Swiss money: India slips to 70th position; UK on top

Zurich/ New Delhi: India has slipped to 70th position in terms of foreign money lying with the Swiss banks and accounts for a meagre 0.10 per cent of total global wealth held in the Switzerland banking system.

While much hue and cry is made over huge amounts of illicit wealth stashed by Indians in Swiss banks, the latest official data released by Switzerland’s central bank shows that the money they owed to Indian clients at the end of last year was 1.42 billion Swiss francs (about Rs. 9,000 crore).

While the UK continues to account for the largest chunk of such funds, India has now slipped lower to 70th position – the lowest rank among all major economies of the world, shows an analysis of annual data released by Swiss National Bank (SNB) on all the banks present in the European country.

India was ranked 55th for such funds a year ago with a total amount of 2.18 billion Swiss francs belonging to the Indian individuals.

Among the top-ten jurisdictions in terms of source of money with Swiss banks, the UK is now followed by the US, West Indies, Jersey, Guernsey, Germany, France, Bahamas, Cayman Islands and Hong Kong.

The funds owed by the Swiss banks to their UK clients stood at 295 billion Swiss francs, accounting for about 22 per cent of total such funds (over 1.4 trillion Swiss francs).

The major countries ranked among the top-25 include include Singapore, Japan, Italy, Australia,  Russia, Netherlands, Saudi Arabia and Cyprus.

Besides, China was ranked 26th, Canada 28th, Brazil at 39th and South Africa at 50th. India’s neighbouring country Pakistan was also ranked one place higher at 69th, although countries like Mauritius, Hungary, Denmark, Finland, Libya, Brunei and Sri Lanka are positioned below India.

As per SNB data, the Swiss banks saw a decline in funds belonging to most of their foreign clients during 2012 and the funds belonging to their domestic clients surpassed those of overseas ones for the first time in their history.

The total funds with Swiss banks slipped by over nine per cent to a record low of 1.4 trillion Swiss francs at the end of 2012, while the Indians’ money also hit a record low with a fall of about 35 per cent during the year, as a global clampdown against the famed secrecy wall of Switzerland banking system made it unattractive for their global clients.

Total funds held by Indian individuals and entities included 1.34 billion Swiss francs held directly by Indian individuals and entities, and another 77 million Swiss francs through ‘fiduciaries’ at the end of 2012.

Fiduciaries are essentially wealth fund managers who hold the money of Indian private holders and families in the so-called numbered accounts.

The Swiss banks’ direct liabilities towards clients from India include funds held in savings and deposit accounts by Indian individuals, financial institutions and corporates.

The data has been released at a time when Switzerland is facing growing pressure from the US and other countries to share the foreign client details, while its own lawmakers are resisting such measures.

The funds, described by SNB as ‘liabilities’ of Swiss banks towards their clients from India, are the official

figures disclosed by the Swiss authorities and do not indicate towards the quantum of the much-debated alleged black money held by Indians in the safe havens of Switzerland.

SNB’s official figures do not include the money Indians or others might have in Swiss banks in the names of others. The sharp decline in Indian money in Swiss banks during 2012 followed a significant increase in the previous year, when such funds had risen for the first time in five years.

The quantum of funds held by Indians in Swiss banks stood at a record high level of 6.5 billion Swiss francs (over Rs. 41,000 crore) at the end of 2006, but has declined by over five billion Swiss francs (over Rs. 32,000 crore) since then.

For clients across the world, total funds in Swiss banks stood at a record high level of $2.6 trillion at the end of 2007, but has fallen by over $1 trillion since then.

In a White Paper on black money tabled in Parliament last year, the Indian government said that the total liabilities of Swiss banks towards Indians have been coming down since 2006 and fell by more than Rs. 14,000 crore during 2006-2010 period.

Amid allegations of Indians stashing illicit wealth abroad, including in Swiss banks, government has said it is making various efforts to bring back the unaccounted money.

While a new treaty has been put in place for sharing of information on issues related to tax crimes on a prospective basis, Switzerland has also agreed to a limited retrospective clause for such information exchange in case of India.

Experts have been saying that there has been a “perceptible flight of funds” of Indian holders from Swiss banks to other places in the recent years.

At the same time, the global pressure has been rising on Switzerland to ask its banks to share information about their clients with foreign governments.

