India Country Brief090403

Basic Political Developments

Pakistan today made it clear that it would not accept any pre-condition for resumption of the stalled peace process with India. While reacting to Prime Minister Manmohan Singh's assertion that for the resumption of dialogue, Pakistan must meet the "minimum pre-condition" of ensuring that its soil will not be used for terror activities against India, Pakistan Presidential spokesman Farhatullah Babar told media that India’s stand was taking peace initiatives a step backward.

The BJP has revived its pet Hindutva themes of rebuilding Ram temple at Ayodhya and abrogation of Article 370 giving special status to Jammu and Kashmir as it released its manifesto for the upcoming Lok Sabha elections. The saffron party also promised to give 35 kg rice per month at Rs two per kg for BPL families, which is seen as a counter to Congress' offer of rice at Rs three per kg. BJP also promised to make available wheat at Rs 3.5 per kg. The BJP manifesto comes after 11 years as the party had released NDA manifestos along with its coalition partners in 1999 and 2004.

The Rashtriya Janata Dal (RJD), the Lok Janshakti Party (LJP) and the Samajwadi Party (SP) will make a formal announcement of their new alliance here on Friday. On March 29, Samajwadi Party General Secretary Amar Singh said, "The RJD, the LJP and the SP will sit together in Lucknow to discuss and announce the secular alliance." The three parties on March 26 had separately announced plans to contest the coming general elections in Uttar Pradesh and Bihar unitedly.

Sarad Pawar, who is an important partner of the United Progressive Alliance (UPA), said that he was not able to reach Bhubaneshwar as his plane developed a technical snag and instead he would be addressing the rally through phone. "I am in Nashik and the aircraft that was supposed to take me could not reach because of a malfunction. I will definitely go sometime next week. I was not going to Third Front rally but going for BJD (Biju Janata Dal) rally.,” he said from Nashik.

Senior BJP leader L K Advani today dismissed as "farcical illusion" the idea of a Third Front government and said the tussle is between BJP-led NDA and Congress, which is "losing" its allies. “There is no scope for a Third Front government, which does not have the support of BJP or Congress. It is a farcical illusion in the minds of people," he told reporters at the manifesto-release function. Taking a dig at Congress, the BJP's prime ministerial candidate said he "sympathised" with Congress which is facing a "sad situation".

Lashing out at Uttar Pradesh Chief Minister Mayawati for slapping NSA on BJP leader Varun Gandhi, the VHP today warned of an "Amarnath-like" protest if the Pilibhit constituency nominee, booked for his hate speeches, was not released at the earliest. "Varun Gandhi's detention under NSA is highly condemnable and totally undemocratic. It is a fall-out of the panic that has been caused among forces like ruling BSP and the Samajwadi Party who thrive on the politics of social fragmentation along the caste lines," VHP chief Ashok Singhal told reporters here.

The Gorkha Janamukti Morcha (GJM) will be a part of the National Democratic Alliance (NDA) and support Bharatiya Janata Party (BJP) candidate Jaswant Singh for the Darjeeling Lok Sabha seat in West Bengal. Announcing this while releasing the BJP poll manifesto here on Friday, the party's prime ministerial candidate L.K. Advani said the decision was reached after discussions with top GJM leaders.

The Biju Janata Dal (BJD) faced a mini revolt on Thursday night after the head of its Parliamentary Party and former union steel minister Braja Kishore Tripathy resigned from the party, protesting against party chief Naveen Patnaik's decision to drop him from the candidate list for the Lok Sabha polls. Tripathy, who reportedly does not get along with Naveen's advisor Pyari Mohan Mohapatra, was expected to be renominated from Puri Lok Sabha constituency.

National Economic Trends

Public sector banks are planning to reduce their lending rates by one percentage point, a move that may bring down interest rates on retail and industry loans to single digits. The proposed cut in prime lending rates (PLR), at which banks lend to preferred borrowers, will be announced over the next six to eight weeks, said a senior official of the Indian Banks Association (IBA), requesting anonymity. Average lending rates of public sector banks would come down to 9.5% after the proposed rate reduction. Over the past couple of months, public sector banks have cut their lending rates by nearly 200 basis points.

The government on Thursday suspended a key accounting norm on foreign exchange losses for the period starting December 7, 2006, to March 31, 2011, allowing companies like Tata Steel, Suzlon Energy and Wockhardt to protect their

profits from a sudden increase in their foreign loan liability on account of adverse currency movements. Under the amended rule, forex losses (or gains) can be kept on the balance sheet itself, and not brought to the profit and loss account.

Business, Energy or Environmental regulations or discussions

Airlines such as SpiceJet, Kingfisher Airlines, Jet Airways and Paramount Airways are likely to increase air fares by 5-8% per ticket from mid-April due to a sharp increase in price of aviation turbine fuel (ATF). “As ATF rates have gone up by 10%, airlines need to increase fares to partially mitigate the jet fuel price increase. We have decided to increase air fares by 5% on the total fare, which will be implemented mid-April,” a senior official said.

