Today's Hot Stories - March 10, 2014
10 Headlines for Today(1) SC directs cases against MPs, MLAs to be completed in one year
(2) Home Ministry concerned over increase in extortion, violence in Manipur
(3) New Zealand sets elections for September 20
(4) ONGC intensifies exploration in Tripura
(5) ICICI Bank to more than double loans to women SHGs
(6) Foreign institutional investors’ buying buoys up bourses
(7) Tomas Berdych falls in Indian Wells
(8) Real Madrid thrash Levante, go three points clear
(9) Asian Air Gun Championship: Pooja Ghatkar clinches gold
(10) Aamir Khan approaches Mumbai police
5 Stories for Today
(1) Haryana, Gujarat, MP top 3 industry-friendly states, Maharashtra among bottom five
(2) Vietnam cannot find object from missing Malaysian jet
(3) NSEL, FTIL auditors face action
(4) Did Vodafone leak data to UK spy agency? India launches probe
(5) Need to reset focus to rev up Indian economy
(1) Haryana, Gujarat, MP top 3 industry-friendly states, Maharashtra among bottom five
A study sponsored by the Planning Commission shows that Haryana, Gujarat and Madhya Pradesh are the top three industry-friendly states in the country. Orissa is at the fourth position, and Andhra Pradesh the fifth.
Of the states in the top five positions, two were ruled by the Congress — Haryana and Andhra Pradesh — and two by the BJP, Gujarat and Madhya Pradesh. Orissa has a BJD government.
Bihar ranks sixth, while Kerala, Rajasthan and Tamil Nadu are in the seventh, eighth and ninth positions respectively. Nagaland, interestingly, ranks 10th. Maharashtra, traditionally considered a favourable destination for industry, is in the bottom five.
Because of the model code of conduct, the government is unlikely to release the report officially, a source in the Planning Commission said.
Among the bottom five states too, two are Congress-ruled (Assam apart from Maharashtra) and two by the BJP (Goa and Jharkhand). The fifth state faring poorly is the Trinamool Congress-ruled West Bengal.
If Maharashtra appears to be losing the race to neighbour Gujarat, the study shows that Punjab needs to perform more to be among the top five while Karnataka is way behind Tamil Nadu.
Barring Nagaland, Northeastern states continue to perform poorly. A Plan Panel official attributed this to difficult geographical terrain and inadequate infrastructure.
The Plan Panel had asked consultancy firm Deloitte Touche Tohmatsu last year to rate states based on certain parameters that would help them improve the regulatory ecosystem for the manufacturing sector. With the World Bank ranking India 132 among 185 nations in overall ease of doing business, a need was felt for states to do more to help industry.
The states were ranked as per their prevailing business regulatory environment, and the variables measured were availability of skilled labour, land and building approvals, pace of environmental clearances, taxation, approvals for infrastructure, and utilities.
The states ranked low are dogged by taxation issues, inflexible labour laws, poor infrastructure, lengthy land and building approvals and slow green clearances.
Deloitte relied only on “secondary information sources and primary interactions with various stakeholders” and not on any in-depth review of the current state government policies. The method employed was the globally recognised ‘Business Regulatory Impact Analysis’.
“Rating of states is aimed at giving a comparative picture on the issues where they need to facilitate the industry,” a senior official of the Planning Commission said, adding that this is expected to help prospective foreign investors make their choices.
Source: The Indian Express
(2) Vietnam cannot find object from missing Malaysian jet
Vietnamese searchers on ships worked throughout the night but could not find a rectangle object spotted on Sunday afternoon that was thought to be one of the doors of a Malaysia Airlines passenger jet that went missing more than two days ago.
Doan Huu Gia, the chief of Vietnam’s search and rescue coordination centre, said on Monday that four planes and seven ships from Vietnam were searching for the object but nothing had been found.
The Boeing 777 went missing early Saturday morning on a flight from Kuala Lumpur to Beijing with 239 people on board.
The plane lost contact with ground controllers somewhere between Malaysia and Vietnam, and searchers in a low-flying plane spotted an object that appeared to be one of the plane’s doors, the state-run Thanh Nien newspaper said, citing the deputy chief of staff of Vietnam’s army, Lt. Gen. Vo Van Tuan.
The jetliner apparently fell from the sky at cruising altitude in fine weather, and the pilots were either unable or had no time to send a distress signal, adding to the mystery over the final minutes of the flight.
There are also questions over how two passengers managed to board the ill-fated aircraft using stolen passports.
Interpol confirmed it knew about the stolen passports but said no authorities checked its vast databases on stolen documents before the Boeing jetliner departed on Saturday.
