Today's Hot Stories - March 08, 2014 - PT education

Today's Hot Stories - March 08, 2014

10 Headlines for Today

(1) AAP's Vishwas booked for poll code violation
(2) Women members in parliament: India ranks 111th
(3) 5 Indians among 239 on board crashed Malaysian flight
(4) SBI mulls selling bad assets
(5) New bank licences in a few weeks: RBI governor
(6) Over 64,000 bottles of Lipitor recalled in US
(7) Misbah, Alam lead Pak's slow recovery
(8) Saina crashes out in quarters of All England Open
(9) Gayle slams 'disrespectful' ECB for sacking Kevin Pietersen
(10) Lydia, the great white shark, on course for Britain

5 Stories for Today

(1) AAP versus BJP: Kejriwal takes aim at Modi's economic model
(2) Heavier sanctions on Russia could backfire
(3) SC: Sahara proposal dishonest
(4) Boeing reports wing cracks on 787 Dreamliners in production
(5) Parliament can set inflation target: Finance minister P Chidambaram

(1) AAP versus BJP: Kejriwal takes aim at Modi's economic model


Bharatiya Janata Party's (BJP) Narendra Modi, who leads opinion polls ahead of next month's general election, faces pressure from anti-graft Aam Aadmi Party (AAP) attacking his economic model on his home turf, the thriving state of Gujarat.

The pro-business leader has presided over rapid economic growth during more than 12 years as the chief minister of Gujarat, and slashed red tape to attract companies such as Ford, Maruti Suzuki and Tata Motors.

Now, Modi promises to replicate his state's development model nationwide if he becomes Prime Minister.

But Arvind Kejriwal, the leader of the Aam Aadmi Party, on Friday said small businesses in the state were being shuttered, public schools and health services were in poor shape and claims of regular supplies of electricity were not true.

"What is your development model?" Kejriwal asked as he tore into the heart of Modi's campaign, saying that 400,000 of the state's farmers who had applied for electricity connections years ago had yet to receive them.

"If you haven't even given a connection, how will you give them electricity?"

Gujarat has been hailed for rapid measures to develop infrastructure and provide stable power supply, but critics often say it lags behind other states in social development.

"What we've seen in the last two days is quite shocking," Kejriwal told reporters at a meeting on the edge of the state's commercial capital of Ahmedabad.

Kejriwal, who was denied an audience with Modi, questioned the Gujarat chief minister's claims on farm growth, job creation and clean governance, and suggested he was too close to big business.

He was on a tour to study conditions in Gujarat, as part of his party's first national campaign since bursting onto the political scene with a stunning victory in Delhi's local election in December.

BJP leaders condemned Kejriwal's remarks.

"The Aam Aadmi Party's politics now includes the right to gate crash, the right to a violent protest and the right to take liberties with the truth," the BJP's Arun Jaitley said on Twitter.

Kejriwal was chief minister of New Delhi for 49 chaotic days before resigning, saying the country's entrenched political parties were not letting him govern.

The former tax collector, who has described himself as an anarchist, seems more comfortable in campaign mode.

Street fighting between supporters of Kejriwal and Modi broke out in three states on Wednesday when Gujarat police briefly stopped his convoy, hours after the announcement of a month-long national election, to be held from April 7.

Opinion polls put Modi far ahead of his main rival, Rahul Gandhi of the governing Congress party, but short of a majority.

Kejriwal says both Congress and the BJP are beholden to corporate interests, and on Friday questioned Modi's relationship to India's richest business families.

His party is expected to win few seats in upcoming polls, but has tapped into a vein of public anger over a culture of entitlement among politicians, rising prices and endemic graft — issues it has helped push to the top of the election agenda.

Gujarat, famed as the birthplace of Indian independence icon Mahatma Gandhi, is now at the centre of the national poll campaign. Modi's supporters often cite the state's economic success as the key reason they back him.

Opponents and some economists say Gujarat's good image owes much to a long tradition of entrepreneurship and point out the seafaring state was doing well before Modi took charge.

Other states, ranging from Delhi and Maharashtra to the southern states of Karnataka, Andhra Pradesh and Tamil Nadu, attracted more foreign investment than Gujarat over the three years to 2012, the Reserve Bank of India says.

