closer trade links with India. Afghanistan is a virgin market, you will make good money here," Mr. Ahady said.
He said that Indian SMEs could explore areas such as plastics, poultry, packaging, food processing and preserving agri-products. The bilateral trade between the two nations stood at $557.81 million in 2010-11. To enhance that, Mr. Ahady said trade between the two must be routed through Wagah border instead of Karachi, which is costly. "We hope that the Transit Agreement which we have signed with Pakistan will enable India to export goods through Wagah," he added.
He said Afghanistan was still a land of opportunity for entrepreneurs; even taking into account the high level of risk, return on investment was much greater there than in most other parts of the world. "Afghanistan has had the misfortune of several decades of war, leading to the displacement of numerous citizens, disruption to studies and an erosion of trade skills," he said.
India was importing 75 tonnes of Afghan apples a week at the peak of the season last year. Mr. Ahady acknowledged India's role in the economic development of his country. The Indian Government had funded the construction of a hydro-electric plant in Herat province which would make a significant contribution to economic growth in western Afghanistan, he said.
Despite the war-related risks, the country has won endorsement from the World Bank when it comes to setting up new businesses. "We rank 25 out of 183 countries surveyed by the World Bank for establishing a business," he said.
Keywords: India-Afghanistan business ties, bilateral trade, India-Afghanistan relations
http://www.thehindu.com/business/Economy/article2552119.ece
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PTISHOW OF SOLIDARITY: Prime Minister Manmohan Singh, President of South Africa Jacob Zuma (centre) and his Brazilian counterpart Dilma Rousseff join hands during the 5th IBSA Summit at presidential guest house in Pretoria on Tuesday.
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File Photo: APPakistan's Army Chief Gen. Ashfaq Kayani
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The HinduPOSING A CHALLENGE: Finance Minister Pranab Mukherjee (right) and MoS for Finance Namo Narayan Meena at the inaugural session of the Economic Editor's Conference in New Delhi on Wednesday. Photo: R.V. Moorthy
Without assigning any specific numbers, Finance Minister Pranab Mukherjee on Wednesday indicated that even as the country's long-term economic indicators remain robust, the targets set for overall growth and fiscal deficit for the current fiscal were unlikely to be met in the wake of the global financial turbulence.
In a candid overview of the state of the economy at the 'Economic Editors' Conference' here, Mr. Mukherjee admitted that the ongoing global turmoil and consequent slowdown would impact the country's growth, thwart measures to control inflation and thereby pose a challenge to adhering to the fiscal deficit target.
"…dark clouds have gathered in the global skies once again, and these are casting a shadow on us…Let me not hide the fact that I have been disappointed by our growth performance over the last few months. It is evident that India's growth rate in 2011-12 will be less than what we were expecting in February when I presented the Budget. In the last few months, a number of factors, both international and domestic have impacted our economy," he said.
Mr. Mukherjee attributed the domestic slowdown and rising inflation to the global problems, especially the rising crude oil and commodity prices in international markets which cast a huge economic burden and consequent near double-digit inflation which called for monetary tightening and rise in interest rates lead to a fall in fresh investments.
Most observers are expecting India's growth to go down to below 8 %. This is disappointing but at the same time we must not lose perspective of the global situation. There is slowdown all over the world…Even ten years ago, the news that India would grow by 8 per cent would be reason for celebration," he said while noting that he would put a number to the fiscal's growth in the mid-year review to be placed in Parliament in December. Mr. Mukherjee said that while WPI based inflation had remained sticky at around 9 per cent during the first half this fiscal owing to a variety of reasons, he hoped that it would ease to about seven per cent by the end of March next year. Despite the monetary measures, while headline inflation has remained stubbornly close to the double-digit mark, the tight monetary policy followed by the RBI has also impacted growth during the year, he said. The source of inflation, he said, has since switched to non-food items owing to imported global commodity inflation — in particular, crude oil.
As for the measures taken by the government towards fiscal consolidation, Mr. Mukherjee stressed that the fiscal policy stance for 2011-12 remained broadly on track and complemented the monetary policy stance. Refuting the general perception about policy paralysis, Mr. Mukherjee listed a slew of reforms measures in the pipeline but regretted that the government could go ahead fast on them owing to the lack of numbers in Parliament.
"It is possible if we collectively do it. Therefore I don't blame anybody. I could have assured you here and now that all the legislations will be passed in the Winter Session but today unfortunately I cannot do so because I am 206 in Lok Sabha and 76 in Rajya Sabha," he said during the interaction.
Appealing for support from all parties, he said: "It is not a help to the ruling party but to help India and the Indian industry to take advantage of the legislative measures that are required to expedite the reforms and for that Parliament must function.''
In particular, Mr. Mukherjee referred to the Direct Taxes Code and legislations on the Goods and Services Tax, insurance and pension reforms bill were before the Standing Committee which required support from the entire opposition.
Keywords: RBI monetary policy, price rise, inflation, inflation control, fiscal policy
http://www.thehindu.com/business/Economy/article2551321.ece
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Former Finance Secretary Ashok Chawla will be sworn in on Thursday as the new Chairman of the competition watchdog, CCI, filling up the key post that has been lying vacant for over four months.
Sources said the Ministry of Corporate Affairs, the administrative ministry of CCI, will hold the swearing-in as per the requirement of the Competition Act 2002.
A day after, he will be taking charge as the chairman, they added.
When contacted, Mr. Chawla confirmed the development.
Last week, the Appointments Committee of Cabinet (ACC) approved the appointment of Mr. Chawla as head of the anti-trust body — Competition Commission of India (CCI).
The other contenders for the post were Anurag Goel, a member in the Commission, and Vijay Sharma, former secretary in the environment and forests ministry.
The appointment assumes significance as after June 1, all high-value merger and acquisition (M&A) deals have come under the CCI purview.
A Gujarat-cadre IAS bureaucrat of 1973 batch, Mr. Chawla retired as Finance Secretary on January 31. He was heading a committee on allocation, pricing and utilisation of natural resources till recently.
The commission was established in 2003 to replace the erstwhile Monopolies and Restrictive Trade Practices Commission. Dhanendra Kumar was appointed its first Chairman in February 2009. Mr. Kumar's term ended on June 5, this year.
The commission draws its power from the Competition Act, 2002, to keep check on unfair practices including M&As that abuse dominant position by market players.
Keywords: CCI, M&A, competition watchdog, Ashok Chawla
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MUMBAI, OCT. 19:
Barring meaningful progress in power sector reforms in the next 18 months, about Rs 56,000 crore lent to the power producers and state distribution utilities would be under potential risk, rating agency Crisil said.
The total exposure to the power sector as of March is Rs 4.8 lakh crore of which 60 per cent or Rs 3 lakh crore is to the state electricity boards and distribution companies. Lenders include banks, Power Finance Corporation and Rural Electrification Corporation.
Addressing the media, Ms Roopa Kudva, Managing Director, Crisil, said, "There were two aspects to the reforms. First, an improvement in systemic efficiency is required through reduction in distribution losses, which remain upwards of 25 per cent. Second, a broad-based political consensus is needed for implementing tariff increases."
Crisil estimates that tariffs need to be hiked 50 per cent for state utilities to breakeven and eliminate subsidy requirements. Equally important for lenders' confidence is the need for timely availability of dependable information on utilities' performance, besides receipt of subsidy by the distribution companies of the state governments.
Mr Pawan Agrawal, Director, Crisil Ratings, said the extent of effectiveness of reforms in the sector remains a key issue to be monitored over the next 18 months. Nevertheless, the strong credit risk profiles of specialised lenders such as PFC and REC continue to be underpinned by the expectations of support from the Central Government.
Keywords: Power sector reforms
http://www.thehindubusinessline.com/industry-and-economy/article2552155.ece
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Business LineThe Finance Minister, Mr Pranab Mukherjee, with the Minister of State for Finance, Mr Namo Narain Meena, and the Finance Secretary, Mr R.S. Gujral, during the inaugural session of the Economic Editor's Conference in the Capital on Wednesday. – Kamal Narang
NEW DELHI, OCT. 19:
In what is seen as a change of stance, the Finance Ministry today said that it was not looking at a rights issue for capital infusion into State Bank of India (SBI), the country's largest commercial bank.
Ruling out a rights issue for SBI this fiscal, the Financial Services Secretary, Mr D.K. Mittal, said that the Centre may inject capital into SBI through a preferential allotment route. The Centre holds 59.4 per cent stake in SBI and is therefore in a position to influence the capital raising route of SBI.
A preferential allotment to the Government would imply that SBI would not be able to raise capital from other shareholders. It would also mean that the Government is ready to infuse more funds into SBI than what would have been the case in a rights issue.
So far the Finance Ministry and the SBI senior management were mainly in discussions for a rights offering. SBI had earlier suggested a rights issue that would help the bank mobilise about Rs 20,000 crore.
The actual amount of capital infusion into SBI and the instrument that would be used by the Centre would be finalised by November 15, Mr Mittal told reporters on the sidelines of Economic Editors conference here on Wednesday.
Last week, Mr Mittal said that the Government would look to infuse Rs 4,500-6,000 crore in SBI by March 2012.
The recent move of Moody's to downgrade SBI by a notch, owing to the lower capital adequacy ratio and deteriorating asset quality, has negatively impacted SBI's stock performance. The Tier-I capital adequacy ratio of SBI had touched 7.6 per cent as of end June, lower than the regulatory requirement of 8 per cent.
SBI had last come out with a rights issue in 2008, raising over Rs 16,000 crore. In the previous rights issue, the Government had made its contribution through bonds instead of cash. The Centre is now looking to infuse capital into SBI through cash and not through marketable Government bonds.
The Centre has in recent years opted against "below-the-line" expenditure and gone in for cash payments even for certain big ticket items like compensation to oil marketing companies.
The Government had in this year's Budget allocated Rs 6,000 crore for capital infusion in banks. The total capital requirement from the Centre for about six State-owned banks including SBI is estimated at Rs 20,000 crore this fiscal.
SBI's shares closed at Rs 1,909.25 on the National Stock Exchange today, up Rs 42.70 over the previous day's close of Rs 1,866.55.
Pranab assures support for public sector banks
The Finance Minister, Mr Pranab Mukherjee, today asserted that adequate resources would be provided for recapitalisation of public sector banks. He also said that the Government would go in for more allocation of funds through supplementary demand for grants to meet the resource requirements, if any.
"Adequate capital will be injected in State Bank of India and all public sector banks to maintain Tier I capital of 8 per cent," Mr Mukherjee said at the Economic Editors' conference in the Capital today.
The Government is in the process of drawing a roadmap for capital requirements of public sector banks over the next 10 years. A committee set up by the Department of Financial Services is expected to submit a report by end October.
This committee is also looking into aspects like Basel 3 capital standards, Mr D.K. Mittal, Financial Services Secretary, said.
The Finance Minister also maintained that the recent spate of scams have not affected the investment climate in India. The investment climate is down all over the world, he said.
krsrivats@thehindu.co.in
Keywords: SBI rights issue, SBI preferential allotment, SBI capital infusion
http://www.thehindubusinessline.com/industry-and-economy/banking/article2551169.ece?homepage=true
The Government needs to be rapped for not making up its mind on how SBI should achieve capital adequacy norms.
For all the righteous indignation over the actions of global rating agencies, the Government cannot absolve itself of blame in the recent Moody's downgrade of the State Bank of India's (SBI) creditworthiness from 'C-' to 'D+'. For over a year now, the country's No. 1 commercial bank has been wanting to raise about Rs 20,000 crore through a rights issue. This money has been sought not just for expanding operations, but also to beef up its capital base. SBI's tier-I capital — the primary cushion for depositors' money — had fallen by two percentage points in the space of three months from December 2010 to March 2011, and further to 7.6 per cent by June. The fact that this was below the regulatory requirement of such capital being at least eight per cent of a bank's assets, suitably adjusted for riskiness, was known. The Government — which owns 59.4 per cent of SBI and considers the bank as its flagship operating vehicle — was duty-bound to contribute its due share of the money necessary to meet the required capital adequacy norms. It has to be rapped for not doing so, especially in a deteriorating external environment.
To that extent, Moody's announcement lowering SBI's bank financial strength rating by a notch should be seen as a timely reprimand. It is a reflection more on the Government's tardy decision-making process than on SBI's financials per se. It was, indeed, a trifle amusing to see the Finance Ministry asking the SBI for an analysis of the downgrade — much in the manner of an offender demanding a first information report from the victim. The rating downgrade may not actually hurt SBI much. Even if overseas fund-raising costs go up, it is unlikely to cripple the bank, as borrowings outside India account for hardly 5.5 per cent of its balance sheet. And even within that, the ratings would apply to a very small portion of what constitutes so-called perpetual debt (currently around $625 million, on which the coupon is fixed; meaning, the problem would arise only in fresh rounds of financing). If at all fund-raising proves a shade costlier, it would be more due to the general tightness in global financial markets than the rating downgrade itself. To illustrate, SBI, in 2007, was able to mop up 10-year money at just 70 basis points (bps) above the rate at which banks lend to one another (LIBOR). But in 2010, it was forced to pay LIBOR plus 200 bps for a five-year paper. This was in spite of its rating remaining the same over these two periods. And today, nobody in the country can borrow at less than LIBOR plus 300 bps.
The SBI fiasco is yet another demonstration of the drift in policy-making evident for some time now. The Government must make up its mind fast. Either it keeps its side of the bargain by subscribing to a rights issue or allows its stake in SBI to fall to 51 per cent or even less. Will the Finance Minister get cracking, please?
(This article was published on October 6, 2011)
Keywords: Moody's. downgrade, SBI, global rating, Govt. policy
http://www.thehindubusinessline.com/opinion/editorial/article2515350.ece
Greek protesters clash with police (02:18)
By Yannis Behrakis and Renee Maltezou
ATHENS | Wed Oct 19, 2011 1:43pm EDT
(Reuters) - Greek police clashed with black-clad demonstrators outside parliament on Wednesday during a mass rally called to protest against a bitterly resented new round of belt-tightening needed to avert default.
The view of the ancient Acropolis was obscured by smoke from burning piles of rubbish and a bank building was evacuated after being set on fire by petrol bombs as a strike called by Greece's two main unions degenerated into violence.
Much of the country was shut down by the 48-hour general strike, the largest since the outbreak of the crisis two years ago with government departments, offices and shops closed and at least 100,000 people taking to the streets of Athens.
"It's one of the biggest demonstrations in recent years. People showed they were determined to protest against these policies," said Mary Bossis, international security professor at the University of Piraeus.
"We are not done with these protests. We've reached a point where people don't feel the government represents them any more, they want a complete change," she said.
Prime Minister George Papandreou, trailing badly in opinion polls, has appealed for support from Greeks before parliament votes on the latest measures which include tax rises, wage cuts and public sector layoffs.