It is being suspected now that Indians having illicit wealth in Swiss banks may be moving their funds in fear of being exposed due to growing scrutiny. At the same time, even those having legitimate funds in Swiss banks may be moving away, due to a growing level of negativity attached to them.


India, US to exchange information on corporate frauds: Sachin Pilot

New York: With an aim to avert possible corporate frauds and safeguard the interest of investors, India is looking for greater exchange of information and regulatory cooperation with the US.

Besides the US government, India will also engage with the companies, universities and other institutions in New York for enhanced cooperation in various areas, Corporate Affairs Minister Sachin Pilot said.

An increased interaction at different levels would not only boost the bilateral ties, but also help in building stronger checks against corporate frauds in the two countries, the minister told PTI in an interview here during his recent visit to the US.

“We need to ensure there is adequate transparency in the dealings of companies’ disclosures, keeping in mind the number of corporate frauds that have been unearthed in the recent past both in the US and in India,” Mr Pilot said.

The minister said that India and the US would share data to prevent such frauds from happening in the future.

“We want to work not just with the government, but also with the private sector, universities and institutions across the US, enhance training programs, exchange regulatory officers, and promote faculty research and staff training both in judicial and non-judicial areas,” he said.

During his visit, Mr Pilot had meetings with the US Federal Trade Commission chairman FTC Ramirez and Assistant Secretary of State Robert Blake, among others.

Emphasising on the need for greater transparency in matters related to corporate governance, the minister said, “We want to make sure that the aspect of corporate governance is taken into consideration while making laws and legislations.”

“At the same time, companies also need to have more transparency and disclosures in the interest of stakeholders and the general public,” he added.

Mr Pilot also expressed hope that the US investors would look positively at India, which is returning to its growth path after some stagnation for about one and half years.

“As we are moving up, we are looking at investments aggressively from the US. We are looking up to the US investment community in the areas of power, retail, aviation, real estate and infrastructure areas. We see a great interest in India in these areas,” he added.

“The economic downturn in last two years has impacted the sentiments of investors. There were some hiccups and we are working on them. India is still a favourable destination for investors,” Mr Pilot said.

He also hoped that the pending proposals, including those for greater foreign investment in insurance and pension sectors, would be cleared soon.

Story first published on: June 23, 2013 12:26 (IST)

Tags: Sachin Pilot, Robert Blake, Corporate frauds, US economy, Economic growth, Corporate Affairs Minister

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Will the rupee weaken further and breach the 60 level?
YesNoCan’t say

From Reuters

When the Ben and Beijing party comes to an end

On June 24, 2013 16:22 (IST)

When the Ben and Beijing party comes to an end Investors have always been able to count on backing from two sources – US Fed chief Ben Bernanke and Beijing.

As Asia embraces casinos, India hedges its bets

Another China central bank worry; companies push into lending

What’s wrong with economics, anyway?

The global middle class awakens

Market Data provided by © Accord Fintech.
© Copyright NDTV Convergence Limited 2013. All rights reserved.

Rupee ends off day’s low at 59.68 against dollar

The rupee fell to near record lows on Monday as foreign investors continue to sell debt and stocks as part of an exit from emerging markets, with only fears of central bank intervention arresting a further drop.

The partially convertible rupee closed at 59.68/69 per dollar, against its previous close of 59.27/28. It fell to a low of 59.8250 in session.

The rupee is likely to continue hovering around a record low of 59.9850 hit on Thursday as long as global markets remain weak over worries about the rollback of U.S. monetary stimulus and concerns about China’s financial sector.

Dealers were split about whether the Reserve Bank of India (RBI) had intervened in the spot and onshore forward markets, suggesting any action would not have been strong. The central bank is seen likely to defend the 60 level for the rupee, which also provides formidable technical and psychological resistance.

Reserve Bank of India Deputy Governor Anand Sinha said on Monday the central bank and the government are doing whatever is needed to get a “hold over” the deteriorating macro economic conditions.

Investors are now awaiting the release of the current account deficit data on Friday, which will underline whether the funding pressures for the economy will further rise.

“One key factor is whether foreign equity investors pull out. But the government and RBI look determined to take steps to stem the rupee’s fall,” said Samir Lodha, senior partner at QuantArt.

“The RBI seems to have been active in the forex market over the past few sessions. They seem to be protecting the 60 level for now.”

The Sensex shed 1.2 per cent on continued worries about outflows after foreign institutional investors sold cash shares for nine straight sessions, totalling Rs. 7760 crore, as per exchange and regulatory data.

