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NEWS

CHENNAI

THE HINDU

MONDAY, JUNE 25, 2012

Interest rate hike for NRI deposits expected

Special Correspondent
NEW DELHI: The stage is set for Mondays announcement. After the assurances, almost as an encore by the Finance Minister and the Prime Minister, on unveiling a booster package to revive the economy and the markets, the bourses, India Inc., various stakeholders and the nation at large are eagerly awaiting a dose of adrenalin to transform the current gloomy environment into one of condence and boom. Such is the despondency that appears to have set in that there is no second guessing what lies in store, not even by the apex chambers and other industry lobbyists. But this time, it is clear that the government, with its back to the wall, is serious and

Markets await a dose of adrenalin to transform the current gloomy environment into one of condence and boom
means business. What apparently has jolted the government into taking action is the free fall of the rupee in recent days and, more so, a single-day slump of 85 paise when the rupee slumped to an all-time record intra-day low of 57.37 to the US dollar on Friday amidst fears that if no immediate steps are taken, it could well breach the 58 mark. The overall economic repercussions of such sharp depreciation of the Indian current in the near future is such that it prompted Finance Minister Pranab Mukherjee to say: I have asked the DEA Secretary to discuss [the] rupee situation with RBI Deputy Governor. DEA Secretary [R. Golapan] will take steps to contain the rupee slide. He followed it up on Saturday in Kolkata saying, We will be able to take certain measures that will be announced on Monday With the RBI maintaining a status quo in its key policy rates and the cash reserve ratio ostensibly on account of inationary pressures still persisting and inaction on the part of the government thus far no one should be expecting the apex bank to tweak the interest rates at this moment. In this scenario, the steps that are likely to be announced, and are largely being anticipated, are a further hike in rates of interest for NRI deposits along with the rollout of a bond issue for overseas investors. RBI may increase the interest rate on FCNR(B) deposit further and announce the issuance of bonds for

Rollout of a bond issue for overseas investors also anticipated PM had talked about a package to put economy on higher growth trajectory
non-resident Indians to address the issues in the shortterm, Crisils Chief Economist D.K. Joshi said. ment Chairman Y.K. Alagh, since private investment is constrained by lack of availability of funds, the government might announce some measures for attracting investments and also steps to cut down wasteful expenditures. On his way back to the capital onboard his special aircraft, Prime Minister Manmohan Singh on Saturday had asserted that a revival package would soon be unveiled to put the economy on a higher growth trajectory. Noting that India cannot ex-

Rupee fall
The two measures in the near term, it is expected, would contain the rupee fall on account of the capital inows that would follow. Alongside, certain measures may also be announced to shore up private investment, boost investor sentiment and cut down on wasteful expenditure further. According to Institute of Rural Manage-

pect outside help to see the country through its difficulties, he said: We have to raise our economy through our own good steps There are problems with regard to management of the balance of payments decit on the current account. Those problems also we will tackle. Indicating that the longpending policy reforms would also be initiated at the soonest, Dr. Singh said: It will not be proper for me to talk about these things in detail, but you have my assurance that I recognise that we have to work our way to restore the momentum of growth that India needs and which the people of India want the Government of India to work for We have to work systematically to ensure that the balance of pay-

ment problem is managed properly and the climate for foreign investment, both direct and portfolio, is also favourably motivated.

CII recommendations
Evidently, while steps will have to be taken to contain the burgeoning subsidies on diesel and other petroleum products, the government is likely to roll out the package that had been suggested by apex chamber CII. While some of its recommendations have already been implemented, the government may now announce a 25 per cent accelerated depreciation for investment in plant and machinery to encourage investments by the private sector and to revive the investment sentiment. The chamber had also sug-

gested that the government could extend all approvals and clearances for 50 large projects on a priority basis in the next 30 days in consultation with State governments and relevant ministries. This, it said, would quickly put projects on implementation mode which in turn would create demand for more than 100 industrial sectors. Also, the chamber viewed that a clear plan with numbers plans for additional revenue and rationalised expenditure for containing scal decit could be released by the government as such an announcement would go a long way in boosting investor sentiments and also arrest the crowding out of private investment due to high levels of market borrowings raised by the government.

U.S. bank Wells Fargo to Teenager falls into open well in West Bengal move jobs to India soon
Ananya Dutta
MUMBAI: Wells Fargo, the fourth largest U.S. bank, has decided to move an unspecied number of jobs to India as part of its plan to increase efficiency. We are thoughtfully pursuing a strategy for where we grow and where we shift resources over the long-term. Businesses and functional areas are investigating what markets are most economically attractive, with access to the best talent, both internationally [including India and the Philippines] and domestically, said Wells Fargo & Company spokeswoman Bridget Braxton. While refusing to reveal the number of jobs that would be moved to India and the Philippines, she added that the areas of business which would be impacted included retirement and tech-

nology. Wells Fargo employs 3,000 people in India at its Hyderabad and Bangalore offices, and 240 in the Philippines, according to the bank. Ms. Braxton said: The timing and the number of positions that would be impacted have not been identied yet, but the majority of our workforce will continue to be based in America. Were the 12th largest private employer in the U.S. The 150-year-old American nancial powerhouse with $1.333 trillion in assets as of December 2011, and the largest by market value, has been present in India since 2006 as a trade nancier, apart from running a technology centre. In the Philippines, the bank has been present since

1976 and it opened a Customer Service Centre called Wells Fargo Philippines Solutions (WFPS) in Manila last year, Ms. Braxton said.