But the mood was furious among demonstrators, fed up after repeated doses of austerity and increasingly hostile to both their own political leaders and international lenders demanding ever tougher measures to cut Greece's towering public debt.
"Who are they trying to fool? They won't save us. With these measures the poor become poorer and the rich richer. Well I say: 'No, thank you. I don't want your rescue'," said 50-year-old public sector worker Akis Papadopoulos.
The boom of tear gas canisters fired by police rang out, and black clouds of smoke from petrol bombs hung over Syntagma Square, scene of violent clashes between police and demonstrators at anti-austerity protests in June.
The latest outbreak of violence overshadowed the start of the 48-hour strike. A huge crowd gathered in front of parliament but after hours of confrontation with a hardcore group of mainly younger demonstrators, police cleared the square.
Groups of hooded youths continued to clash with police on side streets.
At least seven people were taken to hospital and there were several other injuries reported, mainly breathing problems, minor burns and head wounds. There were also serious clashes on major avenues away from the main rally.
Police said clashes also marred demonstrations on the island of Crete, where more than 20,000 gathered to protest the bill, and the cities of Thessaloniki, Volos, Lamia and Patras.
In Athens, where more than 7,000 police were dispatched to deal with possible trouble, many shops boarded up their windows but at least three banks and three hotels were damaged.
RECESSION
Wednesday's action came as European Union leaders were scrambling to settle a new rescue package in time for a summit on Sunday that hopes to agree measures to protect the region's financial system from a potential Greek debt default.
"We are in an agonizing but necessary struggle to avoid the final and harshest point of the crisis," Finance Minister Evangelos Venizelos told parliament. "From now and until Sunday were are fighting the battle of all battles."
Trapped in the third year of deep recession and strangled by a public debt amounting to 162 percent of gross domestic product which few now believe can be paid back, Greece has sunk ever deeper into crisis.
Papandreou's narrow four-seat majority is expected to be enough to ensure the austerity bill goes through, especially given possible support from a smaller opposition group.
But his ruling Socialist party's discipline is increasingly strained with one deputy resigning his seat in protest and at least two others threatening to vote against part of the package dealing with collective wage bargaining agreements.
"It is obvious that society has reached the limits of what it can bear," said PASOK deputy Elpida Tsouri.
"DEBT MONSTER"
After repeated rounds of austerity measures, which have hit middle class Greeks hard, protesters said new cuts would only drive the stricken economy deeper into the ground. Unions urged deputies not to pass the law.
"If they have any humanity, decency, sense of pride and Greek soul left, they must reject the bill," Nikos Kioutsoukis, a top official in private sector union GSEE which is leading the strike with its public sector counterpart ADEDY.
Speaking in parliament on Wednesday, Dimitris Reppas, minister for Administrative Reform, reflected the increasing sense of isolation among many in the ruling party, complaining he felt as though he had been thrown to the lions.
"In government, we often feel like ... we are in the Colosseum, fighting the debt monster while everybody else is just sitting in the stands, watching and commenting," he said.
A first vote takes place late on Wednesday on the overall bill, which mixes deep cuts to public sector pay and pensions, tax hikes, a suspension of sectoral pay accords and an end to the constitutional taboo against laying off civil servants.
A second vote on specific articles is expected some time on Thursday and only after that will the bill become law.
(Additional reporting by Lefteris Papadimas, Harry Papachristou and John Kolesidis; Writing byJames Mackenzie and Dina Kyriakidou; Editing by Jon Boyle)
http://www.reuters.com/article/2011/10/19/us-greece-idUSTRE79H1FI20111019
'I understand why they are angry,' Christie says about the protesters. | AP PhotoClose
By TIM MAK | 10/19/11 6:26 AM EDT Updated: 10/19/11 8:25 AM EDT
New Jersey Gov. Chris Christie had some kind words for the Occupy Wall Street demonstrators at a town hall recently, saying, "I understand why they are angry."
In remarks that sounded much like President Barack Obama, Christie drew a parallel between the Occupy Wall Street protesters and the Tea Party movement, a YouTube video released by the governor's office on Tuesday shows.
Continue Reading
Although Christie did say that the Occupy Wall Street movement's solutions were "probably 180 degrees different" than those of the Tea Party, he added, "I understand why they are angry. Because you look at what's happening down in Washington, D.C., and it should disgust all of us."
Christie, who recently said he would not run for president and endorsed Mitt Romney, said government just isn't working for people anymore, and that both paralysis and overreach is contributing to mass dissatisfaction.
"I understand why the Occupy Wall Street people have sprung up, the same way I understand why - two years ago - the Tea Party people sprung up. Because they are frustrated with what government is doing - and not doing - on their behalf," he said.
Obama expressed a similar analysis in his first remarks about the Occupy Wall Street movement at a presidential press conference two weeks ago. Then, he blamed the protests on "broad-based frustration about how our financial system works."
His comments comparing the OWS protests and the Tea Party are a surprising response coming from Christie, a governor far more known for aggressive responses to the left than for sympathetic comments.
Christie did, however, show a flash of that frank, aggressive side later in the video, criticizing Obama and Congress for creating a situation of distress and frustration in the country whereby the Tea Party and Occupy Wall Street movements have an incentive to spring up.
"You have a president who is unwilling to drag people into the same room and bang heads and enforce solutions, you have a Congress of both parties who won't talk to each other, won't have a civil word for each other to get anything done. Yet at the same time we have people out in the country who are suffering, and they are playing games in Washington, D.C.," Christie said.
Wednesday morning, another conservative Republican, Sen. Tom Coburn (R-Okla.) dismissed the parallels between the two movements. "I see a big difference in the two groups," he said, calling the OWS protests an "organized collection of a group of people who are frustrated" and contrasting that to what he suggested was the more grassroots, "ground swell" of the Tea Party.
"I know a lot of people think the tea partiers are nuts. I find them very enjoyable because they actually know what the Constitution says and would like to see the government back within it," said Coburn.
Read more: http://www.politico.com/news/stories/1011/66342.html#ixzz1bFg2zePj
Posted at 10:40 AM ET, 10/19/2011
The politically inclined actor has been discussing Occupy Wall Street with his Twitter users, sharing what he believes should be the movement's mission: "Campaign Finance Reform should b the goal of#OccupyWallStreet. Wealth is not the issue. It's using wealth to buy the govt, that's the issue."
On Tuesday, he tweeted, "I wanna go to Zuccotti Park..." And an hour later, he did: "On my way to OWS."
After spending "a too brief two hours" at the park, he thanked two demonstrators for his "OWS tutorial." His opinion about the movement was unchanged: "OWS needs to coalesce around some legislative policy. The 'occupy' strategy may be an effective one. But what can each entity agree on?"
To the Twitter hater who claimed Baldwin was behaving hypocritically because he stars in credit card commercials, he replied, "I donated all of my fee from Capital One 2 arts charities. They have been gr8 partners in my support of the arts."
He's now returned to sending non-political tweets concerning viewing fall foliage via trains.
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Categories: Celebrities | Tags: Occupy Wall Street
http://www.washingtonpost.com/blogs/celebritology/post/alec-baldwin-makes-brief-visit-to-occupy-wall-street-camp/2011/10/19/gIQAGwoZxL_blog.html
You can't turn on a TV or pick up a newspaper without seeing a mention of the Occupy Wall Street protests that are being held across the country. Yet as often as the protests are mentioned, there is surprisingly little information about who these ...
By WSJ Staff Occupy Wall Street participants walk on a protest march on their way to stage a demonstration on Times Square in New York, October 15, 2011. The Occupy Wall Street movement seeks to speak for the bottom 99% of the population by income, ...
LAS VEGAS -- My accidental nemesis (just for this week, I think) Dana Loesch played the ol' guilt-by-association game with Occupy Wall Street in CNN's frothy post-debate coverage. They have the blessing of Nancy Pelosi. ...
Alec Baldwin was the latest actor to visit the throngs when he put in an appearance shortly after midnight Wednesday around midnight. The Zuccotti Park camp has attracted a feast of well-known names in the past month, ...
Americans blame the federal government more than they blame Wall Street for the nation's current economic distress, according to a new poll from Gallup. In fact, forced to declare j'accuse to just one culprit, twice as many chose...
For the current election cycle, "jobs" is the new black. It's the buzzword that transcends the left and the right. From the parties of Occupy Wall Street to the tea parties of last year, and from the Republican Party to the Democratic party ...
Alec Baldwin speaks at People For The American Way Foundation's 30th Anniversary Celebration on Oct. 6, 2011, in New York. (CBS) Alec Baldwin is the latest celebrity to spend time with protesters at Occupy Wall Street. The actor tweeted on Tuesday ...
A longtime political commentator and potential candidate himself, Alec Baldwin paid a visit to Occupy Wall Street on Tuesday night. The "30 Rock" star and newly minted podcaster, Baldwin has, during the protesters' occupation of Wall Street, ...
Alec Baldwin may not be running for mayor of New York City (yet), but he proved to be a true man of the people to those involved with the Occupy Wall Street movement. Last night, the 30 Rock star visited Zuccotti Park in downtown ...
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In the wake of successive attacks on Team Anna members, the Centre has asked the Maharashtra government to ensure proper security of Anna Hazare, who is currently observing 'vow of silence'.
Irom Sharmila's supporters attacked in Delhi!
Protests in the West does not mean market economy is bad: Montek
Indian Holocaust My Father`s Life and Time - SEVEN HUNDRED Forty FIVE
Palash Biswas
http://indianholocaustmyfatherslifeandtime.blogspot.com/
http://basantipurtimes.blogspot.com/
www.indianliberationnews.com
A group of unidentified people in Delhi Wednesday attacked the supporters of Manipuri activist Irom Sharmila Chanu, who is on hunger strike for repeal of the Armed Forces (Special Powers) Act (AFSPA) in the north-eastern state.
The incident took place near Kingsway Camp area of north Delhi at around 2:30 pm.
People from Save Sharmila Solidarity Campaign (SSSC), who are campaigning nationwide in Sharmila's support, were on a tour when they were attacked by a group that raised slogans of "Bharat Mata ki jai" and "Vande Mataram".
"We were taking out a caravan when some people came shouting slogans. They asked us to stop, and when we refused, they manhandled us and splashed black ink on our clothes," said Faisal Khan, coordinator of the Save Sharmila Jan Caravan.
He added that even after police was informed, no action was taken.
"The group first raised slogans against us. In Gandhian style, we started singing Gandhian songs; irked by this, the group attacked our people," said Khan.
As a part of the campaign, SSSC has organized a Srinagar to Imphal - Save Sharmila Jan Caravan covering 4,500 km across 10 states. The Caravan that started on Oct 16 from Srinagar reached Delhi Wednesday.
The AFSPA, in force in the northeast and Jammu and Kashmir, gives the armed forces legal immunity for their actions. Sharmila has been on fast for the last almost 11 years for repeal of the act.
A struggle for rights
Oct 17, 2011
The workers' struggle at the Maruti Suzuki plant in Manesar that started with a legitimate demand of the recognition of a new union and other rights of workers calls for greater intervention by the political elite in protecting the rights of the labour force of the country.Related:Strike at Maruti plant enters 13th day
Related:Negotiations to end Maruti strike break down
Image: 1 of 10
 * |
Striking workers of Maruti Suzuki raise slogans from inside the car factory compound as they attend a public meeting conducted outside the factory in Manesar, on Thursday, Oct. 13, 2011. Photo: AP
Protests in the West does not mean market economy is bad: Montek
OUR BUREAUSHARE · PRINT · T+
Dr Montek Singh Ahluwalia (right), Deputy Chairman, Planning Commission, and Mr Mani Sankar Aiyar, Rajya Sabha MP, arriving to attend the V. Sankar Aiyar Memorial Lecture in Chennai on Wednesday. — Bijoy Ghosh
CHENNAI, OCT. 19:
The protests in the developed world against greedy corporates does not mean that the market economy is bad, says Dr Montek Singh Ahluwalia, Deputy Chairman, Planning Commission.
Delivering the V. Sankar Aiyar memorial address at the Institute of Chartered Accountants of India here, Dr Ahluwalia said it would be a "great mistake" if India concluded that the market economy is a failure.
"We should avoid the temptation of thinking that because there is a loss of faith in the market economy in the industrialised countries, we should also change our minds (about market economy)," he said.
On the contrary, the reality is that the resort to market economy has made developing countries more competitive as a result of which they are able to penetrate the markets of the developed world. This, in turn, has resulted in loss of jobs in the developed world, leading to New York-like protests, Dr Ahluwalia said.
Dr Ahluwalia's address was preceded by the introductory remarks of Mr Mani Shankar Aiyar, Member of the Rajya Sabha, in the memory of whose father Dr Ahluwalia's speech was organised. In his introduction, Mr Aiyar lambasted the excessive focus on growth to the complete exclusion of attention on whether or not the benefits of growth reached the poor.
Responding to that averment, Dr Ahluwalia said while it was true that a lot needed to be done in reaching the benefits of growth to the poor, the situation was not as bad as Mr Aiyar made it out to be. He noted that while the growth figures emerge quarter after quarter, statistics relating to social development take years to come. The figures that are available today could be those that pertain to 2004.
"I feel a lot more is happening than the critics are allowing for," he said.
Keywords: Market Economy
Govt may go for French auction method for stake sale in select PSUs
SHISHIR SINHASHARE · PRINT · T+
NEW DELHI, OCT. 19:
The Government is considering French auction method for disinvestment in select public sector undertakings. On the other hand, decision on the timing of ONGC follow-on public offer is expected to be taken soon. Also, the Government is confident of achieving Rs 40,000 crore target for the current year.
Keywords: French auction method, disinvestment in select PSUs
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Rising wages feeding inflation, says Kaushik Basu
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NEW DELHI: Chief economic advisor Kaushik Basuhas said that part of the blame for the sustained highinflation in India must go to rising wages.
Basu believes that labour cost differences between the developed and labour-surplus countries such as India that have been in existence for a long time have now started narrowing which is feeding into higher prices within the country.
"The reason for inflationary pressures in India is that our labour costs are catching up with the rest of the world. The biggest inflation was seen in labour-intensive sectors and wages in India have been inflating faster than goods and services," he said at a panel discussion on sustaining growth and inclusiveness in Asian economies.
India has been reeling under high inflation for more than two years now. Headline wholesale price inflation in September was 9.72%, well above the Reserve Bank of India's comfort rage of 4%-5%. Basu insisted that cooperation in monetary policy and poverty reduction programmes must be encouraged between Asian nations.
Many economists have claimed that food subsidies have leaked out to neighbouring countries like Bangladesh due to the absence of regional cooperation, which creates arbitrage opportunities. Arvind Panagaryia, professor, Columbia University said: "Labour reforms, amongst other things, are necessary to encourage labour-intensive manufacturing activities which can generate employment and improve inclusiveness". Shankar Acharya, honorary professor ICRIER- a think tank, also seconded the importance of labour reforms. "Employment in the organised sector has remained stagnant for years due to stringent labour laws. Encouraging employment in the organised sector would certainly be a move towards better inclusiveness," he said.