Foreign funds have sold a net $5.33 billion in rupee debt since May 22, the day Fed Chairman Ben Bernanke first hinted at stimulus withdrawal.

In the offshore non-deliverable forwards, the one-month contract was at 60.14, while the three-month was at 60.84.

In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed around 59.79 with a total traded volume of $6.4 billion.

US denies India access to Headley for fresh questioning

India will not get fresh access to Mumbai terror attack mastermind David Headley, who is currently in American jail, for questioning, the US indicated on Monday.

This was conveyed to India during the Indo-US strategic dialogue held here today for which Secretary of State John Kerry is in New Delhi.

India had persistently asked the US to give access to Headley for a second time to get more information about the audacious attack in November 2008.

David Headley

File picture of David Headley.

The US interlocutors have cited Headley’s plea bargain with the American authorities (under which a person avoids death penalty by confessing to the crime) and indicated its difficulty in allowing Indian investigators to further question him.

Headley, who had carried out the recce of the 26/11 targets for the Pakistan-based terror outfit Lashkar-e-Taiba, had also opposed further interrogation by Indian investigators, official sources said. Indian investigators had questioned Headley in 2010.

However, India may be allowed to question Headley’s accomplice Tahawwur Hussain Rana who helped his childhood friend to recce the 26/11 targets.

Indian investigators believe that if they could quiz Pakistani-Canadian Rana, many information could come to light as he was a close associate of his Pakistani-American friend Headley.

The investigators believe that Headley and Rana have a lot of information and their interrogations could throw more light on the conspiracy hatched to carry out the worst terror strike in India and role of those behind it.

Headley had pleaded guilty to 12 terrorism charges, including his involvement in the November 2008 terror attacks in Mumbai that claimed 166 lives. He had, however, entered into plea bargain with US authorities.

Kerry asks India to play greater role in Aghanistan, Iran negotiations

Apart from seeking the implementation of the civil nuclear deal and various other topics, US Secretary of State John Kerry today said that they looked to India to play a greater role in resolving issues between the US and nations like Afghanistan and Iran.

Emphasising that any talks with the Taliban, following the setting up of a political office in Qatar, would be process led by the Afghan people, Kerry said that the US would be briefing Indian authorities about the process.

Thanking India for its support in Afghanistan, Kerry said that were in touch with Afghan President Hamid Karzai.

“This is an Afghan-led process,” Kerry said.

Noting that there were certain conditions to be met, like the Taliban severing ties from terror groups like the al-Qaeda, he said,” If these conditions are met, then negotiations will take place with the high peace council of Afghanistan.”

“It is better to explore the possibility of having a peaceful resolution if it is possible,” he said.

John Kerry and Salman Khurshid. AFP

John Kerry and Salman Khurshid. AFP

He said he hoped that talks with the Taliban would provide “an avenue for the reduction of violence,” but in the event that it did not, the US was prepared to continue to train and equip Afghan armed forces well beyond 2014.

The US secretary of state, who is on his maiden visit to the country, said he is certain that India will encourage President Karzai to ensure all provisions are made for free, fair and transparent elections in Afghanistan.

“The people of Afghanistan need to see and feel that the elections are free and fair,” he said, adding that India needed to help it.

The US also expects India to convince the new leadership in Iran to prove to the world that its nuclear programme was indeed for peaceful purposes as claimed.

Kerry said that the US understood India’s relationship with Iran and hoped that India will urge the new leadership there not to “miscalculate” the US’ intention.

“We urge Iran to prove to the world that their peaceful nuclear programme is indeed peaceful. We hope India will help us, ” Kerry said.

He also said the US is looking forward to the early implementation of civil nuclear deal with India.

The two ministers said that they have had substantial discussions on tackling terrorism, joint ventures in space co-operation, defence, development, education, agriculture and health.

Minister of External Affairs Salman Khurshid said that he and US Secretary of John Kerry have struck a right note during the bilateral talks.

“We have so far done a lot of good work to keep the India-US relationship growing and on a personal note Kerry and I seem to have struck a right note,” Khurshid said.

He said that the two countries have exchanged 112 senior officials in high level visits with the US and both the countries will continue to build on the good work done so far.

Kerry reiterating Khurshid’s opinion on having struck the right note and said Vice President Joe Biden will visit India towards the end of July to strengthen ties between the two nations.