Warning “only a handful of countries” routinely make such checks, Interpol secretary general Ronald Noble chided authorities for “waiting for a tragedy to put prudent security measures in place at borders and boarding gates”.
On Saturday, the foreign ministries in Italy and Austria said the names of two citizens listed on the flight’s manifest matched the names on two passports reported stolen in Thailand.
“I can confirm that we have the visuals of these two people on CCTV,” Malaysian Transport Minister Hishammuddin Hussein said at a news conference late on Sunday, adding that the footage was being examined. “We have intelligence agencies, both local and international, on board.”
The thefts of the two passports one belonging to Austrian Christian Kozel and the other to Luigi Maraldi of Italy were entered into Interpol’s database after they were stolen in Thailand in 2012 and last year, the police body said.
Electronic booking records show that one-way tickets with those names were issued on Thursday from a travel agency in the beach resort of Pattaya in eastern Thailand. The agency refused to comment.
But no authorities in Malaysia or elsewhere checked the passports against the database of 40 million stolen or lost travel documents before the Malaysian Airlines plane took off.
Possible causes of the crash included some sort of explosion, a catastrophic failure of the plane’s engines, extreme turbulence, or pilot error or even suicide. Establishing what happened with any certainty will need data from flight recorders and a detailed examination of any debris, something that will take months if not years.
Malaysia’s air force chief, Rodzali Daud, said radar indicated that before it disappeared, the plane may have turned back, but there were no further details on which direction it went or how far it veered off course.
“We are trying to make sense of this,” Mr. Daud said at a news conference. “The military radar indicated that the aircraft may have made a turn back, and in some parts this was corroborated by civilian radar.”
Malaysia Airlines Chief Executive Ahmad Jauhari Yahya said pilots are supposed to inform the airline and traffic control authorities if the plane does a U-turn. “From what we have, there was no such distress signal or distress call per se, so we are equally puzzled,” he said.
A total of 34 aircraft and 40 ships from Vietnam, Malaysia, Thailand, Australia, Singapore, Indonesia, China and the United States were deployed to the area where ground controllers lost contact with the plane on the maritime border between Malaysia and Vietnam.
Of the 227 passengers and 12 crew members on board, two-thirds were Chinese, while the rest were from elsewhere in Asia, Europe and North America, including three Americans.
Family members of Philip Wood, a 50-year-old IBM executive who was on board the plane, said they saw him a week ago when he visited them in Texas after relocating to Kuala Lumpur from Beijing, where he had worked for two years.
The other two Americans were identified on the passenger manifest as 4-year-old Nicole Meng and 2-year-old Yan Zhang. It was not known with whom they were travelling.
After more than 30 hours without contact with the aircraft, Malaysia Airlines told family members they should “prepare themselves for the worst,” Hugh Dunleavy, the commercial director for the airline, told reporters.
Finding traces of an aircraft that disappears over sea can take days or longer, even with a sustained search effort. Depending on the circumstances of the crash, wreckage can be scattered over a large area. If the plane enters the water before breaking up, there can be relatively little debris.
A team of American experts was en route to Asia to be ready to assist in the investigation into the crash. The team includes accident investigators from the National Transportation Safety Board, as well as technical experts from the Federal Aviation Administration and Boeing, the safety board said in a statement.
Malaysia Airlines has a good safety record, as does the 777, which had not had a fatal crash in its 19-year history until an Asiana Airlines plane crashed last July in San Francisco, killing three passengers, all Chinese teenagers.
Details also emerged Sunday about the itineraries of the two passengers travelling on the stolen passports.
A telephone operator on a China-based KLM hotline confirmed Sunday that passengers named Maraldi and Kozel had been booked on one-way tickets on the same KLM flight, flying from Beijing to Amsterdam on Saturday. Maraldi was to fly on to Copenhagen, Denmark, and Kozel to Frankfurt, Germany.
She said the pair booked the tickets through China Southern Airlines, but she had no information on where they bought them.
As holders of EU passports with onward flights to Europe, the passengers would not have needed visas for China.
Interpol said it and national investigators were working to determine the true identities of those who used the stolen passports to board the flight. White House Deputy National Security Adviser Tony Blinken said the U.S. was looking into the stolen passports, but that investigators had reached no conclusions.
Interpol has long sounded the alarm that growing international travel has underpinned a new market for identity theft — bogus passports are mostly used by illegal immigrants, but also pretty much anyone looking to travel unnoticed such as drug runners or terrorists. More than 1 billion times last year, travellers boarded planes without their passports being checked against Interpol’s database of 40 million stolen or lost travel documents, the police agency said.
“No time frame” in search for missing plane
Malaysia aviation authorities said that the search for the missing Malaysia Airlines passenger jet with 239 people aboard will not stop until the aircraft is located.