In 2008, only 6% of the work force was employed in the organised sector as per the annual Economic Survey of India.
http://economictimes.indiatimes.com/news/economy/finance/rising-wages-feeding-inflation-says-kaushik-basu/articleshow/10396192.cms
Reserve Bank is likely to come out with guidelines on allowing new private banks by November end, Financial Services Secretary D K Mittal said today.
In the wake of successive attacks on Team Anna members, the Centre has asked the Maharashtra government to ensure proper security of Anna Hazare, who is currently observing 'vow of silence'.
The Reserve Bank today said Indians who have non-resident accounts in the country can now hold them in any currency which is fully convertible.
The move is likely to help NRIs/Persons of India Origin as it will give them more options in the holding of accounts, and lessen the risk from fluctuations in major currencies.
Earlier, FCNR(B) account holders were allowed to hold accounts in only certain currencies such as the Pound Sterling, US dollar, Japanese yen, euro, Canadian dollar and Australian dollar.
"...it has been decided that Authorised Dealer banks in India may be permitted to accept Foreign Currency (Non- Resident) Account (Banks) deposits in any permitted currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency which is freely convertible," RBI said in a notification.
"The Committee to Review the Facilities for Individuals under Foriegn Exchange Management Act, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency," RBI said.
RBI also said that any citizen who was earlier residing in a foreign country can own or transfer property or other assets in that nation if it was acquired during the time of his residence there.
"... a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India," RBI said.
In a clarification issued by it regarding repatriation of income and sale proceeds of assets held abroad by NRIs who have returned to India permanently, RBI said an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme.
The apex bank said that clarifications are as per relevant sections of the Foreign Exchange Management Act of 1999.
"RBI is actively working on the guidelines...and is likely to come out with the final licencing norms by November," he told reporters on the sidelines of theEconomic Editors conference here.
The RBI had in August released the draft guidelines on allowing industrial houses to promote banks.
As per the draft norms, private sector entities or groups owned and controlled by Indian promoters, with diversified ownership, sound credentials and integrity, and having successful track record of at least 10 years, would be eligible to promote banks.
Earlier this week some Members of Parliament (MPs) had expressed reservations at a meeting of Standing Committee over the RBI's proposal to grant banking licences to industrial houses arguing that it would not promote financial inclusion.
The draft norms on bank licences have pegged the minimum required capital for promoting bank at Rs 500 crore and restrict foreign shareholding at 49 per cent for the first five years.
On implementation of the Shyamala Gopinath committee report on small savings scheme, Economic Affairs Secretary R Gopalan said,"final decision will be taken shortly."
The Committee had suggested that the returns on small savings scheme be aligned the market rates and post office savings scheme interest rate be raised to 4 per cent.
According to government estimates, small savings during the first quarter (April-June) of the current fiscal declined by Rs 26,542 crore. They had increased by Rs 13,250 crore in the same period last year.
In a U-turn of sorts, the Industry Ministry has opined that an Indian promoter can issue equity to foreign investor with an inbuilt option to treat it like debt and withdraw at a pre-determined date.
The Department of Industrial Policy and Promotion (DIPP) made changes in FDI rules on September 30, stating clearly that if a non-resident is given a choice to convert the equity into a debt,the rules of external commercial borrowings must be followed.
But, after sensing that the move has not gone down well with the overseas investors and the Indian promoters seeking foreign funds, the DIPP has changed its views, as evident from its letter to the Finance Ministry.
The DIPP wants the Finance Ministry to advise the Reserve Bank of India (RBI) not to notify the September 30 FDI rule in this regard.
DIPP said it was at the instance of the RBI that the stringent provision for overseas equity was included in the foreign direct investment policy.
However, "We have received feedback from a number of stakeholders ...stating it could have negative fallout, particularly for the SME (small and medium enterprises) sector.." it said.
The changes, if brought into force by RBI, would have affected raising of resources stake sale to the private equity (PE) funds, which buy into the small Indian companies expecting high yields after they grow and get listed. But, the PE players want to retain an exit route, known in the market parlance as the "put option".
But the trend did not go well with the RBI which felt it would add to the country's external debt.
In the wake of apprehensions that the equity inflows could be hit, the DIPP said that the issue needs to be "revisited urgently. In the circumstances, it is requested that RBI may kindly be advised not to notify the provision for the present and maintain status quo until we arrive at a suitable formulation after consultation".
The Reserve Bank of India (RBI) is widely expected to deliver one final interest rate increase at its policy review next week and then pause until the end of the fiscal year in March, a Reuters poll of 30 economists showed.
Of those polled, 17 expect the Reserve Bank of India to increase the key lending rate by 25 basis points on Oct. 25, while 13 expect it to hold the rate.
The median forecast is roughly in line with estimates in a smaller poll conducted immediately after the RBI raised rates in mid-September and indicated more was to follow. Since then, global and domestic indicators have pointed to weakening economic conditions.
A rate increase in India would be the 13th in 19 months and would take the repo rate to 8.50 percent.
India's inflation barely budged in September at 9.7 percent, staying above 9 percent for the 10th straight month, driven by higher fuel and power prices.
"While clearly there are signs that globally the situation is extremely uncertain and there is some amount of headwind on domestic growth, the RBI has been very forthright in maintaining that it wants to control inflation," said Sujan Hajra, chief economist atAnand Rathi Securities.
"From that perspective, inflation control will remain RBI's key objective."
While other central banks are easing monetary policy or considering doing so, the RBI has been among most aggressive globally and is reluctant to press the pause button yet amid sticky inflation. For a take a look on other central banks see:
The RBI last week reiterated that controlling inflation remains a priority.
"We are aware that some central banks in Asia and some outside Asia have reversed...Those circumstances are quite different from ours," RBI Governor Duvvuri Subbarao had said last week.
Worries over the slowdown in advanced economies and slowing growth at home is expected to prompt the RBI to pause in its tightening cycle after October, analysts said.
The median estimate for the repo rate at end-June 2012 is 25 basis points lower at 8.25 percent, compared with the mid-September snap poll.
Of 23 respondents, 18 said the RBI's monetary tightening thus far has been appropriate, while four said less aggressive tightening is needed, and one called for a more aggressive stance.
On Occupy Wall Street, Obama Echoes Jon Stewart
OCT 19 2011, 10:28 AM ETYou've got to love when the words of a mere comedian can become the conventional wisdom of the President of the United States. If you missed it today, President Obama gave a sympathetic comparison between the Tea Party and Occupy Wall Street movements in aninterview with ABC News correspondent Jake Tapper. If the comparison didn't sound earth-shatteringly novel that's because it was a recycled idea that Daily Show host Jon Stewart tookmainstream on October 5. Take a look at the two quotations:
President Obama, October 18: "I understand the frustrations being expressed in those protests. In some ways, they're not that different from some of the protests that we saw coming from the Tea Party. Both on the left and the right, I think people feel separated from their government."
Jon Stewart, October 5: "I don't get it. Here's a group of Americans disenchanted, railing against big government bailouts, angry because they played by the rules ... If this thing turns into throwing trash cans into Starbucks windows, nobody's going to be down with that. We all love Starbucks. But these protesters, how are they not like the Tea Party? ... Aren't these folks real citizens with real problems? Aren't they also speaking for America?"
http://www.theatlantic.com/politics/archive/2011/10/on-occupy-wall-street-obama-echoes-jon-stewart/246973/
India received FDI of USD 19.24 billion in fiscal 2010-11.
27 SEP, 2011, 02.38AM IST,
NRIs returning to India? Investment opportunities available are manifold
By: Surabhi Marwah, Senior Tax Professional,Ernst & YoungRELATED ARTICLES
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- How buying property in India is profitable for NRIs
Global mobility has become a key catalyst of the Indian economy, both due to an increase in Indian outbounds looking to attain international experience and a rise in "returning Indians", given the recession in the west and opportunities back home.
However, such movements bring with them issues like the future state of Indian investments once an individual stays out of India long enough to become a 'non-resident Indian', or the question of overseas assets held by returning Indians once they resettle in India.
Investments are regulated by the Indian exchange control laws, which are set out under the Foreign Exchange Management Act (FEMA), whose approving authority is the RBI. The FEMA broadly covers all matters related to investment avenues such as investment in immovable property, foreign exchange, bank deposits, government bonds, investment in shares, units, securities, and foreign direct investment in India, and has a wide network of notifications and circulars, elucidating permissible avenues for each category of individual.
The residential status under FEMA is the basis of applicability of permissible avenues and this status is determined on the basis of the intention of the person, as also the number of days spent in India in the prior year concerned (there is a current threshold of 182 days).
The analysis of who qualifies as a resident or a non-resident Indian (NRI) is a fact-specific exercise. Transactions of residents in foreign exchange such as investment abroad are being liberalised at a very fast pace. India is still not close to full capital account convertibility, though returning Indians do enjoy certain concessions in relation to existing overseas assets. Some of the key benefits for this category of individuals are:
Foreign currency, foreign security or immovable property acquired, held or owned by an individual while he/she was abroad, or inherited from a person who was a resident outside India, can be continued to be owned even after his/her return to India for permanent settlement. There is no specific provision on movable assets like jewellery, motorcar and personal household effects.
Income earned on overseas assets needs to be repatriated to India. Credit to a resident foreign currency (RFC) account, which is an account free from all restrictions regarding utilisation of foreign currency balances, may also be considered and analysed. As regards the million-dollar question of maintaining overseas bank accounts, technically, a returning NRI would require the RBI's approval to maintain bank accounts abroad. Another important "to-do" for returning Indians is the redesignation of bank accounts once they settle in India and thus become 'residents'.
The bankers would typically do this once an application, along with, relevant proof of the Indian employment is submitted. For the category of Indians attaining the status of NRI on account of moving out of the country for overseas assignments or employment, a burning question is the maintenance or continuity of their erstwhile investments in India. The investment opportunities available to such NRIs are endless.
Some of them are: NRIs can freely invest in government securities, UTI, National Saving Certificates, shares and mutual funds. They are permitted to invest in the FDI scheme on a repatriation basis in equity shares/CCPS/CCDs of an Indian company. They are also permitted to make portfolio investments.
NRI, who is a citizen of India, is permitted to acquire any immovable property (residential/commercial) in India other than agricultural land/plantation/farm house. The purchase can be done out of funds remitted to India through normal banking channels or funds held in certain types of accounts in India. Loans can be taken from authorised dealers or from the Indian employer for purchase of accommodation. NRI can freely invest in any partnership or proprietorship firm (not engaged in agriculture/plantation/real estate) on a non-repatriable basis. The sale or transfer of shares and debentures to Indian residents is permissible.
Sale or transfer of any residential/commercial property in India is permitted subject to certain exceptions. An amount of $1 million per year from such sale can be remitted outside India from a nonresident ordinary account.
With the low return rates in the west, the Indian market is indeed booming and investment opportunities galore. Before venturing out, an important caution point is to keep bankers in the loop, especially for transactions out of foreign exchange, as they are the gate-keepers to the Reserve Bank of India.
http://economictimes.indiatimes.com/news/nri/nri-investments/nris-returning-to-india-investment-opportunities-available-are-manifold/articleshow/10133134.cms
18 OCT, 2011, 05.12AM IST, DEEPSHIKHA SIKARWAR & DHEERAJ TIWARI,ET BUREAU
Finmin tells SBI to focus on improving its operational performance
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NEW DELHI: A miffed finance ministry is set to take the unusual step of specifying certain targets forState Bank of India (SBI) in the middle of the year, as it seeks visible improvement across several parameters in the performance of the country's largest bank.
A finance ministry official said there was a view within the ministry that instead of focusing on improving its operational performance, the SBI management was using the recent credit rating downgrade by rating agency Moody's, as an opportunity to wrest more funds for itself from the government. The government owns a 59% stake in SBI.
Moody's had earlier this month brought down SBI's credit rating to 'D+' from 'C-', citing it low Tier -I capital ratio and deteriorating asset quality as the reason for the downgrade. A 'C' rating denotes "adequate intrinsic financial strength", while a 'D' rating denotes "modest intrinsic financial strength, potentially requiring some outside support at times". After the downgrade, SBI chairman Pratip Chaudhuri had told the media that the bank needed at least Rs 3,000-Rs 10,000 crore capital in the current year.
The finance ministry, on its part has agreed to infuse Rs 3,000 crore in the bank by December and has also said it will provide more funds only after intense examination of the bank's funding requirement and Tier I capital adequacy ratio at the end of the financial year, as the government is under pressure to keep its expenditure under control.
For now, the finance ministry is putting pressure on India's largest lender to focus on performance. "We have asked them (SBI management) to improve their performance. We will send a formal communique to the bank over the next few days giving specific outcomes that we expect it to meet in the coming months," said a senior ministry official.
The official did not specify what these desired 'outcomes' would be, but a reduction in non-performing loans is expected to defiits nitely figure in the list. An SBI official said all state-run banks sign 'Statements of Intent' on annual goals with the finance ministry and added that he was unable to understand what further improvements were being demanded. "If they are setting new goals for SBI alone then it is a matter of concern for us," he said, requesting anonymity. The official said the finance ministry was aware that the bank's Tier I capital adequacy ratio had gone down because of the provisions made for loan losses in 2010-2011.
"The provisions made were as per RBI mandate and the finance ministry was aware of the decisions," he said, adding that like all state-run banks, SBI's board also has a government nominee. The bank had made a massive provision of Rs 17,071 crore in 2010-11 against Rs 9,155 crore in the year before, which resulted in its profits plummeting 99% and the Tier-1 capital adequacy ratio dropping to 7.8%, less than the minimum 8% threshold set by the government. Capital adequacy ratio is a measure of bank's ability to absorb losses from lending before its depositors take a hit. Higher it is the better protection there is for depositors.
Despite the bad loans write-off last year, SBI's gross non-performing loans rose to Rs 27,768 crore at the end of June 2011 from Rs 25,326 crore at the end of March 2011, an increase of almost 10% in a single quarter. Gross non-performing loans are now 3.5% of gross assets, among the highest in the industry. Experts believe that SBI did the right thing by making the required provision in its financial statement but caution that it might have to make more provisions if its non-performing loans continue to rise.
