India faces a crisis of growth

In 1991, when Manmohan Singh rose to present his first Budget as the country's new finance minister, India was reeling under an imminent foreign exchange crisis - which could have led to defaults. We did not have enough money to pay for even two months of imports. The choices staring Singh were stark; either continue with the disastrous economic policies and see India reduced to an economic basket case or seize the moment to usher in far-reaching reforms. He chose the latter option and the rest is history. It was the time for making bold decisions.

Today - for many different reasons - Finance Minister Pranab Mukherjee is at faced with a new set of challenges. Thankfully, the situation is not as desperate as in 1991. Then it was a crisis of survival - now it is a crisis of growth - especially double-digit growth. India's true potential is not in 10+% GDP growth - but a set of recent events have made this seems difficult to achieve. The threat to this aspirational goal of double-digit growth for the next 10 years could be the opportunity for making some bold decisions.

This current threat to the India story is a result of many external as well as internal factors.

The government seems to be caught between a rock and hard place when it comes to the fiscal consolidation. The FM will find it politically impossible to curtail subsidies and funding for schemes like the National Rural Employment Guarantee Scheme (NREGS). Many of these programmes are worthwhile and necessary for inclusive growth, but the key challenge now is get more of limited resources for this as the government's ability to increase outlays will be curtailed in this Budget.

Options to raise additional revenues like using 3G spectrum auction proceeds to bridge the fiscal deficit are no longer available at the same level. Disinvestment is likely to rope in 40,000 crore. So, taxes will have to provide a boost - though the tax revenues are healthy; it is unlikely that in view of rising inflation, individual tax rates will be raised. So, the only option will be to raise some more from corporate and indirect taxes.

Tax revenues for the next year could also be under pressure if the GDP growth rate buckles under the pressure of political pressures and inflationary factors.

The case of inflation control is the biggest issue in front of the FM - it is also probably the most politically sensitive. The classical response till now has been to raise interest rates, which the RBI has already done seven times during the year.

But this has failed to rein in a price rise which is caused by supply-side bottlenecks and inadequate investments in infrastructure. Also inflationary expectations are on the rise, which is dangerous. The FM has to supplement the RBI's actions with tighter fiscal policy measures - to control inflation, for sure; but, more importantly, to rein in inflationary expectations. This is easier said than done as the fallout of this could be GDP growth slowing down.

ET

Europe's biggest Hindu temple to come up in Netherlands

BRUSSELS: The biggest Hindu temple complex in Europe - consisting of three temples, residential areas and tourist spots - is going to be built in the Dutch city of The Hague.

Three Hindu groups would be building three temples on a site behind the Hollands Spoor railway station, EuAsiaNews reported citing the Netherlands' Trouw newspaper.

The complex will include 45 apartments and is set to open in 2014. There would be rooms for yoga and meditation and tourist spots for foreign guests.

The residential towers are also open to non-Hindus.

The Hague council member Rajesh Ramnewash has designed the plan.

Some one percent of people living in the Netherlands are Hindus. The Hindu community also accounts for the largest immigrant group in the Hague, according to Trouw.

et

Government may set up panel to review AI wages

NEW DELHI: Problems relating to disparity in wage structure and seniority among employees of Air India after its merger with erstwhile Indian Airlines are likely to be resolved by a panel chaired by a retired judge. A suggestion that these issues be tackled indepth by a committee headed by a retired judge has been made by civil aviation minister Valayar Ravi during his meetings with leaders of 14 unions of the state-run carrier.

"After a two-day meeting with all the employees' unions of Air India, I have suggested the formation of a committee headed by a retired judge to resolve their issues relating to service matter," Ravi said after inaugurating the Centenary Celebration of Civil Aviation in India here.

The function marked the launch of the first commercial flight in India—between Allahabad and Naini on February 18, 1911. The minister said the unions have agreed to cooperate with the government to bring the national carrier out of red. To questions on lack of manpower integration between the two erstwhile public sector airlines even after almost four years of their merger, Ravi acknowledged that there were "some problems" but said "these can be resolved through talks" .