Import barriers: Why US forgets Tariff of 1789 before blaming India

By Yonathan Benyamini

US Secretary of State John Kerry arrived in Delhi creating a flurry of activity even before the onset of this week’s Indo-US strategic dialogue. Kerry’s agenda is wide and includes bilateral trade, security and defence, science and technology and climate change.

But despite Kerry’s statement that the US regards India not as a “pivot” but “key partner” to re-balance in Asia, the US Chamber of Commerce, National Association of Manufacturers and other angry US business groups allege that the government of India is discriminating against US exports. Trade discussions with India were a point of concern, during the nomination of the new US Trade Representative. Michael Froman, who was appointed to the position last week, was chosen to press the US point of view. Forty US senators also signed a letter to Kerry, in which they urged him “to press for swift action make clear to your Indian counterparts that the United States will consider all trade tools at its disposal”.

US Secretary of State John Kerry in India on Monday. AFP

US Secretary of State John Kerry in India on Monday. AFP

Earlier the business groups had sent a petition saying the Indian government’s attempt to create domestic jobs was “unacceptable for a responsible middle-income country and rising global power”. They claim the import barriers established by India’s policy threaten the $60 billion bilateral trade relationship. They view it as an attempt to flout the economic system, as trying to strengthen their economy at the cost of hurting that of the US.

It’s a shame that they can’t recall such hypocrisy in the history of their own nation, though. It’s sad that they remain ignorant of their own distant past.

Yes, India’s decision to embrace the free market has justified the abandoning of its import-substitution policy. Capitalisation of its non-discriminatory trade has allowed it to experience decades of robust growth. But let’s say theoretically, India reforms its current trade practices. It could certainly maintain an open flow of trade. It could, without question, pursue a more innovative policy that would appease US businesses. And albeit this is all true, so is the insincerity of the United States.

It seems as if the US has forgotten its similar plight as a developing country. The precursor to the American Civil War, the Tariff of 1789 was a heavy tax on imports meant to encourage domestic manufacturing. As the first significant piece of legislation passed by the US Congress to create jobs, it effectively established precedent and basic principles for US trade policy.

A consequence of the onset of the Great Depression, The Smoot Hawley Tariff raised tariffs within the US to a historic high. Instated by then US president Herbert Hoover in desperation, the act elicited a storm of foreign retaliatory measures. US trade policy came to symbolize beggar-thy-neighbor policy — the very grievance of which the US now accuses India. The US department of State reported that US protectionism caused imports to decline from $1,334 million in 1929 to just $390 million in 1932, and exports from $2,341 million to $784 million – a decline in world trade by about 66 percent.

It is only after the realisation of this misfortune that the US assumed its position as a champion of free trade. A champion whose current president vows to create “jobs that pay well and can’t be outsourced”. An advocate that refuses to cut domestic farm subsidies, and places tariffs on technological and solar competitors in China. A paradigm that sanctions regimes, distorting the equilibrium of trade.

India was obliged to reduce its oil dependence on Iran for six months before being exempt, just the other day, from harsh US sanctions.

The United States would also be wise to realise that India holds the key to leveling the playing field with China. At the lower end of the greatest economic war to date, the US has failed to grasp that job creation is essential to maintaining the economic gap with China. Approaching a 1 percent growth of GDP per generation, the US will be surpassed by the Asian superpower within the next two years.

At the current rate, the year 2040 will witness China’ contribution of 40 percent of the world GDP, dwarfing the mere 14 percent produced by the US.

Perhaps the very frustration preoccupying US business groups intimates the inception of a new era, of an epoch no longer dominated by the presence of the United States.

What Modi wants his BJP team to deliver by 2014

by Jun 22, 2013

His staunch supporters in the BJP may be confident of a popular wave in his favour throwing the Congress out of power, but Narendra Modi, a quintessential organiser, is well mindful of the challenges that lie ahead and is already pushing party leaders to focus on various issues.

He may be riding high in surveys and may be the most talked about politician, but Modi knows winning the parliamentary elections requires sound strategy and organisational preparedness. Beyond rhetoric, the BJP so far hasn’t bothered with a coherent plan to defeat the Congress and the Gujarat Chief Minister has cautioned his colleagues not to be “overconfident”, and instead get down to some hard work.

A senior party leader told Firstpost that in the first strategy meet that Modi held with general secretaries earlier this week, there were two issues he focussed on.