"SBI would have to follow all the provisioning norms as per the governance model and those got reflected in the applicable period," said KPMG executive director Ravi Trivedi. "SBI will have to make more provisions if its non-performing assets continue to rise. It is true for all banks but the demand in case of SBI will be much higher," said managing director CNI Research, Kishor Ostwal.
http://economictimes.indiatimes.com/news/economy/finance/Finmin-tells-SBI-to-focus-on-improving-its-operational-performance/articleshow/10396117.cms
18 OCT, 2011, 12.19AM IST, SHRUTI CHOUDHURY,ET BUREAU
FDI deals with debt options likely to stage a comeback; ban could hurt dollar inflows
NEW DELHI: A fortnight ago, the government had shut the door to foreign direct investment deals it felt were debt masquerading as equity. It's now rethinking the move, fearing it could backfire and dry up inbound flow at a time business sentiments are low and growth is under pressure. Recent communications within the government indicate the specific clause that barred a foreign investor from selling back shares in an Indian firm to its joint venture partner here may be dropped. Indian promoters sell 'put options' to attract foreign strategic investors, thus giving them the 'right' to sell back shares if the company fails to fulfil conditions like stock exchange listing or an agreed internal rate of return. The practice never went down well with the Reserve Bank of India(RBI), which felt such fund flows would increase the country's short-term debt.
On September 30, the Department of Industrial Policy and Promotion (Dipp), under the ministry of commerce and industry, amended the rules to put all instruments with inbuilt options outside the ambit of FDI. The policy came under attack from offshore investors, particularly private equity players, as eight out of 10 FDI deals have underlying options. Calling them 'debt' would mean the deals would have to fulfil stringent rules that applied to foreign debt.
The department, which issued the FDI circular, was quick to sense the mood. It's learnt that in a letter dated October 5 - less than a week after the circular - the Dipp urged the Department of Economic Affairs(DEA), also under the ministry of finance, to review the particular clause related to options in FDI. "We have also asked RBI to maintain status quo until all the departments concerned arrive at a unanimous revision of the clause," a senior Dipp official told ET.
"As far as Dipp is concerned, this provision can be done away with completely as the feedback we have received has been very negative," said the official. Significantly, the industry ministry has also sought to distance itself from the new rule, saying it was inserted at the behest of the Reserve Bank and DEA.
"This is definitely a welcome move," said Akash Gupt, executive director at PricewaterhouseCoopers.
The changed clause is an impediment to both joint venture as well as private equity investment. As exit rights are a key to any foreign investment, revision of the clause will remove all uncertainties," Gupt added.
The central bank thinks that FDI with options are arbitrage flows, with foreign investors borrowing cheap dollar in international money markets to buy debt or quasidebt Indian securities promising a higher return. It feels that FDI should be plain-vanilla risk equity that should not receive the protection of debt.
The new policy is based on similar understanding. According to the policy, "Only equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares, with no in-built options of any type, would qualify as eligible instruments for FDI."
Classifying such FDI as foreign debt or external commercial borrowing would also cap the fund-raising capacity of local firms. Earlier, as the RBI opposed such deals, companies tried to overcome the hurdle by signing a separate agreement on the option sale, without making it a part of the shareholder agreement.
The new policy has put an end to this. Those opposing the new policy argue that India should take steps to attract capital amid a slowdown in foreign portfolio investments and widening current account deficit.
Dhanteras, Diwali & Investments
With prices rising, does buying gold make sense this Dhanteras?
From gold coins, gold jewellery to ETFs, people in India are predictably flocking to gold in this festive season.
- What India Inc is planning to gift employees
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India's first F1 race
Formula 1: With Noida track India up to speed with world's best
We hope that we will be able to repair the damage the country's reputation suffered during CWG said Jaypee founder Jaiprakash Gaur.
- Why Jaypee invested $400 million in F1 race
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http://economictimes.indiatimes.com/news/economy/policy/fdi-deals-with-debt-options-likely-to-stage-a-comeback-ban-could-hurt-dollar-inflows/articleshow/10394073.cms
19 OCT, 2011, 03.37AM IST, DHEERAJ TIWARI,ET BUREAU
Department of public enterprises: Revive or shut state-run sick units
Scooters India Ltd.BSE
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NEW DELHI: Backed by a strong endorsement from the prime minister's office, the department of public enterprises has shot off a letter to all ministries asking them to prepare comprehensive proposals to either revive or close down sick state-run companies under their charge.
The government has already put three sick public sector enterprises on the block and is looking to get rid of some more, as they have become big financial drag on resources.
"If there is clarity from the administrative ministry on the viability and proposed action plan, then we can proceed with either revival or closure," a government official told ET.
The prime minister's office was roped in as such efforts have not made much process earlier because the administrative ministries have been reluctant to let go of companies under their control.
"Closure of some companies have been pending since decades because of no affirmative action," the official said, requesting anonymity. The government had no option but to pump more funds into them, in many cases just to pay salaries.
So far, the government has approved 40 cases of revival which would require funding of around 24,000 crore.
The heavy industries minister Praful Patel had earlier said that the government will have to take a 'fundamental call' about those companies which cannot be turned around. The finance ministry has also expressed concern over continuing government support to sick units which have become totally unviable and backed the proposal.
There are 38 state enterprises which have been in losses during the last three years.
The administrative ministries will now need to prepare a comprehensive package for the loss making enterprises and put up the case for cabinet approval within fourth months after approval by the Board of Reconstruction for Public Sector Enterprises or BRPSE, said an official with the ministry of heavy industries. "The administrative ministry will further need to share the information with BRPSE two weeks in advance, so as to seek views of all stakeholders," he said.
Stake sale in Scooters India has been approved but no further action has been taken due to upcoming UP elections. Similarly, stake sale in sick enterprises West Bengal-based Tyre Corporation and Andhra Pradesh-based HMT Bearings has been pending since long.
18 OCT, 2011, 05.20AM IST, ET BUREAU
Asia still not on autopilot, needs to be steered: FM
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NEW DELHI: Finance Minister Pranab Mukherjee has said that growth in Asia must stay intact as it is crucial to the global economy, which is facing a crisis due to sovereign debt problems in the eurozone.
"Despite sustained high growth, Asia is not on auto pilot mode and would require careful steering and direction," Mukherjee said at conference organised jointly by the Asian Development Bank (ADB) and the finance ministry in the capital. Asia, led by China and India, contributes close to 50% of the world's GDP growth.
Mukherjee said it was important that the continent grew in a "more responsible and more inclusive manner". "Sustaining high growth is equally important," Mukherjee said cautioning that spurts in growth followed by stagnation will not deliver the desired results.
It was thus vital for Asian economies to transform their growth from being resource driven to high-skill and productivity driven, he said. The finance minister appeared confident that India would maintain a growth of 8.5 to 9% in the medium to longterm, though the country is not expected to cross 8% in the current fiscal year as per various forecasts.
"We need to be alert and respond to challenges in a timely manner as we make efforts to achieve our potential as a young and fast-growing nation," Mukherjee said.
High inflation and concerns over fiscal imbalances have raised doubts over India's growth in the current year. Speaking at the forum on realising the Asian century, ADB president Haruhiko Kuroda also supported Mukherjee on moving away from resource-driven growth.
"The biggest challenge is moving from resource-driven growth dependent on cheap labour and resources to growth based on high productivity and innovation," Kuroda said, adding that Asian countries would have to focus on domestic growth to get out of middleincome trap.
He warned that the task was not easy and the political leadership had an important role to play, pointing to several Asian and Latin American nations that have fallen into the middleincome trap. Kuroda said to realise the Asian century, nations would have to be taken nationally, regionally and globally. "Of course, Asia's vast diversity means actions must be country specific. Generally, however, each country's national agenda should give high priority to inclusion and elimination of inequalities of opportunities," he said.
By 2050, Asia faces two growth scenarios, he said, one in which it accounts for about half of the global GDP, with per capita income rising to the current level of Europe and another in which Asia's per capita income remains at barely half of its potential. Philippines secretary for finance, Cesar V Purisima, said, "We need to develop our domestic market. We can no longer rely on the West to grow."
Mukherjee also called for cooperation in energy within the region. "Asia would have to ensure energy security by utilising all available sources of energy, including fossil fuels and renewable resources, in an efficient and sustainable manner."
http://economictimes.indiatimes.com/news/economy/policy/asia-still-not-on-autopilot-needs-to-be-steered-fm/articleshow/10396172.cms
19 OCT, 2011, 10.07AM IST, PARTHA SINHA,TNN
State governments paying higher rates to borrow money from the market
MUMBAI: State governments are being forced to pay higher rates to borrow money from the market, thanks to the sharp fall in mobilizations through small saving schemes and the excess supply of government papers in the market. On Tuesday, RBI auctioned bonds of 11 states, aggregating nearly Rs 7,600 crore with the highest cut-off yield-the rate of interest astate government will have to pay-at 9.09% per annum. Compared to this, around the same time last year, states paid a rate of interest of 8.40% to borrow from the market.After several years, the rates being offered by states to borrow from the market have shot up beyond 9%, bond market dealers said. Even during the months soon after the collapse of Lehman Brothers in September 2008, state governments paid about 8.25-8.55% to borrow from the market.
The rise in rates is mainly because states, witnessing low inflows from the centre's small savings corpus, are being forced to borrow more from the market. As per rules, 75% of the total small savings mobilizations are given to the states while the centre gets to keep the balance 25%. This year collections through this channel witnessed a sharp decline as rates of interest in bank fixed deposits (FDs) rose much above the rates offered in small savings instruments like schemes offered by the post offices and National Savings Certificate.
As per the recent government data, between April and August 2011, investors, mainly retail investors who prefer small savings instruments because they offer tax advantages, had taken out nearly Rs 5,500 crore from these schemes. Compared to this, investors had parked over Rs 25,000 crore in small savings schemes in the same period of 2010.
In Tuesday's auction, cut off yields for Maharashtra (which borrowed Rs 2,000 crore) and Tamil Nadu (Rs 600 crore) were 9.09% while for Haryana (Rs 500 crore), it was at 9.03%, RBI data showed.
http://economictimes.indiatimes.com/news/economy/finance/state-governments-paying-higher-rates-to-borrow-money-from-the-market/articleshow/10411786.cms
Hillary Clinton in Kabul to push Afghan reconciliation
KABUL: US Secretary of State Hillary Rodham Clinton is in Afghanistan on an unannounced visit aimed at encouraging the country's wary leadership to keep up Taliban reconciliation efforts as theObama administration presses ahead with troop withdrawal plans.
Clinton arrived in Kabul late Wednesday and will see President Hamid Karzai, other top Afghan officials and civic leaders on Thursday. Her trip comes as Karzai has expressed frustration with attempts to woo Taliban fighters away from the insurgency amid increasing attacks by the Taliban-allied, Pakistan-based Haqqani network.
The US sees a political settlement with the Taliban as key to ending the war and is pushing Karzai to lead and expand a reconciliation drive, although the Taliban has indicated no public interest in such a deal. A secret US effort to spark negotiations earlier this year angered Karzai.
At the same time, the goal of reconciling fighters who renounce al-Qaida, violence and embrace Afghanistan's constitution was dealt a major blow with the assassination last month of elder statesman Burhanuddin Rabbani, who was leading Karzai's outreach. Rabbani was killed when he greeted a suicide bomber posing as a Taliban emissary bearing a reconciliation message.
Karzai has cited the killing as a reason why peace efforts are futile. He lamented recently that although he wants to continue, neighboring Pakistan should be in the lead since the Taliban high command lives there. In addition, spectacular attacks _ like one last month on the US Embassy compound and the headquarters of the US-led NATO forces in Kabul _ by the Haqqani network have dented enthusiasm for the push.
Over the weekend, militants tried but failed to blast their way into an American base in eastern Afghanistan, striking before dawn with rocket-propelled grenades and a car bomb. The Taliban claimed responsibility for the attack in a text message sent to The Associated Press.
NATO says such spectacular strikes, many of them perpetrated by the Haqqani network, are actually down from past years. But assassinations have increased 60 percent for the same period with 131 people killed so far this year.
In addition to reconciliation, Clinton will also be pressing the Afghans on reaching a security agreement that will govern US-Afghanistan relations after American troops leave. The US plans to bring most forces home by 2015 and intends withdraw the 33,000 additional troops that President Barack Obama sent to Afghanistan in late 2009 by the end of the fighting season in 2012, 10,000 of them by the end of this year.
The US hopes to have the security agreement ready before an international conference on Afghanistan's future in early December.
Empowered Group of Ministers meet tomorrow on agri export policy: Sharad Pawar
The Empowered Group of Ministers (EGoM) on food is scheduled to meet tomorrow to discuss the overall export policy and prices of farm items such as sugar and onion, Agriculture MinisterSharad Pawar said today.
"The EGoM meeting is scheduled for tomorrow and the subject is about price of some of the foodgrains items, policy towards exports. They have not mentioned in particular about sugar or onion," Pawar told reporters on the sidelines of the Economic Editors' Conference here.
"There is no specific proposal or note from the Food Ministry. I think there will be a general discussion. Probably, the EGoM may suggest the Food Ministry to come up with specific proposals in the next meeting," he said
He said the government's decision on exports should not "distort international prices".
On sugar front, Pawar said there is "scope for exports" as production would be higher than demand in 2011-12 marketing year (October-September). However, he favoured exports in tranches of small quantities, saying "too much quantity should not be allowed so that global prices decline".
"I think exports in one-go will create a problem. Farmers will not get the better price and it will affect the international market. I don't want to take any decision which will affect the global market".
The minister observed that whenever India enters the global market to export, prices fall and when the country decides to import, the global prices increases.
With estimates of bumper sugar production, the industry has been demanding that the government should allow exports of about four million tonnes of sweetener in the 2011-12.
In the 2010-11 marketing year, the government had allowed exports of 2.6 million tonnes, out of which 1.5 million tonnes was permitted in three equal tranches.
Sugar production of India, the world's second largest producer and biggest consumer, is estimated at 24.6 million tonnes in 2011-12, according to food ministry's projection.
However, the industry has pegged the output at 26 million tonnes as against the domestic demand of 22 million tonne.
Besides sugar, the onion farmers in the major producing states of Maharashtra and Karnataka are demanding that minimum export price ( MEP) of onion should be cut from the current USD 475/tonne to boost exports and check falling domestic prices.
Pawar said that he has received demand for some sort of export assistance to boost onion shipments.
In September, the government had allowed export of wheat and non-basmati rice under the open general licence category in view of bumper production and crunch of storage space.
Anna Hazare hits out at Rahul Gandhi over Sarpanch meeting controversy
RALEGAN SIDDHI: Anna Hazare on Wednesday hit out at Rahul Gandhi for not meeting the Sarpanch from his native village--an issue that has been clouded in controversy--and said he approved his decision not to meet the Congress leader even if given an appointment.
Hazare, who is observing 'maun vrat'(vow of silence), said in a written statement that the decision by the Sarpanch and his team was taken out of "self respect" though he had nothing personal against anybody.
The sarpanch of Ralegaon Siddhi Jaisingh Rao Mapari, Hazare's personal secretary Suresh Pathare and Ramdas Ugale had come to New Delhi on Tuesday to meet Gandhi but no meeting took place as they reportedly had not sought an appointment.