Global GSM players and Sunil Bharti Mittal of Bharti Airtel have submitted a proposal to PM Manmohan Singh highlighting the formidable role that telecommunications can play in global economic recovery, asking him to endorse this at the G 20 meet in London. In a letter dated March 27, the heads of AT&T Mobile, Ericsson, Alcatel Lucent, Orascom, MTN Group and other leading global telcos have said the deployment of mobile broadband, financed by private capital could create 25 million jobs around the globe and boost global GDP by 3 to 4%.

Tata Steel, which completed its centenary in 2007, will achieve another milestone when its mining division in Jharia completes a 100 years of operations on April 4. The Jharia division came to life when the Bhelatand ‘A’ colliery kicked off operations back in 1910. Tata Steel has created a special logo to mark the centenary year of the Jharia division.

Tata, the Indian owners of Jaguar Land Rover, are seeking 781 million pounds in Government and European loans to safeguard the company's future. Jaguar Land Rover is one of a number of companies looking to tap into the 2.3 billion pounds aid package promised by Lord Mandelson. A spokesman insisted that it was seeking loans, which would be repaid, to fund the next generation of environmentally more friendly cars.

About four lakh officers of the central public sector enterprises will receive pay hike in the range of Rs 5,000-15,000 per month and the revised scales will come into effect in the next two-three months, public sector enterprises' umbrella body SCOPE said today. "The individual CPSEs have to seek the approval from their respective (administrative) ministries before implementing the hike... It will take about 2-3 months," Standing Conference of Public Enterprises (SCOPE) Chairman Arup Roy Chowdhury said..

Activity in the Oil and Gas sector (including regulatory)

Reliance Industries (RIL) has commenced natural gas production from its D-6 block in the Krishna-Godavari (KG) basin. The gas started to flow late on Wednesday evening. The development will reduce India’s trade deficit, cut the subsidy burden on fertilisers, and improve chances of oil multinationals investing in oil and gas exploration in Indian seas. RIL’s KG gas will reduce the country’s import bill by $9 billion annually during peak production at current prices.

Militant Activity/Terrorism (Particularly in Bangalore, Mumbai, Noida, Chennai, Coimbatore)

The directive from the Airport Authortiy of India to all Airports across the country warning of a possible 9/11 like suicide attack by six to seven trained militant pilots and 30 women in their twenties, turned out to be an exaggeration. The directive said that these waiting-to-strike fidayeen - mostly from Pakistan - have entered India through Bangladesh over the last few months. This just an alert warning and such kind of information do come to us often, an official said.

Bangalore based newspaper office has received a threat call, warning of serial blasts in Bangalore if Rashid Malbari, an Interpol-certified criminal and aide of underworld don Chhota Shakeel, is not released.

Labour/Social Unrest

Six members of the Shiromani Gurugwara Prabandhak Committee on Friday tried to immolate themselves in New Delhi protesting against the CBI clean chit given to former Union Minister Jagdish Tytler in a 1984 Sikh riot case. However, police prevented the SGPC members from doing so and detained them. The agitated members of the Sikh body accused the Congress-led government of rewarding the riot-culprits instead of punishing them.

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Basic Political Developments

Pre-condition for Indo-Pak talks a step backward: Pakistan http://www.ptinews.com/pti%5Cptisite.nsf/0/A0FEA6E39B6F56516525758D003801C7?OpenDocument By Rezaul H Laskar

Islamabad/London, Apr 3 (PTI) Pakistan today made it clear that it would not accept any pre-condition for resumption of the stalled peace process with India.

Islamabad made its stand clear while reacting to Prime Minister Manmohan Singh's assertion that for the resumption of dialogue, Pakistan must meet the "minimum pre-condition" of ensuring that its soil will not be used for terror activities against India.

"We should move forward and not backwards. By putting conditions, we would be going backward," Pakistan Presidential spokesman Farhatullah Babar told PTI.

Asked about the pre-condition set by Singh, Pakistan Foreign Office spokesman Abdul Basit said, "When we have a dialogue we cannot have pre-conditions." Babar insisted that Pakistan had "fully cooperated and is still cooperating" with India in investigating the Mumbai attacks to bring the perpetrators to justice.

Addressing a press conference at the end of the G-20 Summit last evening, Singh said, "India is willing to discuss bilaterally all outstanding issues, including Kashmir. It (Pakistan) has to convince us that it is absolutely sincere in bringing to book the culprits of the attack on Mumbai." PTI

BJP promises to rebuild Ram temple3 Apr 2009http://timesofindia.indiatimes.com/BJPs-poll-manifesto-To-retrieve-money-from-abroad/articleshow/4353836.cms

NEW DELHI: The BJP has revived its pet Hindutva themes of rebuilding Ram temple at Ayodhya and abrogation of Article 370 giving special status to Jammu and Kashmir as it released its manifesto for the upcoming Lok Sabha elections.

The saffron party also promised to give 35 kg rice per month at Rs two per kg for BPL families, which is seen as a counter to Congress' offer of rice at Rs three per kg. BJP also promised to make available wheat at Rs 3.5 per kg.

The BJP manifesto comes after 11 years as the party had released NDA manifestos along with its coalition partners in 1999 and 2004.

