May we ever imagine an impeachment against the president? Nay, we may not hope for a successful bid for no confidence against the corporate governance!

May we ever imagine an impeachment against the president? Nay, we may not hope for a successful bid for no confidence against the corporate governance!

Troubled Galaxy Destroyed Dreams, Chapter: 818
Palash Biswas

Mobile: 919903717833

Skype ID: palash.biswas44

Email: palashbiswaskl@gmail.com


Prime Minister of India and the whole lot of the political class do engage themselves in every possible activity to sustain the Black Money economy with ensuring every way and avenue wide open to sustain free inflow of foreign capital as that the black money may be recycled as white money in Indian sesex economy. Economic reforms and most of the legislation meant only this.

Prime Minister Manmohan Singh on Saturday said the government has dispelled the atmosphere of 'gloom and doom' and will soon announce steps to stave off investors' fears ensuing from taxations measures like anti-tax avoidance rule and retrospective tax amendments.

"We have dispelled gloom and doom, improved the climate for foreign investment, improved ministry coordination, and are working hard to restore investor confidence and the growth environment," he told captains of India Inc at the Economic Times Award function in Mumbai.

Contrarily, Obama is not bothered about investors`s interest facing so much so hyped fiscal cliff. It is very important because our set of rulers justify the ethnic cleansing all on the name of inclusive growth, development and fiscal discipline! It must be noted that US President Barack Obama urged Congress Saturday to immediately extend a tax cut for middle-class Americans, arguing the move will give 98 per cent of families and 97 per cent of small businesses the certainty that will lead to faster economic growth.Electing obama, America has proved to be an iclusive society where women are enough liberated and empowered to lead the change from the front with minorities, black untouchables, youth, workers and refugees, migrants and transsexuals. The apple cart of right wing christian hindu zionist combine has been defeated and Obama dares to speak for reforms that strengthen further th welfare state representing the majority people. Our women may not lead us despite the fact we had an Indira and we still have Irom Sharmila,Sonia Gandhi, Medha, Mahashweta, Arundhati, Mamata,Mayawati, Jailita and scores of woman faces leading in different spheres of life. We have failed to unify the social and producer forces. Whereas the elite civil society has captured the public domain with exposures inconclusive.In India, reforms means all kinds of anti people repressive measures to enhance the manusmriti apartheid system of exclusion and excommunication. Ironically, the women are leading the forces which do the best to sustain the system.Most of the civil society has broken away to make a neopolitical class which does not believe in democratic institutions. Anna Hazare leads the civil society divided which has nothing against the corporate raj whereas selective exposures by Kejriwal presents excellent glimpses of corporate lobbying. Obama dares to go against the market as he succeeded to defeat the wall street  whereas our leaders in India, the whole lot of the political class may not think beyond sensex economy and the neoaffluent class having swiss bank accounts. Pranab as finance minister have been defending the black money economy and he is elevated to the highest post, the President of India. May we ever imagine an impeachment against the president? Nay, we may not hope for a successful bid for no confidence against the corporate governance!Mind you, Kejriwal said the then finance minister Pranab Mukherjee had even planned an amnesty for all the 700 Swiss account holders.

Neither Kejriwal nor Hazare dared to demand of an  impeachment againt the President nor they did demand no confidence motion againt the corporate government of India. If they could, we would find the ground reality against the crusade against FDI Raj, Black Money economy and the Corporate Politics nexus. It has no to be.Rather,it sounds quite amusing that  locking horns with Union Minister Salman Khurshid over his reported remarks, Arvind Kejriwal on Saturday said he is a "dengue mosquito" whose sting can put both Congress and BJP in trouble.

However, the corporate government has invented an excellent escape way to get through the black money bomb blast as Government is likely to conduct a through inquiry into allegations that multinational HSBC Bank was involved in money laundering which may help terror groups operating in India.


The probe is likely to be conducted by sleuths of various intelligence wings of Home and Finance Ministries as the allegations, if proved true, would have serious security implications, highly placed sources said. However, the sources said, it has nothing to do with activist Arvind Kejriwal's allegations of money laundering against HSBC Bank.

The multinational bank had, however, yesterday denied the charges and said it takes compliance with the law very seriously. The probe agencies will look into reports that funds were being routed from Pakistan and a few Gulf countries to terror groups operating in India using banking networks. Meanwhile, Home Minister Sushilkumar Shinde today said government has information that the terror groups operating in India and outside India were investing money in stock markets through various methods.

