Today's Hot Stories - December 13, 2012
10 Headlines for Today(1) Mayawati now says she has respect for Hamid Ansari
(2) Rahul Gandhi targets Modi, says only one man is shining in Gujarat
(3) Japan sends jets after Chinese plane flies over disputed isles
(4) Consumer price inflation at 9.9% in Nov
(5) HDFC to pay Rs.3Lfor seizing car without notice
(6) 27 Indian companies lobbied in US
(7) 4th Test: Eng 199/5 at close on Day 1
(8) Saina loses again in Super Series Finals
(9) Jayawardene to step down as SL skipper
(10) Egg yolk is as bad as smoking for heart
5 Stories for Today
(1) Nationwide mobile number portability by February: Telecom minister Kapil Sibal
(2) Economic revival is new China leader's top priority
(3) Panel pulls up oil ministry for being soft on RIL
(4) Federal Reserve to spend $45bn to sustain bond purchases
(5) RBI tweaks CAR norms for NBFCs
(1) Nationwide mobile number portability by February: Telecom minister Kapil Sibal
Telecom Minister Kapil Sibal today said nationwide Mobile Number Portability (MNP) is expected to be rolled out by February next year, which will allow users to retain their numbers even if they move from one state to another.
"For the timely implementation of the National Telecom Policy (NTP) 2012, the Department of Telecom has finalised broad agenda for next three months from December 2012 to February 2013," Sibal said at the 'India Telecom 2012' here.
Some of the key initiative in course to be completed by February 2013 are approval of spectrum assignment and pricing, unified licences regime, M&A guidelines, finalisation of guidelines for spectrum sharing, creation of fund for R&D and manufacturing and of course, MNP on a nationwide basis, he added.
Currently, a user is allowed to switch to a different operator within his/her circle, while retaining his/her phone number.
Under NTP 2012, the government had envisaged implementing MNP on a nationwide level allowing users to retain their mobile numbers even when they shift to a different telecom circle.
India has 22 telecom circles.
According to Trai, by the end of October 2012, about 75.14 million subscribers have submitted their requests to different service providers for porting their mobile number.
In the month of September 2012, total number of subscribers who have submitted their request for MNP stood at 5.36 million.
(2) Economic revival is new China leader's top priority
New Chinese leader Xi Jinping has indicated that reviving economy and not balanced regional development was his priority during his first tour as the Communist Party general secretary to Guangdong province. His predecessor Hu Jintao pursued the policy of balanced growth with focus on underdeveloped northern and western regions.
Xi indicated further growth of highly-industrialized southern China during his four-day tour to the province, where China's first experiment with economic reforms was launched under his father Xi Zhongxun's leadership in the 1970s. The tour concluded on Tuesday.
"To pause or reverse the reform and opening up will lead to a dead end," said Xi, who will become the country's next president in March.
Hu's policy involved reviewing the course of development to ensure more environmental friendly growth, and to disperse the benefits to less developed regions outside south and east China.
"We should dare to tackle difficulties and venture along dangerous paths to break through barriers to reform presented by ideological differences and vested interests," Xi said.
His statements have brought great joy to south China, which felt suffocated under Hu. "We see it as a strong signal that Xi has chosen Guangdong for his first tour after taking charge of the party," said Fu Lang, a local official. "We have very high hopes from the new leaders about further economic development.''
Guangdong is China's wealthiest province with higher GDP than Singapore. It has seen industrial investments moving away to the underdeveloped regions in recent times.
Sources said Xi is trying to revive the country's economy by edging the industry in wealthy southern and eastern areas to upgrade their technology and enhance both exports and domestic consumption. This is a task the backward regions are not yet capable of handing.
An expert said Xi is clearly trying to project himself as a "21st century Deng Xiaoping". In the process, he is expected to take China's economy on a different trajectory.
Xi's tour also revealed his contempt for official pomposity. He ordered major changes in the way things have been traditionally done in China. His tour saw no red carpets, official banquets, or long speeches.
The police did not block traffic to give priority to his motorcade. He told officials to follow his frugal style of governance, stop making unnecessary speeches and listen to the people.
(3) Panel pulls up oil ministry for being soft on RIL
The standing committee on petroleum and natural gas has pulled up the oil ministry for not taking penal action against Reliance Industries Ltd (RIL) for failing to adhere to the approved investment plan, leading to fall in gas output from the company's Krishna-Godavari (KG) basin field.
In its latest report tabled in Parliament on Wednesday, the panel asked the ministry to strictly monitor implementation of directions issued to RIL for reversing the trend of falling gas output from the field. RIL's KG-D 6 field has seen output drop from 62-63 mcmd (million cubic metres per day) achieved in August 2010 to 23-24 mcmd at present. The output, as per the approved $8.8 billion investment plan, should have been 80 mcmd as on date.
(4) Federal Reserve to spend $45bn to sustain bond purchases
The Federal Reserve will spend $45 billion a month to sustain an aggressive drive to keep long-term interest rates low. And it says it plans to keep a key short-term rate near zero until unemployment drops below 6.5 percent.