Source: Hindustan Times

(2) Heavier sanctions on Russia could backfire


Underlying talk about taking harsh punitive measures against Russia for its military incursion into Ukraine are economic complications and worries that sanctions levied against Moscow could backfire on the U.S. and Europe.

Heavier U.S. and European Union sanctions could sting Russia’s already slow-growing economy and hurt its financial sector. But Moscow could retaliate and seize American and other foreign assets or cut exports of natural gas to Europe, which is heavily dependent on Russia for energy.

Declaring his determination not to let the Kremlin carve up Ukraine, President Barack Obama on Thursday slapped new visa restrictions on Russian and other opponents of Ukraine’s government in Kiev and authorized wider financial penalties against those involved in the military intervention or in stealing state assets. Obama emphasized his resolve in an hourlong telephone call with Russian President Vladimir Putin, affirming his contention that Russia’s actions violate Ukraine’s sovereignty.

On Capitol Hill, both chambers of Congress looked to advance legislation imposing hard-hitting sanctions on Russia.

Obama hailed U.S. cooperation with the European Union, which on Thursday suspended talks with Putin’s government on a wide-ranging economic agreement and on granting Russian citizens visa-free travel within the 28-nation bloc. But Europe’s presidents and prime ministers remain divided on taking more drastic steps such as freezing assets and issuing travel bans on Russian officials.

European hesitancy reflected the reality that targeting influential Russian businessmen or major Russian companies would also harm Europe’s economic interests. U.S. trade with Russia is less than one-tenth of Europe’s.

Russian investors hold assets worth billions in European banks, particularly in Britain which is highly protective of its financial sector, and major exporters such as Germany and the Netherlands have far more at stake than the United States in Russia’s consumer economy.

Showing greater caution than Obama on sanctions, German Chancellor Angela Merkel said European penalties against Russia depend “on how the diplomatic process progresses.” EU President Herman Van Rompuy said travel bans, asset freezes and the cancellation of an EU-Russia summit could still come. Polish Prime Minister Donald Tusk acknowledged “no enthusiasm” in Europe for economic sanctions.

In some ways, the debate over sanctions echoes the Cold War doctrine of military strategy in which if two opponents fired off nuclear weapons, both sides would be annihilated.

“There is a kind of mutually assured destruction relationship here,” said Steven Pifer, a former U.S. ambassador to Ukraine and analyst at the Brookings Institution think tank in Washington. “Russia could say, `Well, we’re going to cut off your gas and you guys can now scramble and buy extra gas and pay big prices.’

“It would hurt the Europeans, but it also would cut off the biggest source of cash that flows into Russia today,”he said referring to oil and gas sales that account for about 60 percent of Russia’s exports and half of its government revenue.” So the Russians may threaten some things, but they also have to consider that if they do that what it would do to the Russian economy.”

The State Department sought to allay fears that Europe might find itself short on Russian gas.

“We understand that European gas inventories are well-above normal levels, due to a milder than usual winter, and could replace a loss of Russian exports for several months, if necessary,” said State Department spokeswoman Jen Psaki.

House Speaker John Boehner, a Republican, saw an opening for U.S. gas producers. He called on Obama to fast-track approval of U.S. exports of liquefied natural gas, claiming the Energy Department has a slow approval process that amounts to a de facto ban on American natural gas exports.

“We should not force our allies to remain dependent on Putin for their energy needs,” Boehner said.

Ariel Cohen, an expert on Russian and Eurasian affairs at the Heritage Foundation in Washington, said he doesn’t know if the Europeans would be willing to impose tough sanctions, particularly against Russia’s banking and financial systems. Even if the Europeans don’t, the U.S. needs to take the lead or risk allowing Russia to alter current world order, he said.

“Either we take a lead or the international system goes back to the chaos and high-risk levels that existed before World War I and between World War I and World War II,” he said. “This is very serious. I cannot emphasize that enough. People who talk about `Oh, we won’t get cheap gas from Russia’ or `The Russians will get angry’ _ they do not look at it beyond the current geopolitical and international order.”

If Russia grabs Crimea, Iran would be less willing to give up an ability to develop nuclear arms. “The message to Iran would be: If you have nuclear weapons you will not be attacked, your regime will be intact. If you don’t have nuclear weapons, your regime can be toppled and pieces of your territory can be taken away.”