The first issue was that the BJP was losing allies and it was important for the party to look for and engage prospective allies in all regions, no matter how big or small. Prospective allies could be AGP in Assam, INLAD in Haryana, TRS in the Telangana region of Andhra Pradesh and even possibly enticing Yeddyurappa back to the BJP or at least the NDA. The exit of Nitish Kumar and the JD(U) resulted in a psychological blow in the minds of any prospective allies which needs to be amended at the earliest, but isn’t easy presently.

Get me allies: Modi wants more allies for the BJP. Reuters

Get me allies: Modi wants more allies for the BJP. Reuters

The second issue was the party’s shrinking voter base in the country’s most populous state: Uttar Pradesh. The state presents a big challenge to the party and requires a focused strategy and hard work to reclaim support of the social groups that it once enjoyed. Bihar had been a bastion for the BJP and NDA for several years, but given the exit of the JD(U), an organizational regrouping was required. States like Orissa and Haryana, where the BJP once had a prominent presence when it had alliances with regional parties, were wiped out when the party went alone in last elections is also  matter of concern.

Modi, who just took over as the party’s campaign committee, told leaders that while the party may identify some pan-India issues to target the government on, the  internal dynamics and aspirations of each state was different. He pointed out that the party needed to have a seat-wise and state-wise strategy and asked the party’s leaders to start working on them.

For the BJP the states of Uttar Pradesh, Bihar, Karnataka, Rajasthan and Orissa are key states where it has to make substantive gains if it had to dislodge Congress and emerge victorious. The party’s leader in Uttar Pradesh are optimistic and believe the current situation the state could allow the party to make significant gains, possibly doubling or tripling their tally since the last polls, as long as they had the right strategy and maintained a united front.

“Now since Modi has been projected as our leader, UP could well be the game changer for the BJP”, a senior BJP leader said.

According to the leader, there are three groups of voters in the state Modi could appeal to. For upper caste voters, Modi presents a perfect combination of Hindutva and strong administrative skills. Younger voters could also find appeal in his development oriented leadership. And among the lower castes, except the Yadvas, the psychological pride of electing a Prime Minister from among the OBC community could just evoke the right sentiments in favour of the BJP. In Bihar, former deputy chief minister Sushil Kumar Modi had already set the ball rolling by flaunting Modi’s OBC credentials.

The overt projection of Modi’s backward case is to project him as a combination of “Mandal” (the Mandal commission) and “Kamandal”(a term used to denote Hindutva), the two phenomena that changed political landscape of north India and possibly the nation in last two decades. In this context, his supporters are already toying with the idea of Modi contesting the next Parliamentary elections from UP, preferably from one of the urban seats, Lucknow, Allahabad or Kanpur. The BJP won 58 seats from UP in 1998, but since 1999 parliamentary elections the party’s tally has been on a continuous slide. Modi has his protégé Amit Shah posted as party’s in-charge of UP, and the former Gujarat deputy chief minister will soon begin his UP campaign.

His party believes that Modi’s new status has rattled his rivals, and they point to Nitish Kumar’s statement that no one could become leader of backward classes just because of being born into it. The BJP’s response to Nitish Kumar’s continuous attack on Modi has been varied. One section expressed its concern on the grounds that Modi would be targeted over the 2002 communal riots in Gujarat under his watch, and the fact that no single party might be able to come to power without varied alliances. However, another group in the party believes that after the elections the Modi-led BJP will have such a high seat tally that new allies would naturally gravitate towards the party.

A party leader, who was present in the strategy session with Modi, said the Gujarat Chief Minister was acutely aware that he had to substantially increase on the party’s vote percentage as well as is support base in  south and east India. In the last parliamentary elections the BJP’s vote share reduced to around 18.5 percent, as against Congress’s vote share of around 28.5 percent. The BJP got 116 seats and the Congress got 206. Though the Congress’s gain in vote share was only 2.5 per cent,  it had strong allies.

The BJP had around 26 percent of the votes when it got a high of 182 seats in 1998. It roughly retained that peak in 1999, but at that time it had solid allies in all parts of the country like the DMK, TDP, TMC, BJD JD(U) and there were a total of 24 allies. In Jharkhand and Karnataka the party was a united force. However, presently in both  states the party has since split down the middle.