“There is no time frame in the search operations,” said Azhaddin Abdul Rahman, deputy head of the Civil Aviation Authority.
He cited the case of the Air France airbus that crashed at sea in 2009 in which it took two years before the ill-fated plane was located.
Source: The Hindu
(3) NSEL, FTIL auditors face action
Three audit firms — Mukesh Shah & Co, S V Ghatalia & Associates and Deloitte, Haskins & Sells — are facing criminal action for alleged lapses at the now-defunct National Spot Exchange Ltd (NSEL) and its parent Financial Technologies (India) Ltd.
Mukesh Shah & Co and S V Ghatalia & Associates were auditors of NSEL and have been accused of "false disclosures in the auditors' reports on annual financial statements without verifying books and accounts of the company", sources involved with the exercise told TOI. They further said that show cause notices have been issued for action under section 628 of the Companies Act, which carries a maximum punishment of up to two years and a fine.
"We have called for an explanation as to why action should not be taken against them," said a ministry of corporate affairs official. The notices, the official said, were served last Tuesday. "Once we receive their response then we will examine the next course of action," the official said.
NSEL, which was set up for spot trading of commodities, was hit by a Rs 5,500 crore payment settlement crisis last summer as it was operating in unregulated segments of the market and allowed trades without physical assets.
In case of FTIL auditor, Delloitte, Haskins & Sells, a show cause notice is ready. "The notice has been sent to the registrar of companies (RoC) in Chennai and is likely to be delivered to them within a few days," the official said, adding that the firm is also facing action under section 628 of the Companies Act.
"The auditor (Delloite, Haskins and Sells) in their report showed observations, which were in the nature of the 'qualifications' (i.e. adverse findings) as if they were not qualifications," according to an RoC report reviewed by TOI.
A spokesperson for S V Ghatalia and Associates said that it is yet to receive any notice. "Our audit of NSEL's financial statements as of and for each of the years ended March 31, 2010, March 31, 2011 and March 31, 2012 was conducted in accordance with the auditing standards generally accepted in India. We assure our full cooperation to the ministry," the spokesperson said in response to a questionnaire.
When contacted over the phone a few days ago, Mukesh Shah too said he had not received a notice but refused to comment any further, citing ICAI rules.
Deloitte Haskins & Sells did not respond to a questionnaire mailed to its spokesperson.
The actions follow a detailed investigation ordered by the ministry of corporate affairs, which has initiated action against NSEL as well as FTIL, following the payment crisis at the exchange.
Source: The Times of India
(4) Did Vodafone leak data to UK spy agency? India launches probe
The finance ministry has asked the department of telecommunications (DoT) to examine several concerns raised by the home ministry, including the possibility that Vodafone Group Plc may have shared details of phone calls and emails of its subscribers worldwide with British security agency Government Communications Headquarters (GCHQ).
In a letter dated December 27, 2013, the home ministry asked the department of economic affairs to consider the points it had raised (see Red Flags) while processing Vodafone’s proposal to increase its stake in its Indian subsidiary from 64.38% to 100%.
Read: Cyber attack on Russia hits India, secret defence documents leaked
Intriguingly, the same letter, which granted security clearance to the proposal in the first para, ended with a paragraph that said approval “is not advisable from (an) economic angle”.
“No such concern has been raised by the Indian government. Our FDI application was cleared by the Foreign Investment Promotion Board (FIPB) and the cabinet committee on economic affairs after necessary due diligence. Vodafone does not disclose any customer data in any jurisdiction unless — like any other operator — it is legally required to do so,” the company said in response to an email from HT.
“The communications ministry is examining the issue,” a senior official in the ministry said on condition of anonymity.
Telecom secretary MF Farooqui could not be reached for comments.
FIPB cleared Vodafone’s stake hike proposal on December 30, 2013, three days after the home ministry letter. The finance ministry forwarded the home ministry’s letter to DoT for appropriate action on February 20, 2014. HT has seen copies of both letters.
Source: Hindustan Times
(5) Need to reset focus to rev up Indian economy
Economic issues are set to dominate the agenda for the coming elections, more than any other in the past. As the major political parties prepare to release their manifestos, three eminent economists along with political commentator, S. Gurumurthy, came together on a common platform to examine the current scenario, and think up ideas for the next government.
The panel discussion, featuring Arvind Virmani, Former Chief Economic Adviser to the Government of India; Rathin Roy, Director, National Institute of Public Finance and Policy; Ajit Ranade, Chief Economist, Aditya Birla Group; and S. Gurumurthy, Corporate Adviser and Commentator on Political and Economic Affairs, was thought-provoking, and threw up refreshing ideas.