"We have information that they have been putting in money in stock exchanges and stock markets. We have received information in international fora. We are keeping a track of them. They are investing in stock exchanges in India and some neighbouring countries," he told a press conference.

"I am a dengue (causing) mosquito. I will bite BJP and Congress and they will be in trouble," he said in response to the reported comments of Mr. Khurshid that Mr. Kejriwal's attack on him was just a mosquito bite that causes minor irritation.

Mr. Kejriwal also claimed that he will "expose" corruption with regard to hike in power tariff in Delhi.

Kejriwal targeted Pranab Mukherjee saying 'I can't understand on what basis did Finance Minister Pranab Mukherjee decide whom to raid and whom to not?'

Pranab Mukherjee may be he is President must answer as Why weren't Dabur or Birla or the Ambanis raided?

Admitting that certain tax measures like GAAR (general anti avoidance rules) and retrospective tax amendments in the Budget have led to "a very negative" reaction from investors, he said: "We hope to announce decisions on all these issues within the next few weeks."

Pointing out that the Cabinet has approved changes in the banking and insurance laws and also a new pension law, with higher FDI limits, the Prime Minister said: "It will be our endeavour to have them passed by Parliament as soon as possible. They will make our financial system more able to support growth." As regards the growth prospects for the current financial year, Dr Singh said the Indian economy has been affected by the global slowdown and this has dampened the investor sentiment.

"Growth decelerated to 6.5 per cent last year and may be only around 6 per cent in the current year. This has dampened investor sentiment. Doubts are being raised in some quarters about the India growth story going astray..."

"But we can, and we must, correct our own weaknesses, and create new opportunities for economic growth and employment at home. This is the challenge before us," he added.

Referring to the recent government action to raise price of petroleum products and capping supply of subsidised cooking gas cylinders, Dr Singh said the government is conscious of their effects on poor people.

"We will take all possible measures to protect their life line needs," he said.

The Cabinet Committee on Economic Affairs (CCEA), on Thursday, gave its nod to a proposal for disinvestment of 10 per cent of the Centre's equity in Hindustan Aeronautics Limited (HAL).

"The Cabinet Committee on Economic Affairs (CCEA) has approved divestment of 10 per cent equity in HAL out of its holding on 100 per cent through an Initial Public Offer (IPO) in the domestic market as per the SEBI rules and regulations," an official statement said.

RJD president Lalu Prasad today hit out at IAC activist Arvind Kejriwal and dubbed him an 'agent of America'.

"Kejriwal is an agent of America who on the pretext of running an NGO is dancing to the tunes that country," Prasad said while addressing his 'Parivartan rally' here.

Coming down on Kejriwal and BJP President Nitin Gadkari, he said they were 'mentally ill' and need to get 'cured' at Baba Ramdev's yoga camp.

Prasad also criticised Bihar Chief Minister Nitish Kumar and said he was 'faking' that he was a secular leader and people were now flocking to 'Parivartan rally' as they had seen his real face.


Putting his allegations on Mukesh Ambani Kejriwal asked how did 100 crores reached to his Swiss account and if he is involved in hawala transactions then he must be arrested.

Further, Kejriwal demanded the details of all the bank accounts to be checked properly with all debit entries.

He asked the government for immediate raid on Mukesh Ambani, Anil Ambani, Naresh Goyal, Yash Birla and the three Dabur brothers and if they are found guilty and hawala is proved, they must be arrested.

Kejriwal also raised questions over the Voluntary Disclosure Scheme (VDS) saying it was formulated to save these 700 people. But how did the government knew that tose were not black money?

Kejriwal's new posers to Chidambaram! Activist Arvind Kejriwal on Saturday asked the government whether the names of industrialists he named as having accounts in HSBC Bank in Geneva were part of the list of 700 people handed over to the authorities by France.

Posing questions to Finance Minister P Chidambaram, he said the country wants to know from him why the government was "applying" different yardsticks while investigating the matter as only some people are raided while others are let off.

Mr Kejriwal had on Friday made fresh allegations that HSBC Bank was indulging in money laundering and claimed Ambani brothers, Jet Airways Chairman Naresh Goyal and Congress MP Anu Tandon had parked black money in its Geneva branch.

All those who were named by Mr Kejriwal had denied the allegations.

