Today's Hot Stories - December 25, 2012 - PT education

Today's Hot Stories - December 25, 2012

10 Headlines for Today

(1) Virbhadra sworn in for sixth time as CM
(2) Rape victim’s condition continues to be critical
(3) Worshippers rejoice in Bethlehem
(4) Kingfisher submits interim revival plan
(5) SEBI bans Dilip Pendse from capital market
(6) Russian sovereign wealth fund, SBI to form $2 bn consortium
(7) T20: Kiwis level series against South Africa
(8) Apurvi Chandela takes air rifle gold
(9) Overwhelmed by fans’ support: Tendulkar
(10) Ilayaraja gets Sangeet Natak Akademi award

5 Stories for Today

(1) Normalcy returns to Manipur valley
(2) “North’s rocket has military purposes”
(3) Retail sector braces for new innings post-FDI in multi-brand segment
(4) Search for way through American fiscal impasse
(5) Investment slows down in textiles

(1) Normalcy returns to Manipur valley

Normalcy returned to Manipur valley on Tuesday following suspension of ongoing ‘indefinite general strike’ till December 26 midnight, called against the alleged molestation of a film actress by a Naga militant and lifting of indefinite curfew in view of the Christmas festival.

Markets opened and transporters resumed their services as people in large number turned out to purchase essentials at various markets across the four valley districts of Imphal East, Imphal West, Bishenpur and Thoubal.

The curfew was lifted at 6 a.m. this morning and general strike suspended from midnight of December 24 to midnight December 26 in view of the Christmas festival, official sources said.

Large scale violence was reported on Monday in view of the confusion among some of the strike enforcers with a section maintaining the shutdown was on despite the President of the Film Forum Manipur (FFM) and some other artists associations announcing the relaxation of the strike in view of the Christmas, the sources said.

FFM sources threatened to resume the general strike from midnight of December 26 till the arrest of the Naga militant of NSCN-IM, who had allegedly molested film actress Momoko during a musical concert on December 18 at Chandel and fired at two artists who tried to save her.

(2) “North’s rocket has military purposes”

South Korean technicians scrutinising the debris of the North Korean rocket launched this month have found evidence suggesting the rocket’s military purposes and the North’s technological ties with Iran in its efforts to develop an intercontinental ballistic missile, South Korean officials have said.

North Korea insists that its Unha-3 rocket, launched on December 12 to put an Earth-observation satellite in orbit, was part of its peaceful space programme. But intelligence officials and rocket scientists affiliated with the South Korean Defence Ministry said through the rocket launching, North Korea was testing a ballistic missile that could fly more than 9920 km, with a warhead of about 1,100 to 1,300 pounds, putting the West Coast of the U.S. in range.

They spoke to the news media after analysing the rocket’s flight data and the debris of its oxidiser tank, which were recovered in waters off South Korea two days after the launch.

Over the weekend, the South Korean navy also salvaged the remnants of the rocket’s fuel tank and part of its engine, which the officials hoped would provide more clues to the North’s rocket technology.

The officials said they had concluded that the first-stage engine was made of four North Korean Rodong missile engines latched together, and that the North Koreans used their Scud-type missile engine for the second-stage booster.

“They efficiently developed a three-stage long-range missile by using their existing Rodong and Scud missile technology,” a senior military intelligence official said Sunday, briefing reporters on the condition of anonymity.

For an oxidiser, North Korea used red fuming nitric acid, commonly used as rocket propellant in old Soviet-built Scud missiles, as well as in Iranian and North Korean missiles, said the official. Most space-programme rockets use liquid oxygen as an oxidizer, he said. Unlike liquid oxygen, which must be kept extremely cold, red fuming nitric acid can be stored at room temperature, which makes it a convenient propellant for missiles, he said.

The design of the oxidiser tank also suggested an “Iran connection” in North Korea’s rocket programme, he said.

Officials found the welding on the oxidizer tank to be “crude”, “uneven” and “done by hand”. They also found some foreign-made components, despite North Korea’s claim that its rocket was “indigenously produced 100 per cent”. But they said it signalled a great technological advance for North Korea to launch a three-stage rocket successfully and put an object into orbit. All of North Korea’s previous rocket tests had failed to reach orbit, according to Western officials.

Analysts doubted that North Korea had mastered the technology needed to make a nuclear bomb small enough to mount on a missile. South Korean officials also said on Sunday that there was no confirmation of whether the North had the technology needed for a warhead to survive re-entry into the atmosphere.

United Nations Security Council (UNSC) resolutions ban the country, a U.N. member, from any rocket launching that uses ballistic missile technology. They mandated economic sanctions aimed at blocking North Korea from acquiring or proliferating nuclear and missile technology, but analysts have long suspected that Iran and North Korea were closely cooperating in their missile and nuclear programmes, sharing components and test data.

The successful launching was a great push for the North’s young leader, Kim Jong-un. On Friday, Mr. Kim held a huge banquet for the scientists and called for the development and launching of “a variety of more working satellites” and “carrier rockets of bigger capacity”. — New York Times News Service

(3) Retail sector braces for new innings post-FDI in multi-brand segment

‘Global retailers will look for a guarantee in consistency of laws’

The retail sector saw a tumultuous year in 2012, punctuated by ebbs and flows in the government’s attempts to bring in laws to permit foreign direct investment (FDI) in the multi-brand sector.