The anti-corruption crusader said his aides and the Sarpanch have told him that they will not meet Rahul now.
"The Sarpanch won't meet Rahul even if he gives appointment," Hazare said in the statement.
Upset over not getting an appointment with Rahul, the team decided to return home from Delhi yesterday saying now even if they get an appointment, the village will decide whether to meet the Congress leader or not.
Congress P T Thomas, who had interacted with them and had reportedly fixed the much-talked about meeting, however apologised for the "communication gap" that led to the confusion.
Hazare said the Sarpanch got a call from Thomas asking them to come to Delhi on October 17 for a meeting with Rahul the next day.
"They sought my permission and I approved the visit," the Gandhian said.
"We have come here after being told that we have an appointment with Rahul Gandhi on October 18 at 9 am. We came here believing the words of the MP. Now the MP says there was a communication gap. We are returning home.
"We have said in our letter seeking appointment with Gandhi that we want to meet him as suggested by the MP. We were contacted by Thomas' office several times. Even Rahul Gandhi's office called the sarpanch several times," Pathare told reporters in New Delhi yesterday.
Mapari said the team has been humiliated and will not meet Rahul Gandhi.
Anti-corruption campaign can't be apolitical: Kejriwal
October 19, 2011
First Published: 21:58 IST(19/10/2011)
Last Updated: 22:00 IST(19/10/2011)
In an interview with a news channel, Team Anna member Arvind Kejriwal, said that their campaign against anti-corruption is not against any particular party but if the center fails to pass a law by the winter session the Gandhian will start another campaign in UP.
Replying to a
question on allegations that anti-graft movement is gradually turning into a political movement, Kejriwal said any anti-corruption campaign cannot be apolitical. However he added that they are not against any particular political party but all that they want is a strong Lokpal Bill. He asserted, "We are not anti-Congress."
"We want a strong Jan Lokpal Bill and for this we have to follow the path of peace and non-violence as some persons are trying to physically disturb the Team," Arvind Kejriwal on Wednesday told reporters here.
"The attack on me is by those who favour corruption and those who termed Anna Hazare as dictator and released a CD for character assassination of Prashant and Shanti Bhushan," the social activist said.
On Rajendra Singh and Rajgopal leaving the Team, Kejriwal said they were not attending the Anna Team meetings and were not aware of its activities.
"We will talk on the issue later," he said.
Team Anna did not have affiliation with any political party but it had asked the people not to vote for the Congress to pressurise it for bringing the Jan Lokpal Bill, Kejriwal said.
http://www.hindustantimes.com/Anti-corruption-campaign-can-t-be-apolitical-Kejriwal/Article1-759210.aspx
Setback for Jaya, SC rejects plea in DA case
Press Trust Of India
New Delhi, October 19, 2011
First Published: 15:51 IST(19/10/2011)
Last Updated: 22:07 IST(19/10/2011)
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Tamil Nadu chief minister J Jayalalithaa was on Wednesday directed by the Supreme Court to appear in a Bangalore trial court on Thursday in a disproportionate assets case against her after Karnataka assured the apex court of her security.
Rejecting the AIADMK chief's
plea to defer her hearing on the ground that the Karnataka government had failed to provide sufficient security, a bench of justices Dalveer Bhandari and Dipak Misra asked Jayalalithaa to appear in the Bangalore court as scheduled.
The apex court's order came after Karnataka's chief secretary and its director general of police both filed affidavits assuring the apex court of foolproof security measures in tune with her Z plus status and NSG cover.
The trial of the disproportionate assets case, allegedly involving accumulation of assets worth over Rs 66 crore by her between 1991 and 1996, was shifted earlier to Bangalore by the apex court on her fears that she might be denied a fair trial in Tamil Nadu due to state's erstwhile DMK government, which she had accused of implicating her in false cases.
When senior counsel Mukul Rohtagi persisted with his apprehensions over her safety, the bench remarked, "You are public figure. How can you remain away from people?"
The bench also turned down Jayalalithaa's plea to at least shift the venue of her trial closer to the airport.
"What more do you want? The helipad has been prepared. Once the hearing is over, fly back home," the bench observed.
Jayalalithaa's counsel had earlier contended that venue of the trial court being 65 km away from the airport, her safety and security may be rendered more vulnerable.
The apex court, however, was assured by both Karnataka government's counsel Anita Shenoy and Additional Solicitor General P P Malhotra that adequate security measures have been taken to protect Jayalalithaa.
But despite their assurances, Rohtagi submitted that the chief minister was "under a threat perception" and hence sought deferrment of the hearing by at least a few days.
He, however, failed to convince the apex court which said, "Please be reasonable. We are also concerned about the security. After these affidavits and the Supreme Court's directions, there cannot be any fears."
The apex court reiterated that the state shall provide adequate security to Jayalalithaa from the time of her arrival till her departure to Tamil Nadu.
The Karnataka chief secretary and its police chief, earlier, in sworn affidavits faxed from Bangalore to the Supreme Court registry, explained the various steps taken by the state to provide security to Jayalalithaa right from her arrival till her departure.
The affidavits also said the state has no problem in ensuring security as it has been regularly ensuring the same to various national and international dignitaries visiting the state.
The affidavits also contradicted Jayalalithaa's claim that no prior intimation was provided to her either about the security arrangements or the venue for hearing.
The affidavits said Karnataka was in constant touch with the Tamil Nadu's State Intelligence Bureau since September 24 on the issue.
http://www.hindustantimes.com/Setback-for-Jaya--SC-rejects-plea-in-DA-case/Article1-759054.aspx
It will be her first appearance before Special Court
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Judge rejects her plea for change of venue
The Special Court trying disproportionate assets case against Tamil Nadu Chief Minister Jayalalithaa on Wednesday rejected her plea to change the temporary venue for recording of her statement.
Judge B.M. Mallijarjunaiah refused to modify the order of fixing the Gandhi Bhavan, near Central Prison at Parappana Agrahara, as the temporary venue of the Special Court for the purpose of recording her statement in view of security requirement. She had claimed that the venue was not suitable for her appearance as it was under renovation and no proper arrangement was made at the venue.
Gandhi Bhavan is a building, situated in front of the Central Prison, where trial of the some of the sensational criminal cases were held due to security reasons in the recent past.
The Special Court rejected her plea after the Supreme Court rejected her complaint that the Karnataka government has not made adequate security for her appearance and to defer the recording of statement to November last week.
This order has paved the way for recording of her statement under Section 313 of the Indian Penal Code in the case booked against her almost 14 years ago, in 1997. She is appearing before the Special Court in Bangalore for the first time since the case was transferred to Bangalore in 2003.
The allegation against her is that she acquired assets worth about Rs. 66 crore disproportionate to her known sources of income during her tenure as Chief Minister between 1991 and 1996. The trial of the case was held for some time in a Chennai court.
However, the Supreme Court in 2003 transferred the trial of case to Bangalore while holding that fair trial was not possible in Chennai while holding that the accused and the prosecution were in hand in glove after she assumed office of Chief Minister during her earlier term. The case was transferred following a petition by DMK leader K. Anbazhagan.
After trial commenced in Bangalore, the proceedings were held up for a few years following legal battle over the issue of clubbing the two disproportionate assets cases, which finally ended with prosecution withdrawing one of them. The biggest task in the case was translation of thousands of pages of documents to English from Tamil.
Recently, Jayalalithaa approached Supreme Court seeking exemption from personal appearance for recording of statement but her plea was rejected and the Supreme Court fixed October 20 for her appearance.
Keywords: disproportionate assets case
http://www.thehindu.com/news/national/article2552473.ece
Sandal thrown at Kejriwal in Lucknow
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PTIArvind Kejriwal, one of the key members of Team Anna, at a public meeting organised as part of the anti-corruption campaign, in Lucknow on Tuesday. At right is Jitendra Pathak of Jalaun district, who hurled a chappal at Mr. Kejriwal and was overpowered.
'Team Anna will ensure defeat of Congress in U.P. Assembly poll if strong Jan Lokpal Bill is not passed in winter session'
A flutter was created at a rally organised by India Against Corruption here on Tuesday, when a sandal was thrown at the chief guest, Arvind Kejriwal, as he alighted from his car and moved towards the dais. The sandal-thrower, identified as Jitendra Pathak from Jalaun district, was overpowered by IAC activists. Police intervention saved the situation from deteriorating.
Pathak, aged 40, was taken by the police to a temple near the venue, Jhule Lal Park, on the banks of the Gomti and detained. The meeting had begun by then. Later, he was whisked away amidst tight security.
Even as IAC termed the incident an attempt to divert attention and derail the movement against corruption, 'Team Anna' warned the UPA government that if a strong Jan Lokpal Bill was not passed in the winter session of Parliament, it would ensure the defeat of the Congress in next year's Uttar Pradesh Assembly elections.
Mr. Kejriwal, a prominent member of Team Anna's core committee, said Anna Hazare himself would come to Uttar Pradesh and appeal to the people to ensure that the Congress met the same fate that befell it in the Hisar by-election.
Addressing the gathering, Mr. Kejriwal referred to the Prime Minister's letter to Mr. Hazare in which he assured the social activist that a strong Jan Lokpal Bill would be brought in the winter session of Parliament. It had been decided to wait till the winter session, he said. "However, if the UPA government fails to live up to its assurance, it will be ensured that not a single vote is cast in favour of the Congress in the U.P. Assembly polls," Mr. Kejriwal said.
Denying that the anti-corruption movement had assumed the form of an agitation against the Congress, Mr. Kejriwal said that since the Congress was in power at the Centre it alone could bring in a strong Jan Lokpal Bill. "If the Bill is passed, the protest would be withdrawn," the social activist added.
In a specific reference to Uttar Pradesh, Mr. Kejriwal said a strong Jan Lokpal Bill was needed to curb corruption on the part of Chief Minister Mayawati, Samajwadi Party leader Mulayam Singh and the Bharatiya Janata Party.
Keywords: Team Anna, Arvind Kejriwal, chappal attack
http://www.thehindu.com/news/national/article2549028.ece
NEW DELHI, October 19, 2011
'Government successful in unearthing black money'
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The HInduFinance Minister Pranab Mukharjee alongwith MoS for Finance Namo Narayan Meena during the inaugural session of the Economic Editor's Conference in New Delhi on Wednesday. Photo: R.V. Moorthy
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crime, law and justicecorporate crimeHaving impressed upon the G-20 nations to adopt automatic sharing of banking and tax-related information at the Paris Ministerial meeting last weekend, Union Finance Minister Pranab Mukherjee on Wednesday sought to highlight the "noteworthy" achievements and the progress made back home in unearthing unaccounted income.
In his inaugural address at the 'Economic Editors' Conference' here, Mr. Mukherjee noted that following sustained efforts to tackle the menace of black money over the last two years, the government was successful in creating an environment where a regular flow of banking information had started.
In particular, while a huge information network had been created through amended DTAAs (double taxation avoidance agreements) with 81 nations and four TIEAs (tax information exchange agreements) with four tax havens, investigations into transactions by Indians involving black money based on information received from different parts of the world were in progress.
"Specific requests in 333 cases (220 by Foreign Tax Division of the Central Board of Direct Taxes and 113 by the Financial Intelligence Unit) have been made by Indian authorities for obtaining information from foreign jurisdictions. Over 9,900 pieces of information regarding suspicious transactions by Indian citizens from several countries have been obtained which are now under different stages of investigation," Mr. Mukherjee said.
Giving details of other achievements, ostensibly in view of the flak that the government has been receiving in regard to black money, Mr. Mukherjee said: "Under the EOI Article of the DTAA with France, India has received some information regarding Indians having bank accounts. In 69 cases, the tax payers have admitted to the unaccounted income of Rs.397.17 crore. Taxes of Rs.30.07 crore have also been paid."
The revised DTAA with Switzerland, the Minister said, would allow India to obtain banking information from the European nation in specific cases for a period starting from April 1, 2011. India is also "constructively" engaged with Mauritius to update the tax avoidance treaty in line with international practices.
Besides, the investigation wing of the CBDT has also unearthed concealed income worth Rs.18,750 crore during the last two fiscals while over 30,700 pieces of domestic information on suspicious transactions are under investigation by various agencies. "During the first five months of the current financial year, concealed income of Rs.3,014 crore has been detected due to focused searches on the basis of information received from foreign jurisdictions," Mr. Mukherjee said.
Keywords: blackmoney, tax evasion, Indian money in Swiss bank, illegal money flow, Pranab Mukherjee, DTAA, tax treaty
http://www.thehindu.com/news/national/article2551810.eceTeam Anna in crisis as 2 quit panel
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Social activist Anna Hazare along with his supporters during his fast over the Lokpal Bill, in New Delhi, on August 24. Photo : Rajeev Bhatt
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A day after Team Anna rejoiced over the defeat of the Congress in Hisar by-poll, it seems to be heading towards a crisis with two members of the core committee having resigned in protest against the team getting into "party politics'' and Anna Hazare's veiled criticism of colleague Prashant Bhushan in a fresh entry on the Kashmir plebiscite issue on his blog.
Core committee member P.V. Rajagopal of Ekta Parishad announced he was quitting, in writing, on the plea that he was pre-occupied with conducting tribal yatras in 350 districts on the land acquisition issue. Another member, 'Waterman' Rajinder Singh from Rajasthan conveyed his decision to dissociate himself from the core committee to Arvind Kejriwal on telephone.
"This matter was not discussed in the core committee. I feel the team should have waited till after the winter session of Parliament when the Lokpal Bill is to be introduced, instead of mortgaging the movement to a single seat in Hisar,'' Mr. Singh told The Hindu. The core committee comprises 25 well-known members of the civil society
On the other hand, even while maintaining a vow of silence Mr. Hazare continues to remain active on his blog. In what is seen as his criticism of Mr. Bhushan's opinion to hold a plebiscite in Kashmir, Mr. Hazare noted the State was an integral part of India, and that "some people" talk incoherent things, and do nothing for the ground reality in Kashmir.
"Some people talk incoherent things about Kashmir-related issues but they are unaware of the fact that when I was in the Army I had taken active part in the India-Pakistan war as a soldier…This is my active conviction that Kashmir is an integral part of India and will remain so. Today once again if I have to, am ready to take part in war against Pakistan,'' he wrote on his blog.
Earlier, ruling out the possibility of Mr. Bhushan being asked to quit the team, Mr. Hazare and Mr. Kejriwal had maintained that Mr. Bhushan's opinion was his own. The lawyer is presently out of the country.
Keywords: Team Anna, Bhushan controversy, Lokpal demand, Hisar by-poll
http://www.thehindu.com/news/national/article2548608.eceStrike at Maruti plant enters 13th day
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PTIWorkers shout slogans as they strike work at Maruti Suzuki's Manesar plant. File photo
Workers at the country's largest car-maker Maruti Suzuki India's Manesar plant continued their strike for the 13th day today after negotiations with the company management broke down yesterday.