He also alleged the government was saving HSBC.

"If US government can firmly deal with such banks, why can't Indian governmen do the same?" he said.

The government dismissed the allegations made by Mr Kejriwal saying there was nothing new in the accusations and no evidence has been given to substantiate them.

Meanwhile, almost two months after his split with Arvind Kejriwal-led group, Anna Hazare on Saturday unveiled his new team to take his "apolitical" anti-corruption battle forward with a promise to expand the panel within a month in which former Army chief V K Singh could be a special invitee.

The first list does not have names like that of the former Army chief or activists P V Rajagopal and 'Waterman' Rajinder Singh and agriculture expert Devender Sharma.

Mr Rajagopal and Mr Singh had earlier snapped ties with Team Anna while Mr Sharma had opposed Kejriwal-led group's plans to turn the movement political.

Sources said V K Singh could be inducted as a special invitee in the Coordination Committee.

Arvind Kejriwal was on Saturday accused of being interested only in defaming people and also called "mentally sick" by the Congress and the RJD, a day after the activist fired another salvo as part of his campaign against corruption.Scores of activists of Kejriwal's India Against Corruption (IAC) were, meanwhile, briefly detained by police in Mumbai while staging a protest outside the family home of the Ambani brothers to demand a probe into alleged parking of black money by them in a Swiss bank.

After Robert Vadra, Salman Khurshid, Nitin Gadkari and Mukesh Ambani, social activist turned politician and IAC leader Arvind Kejriwal  on Friday has accused the top industrialists of the country of having huge black money deposits in their Swiss accounts. Kejriwal has also pointed out one of the industrialist to be a close aide of Rahul Gandhi.Arvind Kejriwal along with IAC members Prashant Bhushan and Manish Sisodia slammed BJP of saying their exposure 'weekly market of exposes' and said most of the scams are not a weekly market stuff but needs a daily market.Talking about the black money Kejriwal exploded that the entire black money can be brought back to the nation but the government itself is indulged in an alliance with the criminals.

We have received a CD that revealed that only the HSBC branch of Geneva has 700 registered accounts from India. We don not have the full list of the account holders at present but have few names from the list. However, the government has the full list of all the account holders will total amount in their accounts as in December 2006, he said.

Kejriwal further revealed the some names in this reagard such as:

    Mukesh Ambani: Rs. 100 crores.
    Anil Ambani: Rs. 100 crores
    Sandeep Tandon (Ex IRS, ED official): Rs. 125 crores
    Reliance Industries: Rs. 200 crores
    Anu (Wife of Sandeep Tandon and Cong MP from Unnao): Rs. 125 crores.
    Motech Software Private Ltd (Reliance Group company): Rs. 2,100 crores
    Naresh Goyal (Chairman of Jet Airways): Rs. 80 crores.
    Three members of Dabur have accounts with a total amount of Rs. 25 crores jointly.
    Yashovardhan Birla (chairman of the Rs 3000-crore Yash Birla Group) has an account but had no balance in December 2006.

CBI had claimed the total estimated amount abroad is Rs. 25 lakh crores. However, the list of 700 names account for only Rs. 6000 Crores.

"This is something we all agree on," the president of United states of america said in his weekly radio and Internet address. "Even as we negotiate a broader deficit reduction package, Congress should extend middle-class tax cuts right now.

"It's a step that would give millions of families and 97 per cent of small businesses the peace of mind that will lead to new jobs and faster growth."

On Friday, Obama invited top Republican and Democratic leaders to the White House next week for talks focused on averting the so-called "fiscal cliff."

Such a cliff would represent a catastrophic blend of automatic tax hikes and harsh defense and domestic spending cuts that are due to kick into force on January 1, if no other decision is made and approved by Congress.

The showdown will be a crucial test of whether the newly re-elected Obama can bend gridlocked Washington to his political will, with implications for his capacity to enact an ambitious second term agenda.

Obama campaigned on raising taxes on families earning $250,000 a year or more to pay for deficit reductions and to fund education spending and other plans to boost the economy and improve life for the nation's middle class.

But congressional Republicans have opposed tax increases of any kind.

In his address, the president he was not willing to compromise on this issue.

"This was a central question in the election," he said.

"And on Tuesday, we found out that the majority of Americans agree with my approach -- that includes Democrats, Independents, and Republicans. Now we need a majority in Congress to listen."