The BJP now has to count on personal charisma of Modi, perhaps much more than it had to count on Atal Bihari Vajpayee’s when the veteran leader was at peak of his popularity. Modi supporters believe that their leader’s modern day charisma among the urban middle class and rural areas could match the popularity of Indira Gandhi. He may not have physically reached out to the hinterland or even all urban centres, but his reputation as a strong administrator had already reached every household. They are hopeful that a “non-functional corrupt Manmohan Singh regime” at the helm will give them a decisive edge when the electorate has to choose between Modi and Rahul Gandhi.

Uttarakhand: Cong could learn from ‘Rambo’ Modi’s rescue model

by Jun 24, 2013

The Congress’s response to Narendra Modi’s supposed Rambo act has been two fold – its senior leaders taking to Twitter, issuing statements running him down with whatever vocabulary they could summon; and second, let party vice president Rahul Gandhi, who faced severe criticism from the opposition for his disappearing act at the time of a national calamity, make a grand appearance with mother, Congress president Sonia Gandhi, at the party headquarters in New Delhi to flag off 25 trucks carrying relief material to Uttrakhand. The whole exercise looked more like a Presidential salute at the Republic Day parade rather than a sincere helping hand to the victims of the natural disaster.

Modi may have had an eye on the subsequent political mobilization through his ground zero rescue act. After all, he too is a politician and is undeclared prime ministerial candidate of the main opposition party and has to prove his management skills. But the way he conducted rescue operations for tourists and pilgrims from Gujarat and transported around 15,000 of them to their home has some lessons for his political rivals, particularly for the Congress.

He did not do a Rambo act himself but did some smart thinking. He made good use of the BJP’s organisational machinery at district, mandal (block) and village levels in Uttarakhand and synchronized their activities with that of Gujarat state officials who had descended in good numbers and were camping at different trouble-torn places since 18 June, a day after calamity struck. By the time he landed at Jolly Grant airport in Dehradun on 21 June with a team of officers, a mix of senior and intermediate level officers, he had all the relevant statistics at hand and logistical support in place. It was perhaps the first ever rescue and relief act of its kind where the chief minister of a state camped in another state for three days and evacuated people of his own state without assistance from the host state.

Uttarakhand Chief Minister Vijay Bahuguna talks with his Gujarat counterpart Narendra Modi about relief work, in Dehradun on Saturday. PTI

Uttarakhand Chief Minister Vijay Bahuguna talks with his Gujarat counterpart Narendra Modi about relief work, in Dehradun on Saturday. PTI

While Uttarakhand Chief Minister Vijay Bahuguna appeared completely at loss and helpless, his Gujarat counterpart won many admirers in the Uttarakhand administration. A senior Uttrakhand state official said, “One cannot stop admiring Modi’s administrative skills and grasp of the situation.”

Modi began his homework immediately after the news of the natural calamity broke. Gujaratis are known to undertake pilgrimages in large numbers and the state government had some rough estimates as to how many of them could be stranded in Uttrakhand. On 18 June, he dispatched Gujarat’s Relief Commissioner and Principal Secretary, PK Parmar, a senior IAS officer, to Dehradun. With him came a small group of IAS, IPS and IFS (Indian Forest Service) officers of Gujarat cadre who belonged to Uttrakhand and knew both the terrain and the people.

By the time Modi came his officials had weighed situation, made an assessment and put some rescue and relief system in place. Modi landed with another group of select officers, qualified and trained in rescue and relief. But it was the BJP’s party machinery down to block level that he galvanized and put to test. It helped the party workers get out of idle negativity mode and do some worthwhile job to be in sync with their leader. Modi camp office at a hotel in Dehradun had all kinds of communication facilities – all his officers had numbers of BJP functionaries of all 190 mandals (blocks) in Uttrakhand and vice versa.

The party workers were informed of all the logistical support that they could get or Gujarat could provide and were tasked to identify Gujarati tourists or pilgrims, coordinate with Relief Commissioner Parmar or other designated officers. An additional DG rank officer, TS Bisht, had been camping at Guptkashi since June 18. In three days that he spent in Uttrakhand, traveling, meeting people, doing reviews and so on, Modi came across as a man in command, fully conversant with every development and requirement as they arose. State party leaders were surprised to see him holding review meetings at 1 am in morning, after finishing with day’s rescue and relief work.