The BJP had then refrained from making any reference to the Ram Temple issue, saying it remained on the party's agenda but was not a part of the NDA's national agenda for governance. The party promised to enact strong POTA-like laws to tackle terrorism.

BJP also sought to reach out to the armed forces promising them exemption from income tax and introduce 'One Rank, One Pension' scheme. They also promised a separate pay commission for the armed forces.

In another populist promise, the party said it would raise the slab of tax exemption of salaried class to Rs three lakh per annum. For women, the limit would be Rs 3.5 lakh per annum.

Reaching out to farmers, the BJP said it will waive off all current loans and provide fresh loans at four per cent interest rate.

The BJP’s manifesto also promised to retrieve Indian money stashed abroad. There is also a promise to provide bicycle to schoolgoing girls in Below Poverty Line families:

BJP manifesto promises promotion of alternative sources of energy and interlinking of rivers. The party also promised to build one million houses for the poor every year.

The BJP said it would bring down interest rates on housing loans to make urban housing affordable and give complete tax exemption to citizens above the age of 60. --RJD, LJP, SP to formally announce new alliance on April 33 Apr 2009http://economictimes.indiatimes.com/articleshow/4354812.cms LUCKNOW: The Rashtriya Janata Dal (RJD), the Lok Janshakti Party (LJP) and the Samajwadi Party (SP) will make a formal announcement of their new alliance here on Friday.

On March 29, Samajwadi Party General Secretary Amar Singh said, "The RJD, the LJP and the SP will sit together in Lucknow to discuss and announce the secular alliance."

The three parties on March 26 had separately announced plans to contest the coming general elections in Uttar Pradesh and Bihar unitedly.

Singh had revealed that SP chief Mulayam Singh Yadav, RJD supremo Lalu Prasad and LJP leader Ram Vilas Paswan would be together.

"We will not clash with each other in the two states (UP and Bihar) having 120 Lok Sabha seats (80 seats in UP, 40 seats in Bihar)," he said.

Paswan had also informed that he held talks with Mulayam Singh and Lalu Prasad to confirm the alliance. He had further asserted that the three parties would provide an "alternative" in the fight against "communal forces".

Bihar would go to poll in four phases: April 16, 23 and 30 and May 7.

The elections in Uttar Pradesh would be held in five phases: April 16, 23, 30 and May 7 and May 13. --

Pawar flip-flop continues, skips Third Front rallyhttp://ibnlive.in.com/news/pawar-flipflop-continues-skips-third-front-rally/89385-37.html

Pawar, who is an important partner of the United Progressive Alliance (UPA), said that he was not able to reach Bhubaneshwar as his plane developed a technical snag and instead he would be addressing the rally through phone.

"I am in Nashik and the aircraft that was supposed to take me could not reach because of a malfunction. I will definitely go sometime next week. I was not going to Third Front rally but going for BJD (Biju Janata Dal) rally. I am not with the Third Front. There is a difference between Third Front and BJD. We want to continue with UPA," said Pawar from Nashik.

Though Pawar said his plane developed a technical snag stalling his plans, the decision to pull out of the rally at the 11th hour is being seen as a climbdown as the Congress on Thursday had raised strong objections on Pawar's decision to address the rally in Bhubaneshwar.

The NCP chief was scheduled to share the dais with BJD chief and Orissa Chief Minister Naveen Patnaik and the Left leaders in Bhubaneshwar on Friday.

The NCP along with the Communist Party of India (CPI), Communist Party of India-Marxist (CPI-M) and Jharkhand Mukti Morcha had supported the BJD government during the trust vote in state Assembly on March 11.

Pawar has been insisting that he's very much in the race for the next prime minister of India.

However, did give the due credit to Prime Minister Manmohan Singh saying it was a privilege to work with him.

"Manmohan Singh is a very nice person. He has truly worked for the development of the country. I was lucky that I was a part of his Cabinet," said Pawar.

Left leaders like Prakash Karat, AB Bardhan and Patnaik are attending the Third Front rally.

But an important Third Front constituent and Janata Dal (Secular) President HD Deve Gowda has rebuked Pawar's move to get close to the Third Front.

The former prime minister has said that Third Front will not have any discussion with Pawar as long as he is with the UPA.

Third Front Govt, a farcical illusion: Advani http://www.ptinews.com/pti%5Cptisite.nsf/0/E724C2568ED928256525758D0038F9BB?OpenDocument

New Delhi, Apr 3 (PTI) Senior BJP leader L K Advani today dismissed as "farcical illusion" the idea of a Third Front government and said the tussle is between BJP-led NDA and Congress, which is "losing" its allies."There is no scope for a Third Front government, which does not have the support of BJP or Congress. It is a farcical illusion in the minds of people," he told reporters at the manifesto-release function.

Taking a dig at Congress, the BJP's prime ministerial candidate said he "sympathised" with Congress which is facing a "sad situation".

This was because after the Left parties abandoned it, the Samajwadi Party has also parted company so also Lalu Prasad's RJD and Ram Vilas Paswan's LJP, besides PMK, and earlier the TRS had left it, he said.

Advani, who had challenged Prime Minister Manmohan Singh and Congress President Sonia Gandhi for a live debate on television, defended it saying that anything which strengthens democracy should not be objected to.