The White House said that the president would veto any bill that called for an extension of the George W. Bush era tax cuts for the two per cent of Americans earning more than $250,000 a year.

But Republican House Speaker John Boehner warned in his address the tax increase would destroy more than 700,000 American jobs.

"Instead of raising tax rates on the American people and accepting the damage it will do to our economy, let's start to actually solve the problem," Boehner said.

"Let's focus on tax reform that closes special interest loopholes and lowers tax rates."

In New Delhi, a press statement issued by the group, the newlook Anna Brigade said Mr Hazare reconstituted the Coordination Committee to re-energise India Against Corruption (IAC) movement, signalling a possible confrontation with Kejriwal-led group which is still using the name. Mr Hazare had a split with Kejriwal-led group over the question of anti-graft movement taking a political course.

Mr Hazare announced the 15-member Coordination Committee, which has erstwhile Team Anna's members Justice (Retd) Santosh Hegde, Kiran Bedi, Medha Patkar, Akhil Gogoi, Sunita Godara, Arvind Gaur, Shivendra Singh Chauhan and Rakesh Rafiq.

The new faces in the committee are former DGP (Punjab) Shashikant, former IAS officer Avinash Dharmadhikari, Lt Col Brijendra Khokhar, Ran Singh Arya, activist Akshay Kumar and agri expert Vishambhar Chaudhary.

"I had sent an invite for Gen V K Singh (for today's meeting). He will be meeting me later," Mr Hazare told reporters here after a day-long meeting of the committee. Mr Hegde and Mr Dharmadhikari could not attend the meeting due to their preoccupations.

Giving details of the action plan, Mr Hazare said the coordination committee will be expanded by including around 40 more eminent citizens within a month.

Speaking about the agenda of the movement, he said that "after the split, there have been some doubts that I have become silent and there is no forward movement. We have never stopped.

"The movement is on. We don't want the useless government Lokpal. We will fight for a strong Lokpal, decentralisation, Right to Reject, Citizens Charter and system change. If we have all these laws, 90 per cent of corruption can be eradicated," he said.

"The government does not have the intention. If they bring Lokpal, they know 15 ministers will be in jail. Why should they do it then?...We will ensure that crores of people rise and ensure that the government be forced to enact the law," he said adding government will have to bring Lokpal Bill before next general elections.

However, Mr Hazare said the movement's intention is not to assemble crowds but bring about a change in the system.

Touching upon land acquisition, he alleged government was "gifting" farmers' land to foreign companies. "If farmers don't leave their land, first they use lathis. If they continue to resist, then bullets are fired on them.

"...it is necessary to stop foreign companies from coming to the country. These foreign companies are privatising water, rivers, forests. If we do not stop them today, then the future will be bleak," he said.

On the issue of using the name IAC, Mr Hazare said he was not for confrontation and if Kejriwal—led group gives it, he will take it. "Earlier you remember, my photo was in the banners of IAC," he said indicating that he would prefer to use it.

However, Ms Bedi said it was not Mr Hazare who moved out of the movement but others (Kejriwal—led group). "They will be announcing the new name of the party. So, it won't be a problem on the name," she said.



Without naming either the bank or the account holders involved, the government came out with a statement saying that appropriate action has been taken on these cases based on information received last year from the French government.

A day after Arvind Kejriwal accused it of inaction over black money allegedly stashed away in HSBC Bank in Geneva, the government on Saturday said investigations are in progress with tax authorities to obtain more information regarding the reported account holders.

Without naming either the bank or the account holders involved, the government came out with a statement saying that appropriate action has been taken on these cases based on information received last year from the French government.

"And further including assessment, tax collection and levy of penalty will be taken as per the provisions of the Income Tax Act, 1961 and based on the facts of the each case", said a statement issued on behalf of the Department of Revenue of the Finance Ministry.

The statement comes in the wake of allegations levelled by India Against Corruption (IAC) activist Kejriwal and lawyer Prashant Bhushan that government has taken no action on the information provided purportedly on 700 account holders in HSBC Geneva by the French government.

They had also named top industrialists and a politician as having parked their money to the tune of Rs 6000 crore in the bank.

The official statement merely said that information was received in June last year by the government from its counterpart in France relating to certain bank accounts reportedly held by certain individuals and non-individuals in a foreign bank.

