The Ashwamedh yagya is turned to be the carnival of second generation reforms as UPA leadership dared to violate election and vote bank equation to win corporate favour. Steep hike in diesel prices and restriction of LPG use are followed with major d

The Ashwamedh yagya is turned to be the carnival of second generation reforms as UPA leadership dared to violate election and vote bank equation to win corporate favour. Steep hike in diesel  prices and restriction of LPG use are followed with major dose of disinvestment and FDI.Free foreign capital inflow is the theme song for the corporate dominated hegemony fixed match.

Indian Holocaust My Father`s Life and Time: Nine Hundred Two
Palash Biswas

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The Ashwamedh yagya is turned to be the carnival of second generation reforms as UPA leadership dared to violate election and vote bank equation to win corporate favour. India opened its supermarket sector to foreign chains on Friday after months of dithering, pushing ahead with the boldest reforms yet in Prime Minister Manmohan Singh's government as it tries to revive the country's tottering economic growth. Steep hike in diesel  prices and restriction of LPG use are followed with major dose of disinvestment and FDI.Free foreign capital inflow is the theme song for the corporate dominated hegemony fixed match.Jumping over the political hurdles, cabinet headed by Prime Minister Manmohan Singh today allowed 51 % FDI in multi-brand retail.Which would worsen agrarian market dislodging the micro capital from the market and generating enormous employment as retail sector had been the traditional resort for all those who may not get nay regular job. The uneducated, semi educated and unskilled masses have been deprived of local sustainable employment to accommodate big capital.The decision is extremely controversial and will set off another political chain reaction.That the decision was coming was clear from the fact that retail stocks skyrocketed today.It is unfortunate that despite opposition from their own allies they have chosen to again reopen foreign investment into the sector. It is surprising the government has again reopened the sector without announcing any solid measures to protect small traders. Traders will oppose this move even more strongly this time and are hopeful the government will roll back its decision just the way they did last time. FDI in aviation has always been approved, this is just an approval for foreign airlines. This was not something out of the extraordinary, so there is no question of it being reversed. Foreign investors were getting fed up with India because nothing was happening there.They will be happy now.Foreign airlines can now pick up 49 per cent stake in India's domestic carriers, a step that is expected to give a boost to cash-strapped aviation industry. Singh's government ignored calls from political parties for a U-turn on a hike to heavily subsidized fuel prices announced on Thursday, and also approved a policy to allow more foreign investment in airlines as well as selling off stakes in major state-run industries.

The government also approved sale of its minority stakes in four public sector firms — Hindustan Copper, Oil India, MMTC and Nalco — to raise up to Rs15,000 crore.The cabinet committee on economic affairs (CCEA) approved 10% stake sale in Oil India and another 9.59% in Hindustan Copper. It also approved a 12.15% stake sale inNALCO through the Offer for Sale (OFS) route.The CCEA also approved 10% fresh equity sale in an initial public offering (IPO) in the Rail India Technical and Economical Services (RITES) which comes under the railway ministry.In addition, the proposal of disinvesting 9.33% in resources canalising agency, MMTC, was cleared by CCEA.A proposal of a 5% stake sale in Neyveli Lignite Corporation, however, was not taken up. Sources said this was due to strong opposition from Tamil Nadu.The government had earlier spoken of a target of Rs. 30,000 crore from disinvestment in the current fiscal.Raising funds from disinvestment was a pending measure in order to check a fiscal deficit that has been widening following rising food, fuel and fertiliser subsidies.The government, in the last fiscal, had raised only Rs. 14,000 crore from disinvestment against the target of Rs. 40,000 crore.

Killing the Monsoon session helped the ruling hegemony and policymakers to bypass the parliament.Excellent floor management amongst different genres of political class have paved way to continue the genocide based growth story. Media hyped hue and cry would not change the situation which has made India  a free hunting ground for foreign big capital. it would rather help US president Barrack Obama to win a second term in the white house amidst poverty injected US economy in crisis. It seems that the Fed Chairman, Bernanke did an excellent job to manage Indian economists, media and policy makers favoured by intense corporate lobbying.One powerful coalition partner vowed street protests from Friday, and parties from Communists to right-wing Hindu nationalists joined householders demanding a rollback on diesel and on a cap in sales of subsidized cooking gas canisters.With the increase in diesel prices, children's school bus fares are going to increase and prices of every essential items will increase. God knows how we are going to manage with our limited income, said housewife Manu Das in the northeastern state of Assam. Similar protests earlier this year over petrol price and railway fare hikes prompted Prime Minister Manmohan Singh to partially roll them back.