More exibility
Offering the reason for shifting jobs, Ms. Braxton said: Our international customers expect round-theclock service, apart from faster turn-arounds for decisions and responses. In collaboration with teams in the U.S., our teams at WFIS and WFPS help us meet these expectations. Global expansion of our workforce will allow us to do these processes faster, and with more exibility. Wells Fargo had 2,64,900 full-time employees at the end of March, with 98 per cent of them based in the U.S. PTI

KOLKATA: A teenager fell into an open well near a construction site at Liluah in West Bengals Howrah district on Sunday, even as the body of four-year-old Mahi was recovered from a borewell at Kasan in Gurgaon, Harayana. The incident occurred at 3.30 p.m., but till 10 p.m., the authorities could not ascertain whether or not 17-year-old Roshan Mandal was alive.

Toxic gas adds to woes

Mandal, a construction worker, had slipped into the well more than 40 feet deep, while trying to draw water. As the wells diameter was very narrow, it was difficult for the remen, who were the rst to reach the spot, to conduct rescue operations. Others engaged in rescue work also struggled as there

was toxic gas inside the well. The Disaster Management Group of the Kolkata Police, believed to have been far better equipped to handle the situation, arrived at the spot only around 9 p.m. Shortly after, a diver was lowered into the well with a rope and a crane, but he had to beat a retreat. He was lowered a second time with an oxygen mask. The long delay on the part of the Disaster Management Group is being questioned with locals pointing out that had operations begun earlier, the situation might have turned out differently. Minister for Disaster Management Javed Khan sought to defend the authorities, saying the district administration had not apprised them of the situation on time.

ANOTHER TRAGEDY: Fire brigade personnel search inside the well into which 17-year-old Roshan Mandal fell, in Howrah on Sunday. PHOTO: PTI

Opposition to insist on Manmohan appearing before JPC on 2G

Wants to question Prime Minister, Chidambaram on contradictory statements
Shalini Singh
NEW DELHI: The attempt by

Minor re in North Block

Congress members of the Joint Parliamentary Committee (JPC) on telecom last week to halt investigations on the pretext of rushing the report is aimed at ensuring that the JPC does not question the manner in which Prime Minister Manmohan Singh and Home Minister P. Chidambaram have contradicted each other on key issues relating to the spectrum scam, Opposition sources on the Committee told The Hindu.

Underpricing spectrum: 2006

The Prime Minister has said that among the reasons why he allowed spectrum pricing to be dropped from the nal December 7, 2006 Terms of Reference (ToRs) of the Group of Ministers (GoM) on spectrum was that ...it was pointed out to me that there was a Cabinet decision of 2003, which said that spectrum price is a matter which should be discussed between the Finance Ministry (MoF) and the Telecom Ministry (DoT). Dr. Singh made this disclosure on his ight from New York to Delhi on September 28, 2011. These modied ToRs without spectrum pricing allowed the former Telecom Minister Dayanidhi Maran to grant 14 licences on a rst-come, rst-served basis to Aircel in 2006 at 2001 prices, giving the rm windfall gains while making it a

pan-India operator. Spectrum for these licences was later granted by Mr. Marans successor A. Raja in 2008, which the CAG in 2010, valued at nearly ten times the original price of allocation. Mr. Maran was forced to quit the Union Cabinet after the Enforcement Directorate led a case in February 2012 against him and his brother for alleged receipt of Rs. 550 crore in kickbacks linked to the Maxis-Aircel deal. However, in a recent twist, Mr. Chidambaram, indirectly undercut the PMs logic by noting there was never any agreement between the MoF and the DoT. In a letter to The Hindu in which he contested the claim that as Finance Minister he had not protested the dropping of spectrum charges from the ToRs, he revealed that far from agreeing, The MoF sent an OM on 18 May 2006 with the approval of the Finance Minister, insisting that spectrum pricing should be included in the ToR. Additionally, the MoF protested and wrote several letters to the DoT and the Cabinet Secretariat demanding inclusion of spectrum pricing in the ToR. Opposition MPs on the JPC say they would like to know why Mr. Chidambarams protests were ignored by the PM.