Workers at Suzuki Powertrain India Ltd (SPIL) and Suzuki Motorcycle India Pvt Ltd (SMIPL) had also gone on strike from October 7 in support of their colleagues at Maruti Suzuki India (MSI) and are continuing their stir.
"The situation remains the same as yesterday. The strike is continuing, but we will continue partial production at the plant," a company spokesperson told PTI.
Meanwhile, shares of the company were trading 0.52 per cent up at Rs. 1,058 apiece in the morning on the BSE.
On Tuesday, talks between the management and striking workers at the Manesar plant of MSI, brokered by the Haryana government, broke down. Officials of the Haryana Labour Department held talks with workers of MSI as well as those of SPIL and their respective managements.
While the company alleged its workers were maintaining an adamant attitude, the workers denied taking a rigid stand and blamed the management for adopting pressure tactics to end the stir.
The company claimed to have rolled out 350 cars from the Manesar plant on Tuesday, the first time since October 7, when the labourers struck work. MSI's Gurgaon plant also manufactured 1,750 vehicles.
Keywords: Maruti workers strike, Manesar plant, Manesar strike
NEW DELHI, October 18, 2011
Negotiations to end Maruti strike break down
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Talks between the management and workers on strike at the Manesar plant of Maruti Suzuki India, that were brokered by the Haryana government, have broken down.
Officials of Haryana labour department held talks with workers of Maruti Suzuki India (MSI) and Suzuki Powertrain India Ltd (SPIL), as well as their managements during the day, but a solution to end the stir remained elusive.
"The local administration and the management made best efforts to resolve through dialogues with the striking workers. However, the workers maintained an adamant attitude, due to which the issues could not be resolved," a company spokesperson said.
Workers, however, denied taking a rigid stand and blamed the management for adopting pressure tactics to end the stir.
Shiv Kumar, the Secretary of the unrecognised Maruti Suzuki Employees Union (MSEU), alleged that the workers are being harassed by the management in collusion with the State labour department officials.
"Today we were called for talks at 10 am at Gurgaon while the timing for internal inquiry against us by the management was kept at 11:30 am at Manesar. We can't be at two places at the same time," Mr. Kumar said.
He said even the second round of talks for the day was scheduled at 6 pm while the inquiry was still on.
"We could not attend the second round of talks. So we requested for adjustment of the timings, but they have not listened to it" he said.
Keywords: Maruti workers strike, Manesar plant
Achieving 4.6 pc fiscal deficit target a challenge: Pranab
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Amid volatile commodity prices and a sluggish global economy, Finance Minister Pranab Mukherjee on Wednesday said meeting the 4.6 per cent fiscal deficit target for FY'12 will be a "great challenge".
"With the crude prices remaining where they are, it will be a great challenge to maintain the fiscal deficit numbers at 4.6 per cent this year. However, we will make strenuous attempts to keep the fiscal deficit at around these numbers," he said while addressing the Economic Editors conference here.
Mr. Mukherjee said the government would be closely monitoring revenue and expenditure trends and take steps as deemed appropriate.
The government proposes to bring the fiscal deficit down to 4.6 per cent of the Gross Domestic Product (GDP) during 2011-12 from 4.7 per cent in the previous fiscal.
"The fiscal policy stance for 2011-12 remained broadly on the consolidation track, complementing the monetary policy stance," the Finance Minister said.
Government finances have come under stress due to lower than expected revenue realisation, mainly from disinvestment.
Although half of the fiscal is over, the government has only raised Rs 1,144 crore from a stake sale in Power Finance Corporation (PFC). The government had set an ambitious disinvestment target of Rs 40,000 crore for the current fiscal.
The Income Tax Department has already decided to raise the direct tax collection target for the current fiscal by Rs 53,000 crore to Rs 5.85 lakh crore.
Mr. Mukherjee further said, "There could be a potential upside in revenue collection in the current fiscal."
He said the government was able to bring down the fiscal deficit to 4.7 per cent in 2010-11 from the originally planned 5.5 per cent on account of inflows from the 3G auctions, but said a similar situation is not expected this year.
He said one of the largest fiscal corrections was achieved in the 2010-11 fiscal, when the fiscal deficit/GDP ratio declined to 4.7 per cent from a level of 6.4 per cent in 2009-10.
"The compression in fiscal deficit must be seen in the light of huge inflows last year on account of telecom spectrum auctions and which is not going to be repeated this year," Mr. Mukherjee said.
In order to meet its expenditure requirements in the second half of the fiscal, the government had last month decided to borrow Rs 52,800 crore more from the market, over-and-above the Rs 4.17 lakh crore budget plan for the fiscal.
According to government estimates, small savings during the first quarter (April—June) of the current fiscal declined by Rs 26,542 crore. They had increased by Rs 13,250 crore in the same period last year.
Keywords: fiscal deficit
G-20 considers boosting IMF role in euro zone
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APIMF president Christine Lagarde speaks to the media during a press conference in Paris on Saturday.
The finance chiefs of the world's leading economies opened the door Saturday for the International Monetary Fund to play a bigger role in fighting the euro zone's escalating debt troubles.
The Group of 20 rich and developing nations asked the IMF to propose ways that it could help stop countries under severe market pressure from toppling into a full-blown crisis with potential global repercussions.
The move appeared aimed at Italy and Spain, the euro zone's third and fourth largest economies, which have seen their funding costs spike amid growing worries over the currency union's stability. The rest of Europe cannot afford to bail out Spain or Italy should they run out of money.
Until now, the IMF has funded about a third of the bailouts of Greece, Ireland and Portugal, but helping the euro zone to stem contagion beyond those countries would require a broader use of resources that would go far beyond the fund's traditional role of providing rescue loans to cash-strapped governments.
But while acknowledging that the IMF has a role to play in containing the continent's debt problems, G-20 ministers made clear Saturday that Europe must first come up with its own solutions.
"Of course, even though the world has a big stake in Europe doing this effectively, Europe itself has the strongest interest," U.S. Treasury Secretary Timothy Geithner told reporters after a two-day meeting of G-20 finance ministers and central bank governors in Paris.
"I think they've come to recognize that, if you under do it, it's going to be more expensive."
Euro zone ministers sketched out a plan to their counterparts on Saturday and have promised that it will restore confidence in Europe and its banks when they unveil it next weekend.
At their Oct. 23 summit in Brussels, European leaders are expected to sign off on a scheme to maximize the impact of their 440 billion ($600 billion) bailout fund, a plan to recapitalize banks across the continent to ensure they can withstand worsening market turmoil, and a second bailout for Greece.
Part of an effort to shore up shaky countries on the continent may include a bigger role for the IMF, too.
"What has been asked of us is instruments that are more flexible, more short term, that allow countries in good economic health but in difficulty to resist," the IMF's managing director Christine Lagarde said.
She said G-20 leaders would consider the new tools at their summit in Cannes, France, early next month.
The IMF's investigation of new instruments reflects the extent to which the euro zone's debt crisis has affected the rest of the global economy.
"We heard loud and clear that the emerging markets in particular were very concerned about the risk of contagion from advanced economies to emerging markets and to low-income countries," Ms. Lagarde said.
The G-20 also committed to making sure that the IMF has the resources it needs to stabilize the world economy, indicating that an increase in its funding was possible. But there is resistance to such a move.
Mr. Geithner, for instance, stressed that the IMF, with $390 billion on hand, didn't need any more funding, although he said the IMF should continue to play its important role in containing the turmoil.
"That is a very, very substantial amount of financial firepower," he said. After Europe unveils its plan, "if there's a case for more use of the IMF's existing resources, we'd be supportive of that."
In discussing the requested list of tools, Ms. Lagarde said the IMF's efforts would focus on "short-term liquidity instruments available to what we call the 'non-consenting' victims of the economic crisis."
She gave the example of precautionary credit lines the IMF offered to several countries after the collapse of U.S. investment bank Lehman Brothers in 2008, and said the new tools could go in a similar direction.
Precautionary credit lines are linked to fewer conditions than traditional IMF rescue loans that come only in return for radical economic reforms and painful budget cuts. That's why they would be aimed at countries that are fundamentally in decent health, but suffering from increased risk-adversity among investors.
Such flexible short-term loans could help Italy and Spain if they had to come up with billions of euros to recapitalize their banks, also reassuring private investors that they will get their money back.
Keywords: International Monetary Fund, IMF role, G20 Finance Ministers, euro zone, Christine Lagarde
Afghanistan seeks Indian investments in mining, manufacturing
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Seeking enhanced economic engagement with India, war-ravaged Afghanistan on Wednesday asked the Indian industrial houses to invest in sectors such as mining and manufacturing and construction activities.
Speaking at the CII organised Indian Global Summit on MSMEs 2011 here, visiting Afghanistan Trade and Industry Minister Anwar Ul Haq Ahady said there were huge opportunities for Indian small and medium enterprises (SMEs) in the South Asian country. "We are eager to attract Indian investments and form closer trade links with India. Afghanistan is a virgin market, you will make good money here," Mr. Ahady said.
He said that Indian SMEs could explore areas such as plastics, poultry, packaging, food processing and preserving agri-products. The bilateral trade between the two nations stood at $557.81 million in 2010-11. To enhance that, Mr. Ahady said trade between the two must be routed through Wagah border instead of Karachi, which is costly. "We hope that the Transit Agreement which we have signed with Pakistan will enable India to export goods through Wagah," he added.
He said Afghanistan was still a land of opportunity for entrepreneurs; even taking into account the high level of risk, return on investment was much greater there than in most other parts of the world. "Afghanistan has had the misfortune of several decades of war, leading to the displacement of numerous citizens, disruption to studies and an erosion of trade skills," he said.
India was importing 75 tonnes of Afghan apples a week at the peak of the season last year. Mr. Ahady acknowledged India's role in the economic development of his country. The Indian Government had funded the construction of a hydro-electric plant in Herat province which would make a significant contribution to economic growth in western Afghanistan, he said.
Despite the war-related risks, the country has won endorsement from the World Bank when it comes to setting up new businesses. "We rank 25 out of 183 countries surveyed by the World Bank for establishing a business," he said.
Keywords: India-Afghanistan business ties, bilateral trade, India-Afghanistan relations
http://www.thehindu.com/business/Economy/article2552119.ece
Prepare credible recovery plan, IBSA tells Europe
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PTISHOW OF SOLIDARITY: Prime Minister Manmohan Singh, President of South Africa Jacob Zuma (centre) and his Brazilian counterpart Dilma Rousseff join hands during the 5th IBSA Summit at presidential guest house in Pretoria on Tuesday.
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The Fifth Summit of the India-Brazil-South Africa (IBSA) grouping came up with its most comprehensive declaration so far, spelling out its stand on major issues troubling the world and asking the West to meet its commitments towards the world.
The West should act on a wide swathe of issues to receive reciprocation on tackling the financial crises.
The second Tashwane Declaration (the first was at the 2007 IBSA summit) signed by Prime Minister Manmohan Singh, South African President Jacob Zuma and Brazilian President Dilma Rousseff saw the countries publicly supporting each other for permanent seats on the U.N. Security Council (UNSC).
This effectively added another member to the G-4 grouping of Brazil, India, Japan and Germany, which have been spearheading the drive for U.N. expansion. South Africa had so far been waiting for consensus among African countries before making its ambitions public.
Meeting weeks before the Paris G-20 summit on the Euro zone crises, the leaders counselled Europe to prepare a credible recovery plan instead of ad hoc damage control. Officials said the three leaders would meet again in Paris to fine-tune their approach.
The IBSA sought democracy and fairness in the working of the World Bank and the International Monetary Fund. Upset at the manner in which the West pushed through a French candidate for the top IMF post, they wanted next year's selection of the World Bank chief to be transparent and merit-based.
The leaders have decided to ask their Foreign Ministers to consider sending another delegation to Syria in view of the continuing violence and the West's yearning to impose a Libya-type solution.
The 102-para declaration also dealt with the IBSA's point of view and differences with the West on climate change, social aspects of global governance, Doha Round, sustainable development and intellectual property rights.
Regional issues
The IBSA Declaration was similarly expansive on regional issues, touching on every trouble spot in the neighbourhood of the three countries except Pakistan. On the Palestine issue, the leaders wanted the efforts of the Quartet (the U.S., Russia, U.N. and EU) to be monitored by the UNSC. A fully inclusive political settlement in Sri Lanka and peace through dialogue in Afghanistan was sought. The stand on the situation in the two Sudans, Guinea-Bissau and Haiti was also spelt out. The declaration noted that piracy now affected the South Atlantic Ocean as well and contemplated a global effort to combat its spread.
Dr. Singh and the Brazilian and South African Presidents indicated the desire for consolidating the work of the 16 working groups and to give a sharper focus to the issues they are seeking to tackle. On a joint IBSA satellite project, India agreed to do the initial spadework.
Accessing uranium
PTI reports:
High Commissioner to South Africa Virender Gupta said here that energy-hungry India was working out a mechanism with South Africa to access its uranium.
Briefing on Dr. Singh's bilateral meeting with Mr. Zuma, he said: "We are already beginning to consider how to go about it. In the long term, it will be in our interest to access uranium directly from South Africa."
Keywords: global economy, recession, Eurozone crisis, UN Security Council, IBSA
http://www.thehindu.com/business/Economy/article2548678.eceU.S. should think 10 times before attacking Waziristan: Kayani
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File Photo: APPakistan's Army Chief Gen. Ashfaq Kayani
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Asserting Pakistan's nuclear weapon capability, Chief of Army Staff (COAS) Ashfaq Parvez Kayani on Tuesday said the U.S. would think "10 times" before launching a unilateral attack on Pakistan. He was reported by the local media as presenting such an assessment on the stand-off with the U.S. during a closed door briefing for members of the Parliamentary Standing Committee on Defence.
And, Director General of Military Operations Ashfaq Nadeem underscored the threat perception from India given New Delhi's cold start doctrine as seven out of nine Indian commands and three strike corps were along India's Western border. Pointing out that 81 per cent of forward and main operating bases of India were positioned against Pakistan, he said: "We cannot base our strategies on any good intentions, no matter how noble they may be, as intentions can change overnight. Our strategy has to be based on India's capability."
The reported remarks of the senior-most Army officials indicate that Pakistan's Afghanistan policy remains directly linked to its threat perception from India. Denying that Pakistan was seeking strategic depth in Afghanistan, the COAS conceded Islamabad's long-term interests there. "For short term gains, we cannot lose sight of our long-term interests. We cannot leave both our eastern and western borders insecure."
About strategic depth in Afghanistan, Gen. Kayani said history was replete with instances of failed efforts to do so. "When the United Kingdom and the Soviet Union failed, how can it be expected of Pakistan? We do not have a magic wand to succeed in doing what others have failed."