Asked about charges that Air India had given away many profitable routes, both domestic and international, to private competitors, he said it was "not the time to blame but to run the institution and get out of the situation" . The minister said more funds were needed to bring Air India out of red but refused to disclose the amount, saying he would discuss the issue with FM Pranab Mukherjee before taking a decision.

toi

India's ambition backed by sound logic

Recollection of the past and reconstructing moments as they may have exactly happened can be a difficult task. An India-Bangladesh World Cup opener evokes nightmarish memories for an Indian fan, of a similar encounter four years ago, on the same grand stage, which produced a result that shattered the Indian dream even before it had acquired concrete shape.

In the faraway land of Trinidad, whose capital Port-of-Spain, known for the Indian Test team's stirring saga of scoring more than 400 runs to achieve a famous Test victory once, is today remembered for India getting knocked out of the 2007 World Cup even before it had begun.

On the eve of this year's tournament in which India, unlike then, have a far more secure, settled and formidable look to it, the Indian team may still be carrying the wounds inflicted on them by a team which we all believed were there to fill in the numbers. Despite the Bangladeshi journalists reminding us that their team could be dangerous foes, we had paid no heed to them, till they pushed us from the perch we thought was ours.

The shock of that premature exit stunned the cricketing world, from a commercial aspect, so much that four years on, we have a format in which all top teams are guaranteed at least a month's participation, regardless of the results.

Not that India needed that charity this time, given the fact that we are the number two team in the world and, by unanimous consent, the strongest contender for the throne.

Home conditions, crowd support, a billion good wishes and multi-million dollar sponsor backing would be enough incentive for a team to jump from the moon and still hope to survive. And even if on their way, they were to encounter rough passages, this team is strong enough to navigate its way towards its final destination.

From a shifting perspective, Bangladesh must be in greater stress and tension as this time around they are not exactly the "underdogs" they were four years ago.

And the reassuring thought for both the teams is that no matter what the result, it is not going to be the end of the road, just the beginning of a long journey.

India, in any case, are not a team to be trifled with and their ambition to become champions has the sound backing of cricketing logic.

Yet the beauty of sport, the reason why we all follow it, is that the outcome is always shrouded in many ifs and buts till the final moment arrives.

At a time when cricket is itself facing many difficult challenges, let us all hope to witness many nerve-tingling, coruscating, edge-of-the-seat thrillers and not the dreary, boring one-sided games, which could sound the death knell of the World Cup itself.

HT

I-T wants Ali to pay Rs70,000cr in taxes

MUMBAI: The Income Tax (I-T) department will start criminal proceedings for concealment of income against Hasan Ali Khan, the Pune-based owner of race horses who is wanted for money-laundering deals worth billions of dollars and tax evasion.

I-T officials will lodge a complaint for concealment of income in a court in Mumbai and then forward the documents to the Swiss government in yet another bid to ask for information about Khan's banking transactions in
that country.

This will be the third attempt by the I-T department to convince the Swiss about the need for Indian officials to be privy to information about Khan's bank accounts. The Enforcement Directorate (ED) has also made a separate attempt. Data earlier gathered from Khan's computer showed that he allegedly had a balance of $8.04 billion in UBS Zurich at one point.

Amidst fears that Khan might leave the country, which could jeopardise cases against him, I-T officials issued a summons for him and he appeared before them at Aaykar Bhavan in Mumbai on Friday. The Supreme Court recently told
the Centre to ensure that Khan remains in India.

''In a case of concealment of income, we impose a penalty on the amount concealed. There is a provision to lodge a criminal complaint in the court,'' said a senior I-T official. The I-T department wants Khan to pay more than Rs 70,000 crore in taxes.