The policies are intended to help an economy that the Fed says is growing only modestly with 7.7 percent unemployment in November.
Stocks and bond yields rose after the Fed's statement was released Wednesday after its final policy meeting of the year. The Dow Jones industrial average was little changed just before the Fed news crossed at 12:30 p.m. Eastern time and jumped 69 points shortly after.
The yield on the benchmark 10-year Treasury note rose to 1.69 percent from 1.65 percent as investors sold ultrasafe investments and moved money into stocks.
"The Fed is aggressively trying to add to the economy's strength," said Jim O'Sullivan, chief economist at High Frequency Economics.
The Fed said it will direct the money into long-term Treasurys to replace an expiring bond-purchase program. The new purchases will expand its investment portfolio, which has reached nearly $3 trillion.
The central bank will continue buying $40 billion a month in mortgage bonds. All told, its monthly bond purchases will remain $85 billion. They are intended to reduce already record-low long-term rates to encourage borrowing and accelerate growth.
The Fed said it will continue the bond purchases until the job market improves substantially. It said it can pursue the aggressive stimulus programs because inflation remains below its target.
The Fed also kept its target for its benchmark short-term interest rate at a record low near zero, where it has been for the last four years. The Fed said Wednesday that it would link any future rate change to lower unemployment, as long as inflation is expected to stay below 2.5 percent.
Before Wednesday, the Fed had said it planned would keep the rate low until at least mid-2015.
The statement was approved on an 11-1 vote. Jeffrey Lacker, president of Federal Reserve Bank of Richmond, objected for the eighth time this year.
The meeting was held against the backdrop of the looming "fiscal cliff," the sharp tax increases and spending cuts that will hit the U.S. economy in January if Congress and President Barack Obama are unable to reach an agreement this month to avert them.
Bernanke has said that the Fed's efforts will not be able to rescue the economy if the budget negotiations fail and the country does go over the fiscal cliff.
Fears of the cliff have led some U.S. companies to delay expanding, investing and hiring. Manufacturing has slumped. Consumers have cut back on spending. Unemployment remains elevated. If higher taxes and government spending cuts were to last for much of 2013, most experts say the economy would sink into another recession.
The latest bond-buying program would replace an expiring program called Operation Twist. With Twist, the Fed sold $45 billion a month in short-term Treasurys and used the proceeds to buy the same amount in longer-term Treasurys.
Twist didn't expand the Fed's investment portfolio, it just reshuffled the holdings. But the Fed has run out of short-term securities to sell. So to maintain its pace of long-term Treasury purchases and to keep long-term rates low, it must spend more and increase its portfolio.
The Fed's portfolio totals nearly $2.9 trillion — more than three times its size before the 2008 financial crisis.
The Fed has launched three rounds of bond purchases since the financial crisis hit. In announcing a third program in September, the Fed said it would keep buying mortgage bonds until the job market improved substantially.
Skeptics note that rates on mortgages and many other loans are already at or near all-time lows. So any further declines in rates engineered by the Fed might offer little economic benefit.
Inside and outside the Fed, a debate has raged over whether the Fed's actions have helped support the economy over the past four years, whether they will ignite inflation later and whether they should be extended.
(5) RBI tweaks CAR norms for NBFCs
Stocks of finance companies rose in intra-day trade on Wednesday on news that BJP had reached an agreement with the government on passing the Banking Regulation Amendment bill.
Stocks of companies that were keen on banking licence, including Reliance Capital and Larsen & Toubro Finance Holdings, closed more than 4% higher. Others such as M&M Finance and Shriram Transport Finance were up in intra-day trade but closed almost flat. Although the government has been nudging RBI to issue a few bank licences to corporate houses, the central bank has been holding back on the grounds that the centre should first enact amendments to the Banking Regulation Act giving more powers to the central bank.
Among other things the amendments will give RBI the power to supersede bank boards. It will also allow the central bank to inspect books of conglomerates that have a bank in their group. Once the amendments are in force any potentially large investor in a bank will need to take RBI permission before buying shares.
While Banking Regulation Bill raises hopes for NBFCs, there are also new regulatory challenges. RBI has issued new prudential norms based on recommendations of a committee headed by Usha Thorat. The new norms require NBFCs to have a tier-one capital adequacy ratio (CAR) of 12% by April 2014. At present, the tier-I requirement is 7.5% for NBFCs except those in infrastructure where it is 10% and for those lending against gold where it is already 12%.
Non-banking finance companies are also required to adhere to the same norms as banks for classifying an advance as a bad loan. At present , if a borrower does not repay a loan for 180 to 360 days the advance has to be classified as a bad loan compared to 90 days for banks. "It has been decided that the asset classification and provisioning norms should, in a phased manner, be made similar to that of banks for all registered NBFCs irrespective of size. The same will be implemented in phases, viz; a 120-day norm shall be applied from April 01, 2014 to March 31, 2015 and a 90-day norm thereafter. A one-time adjustment of the repayment schedule which shall not amount to restructuring will, however, be permitted," RBI said.
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