Taking some crucial decisions, the Cabinet Committee of Economic Affairs took some major decisions to end UPA's policy paralysis triggering outrage among some of its allies as well as the opposition.Ally Trinamool Congress joined the angry chorus of the Bharatiya Janata Party (BJP) and the Left to denounce the move which the government insisted would not hurt Indian interests.West Bengal Chief Minister and Trinamool Congress Mamata Banerjee was furious and said she would not stand for it.Attacking the government for its "hurried" decision allowing FDI in multi-brand retail, BJP on Friday alleged said that despite strong objections from the Opposition it has been done under foreign elements' pressure and will affect the livelihood of Indians in retail trade.UPA's outside supporter Samajwadi Party today held demonstrations across Uttar Pradesh and burnt effigies of UPA leaders to protest hike in diesel price and cap on supply of subsidised LPG.

Prime Minister Manmohan Singh said at the meeting that the time had come for big bang reforms. "If we have to go down, we have to go down fighting," he said.

Cabinet has raised the FDI cap on various streams of broadcast services by up to 74%.

Meanwhile, private airlines in India have welcomed the decision to allow FDI in aviation by foreign carriers.However,retail prices of essential food items, including wheat and edible oils, are expected to increase marginally across the country due to a rise in the cost of transport following diesel price hike by over Rs5 per litre, industry bodies said.

Commerce Minister Anand Sharma spoke to the media and said the the government has also relaxed sourcing norms for FDI in single brand retail.

As criticism mounted, Commerce Minister Anand Sharma defended the sweeping policy change, viewed as a major step to spur economic reforms.

"It is not a sudden decision," Sharma told the media, explaining the decisions taken on Friday evening by the Cabinet Committee on Economic Affairs chaired by Prime Minister Manmohan Singh.

Trinamool Congress MP Kunal Ghose on Friday said the party strongly opposes union cabinet allowing 51% FDI in multi-brand retail.

Trinamool Congress gives 72-hour deadline to govt for roll back of FDI in multibrand retail and diesel price hike, TMC leader Mukul Roy said.

"BJP strongly condemns this hurried decision forcing FDI in multi-brand retail in India. Inspite of serious opposition from within Congress, its allies and nearly the entire Opposition led by BJP, the government has seriously jeopardised the life, livelihood and employment of five crore people involved in retail trade in the country," BJP Chief spokesperson Ravi Shankar Prasad said.


The logic is that these measures were pending for a long time and the government has now shown political courage to push things through. The process of clearing all these got delayed and it is just that all are coming together.As an immediate impact, business and consumer sentiment will improve, stock market will improve. Industry is hoping beyond hope that  this time the government will stick to its decision (allowing FDI in multi-brand retail) because that is absolutely essential.The move allows global firms such as Wal-Mart Stores to set up shop with a local partner and sell directly to consumers for the first time, which supporters say could transform India's $450 billion retail market and tame inflation. India's inability in the past months to push through major reforms and ease its subsidy burden has put it in danger of becoming the first of the big BRICS emerging economies to see its credit rating downgraded to junk. India's decision late on Thursday to raise diesel prices by 14 percent, the first such move in 15 months, is aimed at shoring up a weak fiscal position, but it has already come under fire from the opposition and allies within the ruling Congress party-led coalition who see a chance to hurt the government.India raised the price of heavily subsidised diesel on Thursday to rein in its fiscal deficit and counter the threat of becoming the first of the big emerging economies to be downgraded to junk.

The Federal Reserve launched another aggressive stimulus program on Thursday, saying it would pump $40 billion into the U.S. economy each month until it saw a sustained upturn in the weak jobs market.   