The stranded Gujaratis were provided with food, fuel, transport ranging from Boleros to Innovas to buses and finally Boeings to reach home. Even the chartered plane on which Modi had landed in Dehradun, took off that same night for Ahmedabad carrying 11 rescued pilgrims.

Uttrakhand BJP leader Anil Balooni said, “The Congress should learn to appreciate good works done by our leader and take a lesson or two from the disaster management skills that he displayed. They unfortunately think that their responsibility is over after doing a misguided tweet or making an ill- informed statement against Modiji. His presence gave a new zeal to our party workers.”

Modi’s three-day Uttrakhand mission has now become a matter of political debate. Two Congress chief ministers Prithviraj Chavan and Bhupinder Singh Hooda landed in Dehradun yesterday. The Congress would hope that their presence and trucks flagged off from its New Delhi headquarters would give relief to the affected people in Uttrakhand and restore popular confidence outside.


Economy in doldrums, Manmohan takes nation back to 1990s

By Virendra Kapoor on June 23, 2013



Economy in doldrums, Manmohan takes nation back to 1990s

If you feel a sense of déjà vu, you are not alone. There are lots of Indians who might be forgiven for thinking they are back in the 1990s. Internet, invariably is the first to reflect the popular mood. A satirical message that has gone viral on the web reads:

GDP back at five percent; Dalmiya back in BCCI; Murthy back in Infosys; Nawaz Sharif back in Pakistan; Madhuri back in Bollywood; Sanjay Dutt back in jail.

Yeah, the clock seems to have been moved back, what with the rupee sinking and the foreign exchange reserves again looking vulnerable.

Plunging rupee can be revived by opening up markets

A vital part of the remedy for the 1990s’ crisis that was pressed on Narasimha Rao by the IMF-World Bank combine was to appoint a professional as Finance Minister. IG Patel said no. Manmohan Singh said yes. Much water — one may add dirty despite hundreds of crores spent by Shiela Dixit — has flown down the Yamuna bridge since those days when India had to pledge its gold with the Bank of England to tide over the forex crisis.

Rao is no longer around and the Congress leadership seems hellbent on obliterating his memory. Singh has since become Prime Minister, albeit a nominated one. Ironically, what he had managed to achieve in the 1990s under the stewardship of Rao, Singh has failed to achieve a fraction of that success under the aegis of his boss Sonia Gandhi. Blaming global factors for the economic woes is an old ploy but it fools no one. The economic mess is largely of the UPA’s own making.

Though this column is not about the state of the economy, but nonetheless, a few facts ought to alert readers about the gravity of the situation. Rupee was 45 to a dollar in early 2004. This past week it touched 60 to a dollar. That is progress for UPA. Forex reserves are about $290 billion alright, but much of it is short-term debt which can be recalled at short notice. And the trade deficit is a whopping 5.1 per cent of the GDP thanks to policy inaction and wrong-headedness on the export front. The outright ban by the Apex Court on iron ore exports following large-scale illegal mining added to the current account woes.

Admittedly, the latest run on the currency was triggered by the US Fed which is tamping down on quantity easing. But, surely, it cannot be anyone’s case that the Americans should continue to pour liquidity into the global markets so that the Indian currency does not come under pressure. The Fed took that decision following the slow but certain revival of the American economy.

UPA’s ‘success’ is just smoke and mirrors

On the other hand, the rupee has been depreciating long before the Fed announcement. And the reason is the gross neglect and mismanagement of the economy. A number of economic pundits, in fact, argue that the rupee is even now overvalued and should depreciate at least seven to eight per cent more. In other words, the intrinsic value of the rupee is about 65 to a dollar. And you know what will be the fall-out of the depreciated rupee? More hardships for the aam admi. Petrol, diesel, vegetables et al will become costlier.

Yet, all that the Government does is field its policy wonks before the media to deny the seriousness of the crisis. From P Chidambaram to his chief economic adviser, Raghuram Rajan, and that compulsive publicity hog, Montek Singh Ahluwalia, everyone seems to be engaged in talking up the rupee. If only it was so easy! Markets are a better judge of the health of the economy. When the Sensex falls more than five hundred points in a single day, it constitutes a huge vote of no-confidence in the Government’s ability to set things right.

With less than a year left before the next Parliamentary poll, the Government is hardly in a position to take tough decisions. Even if it musters the numbers in the Lok Sabha, no single legislative measure is likely to reverse the economic slide. Political drift and policy paralysis these past five years has taken a huge toll on the economy. Only a new Government with an assured majority can put the economy back on the growth path.