Director-general of I-T (Investigation) B P Gaur confirmed that the department intends to initiate criminal proceedings against Khan.

At the same time, another I-T official said that if it is proved that the documents recovered from Khan are forged, the I-T case may not stand. These are the same documents that were earlier provided to Swiss officials to prove his Swiss bank transactions, another official said. UBS Bank had said on Thursday that the documents are forged. The banks officials said they do not have any business relationship with Khan and he does not have any accounts or assets with them. Khan is suspected of transferring $8 billion from a Swiss bank using his wife Rheema's name.

Swiss authorities suspected forgery when the ED approached them with documents in 2008. The ED said Khan had committed an offence under the Prevention of Money Laundering Act (PMLA). Sources said the parameters set for invoking PMLA were not fulfilled by the ED and hence Swiss authorities refused to provide any details. To book a case under PMLA, an Indian Penal Code offence has to be registered.

Soon after, the I-T department filed a criminal complaint against Khan for not filing returns, but the Swiss refused to assist, saying not filing returns in India is not an offence in Switzerland. The I-T department then sought information about Khan's bank account under the Double Taxation Avoidance Agreement. Under the agreement, being a resident of India, Khan's global income would be taxable here. However, Swiss authorities again refused, saying it was a banking issue, an official said. I-T officials said they have raised a tax demand in the belief that the documents on Khan are genuine. ''We have that provision in the Income Tax Act,'' an official said.

Officials said his known properties are worth only a few crores. ''If we attach them and auction them off the amount realized would be far less than his dues,'' said an official.

The SC's remarks had come during the recent hearing of a case filed by Ram Jethmalani, who has alleged that little has been done to recover Rs 70 lakh crore in black money stashed abroad. The government has said that Jethmalani's estimate is unreliable.

TOI

India signs trade pact with Malaysia

NEW DELHI: India on Wednesday signed a comprehensive economic cooperation agreement (CECA) with Malaysia which gives its doctors, accountants , two-wheelers , cotton garments and basmati rice greater access to the Malaysian market. This is in return for faster duty cuts for refined palm oil and binding tariffs on three other palm products. Besides, India has committed to freer entry norms for Malaysian engineers, accountants and IT specialists coming to the country on temporary contractual assignments.

There is an agreement on both sides to foster investment with India allowing Malaysian companies to hold 49-100 % equity in 84 service sectors while Malaysia provided a similar dispensation for Indian companies in 91 sectors including construction (51%), computer & related services and management & consultancy (100% each).

The India-Malaysia CECA goes beyond the commitment offered by the two countries under the Asean agreement. In all, India will keep 1,225 items outside the ambit of tariff reduction, compared to 1,298 for Asean members. Similarly, Malaysia will keep 838 products in the exclusion list compared to 898 under the Asean pact.

As a result, India has agreed to lower the import duty on refined palm oil to 45% by the end of December 2018, which is a year ahead of what it has committed under the Asean treaty. Similarly , the decision to bind tarriffs on three palm products by December 31, 2018 was not part of the Asean agreement.

In terms of tariff reduction, there will be three tracks -- Normal I, Normal II and Sensitive. For Normal Track I, import duty on all products will be eliminated by the end of September 2013, as against December 31, 2013 under the Asean agreement. For Normal Track II, there will be a six-month advancement resulting in an elimination of tariffs by 30 June, 2016. For sensitive list items, the two countries have committed cap tariffs at 5% by 30 June 2016, six months ahead of the schedule provided under Asean. There is a fourth track too — Special Track — where tariffs are to be capped at 5-20 % over a period of fourseven years. Apart from these, there are special provisions for India and Malaysia. For Malaysia , there is another list which includes highly sensitive items. Here, for goods attracting over 50% duty, Malaysia will cap these tariffs at 50% by the end of 2018. For highly sensitive items where the customs duty is 50% or below, there are two options. One is to cut duties by 50% by the end of 2018 or two, to lower it by 25% by then.