He said this when told that the Left parties have attacked his idea of TV debate saying it was aimed at turning the parliamentary democracy into a two-party system.

Advani said anything that helps communicate with the electorate should not be objected to and if it leads to a two- party system, it is all the better. PTI

VHP warns of Amarnath-like protest if Varun not freed soon Press Trust of India / Allahabad April 03, 2009http://www.business-standard.com/india/news/vhp-warnsamarnath-like-protest-if-varun-not-freed-soon/57950/on

Lashing out at Uttar Pradesh Chief Minister Mayawati for slapping NSA on BJP leader Varun Gandhi, the VHP today warned of an "Amarnath-like" protest if the Pilibhit constituency nominee, booked for his hate speeches, was not released at the earliest.

"Varun Gandhi's detention under NSA is highly condemnable and totally undemocratic. It is a fall-out of the panic that has been caused among forces like ruling BSP and the Samajwadi Party who thrive on the politics of social fragmentation along the caste lines," VHP chief Ashok Singhal told reporters here.

Singhal also took a dig at the BSP supremo for fielding Mukhtar Ansari, who has tainted past records.

"If Mayawati is so serious about law and order how can she explain her patronage to Ansari", he asked.

However, the VHP leader said he was not aware of Varun's hate speech contents and rather asked, "if somebody speak of protecting Hindus and fighting those who pose a threat to the community, what is wrong in that".

"If injustice against Varun continues, it may lead to an agitation that would be on the same scale witnessed in Jammu over the Amarnath issue," he added.

Earlier, the BJP had nominated Varun Gandhi to make his electoral debut from Pilibhit, a constituency represented by his mother Maneka Gandhi so far.

Gorkha Janamukti Morcha to be part of NDA http://www.hindu.com/thehindu/holnus/002200904031351.htm

New Delhi (IANS): The Gorkha Janamukti Morcha (GJM) will be a part of the National Democratic Alliance (NDA) and support Bharatiya Janata Party (BJP) candidate Jaswant Singh for the Darjeeling Lok Sabha seat in West Bengal.

Announcing this while releasing the BJP poll manifesto here on Friday, the party's prime ministerial candidate L.K. Advani said the decision was reached after discussions with top GJM leaders.

GJM president Bimal Gurung and general secretary Roshan Giri have been camping in Delhi for the last two days, to hold discussions with the BJP. The GJM is spearheading an agitation for a separate state to be formed out of Darjeeling and the foothills of the Himalayas that are now a part of West Bengal.

BJP president Rajnath Singh announced earlier at the same venue that Jaswant Singh - now the party's leader in the Rajya Sabha - will be the party's candidate from the Darjeeling Lok Sabha seat. With the support of the GJM, he is expected to be a shoo-in.

Revolt in BJD: Denied ticket, party leader quitshttp://www.indianexpress.com/news/revolt-in-bjd-denied-ticket-party-leader-qu.../442676/

Bhubaneswar: The Biju Janata Dal (BJD) faced a mini revolt on Thursday night after the head of its Parliamentary Party and former union steel minister Braja Kishore Tripathy resigned from the party, protesting against party chief Naveen Patnaik's decision to drop him from the candidate list for the Lok Sabha polls.

Tripathy, who reportedly does not get along with Naveen's advisor Pyari Mohan Mohapatra, was expected to be renominated from Puri Lok Sabha constituency, which he has won for last three times in a row. But with Congress treasurer and former MP Pinaki Mishra joining the BJD, Naveen promptly nominated the Supreme Court lawyer for Puri

seat over Tripathy. Pinaki is the second prominent Congressman after Orissa Youth Congress president Rohit Pujari to join the BJD.

The 62-year-old veteran leader quit the party along with Puri district BJD president Shankar Parida. "I have resigned as the chief of the BJD Parliamentary Party and also from the membership of the Lok Sabha. Though I was the chief of the Parliamentary Party, I was ignored while candidate selection for the Puri Lok Sabha constituency was on. The people of Orissa would give a befitting reply to the BJD's undeomocratic step," he said.

Tripathy fuelled speculations of joining the BJP after he met party national president Rajnath Singh at a hotel in Bhubaneswar on Thursday night. But Tripathy himself denied the reports saying that he has not thought about his future steps.

BJP sources said that the party would nominate Tripathy from the Puri Lok Sabha seat if he joins it. A senior BJP leader said Tripathy's joining the BJP would give the party a much-needed foothold in the key coastal district that has all along been a BJD bastion.

Naveen also denied tickets to 11 sitting legislators and another sitting MP Mohan Jena when he declared the party list for nine Lok Sabha seats and 67 Assembly seats.

In the new list, Naveen has retained several tainted names like Maheswar Mohanty, who was embroiled in a sexual harassment case during his tenure as Speaker of Orissa Assembly. Fearing a bigger revolt, Naveen gave tickets to old warhorses like Prafulla Ghadei, Kalindi Behera, Damodar Rout and Kalpataru Das.