The ball was set rolling by the introductory remarks by N. Ravi, Editor-in-Chief of The Hindu, who moderated the panel discussion. Mr. Ravi laid out the questions: What reforms remain to be done? How far can India go with this rights-based and entitlement approach? How can the trade account be made more sustainable? How can the rent-seeking opportunities in the economy be checked?
Mr. Virmani identified malnutrition as one of the biggest problems facing the country. The corporate sector needed to be revived in order to sustain high growth, and the regulatory environment should be made conducive for promoting investments, he said. Using empirical evidence
Mr. Virmani showed that the maximum catching up was required in the area of malnutrition. “The malnutrition problem has to do with sanitation rather than food and poverty,” he said. “India is an outlier only on sanitation, and has more or less caught up on poverty and food,” he pointed out. Mr. Virmani said empowerment had suffered as the focus of the Government was too much on budget allocations. “Nobody is fighting to produce results or outcomes,” he said.The successful reforms in the past had triggered catch-up but sustaining the process for decades was a different ball game, Mr. Virmani said, adding that the learning from countries that had grown fast was that high growth in one decade was no guarantee of high growth in the next.
To ensure sustainable high growth, Mr. Virmani recommended reviving the corporate sector where investments and productivity had ‘collapsed’. Citing the example of the infrastructure sector, Mr. Virmani said that the focus of government was more on getting funds for the sector, rather than providing a regulatory and policy environment that was conducive. “The problem in the infrastructure sector is not funds; if the policy and regulation problems are addressed, tonnes of funds will come automatically,” he said.
Different take
Mr. Gurumurthy presented a different perspective based on his understanding of Indian society and anecdotal evidence from the field to challenge the convention of using theories and wisdom of the Western economies to address Indian problems. He emphasised the need for expertise and research to be India-centric rather than be inspired by Western approaches. One example he cited was the lack of discourse and research, and, therefore, policy ideas for the diamond cutting industry of Saurashtra. “There is a disconnect between institutions and economic agents…where is the study on diamond cutting when nine out of ten diamonds in the world are cut in Saurashtra?” he asked.
He decried what he called as the “Wall Street approach” to policy formulation that was focused excessively on the corporate sector and stock markets. “In the U.S., 55 per cent of families are linked to stock market compared to a minuscule percentage in India. We cannot transplant those policies here,” he said. Dishing out further data to support his arguments, Mr. Gurumurthy said: “only 11 per cent Japanese savings are invested in the stock market, while in the case of Germany, it is 7 per cent.” He pointed out that the market capitalisation of the 30 Sensex companies taken together did not account for more than 1.5 per cent of GDP. “Even if one takes the BSE 500, which accounts for 90 per cent of India’s listed companies, its market capitalisation is less than 5 per cent of the country’s GDP. Why, the contribution of the total corporate sector to GDP is just around 15-16 per cent. Yet, policies are focussed more on the corporate sector. There is something basically wrong about our approach here,” Mr. Gurumurthy pointed out.
Mr. Roy came up with an interesting observation. According to him, States were better in their fiscal policies. Pointing to data, he declared that the states had completed the process of fiscal consolidation. He said that institutions needed to be able to translate ideas into results. According to him, the fiscal deficit problem today “is not as visible in the States as it is with the Centre’’.
“With consistently improving quality of management of public finances despite their continued demonstrated ability to give hand-outs, the States have completed fiscal consolidation,” he pointed out. “India does not even spend as much as small countries such as Kenya and Nepal on education and health,” Mr. Roy said. “Through the plans, we are spending more on health. It is still not enough. And, whatever we are spending is not delivering any results,” he pointed out.
Of the 30 Millennium Development Goals targets set in the 11th Plan only two — roads and infrastructure and forest cover — were achieved. Given the fact that the States were proving to be better fiscal managers than the Centre, the solution, Mr. Roy said, was to shift to greater devolution of funds and responsibilities to the States. This idea, however, would not find takers in New Delhi, he said, adding that the impulse for it would have to come from the States. “The Centre is a well-meaning institution but the assumption that it is capable of delivering either human development or take care of tax payers money can be questioned,” Mr. Roy said.
In response to a question from the audience, Mr. Roy said the reason for the superior fiscal performance of the States could be their proximity to, and, therefore, better understanding of the ground realities.
“States know better about the ground realities. So, the efficiency is better,” he said. In his estimate, about 60 per cent of the fiscal consolidation in the States could be attributed to expenditure controls prescribed by the Fiscal Responsibility and Budget Management reforms.
The balance 40 per cent of the fiscal improvement could be explained by the efficient generation of States’ own tax revenue through genuine superior management, he added.
Source: The Economic Times
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