TOI

SC seeks status of graft charge against ex-CJI

NEW DELHI: Former Chief Justice of India KJ Balakrishnan suffered a setback on Friday when the Supreme Court asked the government to detail the status of inquiry into a nine-month-old complaint accusing him and his kin of corruption.

The CBI's anti-corruption branch in Kochi, which was tasked to inquire into the complaint, will now reveal the outcome of its probe to the court through attorney general GE Vahanvati within two weeks.

Justice Balakrishnan has been under a cloud following allegations of a spike in the assets of his family members during his stint in the country's top court. He has so far shrugged aside demands, including from retired SC judge VR Krishna Iyer, that he disclose his assets. The former CJI also opposed a Right to Information plea on his tax returns.

While the intervention by his former peers should test his resistance, the apex court's bold curiosity about the status of investigation into assets can cause anxiety also to the powerful accused in the spectrum case. The court is monitoring investigation into the 2G spectrum case, and has stressed that CBI disregard the status of the accused.

Justice Balakrishnan refused to comment on the SC asking for the probe status report on Friday.

The inquiry into the former CJI's assets also addresses the criticism that judiciary is reluctant to act on complaints against its members.

Justice Balakrishnan was the first CJI from the dalit community who, after his retirement, was appointed chief of National Human Rights Commission — a position he still holds.

Delhi-based Mohammad Furqan had levelled corruption charges against him in a complaint to the President and Vice-President on May 4 last year. While requesting the President not to appoint him as head of the human rights body, Furqan had sought a thorough probe into the allegations against him and his relatives.

The court on Friday asked for the status of this complaint, which was forwarded to the CBI's anti-corruption branch in Kochi. A Bench comprising Chief Justice S H Kapadia and Justices K S Radhakrishnan and Swatanter Kumar sought the AG's assistance in the matter.

The Bench's query came prior to it hearing a public interest litigation filed by advocate M L Sharma, who sought a judicial inquiry into recent allegations against Justice Balakrishnan, his son, son-in-law and brother.

The court told Vahanvati, "This is a petition seeking judicial inquiry into alleged misbehaviour of the NHRC chairperson. We will deal with the PIL later. But, there was a complaint sent to the Vice-President, who referred it to the home ministry. We want to know what is the status of the complaint."

Vahanvati said he would inquire into it and get back to the court within two weeks.

The V-P's secretariat had on June 21, 2010, written to the home secretary that the complaint "regarding investigation of assets of former CJI" was being forwarded to him for "appropriate action". The ministry sent the complaint to CBI, New Delhi.

The CBI, on August 10, 2010, forwarded the complaint to its anti-corruption branch in Kochi, Kerala, the home state of Justice Balakrishnan.

The communication to superintendent of police, CBI ACB, Kochi, had said, "The complaint is being forwarded to your office for taking further necessary action as deemed fit. CBI, ACB, New Delhi, has not undertaken any inquiry or verification with reference to the matter."

Furqan`s allegations against Justice Balakrishnan ranged from out-of-turn hearing of an appeal of CPM leader Pinarayi Vijayan in SNC Lavlin case to his son`s alleged visits to Dubai for an ulterior purpose relating to another pending case.

Justice Balakrishnan had rejected the allegations and said that his relatives facing charges of disproportionate assets were answerable to the statutory machinery dealing with the cases.

Furqan had also alleged that value of the assets declared by Justice Balakrishnan were "far below the actual assets owned by him and his family members". The judges, while declaring their assets, give the price at which assets were acquired and not their present market value.

PIL petitioner Sharma had requested the court "to advise the President of India to refer/initiate a judicial inquiry under Article 317 to the Supreme Court to prove misbehaviour of former CJI K G Balakrishnan."

Sharma said even former Supreme Court judge, Justice V Krishna Iyer, had on December 28 last year demanded a probe into the charges against Justice Balakrishnan`s son-in-law and relatives but law minister M Veerappa Moily had declined the request.