National Economic Trends

PSU banks set to reduce lending rates by 100 bps3 Apr 2009, 0331 hrs IST, Niranjan Bharati & Dheeraj Tiwari, ET Bureauhttp://economictimes.indiatimes.com/Economy/PSU-banks-set-to-reduce-lending-rates/articleshow/4352627.cms

NEW DELHI: Public sector banks are planning to reduce their lending rates by one percentage point, a move that may bring down interest rates on retail and industry loans to single digits, a government official said.

Banks have conveyed their plans to cut rates in a meeting with cabinet secretary KM Chandrashekhar on Thursday, the official said on condition of anonymity.

The proposed cut in prime lending rates (PLR), at which banks lend to preferred borrowers, will be announced over the next six to eight weeks, said a senior official of the Indian Banks Association (IBA), requesting anonymity. State Bank of India (SBI) chairman OP Bhatt told ET that his bank was considering a revision in lending rates, but refused to give any time-frame.

Average lending rates of public sector banks would come down to 9.5% after the proposed rate reduction. Over the past couple of months, public sector banks have cut their lending rates by nearly 200 basis points.

After the meeting with bankers, Mr Chandrashekhar said banks will consider reducing interest rates on an individual basis and there is no government direction in this regard. “Banks will have to look at it and take a decision themselves based on economics,” he said, adding, “The government can’t force banks to do anything.” Finance ministry officials did not say anything about rate cuts.

Most retail and industry loans are linked to banks’ PLR. PLR is not linked to loans taken under a particular scheme such as the special package announced by public sector banks for home loan borrowers.

For a borrower, a one percentage point cut in interest rate translates into a monthly saving of Rs 50-100 for every Rs 1 lakh borrowed, based on the duration of credit. At present, the PLR of public sector banks is in the range of 11.50% to 13%. This would come down to a level of 10.50% to 12%. The rate cut could be more than 100 basis points in the case of banks that have higher PLR.

Meanwhile, the cabinet secretary said a group of experts—with representatives from the government, industry, the Reserve Bank and public sector banks—will be formed to look into credit facilities extended by banks periodically. Data available with the finance ministry suggest that public sector banks may have achieved the target of 24% growth in credit expansion in 2008-09.

Companies get AS-11 reprieve3 Apr 2009, 0328 hrs IST, ET Bureauhttp://economictimes.indiatimes.com/Economy/Companies-get-AS-11-reprieve/articleshow/4352624.cms

NEW DELHI: The government on Thursday suspended a key accounting norm on foreign exchange losses for the period starting December 7, 2006, to March 31, 2011, allowing companies like Tata Steel, Suzlon Energy and Wockhardt to protect their profits from a sudden increase in their foreign loan liability on account of adverse currency movements. This marks a rare occasion where companies are being allowed to restate their past accounts.

Before the suspension of Accounting Standard 11, the weakening of the local currency meant a rise in the repayment obligation in terms of rupees, which had to be captured in the accounts as an expenditure, reducing profits. Under the amended rule, forex losses (or gains) can be kept on the balance sheet itself, and not brought to the profit and loss account.

The ministry of corporate affairs notification allows companies two options to show the extra money they have to shell out for paying off a foreign currency loan taken when the

rupee was stronger. Companies can either add the forex loss into the cost of acquiring an asset for which the loan was taken or show it in a separate account.

Gradually during the term of the loan, this amount in the separate account can be charged to the profits so that profits do not take a sudden hit in any given year on account of sharp currency movements.

“Corporate houses can benefit because the current financial meltdown and unusual movements in exchange rates will not impact their current years’ results,” said Ernst & Young India director Rahul Roy. For companies like Tata Motors, JSW Steel, Suzlon Energy, GMR Infrastructure and Wockhardt Ltd, it is good news.

They need not show lower profits on account of forex loss due to a sharp erosion in the value of rupee against the US dollar. However, companies will have to disclose the forex losses or gains as part of their annual accounts, to keep investors informed. Companies like Reliance Industries, RCOM and Jet Airways that had not chosen to adopt AS 11 will not be affected by the suspension of this standard till 2011, with retrospective effect from December 7, 2006.

“The amendment of AS11 will not affect the net worth of a company if the exchange loss or gain is recognised in the balance sheet that is the ‘foreign currency monetary item translation difference account’. However, if exchange loss is capitalised to fixed assets, that would enhance the networth compared to existing AS11 requirements. The decision to extend the benefit only till the accounting period ending March 31, 2011 indicates the government’s strong commitment to adopt international financial reporting standards by 2011, which entails fair value accounting,” said Dolphy D’Souza, partner E&Y.

Business, Energy or Environmental regulations or discussions

Air fares likely to go up by 5-8%3 Apr 2009, 0122 hrs IST, Mithun Roy, ET Bureau http://economictimes.indiatimes.com/News/News-By-Industry/Transportation/Air-fares-likely-to-go-up-by-5-8/articleshow/4352493.cms MUMBAI: There could be bad news for air travellers this summer. Domestic airlines such as SpiceJet, Kingfisher Airlines, Jet Airways and Paramount Airways are likely to increase air fares by 5-8% per ticket from mid-April due to a sharp increase in price of aviation turbine fuel (ATF).