Reference to this matter was made by the then Finance Minister during the course of the debate on adjournment motion in the Lok Sabha on December 14. Subsequently, answers to question on this matter were furnished in the Rajya Sabha on August 23 this year.

The IAC activistKejriwal appears to have come out with a fresh set of allegations, though it was only in May the then Finance Minister, Pranab Mukherjee, unveiled a White Paper on black money in the Lok Sabha at the behest of BJP leader L.K. Advani.

In its White Paper, the government pitched for deterrent punishment through fast-track courts to deal expeditiously with financial offences as part of its multipronged strategy to curb the menace of illicit funds. Significant, it did not provide an official estimate of black money stashed away at home or abroad, leave alone disclosing the names of any offender. And it is on this gap IAC has now sought to pummel the government.

The 97-page document noted that the government would have to take a decision whether India should have a revenue-sharing agreement with Switzerland from taxes on assets held by Indian residents in the European nation without knowing about the identity of the defaulting residents on the lines of similar bilateral treaties the Alpine nation already has entered into with the U.K. and Germany. "The government looks forward to discussion on this important issue within and outside Parliament before taking any further steps," the White Paper said.

Startling revelation

The paper pointed to one estimate of the amount of Indian deposits in Swiss banks which noted that the total liabilities of Swiss banks towards Indians at the end of 2010 were 1.945 billion Swiss francs or about Rs. 9,295 crore. A more startling revelation was that this marked a sharp decrease from Rs. 23,373 crore in 2006. The paper provided a pointer to how the sharp reduction may have come about. "The illicit money transferred outside India may come back through various methods such as hawala, mispricing, foreign direct investment (FDI) through beneficial tax jurisdictions, raising of capital by Indian companies through global depository receipts (GDRs), and investment in Indian stock market through participatory notes."

In August, the government, in its bid to counter yoga guru Ramdev's campaign against black money, revealed that an undisclosed income of over Rs. 49,325 crore and tax evasion totalling Rs. 600 crore were detected based on banking information obtained from foreign countries.

The Bharatiya Janata Party, which has till recently been critical of activist-turned-politician Arvind Kejriwal, on Friday endorsed the latter's allegations over black money and was at pains to stress that the party had been the first to press for a campaign to unearth black money stashed away abroad.

When Mr. Kejriwal had, in October, trained his guns on BJP president Nitin Gadkari, the party had attributed motives and claimed the activist was acting at the behest of vested interests.

On Friday, however, the party said the cases raised by Mr. Kejriwal and India Against Corruption should be investigated.

Speaking to the press, party spokesperson Nirmala Sitharaman demanded that the government come out with details of individuals and entities that had illegal foreign bank accounts.

NIPFP study: 52.85 per cent returns expected from Aadhaar project

Integrating unique identification number project "Aadhaar" with various social sector schemes like rural employment guarantee programme and PDS, would yield rich dividends for the government, says a study.

According to cost benefit analysis study done by the National Institute of Public Finance and Policy (NIPFP), the investment on Aadhaar project would provide a return of as high as 52.85 per cent to the government.

Substantial benefits, it added, would accrue to the government by integrating Aadhaar with schemes such as PDS, MNREGS, fertiliser and LPG subsidies as well as certain housing, education and health programmes.

"After taking into account all the costs, and making modest assumptions about leakages, the study finds that the Aadhaar project would yield an internal rate of return of 52.85 per cent to the Government," NIPFP said in a statement.

The NIPFP study argues that "if we were to add more programmes and expand the scope of the analysis, and also include the intangible benefits, the likely returns will be higher."

As per the projections, the benefits accruing from implementation of Aadhaar scheme would exceed the expenditure in 2015-16 and in 2020-21 the total benefit would be Rs 25,100 crore as against the expenditure of Rs 4,835 crore.

Earlier yesterday, the government has announced rolling our of the ambitious electronic Direct Cash Transfer scheme for beneficiaries of subsidised items from January next year.

The programme is expected to cover 16 states by April 2014. The scheme, which is aimed at curtailing corruption and pilferage of subsidised items, will be based on the payment platform of Aadhaar which is also to be rolled out speedily in line with it.

The 12th Plan document as approved by the Cabinet aims at financial inclusion by providing Aadhaar linked banking services to all desirous households and progressively moving to 'cash transfers' for major subsidies and beneficiary payment programme.