* India revives plan to open retail sector to foreign supermarkets

* Foreign carriers to be allowed stakes in Indian airlines

* Government likely to announce spending cuts, sources

* August inflation jumps to 7.55 pct, diesel hikes to push prices

* Protests flare across India against higher prices

Understandably,retail stocks, including Pantaloon Retail, Provogue India and Koutons Retail, rose as much as 2-8 per cent on hopes the government will soon implement the decision to allow Foreign Direct Investment (FDI) in multi-brand retail sector. Shares of Future Group firm Pantaloon Retail jumped 6.92 per cent to settle at Rs 157.60, while Provogue India climbed 6.58 per cent to Rs 16.04 on the BSE.Among others, Brandhouse Retails soared 7.99 per cent, Koutons Retail India gained 4.93 per cent, Shoppers Stop (2.78 per cent) and Tata Group retail firm Trent (2.29 per cent) also notched up smart gains.  The BSE benchmark Sensex surged over 406 points in early trade today on flurry of buying by funds and retail investors, driven by strong global cues after the Federal Reserve unveiled a fresh stimulus plan to help bolster the US economy.The 30-share barometer, which has gained nearly 710 points in the previous seven sessions, shot up further by 406.45 points, or 2.26 per cent, to 18,427.61.All sectoral indices, led by banking, metals and oil and gas, were trading in the positive zone with gains of up to 3.36 per cent.

India's inability in the past months to push through major reforms and ease its subsidy burden as growth slowed sharply has put it in danger of becoming the first of the big BRICS emerging economies to see its credit rating downgraded to junk.While the measures will add to inflation in the short term, it will ultimately make it easier for the central bank to loosen monetary policy and help revive investor confidence damaged by political gridlock in New Delhi.It is a bold move, and will send a strong signal to the Reserve Bank of India (RBI) on the government's efforts at fiscal consolidation, said Anubhuti Sahay, an economist at Standard Chartered Bank in Mumbai.While most other G20 central banks are trying to ease monetary conditions to counter a global slowdown, the RBI has consistently flagged high inflation as a key risk to an economy where growth is faltering.

Data due at 0600 GMT on Friday is expected to show wholesale prices rose 6.95 percent year-on-year in August, slightly higher than July's 6.87 percent, according to a Reuters poll of 32 economists.

Prime Minister Singh was credited as the economist who opened up India's economy in the 1990s, but since taking office eight years ago he has repeatedly put off or rolled back difficult economic decisions.Singh will need resolve and the support of powerful Congress party boss Sonia Gandhi if he is to muster the political will to fight off a wave of protests from both political allies and the opposition over reforms seen as costing jobs and raising prices.The supermarket policy was first announced last year but a political backlash forced the Congress-led government to put the measure on hold.

Making a strong pitch for immediate rollback of hike in diesel price, UPA allies and opposition parties have threatened to take to the streets with Samajwadi Party saying it will "not hesitate to take stern steps".While the Congress party termed the government's decision as one "forced" upon it due to rise in international crude oil prices, a Congress Chief Minister demanded a partial rollback.

Cabinet today decided to operationalise 51 per cent FDI in multi-brand retail but left it to the state governments to allow setting up of such stores.The Cabinet cleared the decision at a meeting this evening, a Union minister, who asked not to be identified, said in New Delhi.For single-brand retail, the Cabinet decided that any firm seeking waiver of the mandatory 30 per cent local sourcing norms would have to set up a manufacturing facility in the country, the minister added.

In November last year, the government had approved 51 per cent FDI in multi-brand. This was, however, put on hold due to political opposition, including from UPA constituent Trinamool Congress.

The minister said since the implementation of the decision was put on hold, it had to go to the Cabinet again before going ahead with the decision.

The Cabinet Committee on Economic Affairs today approved the proposal which would pave way for much-needed equity infusion into India's airlines passing through acute turbulence as most of them are in dire need of funds for operations.

"The cabinet today approved the proposal of allowing foreign airlines to pick up to 49 per cent stakes in Indian carrier. Though FDI of up to 49 per cent, 75 per cent and 100 per cent was there in aviation sector, foreign airlines were not allowed," Civil Aviation Minister Ajit Singh told reporters after the meeting.

Current FDI norms allow foreign investors, not related to airline business, to directly or indirectly own an equity stake of up to 49 per cent in Indian carrier.

Allowing foreign airlines to pick up stakes in Indian carriers has been a long-pending demand of the aviation sector.

Most of the Indian carriers are suffering losses because of high taxes on jet fuel, rising airport fees, costlier loans, poor infrastructure and cut-throat competition.

Except IndiGo, all airlines have posted losses in the financial year ending on March 31.

Kingfisher Airlines, which is burdened with a debt of over Rs 7,000 crore, has been in the forefront of pushing for permission to allow foreign airlines to invest in domestic carriers.