Delhi-based low-cost carrier SpiceJet will hike fares by 5% over the next two weeks, CEO Sanjay Aggarwal confirmed. “As ATF rates have gone up by 10%, airlines need to increase fares to partially mitigate the jet fuel price increase. We have decided to increase air fares by 5% on the total fare, which will be implemented mid-April,” said Mr Aggarwal.

ATF prices have increased by an average of Rs 2,750 per kilolitre (10%) on April 1 in Delhi, making it the second such hike in 15 days. In Mumbai, the country’s busiest airport, ATF rates were raised to Rs 30,785 per kl, from Rs 28,023.

Kingfisher Airlines chairman Vijay Mallya said: “If jet fuel prices go up, we’ll look at adjusting fuel surcharge...but so far so good. If there is another hike in ATF, we may have to revisit the issue. Kingfisher will pass the increased cost to consumers because the airline cannot absorb this cost.”

After the proposed hike, a Mumbai-Delhi ticket of SpiceJet would cost Rs 4,807, including taxes. Kingfisher and Jet Airways fares for the same route will be around Rs 5,925, all inclusive.

It has been learnt that Jet Airways has called an internal meeting to discuss the air fare issue after the sudden rise in ATF prices in India and globally. A Jet Airways spokesperson said no decision has been taken as of now.

Paramount Airways MD M Thiagarajan said: “There could be a marginal increase in fares, but the company has not made a final decision yet.”

Analysts said increase in ATF and the falling rupee are denting domestic airlines’ bottomline. Around 30% of an airline’s operational expenses are denominated in dollars, whereas 50% of the operational cost is accounted by jet fuel.

ATF spot prices have soared by about 23% in Singapore in the past week. It rose by 19% in the US Gulf Coast, 17% in New York and Los Angeles, and 15% in Amsterdam. Crude oil prices touched $50 a barrel on Thursday rising steadily from $35 in February.

Telecom can create 25 mn jobs, CEOs tell PM3 Apr 2009, 1641 hrs IST, TNN http://economictimes.indiatimes.com/News/News-By-Industry/Telecom/Telecom-can-create-25-mn-jobs-CEOs-tell-PM/articleshow/4353580.cms NEW DELHI: Global GSM players and Sunil Bharti Mittal of Bharti Airtel have submitted a proposal to PM Manmohan Singh highlighting the formidable role that telecommunications can play in global economic recovery, asking him to endorse this at the G 20 meet in London.

In a letter dated March 27, the heads of AT&T Mobile, Ericsson, Alcatel Lucent, Orascom, MTN Group and other leading global telcos have said the deployment of mobile broadband, financed by private capital could create 25 million jobs around the globe and boost global GDP by 3 to 4%.

"As the G20 leaders prepare to meet in London, we the undersigned urge you to endorse an ambitious private sector initiative to build new infrastructure for the digital economy, which will bring measurable benefits to societies across the world", they write.

"The initiative is centred on replicating the success story of GSM and making access to the Internet via mobile broadband devices ubiquitous. Already, mobile phone companies provide voice and basic data services to over 4 billion consumers, on networks that cover over 6 billion. The broad economic impact of this is well established in research. In emerging economies, a 10% increase in mobile penetration boosts annual GDP growth by 1.2%," the letter reads.

In return for this, the mobile industry has asked for two key enabling actions from the G20 governments. It specifically wants a commitment to allocate to the mobile industry the radio spectrum it needs over time to build these new networks and deliver a stable, predictable and minimally intrusive regulatory environment.

The mobile industry is forecast to invest $800 billion during the next five years. Independent estimates by AT Kearney identify that $550 billion of this is earmarked for mobile broadband, with an expectation of connecting 2.4 billion people to the Internet, many for the first time.

According to these global GSM players, this initiative will secure current employment in the industry and its suppliers and also create new jobs. As mobile broadband repeats the productivity revolution of mobile phones, the global GDP boost could be 3-4%.

Tata Steel's Jharia mining division completes 100 years of operations2 Apr 2009, 1810 hrs IST, ET Bureau http://economictimes.indiatimes.com/News/News-By-Industry/Indl-Goods--Svs/Tata-Steels-Jharia-mining-division-completes-100-years-of-operations/articleshow/4350914.cms KOLKATA: Tata Steel, which completed its centenary in 2007, will achieve another milestone when its mining division in Jharia completes a 100 years of operations on April 4. The Jharia division came to life when the Bhelatand ‘A’ colliery kicked off operations back in 1910.

To mark the ocassion, Tata Steel has created a special logo to mark the centenary year of the Jharia division. Mr H M Nerurkar, chief operating officer, Tata Steel and A M Misra, vice president (raw material and coke, sinter & iron), will be present on the occasion.

Coal mining in Jharia started when Tata Group founder, the late J N Tata, visited Pittsburgh, where he was introduced to Charles Page Perin, a consulting engineer. Later Mr Perrin and his associate C M Weld visited India to conduct an elaborate survey of iron ore and coal deposits in the country. After examining these deposits Mr Perin concluded that coking coal suitable for use in steel-making could be obtained from Jharia coal fields.