TOI

Team India seeks revenge for 2007 World Cup debacle

MIRPUR: It's not about having the best team. It is not about revenge either. When India and Bangladesh square off on Saturday at the Shere-e-Bangla National Stadium here, it will all be about handling pressure.

There is so much hype surrounding the inaugural match of the 2011 World Cup that even a seasoned campaigner like Mahendra Singh Dhoni is feeling the heat, while his Bangladesh counterpart Shakib Al Hasan is reeling under it. While Dhoni tried to deflect pressure by playing to the gallery at Friday's match-eve press conference, Shakib literally sweated it out even as he fielded uncomfortable questions, including a few on the injured Mashrafe Mortaza's absence.

Shakib, in all seriousness, maintained that his side would miss the experienced allrounder, who was Man of the Match on the last two occasions when Bangladesh beat India, but expected others to do the job. Dhoni, on the other hand, simply pointed out - amid peals of laughter - that "being out of the squad means Mortaza wouldn't be able to pick up the award this time."

It was clearly Dhoni's way of dealing with the pressures of World Cup that his team is hotly tipped to win. The match-up against Bangladesh represents the first hurdle in what promises to be a fascinating campaign.

History counts for little in instant cricket, and the loss to Bangladesh in the 2007 World Cup has been reduced to a footnote by tall achievements by the current crop of players whom Dhoni has galvanized into world-beaters. It's redemption, rather than revenge, that India would be seeking through a winning start on Saturday. Even lightning never strikes twice at the same place. To expect Bangladesh to do so against India will be expecting too much from Shakib's youthful side which clearly lacks depth.

Purely from a cricketing point of view, Bangladesh are over-reliant on their left-handed opener Tamim Iqbal to post a match-winning total, while their bowling attack lacks both variety as well as depth. Their two pacers - Shaiful Islam and Rubel Hossain - are both right-arm operators, while their three frontline spinners Shakib, Razzak and Sohrawordi Suvho are all of left-arm variety.

Unless they make early inroads and keep picking wickets at regular intervals, it is hard to see them containing a powerful Indian line-up that boasts some of the biggest hitters in the game.

It is good for any captain to have a problem of plenty, but spare a thought for Dhoni, who must now make up his mind about Yuvraj Singh. Picked on his reputation as a match-winning batsman, Yuvi continues to struggle with the bat but has emerged as a frontline spinner, who regularly bowls his full quota of overs.

The first XI picks itself with Sachin, Sehwag, Gambhir and Kohli taking up the top four slots and Yuvraj, Dhoni and Pathan coming in next, followed by Harbhajan, Zaheer, Chawla and Munaf.

Nehra could pip Munaf to the second pacer's berth. But Dhoni must be relieved to see Zaheer back in the bowling nets here after missing the warm-up games.

Yuvi's new-found confidence in bowling gives Dhoni a chance to include a frontline batsman instead of allrounder Pathan, whose hard-hitting skills may not be needed against Bangladesh. Dhoni has also not used Pathan's off-spin much in the two warm-up matches against Australia and New Zealand. Raina could be a direct beneficiary as he is a good player of spin and would relish batting against the left-arm tweakers of Bangladesh.

The bald, brown pitch will have nothing to offer to the pacers. It is expected to play low and slow which means taking the pace off the ball would pay for the bowlers, while batsmen need to play the waiting game.

It may not be a walk in park for India, but a battle of attrition, where Dhoni's bravehearts must overcome the pressure of expectations before slaying the Bangla Tigers in their den.

Toi

Advani apologises to Sonia on Swiss bank account issue

New Delhi, Feb 18 (PTI) Senior BJP leader L K Advani has apologised to Congress President Sonia Gandhi for a party-appointed task force report, which had alleged that she and her late husband Rajiv had accounts in Swiss banks.