As a result of its move into Ukraine, Cohen said Russia already has lost billions in its stock market drop and devaluation of the Russian ruble. It also stands to lose from a decline in tourism and future energy sales if European nations decide it’s time to reduce their dependence on Russian gas and buy it from North Africa, Qatar, Nigeria and the U.S.

For the U.S., the worst that can happen is that Russia will partially seize assets of companies like Coca-Cola, Boeing or Pepsi, he said. But that also would make Russia’s investment climate more difficult than it already is because of arbitrary rules, corruption and hard to understand taxation.

Source: The Economic Times

(3) SC: Sahara proposal dishonest


The Supreme Court on Friday frowned upon Sahara for submitting what it called a dishonest proposal to refund deposits and refused to revoke the order sending its chief Subrata Roy and two other directors to judicial custody.

A Bench of Justices K.R. Radhakrishnan and J.S. Khehar asked Sahara to come out with a concrete and acceptable proposal on March 11 so that it could consider the release of the three directors.

The Bench, however, allowed Sahara’s financial consultants and lawyers to meet Mr. Roy in jail between 10 a.m. and 12 noon everyday till March 11, the next date of hearing.

Payment plan

Senior counsel Aryama Sundaram, Ravi Shankar Prasad, Rajeev Dhavan and Rakesh Dwivedi told the court that Sahara would pay Rs.17,400 crore to SEBI in the following manner: Rs.2,500 crore within three working days of the restriction on operation of bank accounts/deposits being lifted; Rs.2,000 crore by July 31, 2014; Rs.2,500 crore by October 31, 2014; Rs.3,000 crore by January 31, 2015; Rs.3,500 crore by April 30, 2015; and the balance Rs.3,900 crore by July 30, 2015.

Not satisfied

The court was not satisfied with this proposal.

“For a year and a half you have been telling us that you will repay, but nothing is coming out. It is a big insult to make us assemble and you can’t give a concrete and acceptable proposal as you are not willing to pay. This is a dishonest proposal which can't be accepted,” Justice Khehar said.

Source: The Hindu

(4) Boeing reports wing cracks on 787 Dreamliners in production


Boeing Co said on Friday that "hairline cracks" had been discovered in the wings of about 40 787 Dreamliners that are in production, marking another setback for the company's newest jet.

The cracks have not been found on planes that are in use by airlines and therefore pose no safety risk, Boeing said, adding the problem also will not alter Boeing's plans to deliver 110 787s this year.

However, Boeing said the cracks, which also occurred on the larger 787-9 model currently undergoing flight tests, could delay by a few weeks the date when airlines can take delivery of their new planes.

The disclosure raised questions about repair costs and a possible minor increase in the weight of the plane, but did not seem to spell major trouble for Boeing, industry experts said.

Wing-maker Mitsubishi Heavy Industries Ltd notified Boeing in February of the problem, which arose after the Japanese company altered its manufacturing process.

"We are discussing with Boeing how to deal with the problem," a spokesman for Mitsubishi Heavy Industries in Tokyo said. He was unable to comment on why the company changed the manufacturing process.

Boeing, based in Chicago, said it immediately notified customers of potential delays. It said none of the jets potentially affected by the problem has been delivered.

"We are confident that the condition does not exist in the in-service fleet," Boeing spokesman Doug Alder said.

The US regulator said it is aware of the situation.

"The FAA will work with Boeing to ensure that the issues are corrected before the airplanes are delivered," the Federal Aviation Administration said in a statement.

Boeing shares fell 54 cents, or 0.4%, to $128.00 in after-hours trading.

Teething issues

The cracks are the latest trouble for the Dreamliner, a high-tech jet largely made of carbon-fiber composite that has been beset with so-called "teething issues" since entering service in 2011, three years behind schedule.

Last year, lithium-ion batteries overheated on two Dreamliners, prompting regulators to ground the worldwide fleet for more than three months while Boeing redesigned the battery system. Another battery overheated this year.

Airbus also has struggled with wing cracks on its A380 jet.

"If they can keep the delivery schedule going, it shouldn't be a major problem for customers," said Richard Aboulafia, aerospace analyst at the Teal Group in Fairfax, Virginia.