The issue snowballed into a political tussle with voices raised against the move in the first-half of the year.

While FDI in the wholesale (cash & carry) segment and single-brand retail is allowed, it was only in September 2012, that 51 per cent FDI in multi-brand retailing was allowed.

The Parliament approved the FDI policies and the sector, which was stagnating due to paucity of fresh capital infusion, is likely to get a boost going forward.

Industry watchers feel that organised retail, now estimated at $500 billion, will grow at 15 per cent annually.

“The major advantage of the entry of private companies, including domestic and foreign, into the retail sector is the enhanced flow of investments in overall infrastructure and the establishment of new supply chains,” said Pranad Barua, Business Head-Apparel & Retail Business, Aditya Birla Group.

“Retail giants are able to transform the farm-to-fork infrastructure,and develop transport infrastructure”.Also, contrary to expectations that the floodgates of investments would open as soon as FDI is allowed, there are now more realistic expectations that it would be at least a year before any significant investment comes in.

“When FDI comes in, it would be an evolutionary phenomenon rather than a revolutionary one,” Kumar Rajagopalan, CEO, Retailers Association of India (RAI), told The Hindu.

Another factor would be the prevailing sky-high realty rates in major metros, which have not shaved too much off their record highs despite the economic slowdown.

“Metro realty rates have not let up and increasingly retail players will get into metro suburbs. It is typically known as the ‘doughnut’ effect, where city centres become prohibitively expensive and activity tends to fan out to the suburbs,” Mr. Rajagopalan said.

According to Mr. Rajagopalan, “everyone knows India as one of the largest markets but it is certainly not the easiest and what is called for is ‘patience capital’ of 7-8 years. Global retailers will look for a guarantee in consistency of laws”. “Going forward, India is poised to become a competitive market that will have some of the best retail players providing products and services on a par with global retail standards,” said Mr. Barua.

“We are hoping that in the coming year, consumer sentiment will gain momentum and the markets will improve”.

(4) Search for way through American fiscal impasse

With little more than a week for lawmakers to avert huge tax increases and spending cuts, attention is turning from the gridlocked House of Representatives to the Senate, where some Republicans on Sunday endorsed President Barack Obama’s call for a partial deal to insulate most Americans from the tax increases but defer a resolution on spending cuts.

Senator (Sen.) Kay Bailey Hutchison, Republican-Texas; and Sen. Johnny Isakson, Republican-Georgia, implored Senate leaders to reach an accommodation with Mr. Obama when Congress returns on Thursday, even if that means that taxes would go up for those with high incomes but that spending cuts would be put off.

Sen. Hutchison, appearing on the CBS program “Face the Nation”, said the tax cuts signed into law by President George W. Bush should be extended “at a reasonable salary level”.

“We can’t let taxes go up on working people in this country,” she said, backing Mr. Obama’s calls for a stripped-down temporary measure. “It is going to be a patch because, in four days, we can’t solve everything.”

The failed attempt on Thursday by the House speaker, John A. Boehner, to attract enough Republican support for legislation that would have prevented tax increases on income below $1 million left little chance for a “grand bargain” on deficit reduction.

It also shifted the action to the Senate as the last hope to stop more than half-a-trillion dollars in tax increases and across-the-board spending cuts from kicking in on January 1.

Mr. Obama urged senators to take up legislation extending the Bush-era tax cuts on income under $250,000 and preventing the expiration of unemployment benefits, while delaying the defence and domestic spending cuts to allow negotiations on a deficit deal continue.

“The fact that the House Republicans spent a week wasting time we didn’t have has greatly exacerbated the problem,” said Dan Pfeiffer, Mr. Obama’s Communications Director.

The hope is that the less polarised Senate will be different from the House. It is run by Democrats and includes several Republicans who are openly backing a deal.

“The President’s statement is right,” Sen. Isakson said on Sunday on the ABC program “This Week”. “No one wants taxes to go up on the middle class. I don’t want them to go up on anybody, but I’m not in the majority in the United States Senate, and he’s the president of the United States.”

“The truth of the matter is, if we do fall off the cliff after the President is inaugurated, he’ll come back, propose just what he proposed yesterday in leaving Washington, and we’ll end up adopting it,” Sen. Isakson continued. “But why should we put the markets in such turmoil and the people in such misunderstanding or lack of confidence? Why not go ahead and act now?”

Democratic leaders say they will move forward on legislation this week only if Sen. Mitch McConnell of Kentucky, the Republican leader, can assure them that it will not be filibustered, and that once it is passed, Representative (Rep.) Boehner will bring it to a vote in the House.

Sen. McConnell has played the role of congressional deal closer before. Last year, he engineered a way to raise the nation’s statutory borrowing limit that satisfied Republicans and Democrats alike. He also threw his weight behind an extension of the expiring two-percentage point cut in the payroll tax, even after House Republicans tried to block it.

But in this case, neither he nor the junior members of his leadership has given any indication that they will intervene.