Ever since Mr Perin’s recommendation, Jharia coalfields have been fulfilling coal needs of Tata Steel. In 2008-09, raw coal production at Jharia crossed 15.86 lakh tonne. Spread

across 5,500 acres, six collieries of the Jharia division have been grouped in two locations – Sijua and Jamadoba. The Bhelatand Colliery that is celebrating its centenary this year was acquired in 1910 by Tata Steel (formerly known as Tata Iron and Steel Company). Subsequently, in 1918 it acquired Malhera in Sijua as well as Jamadoba, Digwadih and 6&7 Pits collieries of the Jamadoba group.

Sustainable mining operations at Jharia division continues to be the single largest factor responsible for Tata Steel’s consistent growth, as it has contributed to expansion and growth projects initiated by the company.

Tata's Land Rover seeks 781 m pounds in UK Govt. loans3 Apr 2009, 1710 hrs IST, AGENCIES http://economictimes.indiatimes.com/News/News-By-Industry/Tatas-Land-Rover-seeks-781-m-pounds-in-UK-Govt-loans/articleshow/4355590.cms LONDON: Tata, the Indian owners of Jaguar Land Rover, are seeking 781 million pounds in Government and European loans to safeguard the company's future.

Jaguar Land Rover is one of a number of companies looking to tap into the 2.3 billion pounds aid package promised by Lord Mandelson.

A spokesman insisted that it was seeking loans, which would be repaid, to fund the next generation of environmentally more friendly cars.

Beleaguered car manufacturers, who have been battered by the dramatic slump in demand in the latter half of last year, say action has to be taken to safeguard the 800,000 jobs supported by the industry.

They are also pushing for a scrappage scheme, which would see the owners of cars more than nine years old receiving a 2, 000 pound grant towards the purchase of a new replacement, The Telegraph reports.

In the case of Jaguar Land Rover, it means maintaining production at Halewood in Merseyside as well as Solihull and Castle Bromwich in the West Midlands.

CPSE officers to get pay hikes in 2-3 months3 Apr 2009, 1718 hrs IST, PTI http://economictimes.indiatimes.com/News/News-By-Industry/CPSE-officers-to-get-pay-hikes-in-2-3-months/articleshow/4355617.cms NEW DELHI: About four lakh officers of the central public sector enterprises will receive pay hike in the range of Rs 5,000-15,000 per month and the revised scales will come into effect in the next two-three months, public sector enterprises' umbrella body SCOPE said today.

"The individual CPSEs have to seek the approval from their respective (administrative) ministries before implementing the hike... It will take about 2-3 months," Standing Conference of Public Enterprises (SCOPE) Chairman Arup Roy Chowdhury told PTI.

Chowdhury, who is also the CMD of National Buildings Construction Corporation (NBCC) said, per month the executives would get a hike of Rs 5,000-15,000 depending on the scale and the company they work for.

The government had last month cleared a report of the Committee of Ministers, bettering the emoluments for CPSE officers on top of what was notified in November, 2008 based on the recommendations of the Justice Jagannada Rao committee.

With the Cabinet approving the proposal last week, 78.2 per cent of dearness allowance (DA) will be merged with the basic pay as against the 68.8 per cent announced in November last year.

Activity in the Oil and Gas sector (including regulatory)

Energy boost for India as KG gas flows3 Apr 2009, 0334 hrs IST, ET Bureau http://economictimes.indiatimes.com/News/News-By-Industry/Energy-boost-for-India-as-KG-gas-flows/articleshow/4352631.cms

NEW DELHI: In a development slated to enhance India’s macroeconomic health as well as energy security, Reliance Industries (RIL) has commenced natural gas production from its D-6 block in the Krishna-Godavari (KG) basin. The gas started to flow late on Wednesday evening. The development will reduce India’s trade deficit, cut the subsidy burden on fertilisers, and improve chances of oil multinationals investing in oil and gas exploration in Indian seas.

“The company has started producing 2.5 mmscmd of natural gas from the D-6 block on Wednesday evening. The output is expected to go up to 5 mmscmd in a day. Production will gradually increase to reach its peak of 80 mmscmd within a year, which would double the country’s gas production,” petroleum secretary RS Pandey said on Thursday. Along with the oil it produces, the field would meet about one-sixth of India’s total oil and gas consumption, he said. The country’s annual consumption of petroleum and natural gas is equivalent to 175 million tonnes of crude oil.

RIL’s KG gas will reduce the country’s import bill by $9 billion annually during peak production at current prices. In 2007-08, the crude oil import bill was about $68 billion. The value of the gas over the 11-year life of the project is estimated at around $42 billion at $4.20 per mmBtu, and at this rate, the government’s share is expected to be about $14 billion. With $2 billion going to RIL’s bottom line every year, as ET had reported on March 30. Of course, prices would change, and so would these figures.

Engineering complexity and financing challenges were not the only hurdles the project had to clear: a wrenching legal battle arising from the bitter fallout between the two brothers who inherit the Reliance name was the final obstacle. “Reliance has created history and has once again demonstrated its ability to implement complex projects on a par with the best performance benchmarks in the world,” RIL CMD Mukesh Ambani said in a statement.

RIL, with its partner Niko Resources of Canada, had bagged this block in the first round of the new exploration licensing policy (Nelp-1). RIL holds a 90% interest in the block while the balance is held by Niko. The gas was discovered in 2002 and production commenced in less than seven years of the discovery.