Asked if the U.S. would attack Pakistan, Gen. Kayani said Pakistan was a nuclear power and must not be compared with any other country including Iraq and Afghanistan. And, instead of pressuring Pakistan, the U.S. should focus on stabilising Afghanistan as the problem was within, he added.
Stating that the U.S. was mounting pressure on Pakistan to launch operations in North Waziristan – considered a haven of the Haqqani network held responsible for many of the attacks on U.S.-led forces in Afghanistan – the COAS was quoted by members as saying: "If anyone convinces me that everything will be sorted out if we act in North Waziristan, I will take immediate action."
Reiterating Islamabad-Rawalpindi's long held contention on the American `do more' refrain – particularly, vis-à-vis the Haqqani network -- he said: "We have made it clear to the U.S. that we will decide the timing of any such action according to our situation and capabilities."
As for links with terrorist groups, he said intelligence agencies world over maintained such contacts. "That is where we get our information, the intelligence, from. The important thing is how we use the information gathered from these elements. You can do it positively and negatively."
Keywords: AfPak, Haqqani network, Rabbani killing, North Waziristan, Pak terror links, Gen. Ashfaq Pervez Kayani, U.S.-Pak relations
http://www.thehindu.com/news/international/article2551586.eceGlobal turmoil will impact growth: Pranab
SPECIAL CORRESPONDENTSHARE · COMMENT · PRINT · T+
The HinduPOSING A CHALLENGE: Finance Minister Pranab Mukherjee (right) and MoS for Finance Namo Narayan Meena at the inaugural session of the Economic Editor's Conference in New Delhi on Wednesday. Photo: R.V. Moorthy
Without assigning any specific numbers, Finance Minister Pranab Mukherjee on Wednesday indicated that even as the country's long-term economic indicators remain robust, the targets set for overall growth and fiscal deficit for the current fiscal were unlikely to be met in the wake of the global financial turbulence.
In a candid overview of the state of the economy at the 'Economic Editors' Conference' here, Mr. Mukherjee admitted that the ongoing global turmoil and consequent slowdown would impact the country's growth, thwart measures to control inflation and thereby pose a challenge to adhering to the fiscal deficit target.
"…dark clouds have gathered in the global skies once again, and these are casting a shadow on us…Let me not hide the fact that I have been disappointed by our growth performance over the last few months. It is evident that India's growth rate in 2011-12 will be less than what we were expecting in February when I presented the Budget. In the last few months, a number of factors, both international and domestic have impacted our economy," he said.
Mr. Mukherjee attributed the domestic slowdown and rising inflation to the global problems, especially the rising crude oil and commodity prices in international markets which cast a huge economic burden and consequent near double-digit inflation which called for monetary tightening and rise in interest rates lead to a fall in fresh investments.
Most observers are expecting India's growth to go down to below 8 %. This is disappointing but at the same time we must not lose perspective of the global situation. There is slowdown all over the world…Even ten years ago, the news that India would grow by 8 per cent would be reason for celebration," he said while noting that he would put a number to the fiscal's growth in the mid-year review to be placed in Parliament in December. Mr. Mukherjee said that while WPI based inflation had remained sticky at around 9 per cent during the first half this fiscal owing to a variety of reasons, he hoped that it would ease to about seven per cent by the end of March next year. Despite the monetary measures, while headline inflation has remained stubbornly close to the double-digit mark, the tight monetary policy followed by the RBI has also impacted growth during the year, he said. The source of inflation, he said, has since switched to non-food items owing to imported global commodity inflation — in particular, crude oil.
As for the measures taken by the government towards fiscal consolidation, Mr. Mukherjee stressed that the fiscal policy stance for 2011-12 remained broadly on track and complemented the monetary policy stance. Refuting the general perception about policy paralysis, Mr. Mukherjee listed a slew of reforms measures in the pipeline but regretted that the government could go ahead fast on them owing to the lack of numbers in Parliament.
"It is possible if we collectively do it. Therefore I don't blame anybody. I could have assured you here and now that all the legislations will be passed in the Winter Session but today unfortunately I cannot do so because I am 206 in Lok Sabha and 76 in Rajya Sabha," he said during the interaction.
Appealing for support from all parties, he said: "It is not a help to the ruling party but to help India and the Indian industry to take advantage of the legislative measures that are required to expedite the reforms and for that Parliament must function.''
In particular, Mr. Mukherjee referred to the Direct Taxes Code and legislations on the Goods and Services Tax, insurance and pension reforms bill were before the Standing Committee which required support from the entire opposition.
Keywords: RBI monetary policy, price rise, inflation, inflation control, fiscal policy
http://www.thehindu.com/business/Economy/article2551321.ece
Ashok Chawla to be sworn-in as new CCI chairman
PTISHARE · PRINT · T+
Former Finance Secretary Ashok Chawla will be sworn in on Thursday as the new Chairman of the competition watchdog, CCI, filling up the key post that has been lying vacant for over four months.
Sources said the Ministry of Corporate Affairs, the administrative ministry of CCI, will hold the swearing-in as per the requirement of the Competition Act 2002.
A day after, he will be taking charge as the chairman, they added.
When contacted, Mr. Chawla confirmed the development.
Last week, the Appointments Committee of Cabinet (ACC) approved the appointment of Mr. Chawla as head of the anti-trust body — Competition Commission of India (CCI).
The other contenders for the post were Anurag Goel, a member in the Commission, and Vijay Sharma, former secretary in the environment and forests ministry.
The appointment assumes significance as after June 1, all high-value merger and acquisition (M&A) deals have come under the CCI purview.
A Gujarat-cadre IAS bureaucrat of 1973 batch, Mr. Chawla retired as Finance Secretary on January 31. He was heading a committee on allocation, pricing and utilisation of natural resources till recently.
The commission was established in 2003 to replace the erstwhile Monopolies and Restrictive Trade Practices Commission. Dhanendra Kumar was appointed its first Chairman in February 2009. Mr. Kumar's term ended on June 5, this year.
The commission draws its power from the Competition Act, 2002, to keep check on unfair practices including M&As that abuse dominant position by market players.
Keywords: CCI, M&A, competition watchdog, Ashok Chawla
Power sector reforms critical for lenders, says Crisil
OUR BUREAUSHARE · PRINT · T+
MUMBAI, OCT. 19:
Barring meaningful progress in power sector reforms in the next 18 months, about Rs 56,000 crore lent to the power producers and state distribution utilities would be under potential risk, rating agency Crisil said.
The total exposure to the power sector as of March is Rs 4.8 lakh crore of which 60 per cent or Rs 3 lakh crore is to the state electricity boards and distribution companies. Lenders include banks, Power Finance Corporation and Rural Electrification Corporation.
Addressing the media, Ms Roopa Kudva, Managing Director, Crisil, said, "There were two aspects to the reforms. First, an improvement in systemic efficiency is required through reduction in distribution losses, which remain upwards of 25 per cent. Second, a broad-based political consensus is needed for implementing tariff increases."
Crisil estimates that tariffs need to be hiked 50 per cent for state utilities to breakeven and eliminate subsidy requirements. Equally important for lenders' confidence is the need for timely availability of dependable information on utilities' performance, besides receipt of subsidy by the distribution companies of the state governments.
Mr Pawan Agrawal, Director, Crisil Ratings, said the extent of effectiveness of reforms in the sector remains a key issue to be monitored over the next 18 months. Nevertheless, the strong credit risk profiles of specialised lenders such as PFC and REC continue to be underpinned by the expectations of support from the Central Government.
Keywords: Power sector reforms
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Finance Ministry nixes SBI's rights issue this fiscal
K.R. SRIVATSSHARE · COMMENT · PRINT · T+
Business LineThe Finance Minister, Mr Pranab Mukherjee, with the Minister of State for Finance, Mr Namo Narain Meena, and the Finance Secretary, Mr R.S. Gujral, during the inaugural session of the Economic Editor's Conference in the Capital on Wednesday. – Kamal Narang
NEW DELHI, OCT. 19:
In what is seen as a change of stance, the Finance Ministry today said that it was not looking at a rights issue for capital infusion into State Bank of India (SBI), the country's largest commercial bank.
Ruling out a rights issue for SBI this fiscal, the Financial Services Secretary, Mr D.K. Mittal, said that the Centre may inject capital into SBI through a preferential allotment route. The Centre holds 59.4 per cent stake in SBI and is therefore in a position to influence the capital raising route of SBI.
A preferential allotment to the Government would imply that SBI would not be able to raise capital from other shareholders. It would also mean that the Government is ready to infuse more funds into SBI than what would have been the case in a rights issue.
So far the Finance Ministry and the SBI senior management were mainly in discussions for a rights offering. SBI had earlier suggested a rights issue that would help the bank mobilise about Rs 20,000 crore.
The actual amount of capital infusion into SBI and the instrument that would be used by the Centre would be finalised by November 15, Mr Mittal told reporters on the sidelines of Economic Editors conference here on Wednesday.
Last week, Mr Mittal said that the Government would look to infuse Rs 4,500-6,000 crore in SBI by March 2012.
The recent move of Moody's to downgrade SBI by a notch, owing to the lower capital adequacy ratio and deteriorating asset quality, has negatively impacted SBI's stock performance. The Tier-I capital adequacy ratio of SBI had touched 7.6 per cent as of end June, lower than the regulatory requirement of 8 per cent.
SBI had last come out with a rights issue in 2008, raising over Rs 16,000 crore. In the previous rights issue, the Government had made its contribution through bonds instead of cash. The Centre is now looking to infuse capital into SBI through cash and not through marketable Government bonds.
The Centre has in recent years opted against "below-the-line" expenditure and gone in for cash payments even for certain big ticket items like compensation to oil marketing companies.
The Government had in this year's Budget allocated Rs 6,000 crore for capital infusion in banks. The total capital requirement from the Centre for about six State-owned banks including SBI is estimated at Rs 20,000 crore this fiscal.
SBI's shares closed at Rs 1,909.25 on the National Stock Exchange today, up Rs 42.70 over the previous day's close of Rs 1,866.55.
Pranab assures support for public sector banks
The Finance Minister, Mr Pranab Mukherjee, today asserted that adequate resources would be provided for recapitalisation of public sector banks. He also said that the Government would go in for more allocation of funds through supplementary demand for grants to meet the resource requirements, if any.
"Adequate capital will be injected in State Bank of India and all public sector banks to maintain Tier I capital of 8 per cent," Mr Mukherjee said at the Economic Editors' conference in the Capital today.
The Government is in the process of drawing a roadmap for capital requirements of public sector banks over the next 10 years. A committee set up by the Department of Financial Services is expected to submit a report by end October.
This committee is also looking into aspects like Basel 3 capital standards, Mr D.K. Mittal, Financial Services Secretary, said.
The Finance Minister also maintained that the recent spate of scams have not affected the investment climate in India. The investment climate is down all over the world, he said.
krsrivats@thehindu.co.in
Keywords: SBI rights issue, SBI preferential allotment, SBI capital infusion
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A policy downgrade
SHARE · COMMENT (1) · PRINT · T+The Government needs to be rapped for not making up its mind on how SBI should achieve capital adequacy norms.
For all the righteous indignation over the actions of global rating agencies, the Government cannot absolve itself of blame in the recent Moody's downgrade of the State Bank of India's (SBI) creditworthiness from 'C-' to 'D+'. For over a year now, the country's No. 1 commercial bank has been wanting to raise about Rs 20,000 crore through a rights issue. This money has been sought not just for expanding operations, but also to beef up its capital base. SBI's tier-I capital — the primary cushion for depositors' money — had fallen by two percentage points in the space of three months from December 2010 to March 2011, and further to 7.6 per cent by June. The fact that this was below the regulatory requirement of such capital being at least eight per cent of a bank's assets, suitably adjusted for riskiness, was known. The Government — which owns 59.4 per cent of SBI and considers the bank as its flagship operating vehicle — was duty-bound to contribute its due share of the money necessary to meet the required capital adequacy norms. It has to be rapped for not doing so, especially in a deteriorating external environment.
To that extent, Moody's announcement lowering SBI's bank financial strength rating by a notch should be seen as a timely reprimand. It is a reflection more on the Government's tardy decision-making process than on SBI's financials per se. It was, indeed, a trifle amusing to see the Finance Ministry asking the SBI for an analysis of the downgrade — much in the manner of an offender demanding a first information report from the victim. The rating downgrade may not actually hurt SBI much. Even if overseas fund-raising costs go up, it is unlikely to cripple the bank, as borrowings outside India account for hardly 5.5 per cent of its balance sheet. And even within that, the ratings would apply to a very small portion of what constitutes so-called perpetual debt (currently around $625 million, on which the coupon is fixed; meaning, the problem would arise only in fresh rounds of financing). If at all fund-raising proves a shade costlier, it would be more due to the general tightness in global financial markets than the rating downgrade itself. To illustrate, SBI, in 2007, was able to mop up 10-year money at just 70 basis points (bps) above the rate at which banks lend to one another (LIBOR). But in 2010, it was forced to pay LIBOR plus 200 bps for a five-year paper. This was in spite of its rating remaining the same over these two periods. And today, nobody in the country can borrow at less than LIBOR plus 300 bps.
The SBI fiasco is yet another demonstration of the drift in policy-making evident for some time now. The Government must make up its mind fast. Either it keeps its side of the bargain by subscribing to a rights issue or allows its stake in SBI to fall to 51 per cent or even less. Will the Finance Minister get cracking, please?
(This article was published on October 6, 2011)
Keywords: Moody's. downgrade, SBI, global rating, Govt. policy
http://www.thehindubusinessline.com/opinion/editorial/article2515350.ece
Violent anti-austerity protests grip Greek capital
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Greek protesters clash with police
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By Yannis Behrakis and Renee Maltezou
ATHENS | Wed Oct 19, 2011 1:43pm EDT
(Reuters) - Greek police clashed with black-clad demonstrators outside parliament on Wednesday during a mass rally called to protest against a bitterly resented new round of belt-tightening needed to avert default.
The view of the ancient Acropolis was obscured by smoke from burning piles of rubbish and a bank building was evacuated after being set on fire by petrol bombs as a strike called by Greece's two main unions degenerated into violence.
Much of the country was shut down by the 48-hour general strike, the largest since the outbreak of the crisis two years ago with government departments, offices and shops closed and at least 100,000 people taking to the streets of Athens.
"It's one of the biggest demonstrations in recent years. People showed they were determined to protest against these policies," said Mary Bossis, international security professor at the University of Piraeus.
"We are not done with these protests. We've reached a point where people don't feel the government represents them any more, they want a complete change," she said.
Prime Minister George Papandreou, trailing badly in opinion polls, has appealed for support from Greeks before parliament votes on the latest measures which include tax rises, wage cuts and public sector layoffs.