The Unique Identification Authority of India (UIDAI) implementing the Aadhaar project, will set up a dedicated cell of technical experts in UIDAI to facilitate Aadhaar enabled Direct Cash Transfers and help individual ministries.

Government plans to transfer cash subsidies from January 2013

Economic Times reports:

The government plans to kick off direct transfer of cash subsidies under various welfare schemes into the bank accounts of poor beneficiaries from January 2013.

A high-level government panel on direct cash transfers led by the Prime Minister's principal secretary Pulok Chatterjee on Friday asked ministries to identify schemes whose benefits can be disbursed through direct cash transfers. The ministries have also been asked to revert with clear roadmaps and timelines for rolling out cash transfers under these schemes.

The new transfer regime will ride on the Aadhaar-based biometric identification of beneficiaries created by the Unique Identification Authority of India (UIDAI). To bring reluctant ministries on board with the Aadhaar-based cash transfer systems, Prime Minister Manmohan Singh had recently thrown his weight behind the UIDAI by creating a new National Committee on Direct Cash Transfers under his own chairmanship.

The PM is expected to chair the first meeting of this committee on 26 November, where the roadmaps and timelines submitted by ministries for shifting schemes to the direct cash transfer system will be presented.

The Congress-led UPA government is betting on cash transfers being a game changer ahead of the Lok Sabha elections of 2014 and the timelines dictated by the executive committee led by Chatterjee confirm this strategy.

While January 1 has been set as the target rollout date for cash transfers in 51 districts of the country, it would be extended to as many as 18 states by April 1, 2013. The rest of the 16 states, the committee decided, should have initiated cash transfers "from 1 April, 2014 or earlier," a release from the PM's office said.

To ensure a smooth transition, the department of financial services has been asked to ensure 'universal financial inclusion through individual bank accounts for all' in line with the region-wise roadmap for rollouts.

The UIDAI, chaired by InfosysBSE -1.08 % veteran Nandan Nilekani, has been told to set up a dedicated cell of technical experts to help ministries move to Aaadhaar-enabled direct cash transfers. The authority has also been asked to expedite the rollout of Aadhaar numbers to citizens.

at, Nov 10, 2012 at 14:24

Global economies in fiscal crisis: Moses Harding

It is fiscal crisis in developed economies and some of the emerging economies (especially in India). It is difficult to make both ends meet when growth momentum is under pressure; revenues will be squeezed while it is difficult to cuts costs, thereby widening the fiscal gap, says Moses Harding, IndusInd Bank.


Moses Harding
IndusInd Bank


Global economies in fiscal crisis.......extended delay in growth recovery to haunt markets

It is fiscal crisis in developed economies (especially in the US and Euro zones) and some of the emerging economies (especially in India). It is difficult to make both ends meet when growth momentum is under pressure; revenues will be squeezed while it is difficult to cuts costs, thereby widening the fiscal gap. It is also difficult to bridge revenue gap through higher taxes while cutting unproductive expenses will not be populist. It may not be prudent to cut productive expenditures or investments when growth is under pressure; cut in public investments will also push private investors into risk-off mode. It is a vicious trap which US and Euro zones are unable to get out of it. The western economies are already in very loose monetary policy to spur consumption and investments but its beneficial impact on growth and employment is not yet felt despite low inflation, negative real interest rates and the Governments and Monetary authorities walking in the same direction. On the domestic front, the crisis is worse with elevated inflation generating conflict of interest between the Government and RBI. After series of action from the Government towards addressing fiscal crisis, there was expectation of rate cut action from RBI. Though, the market was seen to be divided in rate cut expectation, the post-policy reaction do not suggest this. The 10Y Bond yield was up sharply from 8.11% to 8.22%, 1Y OIS rate up from 7.55% to 7.80% and 5Y OIS rate up from 6.95 to 7.15%. So, most market participants if not all, expected or positioned for rate cut action. The impact on rupee is severe; down from 53.75 to 54.80 on a deep correction from recent high of 51.35. The equity market fared better; initial weakness into 5580 was followed by rally into 5780 on value buying from off-shore investors but momentum could not be held for correction into 5680. The consolation is from clear signals of rate cut action in January-March 2013 and thereafter prepare for shift of system liquidity from deficit to surplus in July-December 2013.

