Today's Hot Stories - December 21, 2012 - PT education

Today's Hot Stories - December 21, 2012

10 Headlines for Today

(1) Delhi gang rape: Protests outside Rashtrapati Bhavan
(2) CWG scam: Delhi court orders framing of charges against Suresh Kalmadi & others
(3) UN sanctions two Iranian firms over Syria arms supplies
(4) Job market to see modest hiring, 10-15% pay hike next year
(5) TIL launches first interest network site
(6) UBS fined $1.5bn for fixing Libor
(7) India looking ahead for T20 clean sweep
(8) Hockey: India blank China 4-0 in Asian CT opener
(9) NBA: Clippers down Hornets for 11th victory
(10) Brooklyn’s Mayans pretty sure world won’t end today

5 Stories for Today

(1) Hat-trick to reverse west’s pariah status for Narendra Modi?
(2) China offers to help unify the 2 Koreas
(3) Govt promises stable tax regime
(4) Fiscal cliff may cost US AAA tag: Fitch
(5) 2013 augurs better for world economy, if only slightly: Poll

(1) Hat-trick to reverse west’s pariah status for Narendra Modi?

Narendra Modi's hat-trick in assembly polls could be a cue for many western countries, who had kept their doors shut to the Gujarat politician since the 2002 riots, to rethink their strategies.

For the past decade Modi has been something of a pariah in the western world — with a visa ban by the US, the UK and Europe — for more than a decade. It has meant that while Western business interests have been free to come to Gujarat, Modi himself has been barred from travelling to these countries.

Banned by the west, he adopted a "look east" policy, linking his growing ties with Japan, China and Israel to develop Gujarat's economy. Japan was the first G-8 country to open its doors to Modi, and both have not looked back since. The Delhi-Mumbai Industrial Corridor (DMIC) — 40% of which runs through Gujarat — promises to see a plethora of Japanese investment in the manufacturing sector.

Modi attracted Chinese investment with an enviable degree of success, and on his visit to China, even managed to chastise them for their links with Pakistan. Israel, as one of Modi's early friends, is collaborating with the CM to set up an agriculture research and hi-tech training institute for the farm sector in Gujarat.

The first sign of a thaw from the West came from the UK, when its high commissioner to India was dispatched by the foreign office in October, 2012, to Gujarat and open lines of communication with him.

The US, however, remains the big question: will America revoke its visa strictures against Modi? Analysts said the ban on Modi in the US is linked to a domestic law — a section of the Immigration and Nationality Act that targets foreign government officials "who have committed particularly severe violations of religious freedom." That law is still in force, and hence, it might be a while before he gets to travel to the US.

(2) China offers to help unify the 2 Koreas

China has offered to facilitate reconciliation and unification of North Korea and South Korea.

"Beijing is in favour of ultimate reunification of the two countries. We are also willing to further enhance mutual strategic and political trust between China and South Korea,'' Chinese foreign ministry spokeswoman Hua Chunying said while congratulating South Korea's new president Park Geun-hye behalf of President Hu Jintao's.

Hua said China has always encouraged dialogue and reconciliation between the two Koreas in order "to ultimately achieve the independent and peaceful reunification of the peninsula''.

(3) Govt promises stable tax regime

The government on Wednesday promised a stable tax regime and said it was banking on better compliance to boost revenues. The statement by finance minister P Chidambaram before the consultative committee will provide fresh comfort to taxpayers, who have in recent times blamed the government for a series of flip flops. "Our focus is always to have a reasonably stable tax regime, which is in the interest of both the taxpayers as well as tax collectors," a finance ministry statement quoting the minister said.

At the same time, the government also made clear its intention of keeping a close watch on those who may not be disclosing their income or are not paying their dues and stressed on an upgraded tax information system. "We have moderate rate of income tax as compared to various developed countries. Our peak rate of taxation is 30% at present. Therefore, there is lot of scope for better tax compliance and tax collections," Chidambaram said.

In recent weeks, the government has repeatedly pointed out that several individuals had large investments or large spending on credit cards or bought real estate but their tax returns did not seem to reflect this. Chidambaram once again sought to raise the concern.

"At present, 3.5 crore people are filing income tax returns. Only 14.6 lakh people have declared their income of Rs 10 lakh and above for tax purposes which is not realistic."