Though Kingfisher has been pushing for FDI to boost the sector, Jet Airways and IndiGo have expressed reservations saying allowing global players in would lead to cartelisation and takeovers of Indian carriers.

The opening of the sector to foreign airlines may, however, bring good news for passengers who would benefit from more competitive fares, better product and services and better international connectivity.

The Manmohan Singh government had initiated the process in January but key UPA constituent Trinamool Congress was opposed to it.

Sensing that FDI proposals may be approved by the government, Kalanidhi Maran owned no-frill carrier – SpiceJet, had recently held "preliminary discussions" with a Gulf-based airline for potential investment in the budget carrier.

Foreign carriers such as British Airways and Virgin Atlantic Airways Ltd have expressed interest in investing in Indian carriers.

Terming the step as "undemocratic", Samajwadi Party general secretary Naresh Agarwal, whose party is supporting the UPA government from outside, said his party "has never and will never support this government on the issue of price rise. If need be we will not hesitate to take any kind of stern steps." He said, "We will oppose this hike and take to the streets."

UPA ally and Trinamool Congress has opposed the diesel price increase and curb on purchase of subsidised cooking gas cylinders and its chief Mamata Banerjee is set to lead a street rally in Kolkata on Saturday demanding their rollback.

DMK, another UPA ally, has termed the price hike as "very high" and unexpected and sought a rollback.

RJD supremo Lalu Prasad, who party supports the UPA, said that the government's decision was "unfortunate" and sought its reconsideration while BSP chief Mayawati demanded immediate rollback of the "anti-people decision".
Describing the move as a cruel joke and "mortal blow" on the common man and farmers, BJP has accused the government of conspiring with petrol 'mafia' and said it will not allow the hike and take to the streets instead.

Bihar Chief Minister Nitish Kumar flayed the Centre for steep hike and restricting the annual supply of LPG cylinders and said that the latter has inflicted a "cruel joke" on the people who are reeling under the price rise and inflation.

Kerala Chief Minister Oommen Chandy, who heads Congress-led UDF government, said, "If it is difficult to completely roll back the increase, the Centre should at least reduce the hike."

The government yesterday hiked diesel price by Rs 5.63 per litre and capped supply of subsidised LPG to 6 cylinders per household in a year.

Congress spokesperson Rashid Alvi said since international prices of crude oil had risen, the "government has been forced to take such a step".

BJP leader M Venkaiah Naidu said the restriction on LPG cylinder will have a minimum burden of Rs 750 every month on each family.

"The government it seems has become careless and adopted a 'we don't care' approach towards people," he said, adding that the government's slogan given before the polls of Congress' hand with the common man now seems to have become "Congress' hand is a betrayal with the people".

Mamata said in Kolkata,"We are unhappy and astonished that in spite of the formation of the UPA coordination committee after a long time, such a decision was taken without consulting us,"

DMK chief M Karunanidhi said in Chennai the hike would further affect the poor and the salaried class who are already reeling under high prices of essential items. He said his party was not consulted by the Centre on the issue.

Demanding a rollback, the Left said it will discuss with other political parties the issue of launching a "powerful" movement against the hike and also took the opportunity to attack Trinamool Congress for its "hypocrisy and double standards".

CPI(M) General Secretary Prakash Karat said both the diesel price hike and LPG restriction will hit the common people and said his party will strongly protest the move.

Charging the Centre with lacking economic ideas to tackle the fuel price hike, Tamil Nadu Chief Minister Jayalalithaa demanded immediate rollback of diesel price and the ceiling on supply of subsidised cylinders.

In Bhubaneshwar, Odisha Chief Minister Naveen Patnaik termed the diesel hike and restriction on LPG cylinders as a "breakdown" of the Centre's economic policies and demanded immediate rollback of the decision.

Ahead of the mid-quarter review of the monetary policy on Monday, senior-most Reserve Bank deputy governor K C Chakrabarty today said the top priority is to keep inflation under control.

"Controlling inflation is the top most priority of the central bank," Chakrabarty told students of a city college here on a day when the Wholesale Price Index data for August was released by the government.

After falling a bit in the previous month, inflation rose to 7.55 per cent in August, driven by higher prices of potatoes, wheat and pulses which rose due to poor monsoons.

The spike in August's WPI was also driven by a rise in the prices of manufactured items, further whittling down the efforts of the monetary authority to batten down inflation.