"But there is an expense."

He added that the manufacturing change was probably aimed at reducing the weight of the plane, as was the case with the A380.

"If they have to revisit that, it could add weight to the design, though only a modest amount," he said.

Boeing said the 787 cracks occurred in shear ties on wing ribs, and will take one to two weeks to inspect and fix.

Wing ribs run parallel to the fuselage of the plane. The ties, made of aluminum, hold the rib to the skin of the wing and will be replaced with an aluminum part.

"If we find an affected area, we'll correct the issue by trimming out the area and applying a fabricated piece in its place," Alder said.

Boeing declined to discuss the manufacturing change that led to the problem.

Boeing expects to deliver 110 787s this year, and to earn revenue of between $87.5 billion and $90.5 billion. So far it has delivered nine, including one delivered on Friday.

"Deliveries continue as normal outside this potentially impacted 40," Alder said.

Airbus cracks

Boeing's disclosure comes as Airbus emerges from a painful two-year program of modifications and hundreds of millions of euros of financial charges triggered by the discovery of cracks on brackets attached to wing ribs on the A380.

Reuters reported on Thursday that Airbus had once again ordered more frequent inspections of the wings of the world's largest passenger jet after discovering unexpected levels of metal fatigue, this time during testing on a factory mock-up.

The planemaker has asked airlines to inspect the wing's "spars" or main internal beams during regular major overhauls carried out after six years in service, and then again at 12 years, instead of waiting for the 12-year overhaul, industry sources said.

An Airbus spokeswoman confirmed the discovery of unspecified "fatigue findings" on a factory test plane.

"This will be addressed during routine maintenance inspections and the aircraft remains safe to fly," she said.

Most aircraft undergo a regular pattern of checks from small daily ones to heavy maintenance checks every five or six years.

Aircraft industry experts have known for decades that metal fatigue cannot be eliminated, but they have worked out a system for monitoring it backed up by mandatory maintenance schedules.

Source: The Times of India

(5) Parliament can set inflation target: Finance minister P Chidambaram


Amid controversy over fixing interest rates, finance minister P Chidambaram on Friday said that Parliament could set an inflation target which can form the basis for monetary policy actions by the Reserve Bank of India.

The statement comes in the backdrop of a debate triggered by a panel headed by RBI deputy governor Urjit Patel that suggested that an inflation target of 4% should be fixed, with a band of 2%. The suggestion immediately triggered a protest from the government. Earlier the Financial Sector Legislative Reforms Commission had suggested that the government should provide a mandate for the central bank. Recently, RBI governor Raghuram Rajan suggested that Parliament could provide a target, which has now been backed by the finance minister.

"The sovereign has the right to set the (inflation) target, and then the central bank has the mandate to take steps to achieve that target... I think there is a degree of convergence on the way to go forward, and I sincerely hope that in the years ahead we will be able to take this forward," Chidambaram told reporters at a press conference with Rajan by his side.

In fact, Chidambaram acknowledged that Rajan too had made a similar statement when the RBI head said that "the government through Parliament will set an inflation target and leave the regulator to find ways and means to achieve that target. I think that is the correct approach." Over the past few years, the government and the RBI have appeared to differ on their approaches to tame inflation, with the Centre suggesting that repeated increase in interest rates may not be the best solution. Even today, Chidambaram said there has to be a balance between growth and inflation.

"We must achieve both goals of price stability and growth...I am sure working together the government and central bank will be able to achieve these goals," Chidambaram said.

The RBI-appointed Urjit Patel panel has recommended that the central bank should set a retail inflation target of 8% by January 2015 and 6% by January 2016. Inflation as measured by the consumer price index was 8.8% in January.

Chidambaram said it "certainly is more stable today than what it was 18 months ago. That is reflected in the strengthening of the rupee, which is reflected in heightened interest of investors, both FDI and FII." He then went on to say

that the current account deficit will be contained below $40 billion, against his earlier estimate of $45 billion. The minister said measures taken by the RBI and the government are complementary and have delivered substantially on the goal of stability set 18 months ago.

Source: The Indian Express

Disclaimer: All news stories and content sourced from freely available material on the internet. All sources are acknowledged.