But the mood was furious among demonstrators, fed up after repeated doses of austerity and increasingly hostile to both their own political leaders and international lenders demanding ever tougher measures to cut Greece's towering public debt.
"Who are they trying to fool? They won't save us. With these measures the poor become poorer and the rich richer. Well I say: 'No, thank you. I don't want your rescue'," said 50-year-old public sector worker Akis Papadopoulos.
The boom of tear gas canisters fired by police rang out, and black clouds of smoke from petrol bombs hung over Syntagma Square, scene of violent clashes between police and demonstrators at anti-austerity protests in June.
The latest outbreak of violence overshadowed the start of the 48-hour strike. A huge crowd gathered in front of parliament but after hours of confrontation with a hardcore group of mainly younger demonstrators, police cleared the square.
Groups of hooded youths continued to clash with police on side streets.
At least seven people were taken to hospital and there were several other injuries reported, mainly breathing problems, minor burns and head wounds. There were also serious clashes on major avenues away from the main rally.
Police said clashes also marred demonstrations on the island of Crete, where more than 20,000 gathered to protest the bill, and the cities of Thessaloniki, Volos, Lamia and Patras.
In Athens, where more than 7,000 police were dispatched to deal with possible trouble, many shops boarded up their windows but at least three banks and three hotels were damaged.
RECESSION
Wednesday's action came as European Union leaders were scrambling to settle a new rescue package in time for a summit on Sunday that hopes to agree measures to protect the region's financial system from a potential Greek debt default.
"We are in an agonizing but necessary struggle to avoid the final and harshest point of the crisis," Finance Minister Evangelos Venizelos told parliament. "From now and until Sunday were are fighting the battle of all battles."
Trapped in the third year of deep recession and strangled by a public debt amounting to 162 percent of gross domestic product which few now believe can be paid back, Greece has sunk ever deeper into crisis.
Papandreou's narrow four-seat majority is expected to be enough to ensure the austerity bill goes through, especially given possible support from a smaller opposition group.
But his ruling Socialist party's discipline is increasingly strained with one deputy resigning his seat in protest and at least two others threatening to vote against part of the package dealing with collective wage bargaining agreements.
"It is obvious that society has reached the limits of what it can bear," said PASOK deputy Elpida Tsouri.
"DEBT MONSTER"
After repeated rounds of austerity measures, which have hit middle class Greeks hard, protesters said new cuts would only drive the stricken economy deeper into the ground. Unions urged deputies not to pass the law.
"If they have any humanity, decency, sense of pride and Greek soul left, they must reject the bill," Nikos Kioutsoukis, a top official in private sector union GSEE which is leading the strike with its public sector counterpart ADEDY.
Speaking in parliament on Wednesday, Dimitris Reppas, minister for Administrative Reform, reflected the increasing sense of isolation among many in the ruling party, complaining he felt as though he had been thrown to the lions.
"In government, we often feel like ... we are in the Colosseum, fighting the debt monster while everybody else is just sitting in the stands, watching and commenting," he said.
A first vote takes place late on Wednesday on the overall bill, which mixes deep cuts to public sector pay and pensions, tax hikes, a suspension of sectoral pay accords and an end to the constitutional taboo against laying off civil servants.
A second vote on specific articles is expected some time on Thursday and only after that will the bill become law.
(Additional reporting by Lefteris Papadimas, Harry Papachristou and John Kolesidis; Writing byJames Mackenzie and Dina Kyriakidou; Editing by Jon Boyle)
http://www.reuters.com/article/2011/10/19/us-greece-idUSTRE79H1FI20111019
Chris Christie channels Obama on 'Occupy'
'I understand why they are angry,' Christie says about the protesters. | AP PhotoClose
By TIM MAK | 10/19/11 6:26 AM EDT Updated: 10/19/11 8:25 AM EDT
New Jersey Gov. Chris Christie had some kind words for the Occupy Wall Street demonstrators at a town hall recently, saying, "I understand why they are angry."
In remarks that sounded much like President Barack Obama, Christie drew a parallel between the Occupy Wall Street protesters and the Tea Party movement, a YouTube video released by the governor's office on Tuesday shows.
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"I think that if you look at the Occupy Wall Street folks and the Tea Party folks, they come from the same perspective," said Christie. "They just have different solutions. What they're saying is, 'government is not working for me anymore.'"Although Christie did say that the Occupy Wall Street movement's solutions were "probably 180 degrees different" than those of the Tea Party, he added, "I understand why they are angry. Because you look at what's happening down in Washington, D.C., and it should disgust all of us."
Christie, who recently said he would not run for president and endorsed Mitt Romney, said government just isn't working for people anymore, and that both paralysis and overreach is contributing to mass dissatisfaction.
"I understand why the Occupy Wall Street people have sprung up, the same way I understand why - two years ago - the Tea Party people sprung up. Because they are frustrated with what government is doing - and not doing - on their behalf," he said.
Obama expressed a similar analysis in his first remarks about the Occupy Wall Street movement at a presidential press conference two weeks ago. Then, he blamed the protests on "broad-based frustration about how our financial system works."
His comments comparing the OWS protests and the Tea Party are a surprising response coming from Christie, a governor far more known for aggressive responses to the left than for sympathetic comments.
Christie did, however, show a flash of that frank, aggressive side later in the video, criticizing Obama and Congress for creating a situation of distress and frustration in the country whereby the Tea Party and Occupy Wall Street movements have an incentive to spring up.
"You have a president who is unwilling to drag people into the same room and bang heads and enforce solutions, you have a Congress of both parties who won't talk to each other, won't have a civil word for each other to get anything done. Yet at the same time we have people out in the country who are suffering, and they are playing games in Washington, D.C.," Christie said.
Wednesday morning, another conservative Republican, Sen. Tom Coburn (R-Okla.) dismissed the parallels between the two movements. "I see a big difference in the two groups," he said, calling the OWS protests an "organized collection of a group of people who are frustrated" and contrasting that to what he suggested was the more grassroots, "ground swell" of the Tea Party.
"I know a lot of people think the tea partiers are nuts. I find them very enjoyable because they actually know what the Constitution says and would like to see the government back within it," said Coburn.
Read more: http://www.politico.com/news/stories/1011/66342.html#ixzz1bFg2zePj
Posted at 10:40 AM ET, 10/19/2011
Alec Baldwin makes brief visit to Occupy Wall Street camp
By Sarah Anne HughesAlec Baldwin made a brief stop by Occupy Wall Street's camp in Zuccotti Park late Tuesday evening, as he promised to do on Twitter.
The politically inclined actor has been discussing Occupy Wall Street with his Twitter users, sharing what he believes should be the movement's mission: "Campaign Finance Reform should b the goal of#OccupyWallStreet. Wealth is not the issue. It's using wealth to buy the govt, that's the issue."
On Tuesday, he tweeted, "I wanna go to Zuccotti Park..." And an hour later, he did: "On my way to OWS."
After spending "a too brief two hours" at the park, he thanked two demonstrators for his "OWS tutorial." His opinion about the movement was unchanged: "OWS needs to coalesce around some legislative policy. The 'occupy' strategy may be an effective one. But what can each entity agree on?"
To the Twitter hater who claimed Baldwin was behaving hypocritically because he stars in credit card commercials, he replied, "I donated all of my fee from Capital One 2 arts charities. They have been gr8 partners in my support of the arts."
He's now returned to sending non-political tweets concerning viewing fall foliage via trains.
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http://www.washingtonpost.com/blogs/celebritology/post/alec-baldwin-makes-brief-visit-to-occupy-wall-street-camp/2011/10/19/gIQAGwoZxL_blog.html
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Obama nod for Occupy Wall Street
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But it was the Occupy Wall Street movement, and the challenges it poses to a worsening rich-poor divide in the US that seemed to catch Mr. Obama's ...
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Contraction is answer to recession
Napa Valley Register - 10 hours ago
I've written that Obama's acceptance of Republican demands to not raise taxes on the rich ... It will be sad if Occupy Wall Street causes a grassroots-level ...
THE ED SHOW for October 17, 2011, MSNBC istockAnalyst.com (press release)
The Morning Plum Washington Post (blog)
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Occupy Wall Street hits John Boehner during golf trip
The State Column - 1 hour ago
The Occupy Wall Street movement hit House Speaker John Boehner during a trip to ... Obama's $447-billion jobs bill, which stalled last week in the Senate. ...
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Is Occupy Wall Street Being Overhyped?
New York Times (blog) - David Brooks - Gail Collins - 1 hour ago
Occupy Wall Street: Do protests like these shape policy? ... by wealthy white Republicans reacting against President Obama's agenda: the drop is if anything ...
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Obama on Occupy Wall Street: 'We Are on Their Side'
Daniel Halper
The Weekly Standard
Tuesday, October 18, 2011
Comment: As we predicted right from the start, Obama and the Democratic machine have attempted to co-opt the protests as an election campaign gimmick. Obama is trying to pose as a populist in appearing to side with American citizens against Wall Street, when his 2008 campaign was funded by Wall Street, his cabinet is stuffed with former Wall Street insiders, and his 2012 campaign is even more reliant on Wall Street.
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In an interview that will be aired tonight on ABC News, President Obama continues to express his commitment to the Occupy Wall Street protesters.
"The most important thing we can do right now is those of us in leadership letting people know that we understand their struggles and we are on their side, and that we want to set up a system in which hard work, responsibility, doing what you're supposed to do, is rewarded," Obama tells ABC News. "And that people who are irresponsible, who are reckless, who don't feel a sense of obligation to their communities and their companies and their workers that those folks aren't rewarded."
The president also compares the protesters to the Tea Party. "In some ways, they're not that different from some of the protests that we saw coming from the Tea Party," Obama says. "Both on the left and the right, I think people feel separated from their government. They feel that their institutions aren't looking out for them."
Full story here.
http://www.prisonplanet.com/obama-on-occupy-wall-street-we-are-on-their-side.html
Obama: Occupy Wall Street 'Not That Different' From Tea Party Protests
By Devin Dwyer | ABC News – 19 hrs ago
President Obama, who has become a target of the Occupy Wall Street protests sweeping the country, today embraced the economic frustration being given voice on the streets and said that his vision for America's economic system is best suited to resolve protesters' concerns.
"I understand the frustrations being expressed in those protests," Obama told ABC News senior White House correspondent Jake Tapper in an exclusive interview from Jamestown, N.C.
"In some ways, they're not that different from some of the protests that we saw coming from the Tea Party. Both on the left and the right, I think people feel separated from their government. They feel that their institutions aren't looking out for them," he said.
The full Tapper interview with Obama will air tonight on "Nightline" at 11:35 ET.
Obama said the most important thing he can do as president is express solidarity with the protesters and redouble his commitment to achieving what he described as a more egalitarian society.
"The most important thing we can do right now is those of us in leadership letting people know that we understand their struggles and we are on their side, and that we want to set up a system in which hard work, responsibility, doing what you're supposed to do, is rewarded," Obama said. "And that people who are irresponsible, who are reckless, who don't feel a sense of obligation to their communities and their companies and their workers that those folks aren't rewarded."
Obama alluded to his American Jobs Act, which is funded in part by raising taxes on wealthier Americans and some corporations in order to make them pay "their fair share."
"We're at a critical moment in this country where if we can regain some of the values that helped build this country that people, I think, long for, when they feel that everybody gets a fair shake but we're also asking a fair share from everybody, if we can go back to that then I think a lot of that anger, that frustration dissipates," he said.
Obama acknowledged that widespread popular frustration is directed at him over the administration's failure to jumpstart job creation and economic growth. But he shrugged off the suggestion that he could have done more from the start, including focusing less on health care reform.
"Every day I think about other things we could be doing," Obama said. "The truth of the matter is what we passed is a very big Recovery Act that we knew was going to take some time to take effect. It made a difference," he said.
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News for Occupy wall Street
* Fairfield Mirror
Wall Street Journal (blog) - 2 hours ago
AmLaw Daily has taken the initiative on a story about Occupy Wall Street's First Amendment guardians. About 200 National Lawyers Guild members are ...
Occupy Wall St: Naomi Wolf condemns 'Stalinist' erosion of protest ...
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Occupy Wall Street | NYC Protest for American Revolution
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occupywallst.org/
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2 days ago – News and resources for protesters attending the mass demonstration onWall Street against financial greed and corruption.
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You visited this page on 17/10/11.
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Greetings from Occupied Wall Street, | OccupyWallSt.org
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occupywallst.org/article/greetings-occupied-wall-street/
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30 Sep 2011 – News and resources for protesters attending the mass ...
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Occupy Wall Street - Wikipedia, the free encyclopedia
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en.wikipedia.org/wiki/Occupy_Wall_Street
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Occupy Wall Street (OWS) is an ongoing series of demonstrations in New York City based in Zuccotti Park on Wall Street. Initiated by the Canadian activist group ...
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You visited this page on 09/10/11.
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Occupy Wall St. | Facebook
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www.facebook.com/OccupyWallSt
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Occupy Wall St. - Description: Declaration of the Occupation of New York City THIS DOCUMENT WAS ACCEPTED BY THE NYC GENERAL ASSEMBLY ON ...
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Occupy Wall Street | World news | The Guardian
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www.guardian.co.uk/world/occupy-wall-street
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Latest news and comment on Occupy Wall Street from guardian.co.uk.
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Why You Shouldn't Compare Occupy Wall Street to the Tea Party ...
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news.yahoo.com/why-shouldnt-compare-occupy-wall-st... - United States
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2 days ago – With the Occupy Wall Street protests gaining steam in the U.S., it seems ... Michael Scherer recast Occupy Wall Street as the Tea Party of the ...
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Occupy Wall Street shows muscle, raises $300K - US news - Life ...
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www.msnbc.msn.com/id/44924775/ns/us_news-life/ - United States
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2 days ago – The Occupy Wall Street movement has close to $300000, as well as storage space loaded with donated supplies in lower Manhattan.
Occupy Wall Street -- America's own Arab Spring? - YouTube
* www.youtube.com/watch?v=rWoWZO3nqOY19 Sep 2011 - 3 min - Uploaded by RTAmerica
Crowds gathered in New York's financial district to protest Wall Streetgreed, corruption and lack of accountability. RT's ...
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The Contrasting Psychologies of 'Occupy Wall Street' and the 'Tea ...
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www.forbes.com/.../the-contrasting-psychologies-of-occupy-wall-stre...
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3 days ago – What to make of Occupy Wall Street: ignore it as silly excess or embrace the movement? celebrate the energy or ridicule the process? fear the ...
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Occupy Wall Street | September 17th | #OCCUPYWALLSTREET ...
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www.adbusters.org/campaigns/occupywallstreet
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#OCCUPYWALLSTREET is a people powered movement for democracy that began in America on September 17 with an encampment in the financial district of ...
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*Palash Biswas
Pl Read:
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