BJP had appointed the task force on unravelling the amount of black money stashed by Indians in foreign banks and ways to bring it back.

The report had alleged that Sonia Gandhi and former Prime Minister Rajiv Gandhi were among Indians who held Swiss bank accounts.

This had led Sonia Gandhi to write a letter to Advani denying the allegation.

Sources said in the letter, Gandhi had said that neither she nor her husband held Swiss bank accounts.

In his reply to the Congress President''s letter, Advani expressed regret of her name and that of her late husband being mentioned in the task force report.

However, Advani also stated in his reply that the Gandhis should have denied this publicly when there were murmurs that names of her family members could figure in the report.

Advani said had she done so, the name of her family members would not have figured in the task force.

The four-member task force comprising S Gurumurthy, former IB director Ajit Doval, Professor R Vadiyanathan and advocate Mahesh Jethmalani has put the figure of money stashed in safe havens to be 25 lakh crore.

On February 1, NDA leaders had released a booklet ''Indian Black Money Abroad in Secret Banks and Tax Havens'', the second report of the task force appointed by the BJP. PTI

Rupee gains 13 paise to 1-month high against dollar

MUMBAI: The rupee rose by 13 paise to a one-month high of 45.21 per US dollar at the Interbank Foreign Exchange today, supported by a rally in the domestic stock market and dollar weakness against other currencies.

Forex dealers said a higher opening in the stock market and dollar losses against a basket of major currency rivals overseas kept the rupee sentiment firm.

The rupee had gained 18 paise to close at Rs 45.34/35 per dollar in the previous session on the back of bullish domestic equities and sustained dollar-selling by exporters and banks.

Meanwhile, the Bombay Stock Exchange index Sensex was up by 119.85 points, or 0.65 per cent, to 18,626.67 in opening trade today.

TOI

Sensex down 295 pts on profit booking after 5 days of gain

MUMBAI: The BSE benchmark Sensex on Friday tanked over 295 points to close at 18,211.52, breaking five days of winning run, with realty and auto stocks leading the fall as investors booked profits amid mixed global markets.

Marketmen said the sentiment was also affected by the widening probe in the 2G spectrum allocation scam, pulling down ADAG firm RCom by nearly 7 per cent.

The Bombay Stock Exchange benchmark Sensex, which rallied nearly 1,045 points during the five-session bull-run, fell sharply by 295.30 points, or 1.60 per cent to close at 18,211.52 after touching a low of 18,159.82 largely on fag-end sell-off.

The gauge gained nearly 186 points at one stage to hit a high of 18,690.97 points on the back of sustained surge in realty, banking and oil and gas sector stocks supported by easing inflation.

The wide-based National Stock Exchange index Nifty also lost 87.50 points, 1.58 per cent to 5,458.95, after touching the day's low of 5,441.95.

Marketmen said emergence of profit-taking by funds as well as retail investors after witnessing significant gains in mainly dampened the trading sentiment.

Retail investors, who had been extending support to the market in the past few sessions, turned cautious and reduced their portfolio ahead of the monthly expiry next week and the general Budget for the financial year 2011-12.

In 30-BSE index components, 25 stocks ended with losses while 5 closed higher.

Stocks of RCom tumbled 6.80 per cent to Rs 93.15 on massive selling, triggered by ongoing CBI probe into the 2G spectrum allocation scam.

The realty sector index suffered the most by falling 4.04 per cent to 2,052.11 followed by auto sector index by 2.39 per cent to 8,717.71.

The oil and gas index plunged 2.09 per cent to 9,329.99 and capital goods sector index by 1.97 per cent to 13,132.51.

The banking index fell by 1.73 per cent to 12,419.72 as largest lenders State Bank of India and ICICI Bank suffered fresh losses.

With the selling spread over a broad front, the small-cap index closed 2.35 per cent lower at 8,128.91 points, while mid-cap index shed 1.98 per cent to 6,661.65.

TOI