(4) Fiscal cliff may cost US AAA tag: Fitch

Fitch warned on Wednesday that the US was more likely to lose its top-notch " AAA" debt rating if lawmakers and president Barack Obama cannot agree on how to cut the deficit and avoid the deep government spending cuts and tax increases that automatically would go into effect next year.

But the credit ratings agency said in a report that if a deficit-cutting plan is reached, the US would likely keep its "AAA" rating. Fitch would then raise its outlook to stable from negative. "Resolution of the fiscal cliff and an increase in debt ceiling are pressing issues that the President and Congress must address if the US is to avoid a fiscal crisis," the report said.

(5) 2013 augurs better for world economy, if only slightly: Poll

Next year promises only a slight pick-up in the world economy and even that will again depend heavily on the United States and emerging markets as Europe stalls, according to the latest Reuters Polls.

In many ways, the outlook for 2013 hinges on whether emerging economies like China and Brazil finally deliver the upturn that many economists had expected this year.

There again seems little hope that growth in the biggest developed economies, many of them burdened with major financial problems, will accelerate much next year.

Threats to the stability of the world economy have a now-familiar ring to them, whether in the form of the smouldering sovereign debt crisis in the recession-hit euro zone, or geopolitical convulsions in the Middle East.

While more swathes of central bank cash have largely placated volatile financial markets over the last year, many of the big economic questions remain unanswered.

The threat that the United States will start the new year by plunging into a round of severe and automatic budget cuts remains real. Stalled talks on the U.S. "fiscal cliff" grew more heated on Wednesday.

Still, there are reasons why most economists polled by Reuters think next year will better the mediocre growth of 2012, if only by a little.

And business surveys in China suggest the slowdown there, more protracted than most economists had expected, has ended.

"With the exception of the fiscal cliff, the major risks are broadly the same as 12 months ago. However, they do attract slightly different nuances," said Philip Shaw, chief economist at Investec in London.

"Quite clearly, the lagging economy is likely to be the euro zone. While financial confidence has improved markedly over the last few months, that hasn't extended to economic confidence."

He said it was unlikely the region will see anything resembling an upturn until the second half of 2013. That weak euro zone outlook will pressure the euro next year, although forecasts for most major currencies are steady.

Overall, global forecasts collated from 22 economists suggested the world economy will grow around 3.2 percent in 2013, compared with around 3.1 percent forecast for 2012 in the last Reuters quarterly global economy poll.

That outlook is slightly more pessimistic than those from either the International Monetary Fund or the Organization for Economic Co-operation and Development.

RISKS RECEDING?

Reuters polls of professional forecasters suggest next year will be a slightly calmer one for the world economy.

"It has been a fatiguing year for market participants and observers," said Huw McKay, senior international economist at Westpac, pointing out the many uncertainties of 2012.

"Euro zone survival, political leadership in the U.S. and China, recession risks, commodity price volatility and activist monetary policy in many guises. Individually such things fray the nerves. Collectively they apply a blow-torch to them."

At least some of those risks have receded. Last week's global poll of equity market strategists suggested world stocks should gain firmly next year, helped by a surfeit of central bank cash and led by Asian shares in particular.

Yields on major government bonds are also expected to climb modestly through 2013, a Reuters poll showed on Thursday, but this is contingent upon real economic recovery.

Global asset managers are ending 2012 with lower stock holdings and more bonds than 12 months ago, staying wary about the U.S. "fiscal cliff" despite a rally in most markets this year, a Reuters poll showed on Thursday.

However, looking forward to 2013, fund managers said, a deal on the fiscal cliff - still the baseline scenario for most - is likely to push investors back towards stocks.

Still, oil analysts polled on Thursday were more cautious about prospects for the world economy.

They suggested North Sea Brent crude oil will average $108 per barrel in 2013, down from Wednesday's $110.04, weighed down by oversupply.

"The weakness of the global economy and an erosion of the premium that has resulted from increased political tension in the Middle East should weigh on the price of oil," said economists John Higgins and Andrew Kenningham from Capital Economics.

Investec's Shaw forecast better days for China and the United States.

China's vast manufacturing sector grew in early December and U.S. factories were having their best month since April, according to business surveys last Friday, adding to hopes the world's two biggest economies were on the mend.

"With the United States, our central view is that activity should maintain its momentum at the very least through 2013, providing of course that the issue surrounding the 'fiscal cliff' is sorted out in time."

While there is still a risk negotiations between President Barack Obama and opposing Republicans who control the House of Representatives could fall apart, both sides have made concessions towards striking a deal in recent days.