The markets will remain choppy and weak till resolutions to fiscal crisis are out of the way. The Obama administration has tough task ahead to avert fiscal cliff; not clear at this stage, how he is going to achieve without tax hikes and cut in unproductive expenses. The same is the case in the Euro zone; PIIGS countries can give shock while Germany and France are under severe growth pressure. The comfort is from the efforts to hold the Euro zone together.  On the domestic side, soft commodity prices would help but weak rupee stays spoil-sport. There is not much of pressure on the revenue side so far but addressing cost side with limited political support is an issue. The market will watch closely on the ability to raise money through disinvestments and other one-off items from sale of unproductive assets. It seems India is better positioned in addressing fiscal crisis than the developed economies. The major concern is from elevated inflation and possible delay in RBI's shift to growth supportive monetary stance; need is to maintain operative policy rate at the lower end of LAF corridor, the Reverse Repo rate to spur growth, consumption, investments and remove supply-side bottlenecks. Over all, near term uncertainties continue to remain valid with no confirmation on sighting the light at the end of the tunnel. It is difficult at this stage to take short/medium term bullish outlook on lack of confidence on fixing fiscal issues and limited ability to get growth momentum back on track. What is the impact on asset markets?

Currency market

Rupee is sharply down from 5th October 2012 high of 51.35 (into 54.80) wiping out 58% of its recovery from historic low of 57.32 (punched on 22nd June 2012). During this period USD Index is up from 78.60 to 81.00 i.e., while the dollar is up by 3%, rupee is down by 6.7%. So, rupee woes are from combination of domestic and external cues. The domestic woes from issues relating to twin deficits and conflict in growth-inflation dynamics remain valid with risk of delay in resolutions till the Government and RBI walk in the same direction. Rupee is now seen as the most underperforming currency against its peers; it is not good for the pride of the Indian economy. What next? The dilution in bearish set-up on rupee will be from further downtrend in commodity prices, sustainable off-shore liquidity flow into debt and equity capital market and favourable monetary conditions triggered by downtrend in headline inflation. These conditions will lead to rupee outperformance against peers and dilute dollar bullish impact on rupee. It is also essential for USD Index to fail ahead of key resistance at 81.35 to remove pressure on rupee. What is in our control is to roll-out investor friendly policies and swift shift into growth supportive monetary environment. For now, let us watch next solid support for rupee at 55.00-55.10, risk of extended rally in USD Index into 82.00 will bring rupee focus into 55.60 ahead of 56.00-56.10. It is also important for rupee to take out immediate resistance at 54.30 for extension into 53.40-53.65. Despite the need to maintain stability in rupee exchange rate with bullish undertone to attract off-shore inflows and contain inflationary pressures, excessive weakness in rupee will delay improvement in macroeconomic stability; will look up to RBI for ensuring this. For the week, let us watch 54.30-55.10 and stay neutral on extension into 53.60 or 55.60-56.00; will have close watch on price action in USD Index at 81.35 and 80.20 for this directional breakout. The strategy is to trade end-to-end of 54.30-55.10 with stop/double reverse on break thereof.

Euro is down into lower end of set strong short term base at 1.2650-1.2750 (low so far at 1.2691). It is important for Euro to hold above 1.2650 to retain its short term bullish undertone; else, extended weakness into 1.2475-1.2500 will come into play. The immediate resistance at 1.2785-1.2800 has to be taken out to bring Euro bulls into street for further extension into 1.2875-1.2900. While ECB maintained "no rate cut" stance, there is build up of 25 bps rate cut which is keeping Euro under pressure. The "fiscal cliff" in the US has retained investors' risk-off mode to add strength to the US Dollar. There is no clarity either-way at this stage but will keep the bias open for reversal in recent sharp fall in the Euro from 1.3169 to 1.2689. For the week, let us watch 1.2650-1.2900 with bias into higher end. The strategy is to trade end-to-end with stop/double reverse on break thereof. The earlier outlook for Euro strength into 1.3070-1.3170 stays valid.

USD/JPY traded perfect to the script; rally from 77.40 met the set objective at 80.65 and reversal from there met its target at 79.40-79.15. What next? USD/JPY has to hold above 78.85 to retain its bullish undertone for extension beyond 80.65; else deeper correction into 78.00-77.85 will come into play. For the week, let us watch consolidation at 78.85-80.65 and stay neutral on break-out direction. The strategy is to trade end-to-end with stop/double reverse on break thereof.