NEWS ANALYSIS

in the Rajya Sabha on February 24, 2011, The government policy on pricing of spectrum was taken on the basis of the Cabinet decision of 2003, which specically left this issue to be determined by the MoF and the Ministry of Telecommunications. He added, The two Ministers had agreed because of legacy considerations and I accepted the recommendation. A government press release of January 7, 2011 gave the PM a clean chit by specifying that the 2G spectrum pricing was discussed extensively between the MoF and the DoT in line with the Cabinet decision of 2003. It added that the Finance Minister and the DoT after considering all options, had come to an agreement that the 2G spectrum pricing would continue as before, based on which the PM accepted the outcome. The PMs statement in Parliament was made within days of Mr. Rajas arrest, presumably in anticipation of Mr. Raja seeking to implicate him and Mr. Chidambaram in the 2G spectrum mess. Five months later, in June 2011 during his deposition in the Special CBI Court, Mr. Raja 2G scam: 2008 predictably dragged both the Asked why he did not insist PM and Mr. Chidambaram on auctions in 2007-08 dur- into the scam, challenging the ing Mr. Raja's tenure, the PM PM to deny it. claried, at a press conferFollowing the press reence on February 16, 2011 and lease, the PMs clarication

and Mr. Rajas statement in court, the focus shifted from the PM to Mr. Chidambaram. However, when attempts were made to get the trial court to prosecute him, the government took a U-turn: a December 10, 2011 press release rubbished any possibility of agreement between Mr. Chidambaram and Mr. Raja. The new release claimed, As Finance Minister, it was Shri P. Chidambaram who raised the issue of revision of entry fee. However, the nal view taken by the DoT was that it would adopt the same policy that had been followed since 2003, including charging the same entry fee of about Rs. 1,650 crore. Going on to reverse the PMs claim to the press and in the Rajya Sabha, it added, It is therefore preposterous to suggest that Shri P. Chidambaram had any role to play in xing the entry fee of the LoIs issued on January 10, 2008. Later, Mr. Chidambaram too contradicted the PMs statement about his agreement with Mr. Raja on the 2G spectrum pricing to the media, including in a letter to The Hindu published on February 18, 2012. Mr. Chidambaram wrote, There was never any agreement between the Minister of C&IT [A. Raja] and me not to revise the entry fee. On the contrary, the decision was taken by the government at the high level meeting on 4.7.2008 to revise and update the entry fee. Beyond merely denying

agreement with Mr. Raja, Mr. Chidambaram actually noted that the decision to revise the entry fee was taken in the presence of the PM and Mr. Raja. This explains why some members of the JPC want all three the PM, Mr. Chidambaram and Mr. Raja to appear as witnesses.

PAC yes, JPC no

Ironically, the Congressmen are resisting demands to bring the PM and Mr. Chidambaram as witnesses in the JPC, when the PM himself, in December 2010 while battling the Oppositions demand for a JPC had in writing offered to appear before the Public Accounts Committee (PAC). Interestingly, the response of the PMs spokesman to a detailed questionnaire from The Hindu, seeking clarications on the contradictions between several of the statements of the PM and Mr. Chidambaram in 2006, was that the information was not available as all the relevant les and documents pertaining to the issues you raised have been sent to the JPC and the PAC by the PMO and are now in the public domain. Under the rules of procedure governing the JPC, these documents are treated as condential and are thus not in the public domain. This makes it obvious that the JPC is the only forum left to reconcile the PM, Mr. Chidambaram and Mr. Raja's multiple contradictory statements.

Smoke billows from Room 102, next to Home Minister P. Chidambarams office, on the second oor of North Block in New Delhi, after a minor re on Sunday. It was put out by over seven re tenders, which rushed to the scene within minutes of the incident. PHOTO: V.V. KRISHNAN

G20 Challenge award for Apollo medicare initiative

Special Correspondent
HYDERABAD: The Apollo Hospi-

tals Group initiative to provide quality tertiary healthcare in semi-urban and rural areas has won the G20 Challenge on Inclusive Business Innovation. The group showcased Apollo Reach Hospital, Karimna-

gar, Andhra Pradesh, in a competition launched by the Group of 20 and International Finance Corporation (IFC). Apollo is the only healthcare organisation to win this honour, according to a press release here. Apollo Reach Hospitals operate in tier-II cities and offer medical care at rates up to 30

per cent lower than what is charged by other major hospitals, mainly through cross-subsidy. The award was presented at the recently-held G20 Summit at Los Cabos, Mexico. An independent panel selected 15 Challenge winners based on innovation, developments, potential for growth

and nancial and social sustainability. The online competition was launched to nd the best examples worldwide of businesses in developing countries that provide critical goods, services and livelihood opportunities in nancially, environmentally and socially sustainable ways to those living at the bot-

tom of the pyramid, called inclusive businesses. The G20 Challenge on Inclusive Business Innovation recognised businesses with innovative, scalable and commercially viable ways of working with lowincome people in developing countries. Preetha Reddy, managing director, Apollo Hospitals

Group, said: We are extremely proud to be recognised by the G20 for our efforts in bringing about a visible change in the lives of people living at the bottom of the pyramid. More than 25 per cent families in India live on the margins, spending less than $70 a month on goods and services.
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