In July, the inflation was 6.87 per cent. However, in August last year the rate of price rise was 9.78 per cent.

Chakrabarty admitted that the nearly two-year-old rate hikes to combat inflation have had impact on growth, driven by slowing investments. "We agree that investment has slowed down due to higher interest rate."

On the third round of quantitative easing (QE3) announced by the US Fed yesterday, he said it will help the American economy, but it will spike commodity prices.

"What the US has done, will help the American economy. But it will have impact on the commodity prices. However, our problem is more internal," he said.

Yesterday, US Federal Reserves chairman Ben Bernake

said the central bank will buy USD 40 billion worth government bonds every month to help boost the economy till 2015. He also left the interest rates unchanged at 0.25 per cent till then.

The move has jacked commodity prices across the globe, besides triggering a rally in stock markets.

Taking a dig at the banks for reducing interest rates on their deposits, Chakrabarty said savers must be given higher rates of interest in comparison to inflation.

ENERGY/COMMODITIES

The government has decided to terminate mining licences of four coal blocks and will decide on Friday the fate of six blocks with reserves of 2.2 billion tonnes held by 14 firms, including Tata Steel, Hindalco Industries, Tata Power and Reliance Power. A senior coal ministry official said the three companies did not put up the associated end-use projects as required under law.

An Indian court ruling has cut the tax bill of Essar Oil , a subsidiary of London-listed Essar Energy, by $327 million, in a development that the company said drew a line under its tax problems.

India has moved further away from a widespread drought with a third straight week of heavy rains and the weather office is now suggesting the crucial monsoon could even slow its retreat, helping winter planting in the major food producer.

TELECOMS

Russia's Sistema JSFC is close to acquiring a controlling stake in Aircel Communications for around $3 billion, two people familiar with the development said. Malaysia's Maxis Communications owns a 74 percent stake in Aircel through multiple entities, which are being consolidated into a single company.

AUTOS

Hero MotoCorp Ltd will increase its scooter production capacity by 50 percent to 60,000 vehicles a month and raise its production of 125cc motorcycles by 25 percent to 75,000 vehicles per month, the company said on Thursday.

The telecom department is likely to make three blocks of 1.25 MHz available as 'top- p' spectrum in all circles except Delhi and Mumbai for the upcoming auction, a senior official said.

PHARMA

Ranbaxy Laboratories Ltd has got the approval to set up a greenfield manufacturing facility in Malaysia. Ranbaxy said it will invest around $40 million in the project, and increase total output in Malaysia from 1 billion doses/annum to 3 billion doses/annum. (Reuters)

MEDIA

Deccan Chronicle Holdings have rejected the one takeover bid they have received for their Indian Premier League Deccan Chargers cricket, the country's cricket board (BCCI) said on Thursday.

"There could be some impact on sugar prices in those places where mills are not present. Sugar prices in North Eastern region could increase due to a rise in transport cost," Indian Sugar Mills Association (ISMA) Director General Abinash Verma said.

Currently, ex-factory price of sugar is ruling in the range of Rs34.5-35.5 per kg, he added.

Echoing similar views, Mumbai-based Solvent Extractors Association Executive Director BV Mehta said: "It will have impact on all commodities including edible oils. We are heavily dependent on local transport for movement of oilseeds and oils from crushing centre and also from ports".

He said that it would be difficult to calculate at present how much price increase could be seen in edible oils.

Agricultural Produce Market Committee (APMC) of Azadpur, President Rajendra Sharma, however, said: "Prices of vegetables and fruits are unlikely to be affected as rates are driven purely by supply-demand situation".

Roller Flour Mills Federation of India Secretary Veena Sharma said: "Wheat, wheat flour and other wheat products prices will be affected with rise in transportation cost".

All India Rice Exporters Association former President Vijay Sethia said, "There will not be much impact on rice prices as we have enough supply. However, profit margin of millers could take a hit at least by 50 paise a kg."

On Thursday, the Cabinet Committee on Political Affairs, headed by Prime Minister Manmohan Singh, decided to raise diesel price by Rs5/litre, excluding value-added tax.

Last year, the country produced about 77.52 million tonnes of fruits, 149.6 million tonnes of vegetables, 104.32 million tonnes of rice and 93.90 million tonnes of wheat.

However, it depended on import of pulses and edible oils to meet the domestic shortages.