Equity market

The smart rally in NIFTY from set short term base at 5580 lost steam at 5780 ahead of set objective at 5800-5830; correction from there found support at 5680 for weekly close at 5686. The monetary policy jitters could not do much harm to equity market on good appetite from foreign investors. It would need strong domestic cues for extended bullish undertone beyond 5780-5830 while 5630-5580 stays firm. There is good value buying seen at 5630-5580 to retain bullish undertone into short term. For the week, let us watch 5630-5780 with extension limited to 5580-5830. It is traders market and considered good to buy at 5630-5580 and sell at 5780-5830 with tight stop on break thereof. There is no change in expectation of extended rally into 5980 on signals of monetary easing from RBI.

Commodity market

Gold has traded to the script; up from set buy zone of 1680-1665 (low of 1672) to meet set objective at 1735-1750 (high at 1738). What next? The growth concerns on the Global economy will add strength to Gold in the near term; thereafter possible resolution to the "fiscal cliff" and resultant shift into risk-on mode will extend rally in Gold. It is possible that Gold has already seen a near/short term base at 1672 for bull-run into immediate objective at 1790-1800. For the week, let us watch 1715-1765 with bias into higher end, and prepare momentum for extended gains into 1790-1800. The strategy is to buy dips into 1720-1695 with tight stop for set objectives at 1765-1790.

The reversal target in NYMEX Crude from above $100 (high of 100.42) is just short of final objective at 82.50-77.50 (low so far at 84.04). The bulls are already down and out on lower demand and efforts to be less dependent on imported CRUDE. The next objective is at 82.25 ahead of 77.30 not ruling out further extension into 75. This expectation is valid till 88-90 stays firm to set up near term trading range of 75-90 with bias into lower end. For the week, let us watch 77.50-87.50; strategy is to sell in two lots at 86.50-87.50 and 89-90 with tight stop for 77.50-75.00.

Interest rate market

10Y Bond yield traded end-to-end of set "inner ring" of 8.17-8.22 (within the "outer ring" of 8.15-8.25%) before close of week at 8.22%. The undertone into near term is bearish driven by week-on-week auction supplies, risk of overshoot in market borrowing and fear of cut in HTM limit from 25% to 23%. On the other hand, rate cut expectation in January-March 2013 provides support. There is strong debate on the need to have HTM retention limit at 25% while SLR limit is 23% with availability of refinance from RBI Repo counter for over 23%. RBI may "time" the cut in HTM limit along with rate cut actions to prevent extended weakness in 10Y Bond yield above 8.25% and arrest excessive gains below 8.10% to build time value between overnight rate and 10Y Bond yield; overnight rate at 7.50% and 10Y Bond yield at 8.10% will look alright. This sets up short term range play at 8.10-8.25%. For the week, let us watch 8.17-8.25% with bias into higher end. The strategy is to stay invested at 8.23-8.25% for 8.18-8.17%. It is possible that RBI would open its OMO window on extended weakness beyond 8.25%. It is also good time for Banks to fill shortfall in HTM for good yield pick-up.

OIS rates too traded end-to-end of set range of 7.72-7.80% (1Y) and 7.07-7.15% (5Y). It was also considered not safe to stay "paid" on test/break of higher end; test/break there could not sustain for close at 7.77% and 7.14% respectively. Now, focus will shift into 1X5 play; while 1Y is expected to stay below 7.80%, there is risk of extension in 5Y into 7.20% to cut 1X5 spread to 55-50 bps (from current 63-65 bps) into near term. For the week, let us watch 1Y at 7.70-7.80% and 5Y at 7.10-7.20%. The strategy is to stay received in 1Y at 7.80% (for gradual move into 7.70%) and pay 5Y at 7.12-7.10% (for 7.18-7.20%).

FX premium has nicely settled into trading range within 6.25-6.75% (3M) and 5.35-5.75% (12M); bullish momentum into higher end is arrested by strong exchange rate play while there is strong support on the lower end from interest rate play. The risk of test/break of higher end will be on sharp reversal in USD/INR from 54.80-55.10; break here (into 55.60-56.10) will trigger test/break of lower end. For the week, let us watch 6.15-6.65% (3M) and 5.4-5.7% (12M). The strategy is to trade end-to-end with tight stop on break thereof. It will be good to stay paid on test/break of lower end for ALM play and interest arbitrage for importers.

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