Where our money went wrong

Till then, the rupee would remain under pressure, the share markets would move in a narrow band, and the aam admi will have to suffer double-digit consumer inflation. The truth is the economist Manmohan Singh as PM is no patch on the economist Manmohan Singh as Finance Minister. But then you don’t have to be a leader in your own right to be a successful FM.

UPA has turned governance into a daily act of betrayal

By Gautam Mukherjee on June 24, 2013



UPA has turned governance into a daily act of betrayal

The perfect crime said Nicolo Machiavelli, the renaissance political theorist, is one without a suspect. In the Indian context, this perfect crime masquerades as governance, or its travesty, depending on one’s bias, perception, comprehension and position.

The economic scenario is such that no one believes India anymore. There are no silver linings. We who live here are in despair, forever waiting for Godot. There is little or no international confidence in our Government’s pronouncements too.

Potential FDI and FII are openly laughing at us, most recently at the Finance Minister’s tired assurances, for talking much and implementing next to nothing. Global rating agencies are moving relentlessly towards downgrading our sovereign credit rating to junk status, convinced our deficits will balloon out of control now.

Despite talk of reform, India’s economy remains under stress

There are no takers for India’s Government bonds despite easing of norms for foreign investors. This is our Government’s borrowing programme, without which it cannot function, and it is in trouble. Even the collection of income tax arrears which run into tens of thousands of crores is reported to be dismal, a mere 2 or 3 per cent of the outstanding! NPA’s (non-performing assets) in banks are at an all-time high.

The sharp fuel price rises, particularly of the widely used diesel for transportation and agriculture/ back-up power generation, coming up very soon, due to a currency becoming more worthless every day, will spiral our deficits and inflation out of control.

Damage done by UPA needs urgent repair

The cost of our electricity will go up as we have begun to import coal with our weak and weaker currency to run our power stations. The Indian coal is inadequate and of low quality. At the retail level, we will not only suffer even greater shortfalls of electricity as demand relentlessly outstrips supply, but have to generate our own with very expensive diesel.

There is no remedy to this crisis on every front because there is no will to rectify matters. There is no one effective on the command deck. This ship is in denial of reality and drifting on its own.

UPA’s self-serving welfarism is wrecking economy

The perpetrators of the plight India finds itself in has no claimants, and certainly no one from the topmost echelons of Government to the dregs, is owning any responsibility. It is an act of daily betrayal without a signature. It is a collective shirking of responsibility almost anonymous in its manifestation. The cumulative burden of which negligence and its consequences is the lot of the Indian people and the foreigners who live amongst us. Robert Vadra was more prophetic than he knew when he called the land ruled by his mother-in-law one of “mango people in a banana republic.”

It is we, the people, who must suffer the effects of our savings being eaten away by inflation and our incomes becoming more inadequate by the day. We, the people, have no power to extract tribute like our masters, full of themselves and their immunity from any accountability in real terms, not behaving at all as elected representatives are meant to.

Government helpless as Rupee plummets

We are helpless, always at position after the fact, at the receiving end, and will always necessarily be in this state of victimhood in a system meant to be representative democracy. But yes, the one net advantage available to us is our functioning democracy, our quite admirable election commission and process. With its universal franchise, and through this one right, we can change the water in our quest to restore the balance if we choose to do so.

But if even now we are cynical, and believe we are doomed no matter who rules us, we are indeed doomed, caught fast by our own self-fulfilling prophecy.

UPA’s ‘success’ is just smoke and mirrors

This kind of defeatist thinking subverts the very roots of democracy and undermines its foundations. We can make a change with our votes, and must do so with the intent of bettering our circumstances. We must believe there are politicians who can address our aspirations, and we must not cling to the crumbling status quo falling into the illusion of safety that has been betrayed times without number. There is no status quo. We are under threat of destruction and dissolution.

And the more fractious we turn our democratic verdict, splitting our vote like a shattered mirror, that is just how we will reap the whirlwind. A Government that is a bazaar of competing interests cannot govern. We have been through the experiment before with sad and unstable results in minority and Janata Dal Governments. We will not be able to address our economic ills if we elect another one like the old ones that failed. Politics will dominate all else. There will be total gridlock.

But the Indian electorate has sometimes been wiser than anyone expected. This is another time when it needs to come to the rescue and restore the promise of the India story.