“It’s hard to overstate how little is going on,” said a senior Democratic leadership aide in the Senate, indicating what most lawmakers say in private: The country is likely to miss the January 1 deadline.

Investors are anticipating a turbulent week in the markets if the White House and Congress continue their standoff. Last Friday, the Standard & Poor’s 500-stock index fell nearly 1one per cent as pessimism mounted over the prospect of any deal being reached.

Republican leaders in both chambers of Congress appear stymied by a conservative wing that will not tolerate a vote on legislation that even tacitly allows taxes to rise. Don Stewart, a spokesman for Sen. McConnell, said the minority leader could not declare by fiat that a bill could be presented for a simple majority vote with no threat of a filibuster. That would require the consent of every Republican, and Mr. Stewart gave no indication that Sen. McConnell would seek it.

Asked if Republicans might filibuster the President’s backup plan, Sen. John Barrasso of Wyoming, a member of the Republican leadership, said on “Fox News Sunday”: “I just don’t think this is going to solve the problems — it actually doesn’t solve the problems. We have a spending problem in this country.”

Besides, Mr. Stewart said, Democrats have yet to detail the legislation they want a vote on. The Senate passed legislation in July to extend expiring income tax rates on income under $250,000, but divided Democrats could not agree on a new level for the estate tax, which is also set to rise in January, nor did they include a provision to stave off $100 billion in across-the-board cuts to defence and domestic programs next year.

Mr. Obama, speaking to reporters on Friday, left critical details out of his description of the plan he wants Congress to pass. Although Mr. Obama favours allowing the current estate tax rate of 35 per cent on inheritances over $5 million to rise to 45 per cent on estate values over $3.5 million, for example, he did not say how such taxes should be treated as part of his stopgap fiscal plan. If nothing is done, the estate tax will jump to the Clinton-era level, 55 per cent, on estate values over $1 million.

Nor did the Mr. Obama say what he wanted to do about expired business tax provisions, like the research and development tax credit, which is set to disappear on January 1. He gave no instructions about a long-delayed law that, absent Congressional action this week, would sharply cut reimbursements for physicians treating Medicare patients, starting next month.

Referring to the Senate majority leader, Harry Reid of Nevada, Mr. Stewart continued: “Reid is the majority leader. Maybe for once he could propose something that he actually thinks could pass.”

The impending cuts were set in motion last year when the Budget Control Act ended an impasse over raising the nation’s borrowing limit with a deal designed to hurt both parties if they did not strike an agreement later on. A committee came up with at least $1.2 trillion in cuts over 10 years that would come automatically, half to national security, half to domestic programs.

The measure that Mr. Obama and Democratic leaders are considering would contain all the provisions of a tax bill that the Senate passed in July, according to a Democrat familiar with the discussions. That bill included an adjustment to the alternative minimum tax — a parallel income tax that is designed to make sure the affluent do not escape taxation but that is increasingly hitting the middle class — as well as several tax credits for middle-and-low-income workers that also are due to expire at the end of the year.

Both Rep. Boehner and Sen. McConnell are dealing with rising pressure from the right. The conservative website Breitbart.com stoked passions in conservative circles when it reported that a handful of Republicans were considering a challenge to Rep. Boehner’s speakership when the 113th House votes to elect a speaker on January 3. Boehner critics took to twitter to keep up the pressure on him not to return to negotiations with Mr. Obama.

With Sen. McConnell’s own re-election bid coming in 2014, Democrats are worried that he will do nothing to shift the anger onto himself especially if the speaker has no intention of bringing a Senate-passed fiscal bill to the floor before the end of the year.

'”The ball is not moving along,” said Sen. Bob Corker, Republican-Tennessee.

(5) Investment slows down in textiles

Hit by several factors, the textile and clothing industry in the country seems to have made minimal investment in expansions and new projects this year.

The Union Ministry of Textiles announced the Restructured Technology Upgradation Fund Scheme (R-TUFS) in April 2011 with subsidy cap for each value adding segment, such as spinning, weaving and processing. The total subsidy amount allocated for 2011-2012 was Rs. 1,972 crore. It was expected to leverage total investment of Rs. 46,900 crore.

Of this, the unutilised amount (subsidy allocation) that was available for 2012-2013 was Rs. 497 crore.

According to the Office of the Textile Commissioner, from April 2011 to November 2012, the subsidy claimed was only Rs. 362 crore. Though 3,542 applications were received, envisaging a total investment of Rs. 35,892 crore (April 2011 to November 2012), implementation of the projects are delayed.

An industry source said that practically there were no new investments this year. The only investments made were for essential replacements.

According to Hermann Selker, Head of Marketing of Trutzschler Spinning, a major player in the spinning preparatory machinery, the demand in the Indian market in 2012 was lower than in 2011. Power availability was a problem in south India and hence, investments in textile industry were slow. However, demand was expected to pick up next year. “At the ITME in Mumbai we discussed many new projects in India for realising next year,” he said.

“We are already seeing a positive mood in the textile sector,” says Chairman and Managing Director of Lakshmi Machine Works Sanjay Jayavarthanavelu.