According to Mr Pandey, the KG gas will first reach the Nagarjuna fertiliser plant in the eastern part of the country (near the KG basin) in 4-5 days, and will be supplied to the farthest fertiliser plant in western India within 15 days. As per the government’s gas utilisation policy, the first 15 mmscmd gas from the KG basin will be supplied to fertiliser units situated around the natural gas trunk pipelines. “At peak level, it would amount to 44% of the current oil and gas production taken together,” he said.

Commenting on the development, global consultancy firm KPMG’s head of Infrastructure & government, Jai Mavani, said: “This is the first time, deepwater production of natural gas shall commence in India. Hopefully, this should also establish the commercial viability of the deepwater play in India. The huge volume of natural gas slated to come onstream from D-6 shall go a long way in mitigating the supply shortage in the country. In these times of ballooning current account deficit, the forex savings that this gas production will bring in is indeed welcome.”

The initial production of gas from the Dhirubhai 1 and 3 discoveries of the KG D-6 block will be sold to existing gas-starved fertiliser and power companies, resulting in substantial reduction in subsidy burden of the government, the statement said. As per an official estimate, the allocation of 15 mmscmd gas to the fertiliser sector will help the government save the fertiliser subsidy bill of Rs 3,000 crore.

Militant Activity/Terrorism (Particularly in Bangalore, Mumbai, Noida, Chennai, Coimbatore)

Airport terror threat a false alarm, say officialshttp://ibnlive.in.com/news/airport-terror-threat-a-false-alarm-say-officials/89401-3.html

New Delhi: It was a high security alert that turned out to be an exaggeration. A directive from the Airport Authortiy of India to Airports across the country warned of a possible 9/11 like suicide attack by six to seven trained militant pilots and 30 women in their twenties targetting election rallies of important leaders as well as sensitive installations.

The directive said that these waiting-to-strike fidayeen - mostly from Pakistan - have entered India through Bangladesh over the last few months.

"There have been inputs that during elections, terrorists may possibly target airports, so all airports are on high alert. The information was not meant to be issued to the media but sill got leaked. We want to clarify that this is not the only time these kind of information comes to us. These reports keep coming in and neccessary steps are taken and security is stepped up as and when situations arise," said an official.

The directive quoted a Bureau of Civil Aviation Security input but sources in the Intelligence Bureau rubbished the alert, and the Home Minster too called the threat exaggerated.

Sources say the input came from the Indian Embassy in Bangladesh about two months ago but the source of the input was termed 'unreliable'. However, by the time the input reached the Bureau of Civil Aviation Security, the word unreliable had somehow been overlooked.

Even though the advisory now stands cancelled, authorities are looking into possible lapses within the security establishment that might have been responsible for inflating an unreliable input into a terror threat. (With inputs from Raheel Khursheed and Meetu jain in New Delhi)

Threat call hints at serial blasts in Bangalore http://www.hinduonnet.com/thehindu/holnus/001200904031670.htm

Mangalore (PTI): A local newspaper office has received a threat call, warning of serial blasts in Bangalore if Rashid Malbari, an Interpol-certified criminal and aide of underworld don Chhota Shakeel, is not released.

Karnataka home minister V S Acharya had said on Thursday that Varun Gandhi, BJP candidate from Pilibhit Lok Sabha constituency, was on the hit-list of Malbari.

Malbari and his four aides were arrested from Ullal on the outskirts of Mangalore on March 29 for conspiring to execute or kidnap for ransom and assassinate some prominent figures in public life with a view to disrupting the poll process.

Deputy Inspector General of Police (DIGP), Western Range, Gopal B Hosur, told PTI here that police are examining the origin of the call, made to the office three days ago.

"Police know the telephone number and an investigation is in progress," he said, but did not name the newspaper.

Meanwhile, Dakshina Kannada district, of which Mangalore is a part, has been put under "red alert", Mr. Hosur said. Coastal Security Force and police have also been alerted.

Labour/Social Unrest

SGPC members trying to self-immolate detained http://www.hindu.com/thehindu/holnus/000200904031565.htm

New Delhi (PTI): Six members of the Shiromani Gurugwara Prabandhak Committee on Friday tried to immolate themselves here protesting against the CBI clean chit given to former Union Minister Jagdish Tytler in a 1984 Sikh riot case.

However, police prevented the SGPC members from doing so and detained them.

"Six members of the Sikh community were detained when they tried to immolate themselves in the premises of Gurudwara Bangla Sahib," G S Randhawa, ACP, Parliament Street police station said.

The agitated members of the Sikh body accused the Congress-led government of rewarding the riot-culprits instead of punishing them.

"It is most unfortunate for Sikhs that a culprit like Tytler has been given a clean chit by a central investigation agency when the country is led by a member of community," Kuldeep Singh Bhogal, a member of Amritsar SGPC, said.

He said the "CBI clean chit to Tytler has further exposed the hypocrisy of the Congress".

The CBI on Thursday gave Mr. Tytler a clean chit in a 1984 anti-Sikh riots case and informed a Delhi court that it wanted to close the matter.