Inherent Inequality, Injustice and Ethnic Cleansing Make the Vital Statics of Strategic Realliance in US ISRAEL Lead!
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Meanwhile,the United States has expressed its appreciation for the increasing dialogue between Pakistan and India, saying it's in their self-interest and larger US interest to reduce tensions through talks.
"Just as we've said many, many times, we appreciate and certainly endorse increasing dialogue between Pakistan and India," State Department spokesman Phillip J. Crowley told reporters Friday when asked about the talks in Islamabad.
"It is in their self-interest and our larger interest to see dialogue that can help to resolve tensions that exist between the two countries," he said.
The U.S. comments came as Indian Home Minister P. Chidambaram met his Pakistani counterpart Rehman Malik and Pakistani Foreign Minister Shah Mahmood Qureshi in Islamabad Friday.
Mr. Chidambaram, the first Indian minister to visit Pakistan since the 26/11 terror attack and the first Indian home minister to visit Islamabad in three decades, is to participate in the SAARC home ministers' conference in Islamabad Saturday.
Indian Foreign Secretary Nirupama Rao had Thursday held talks her Pakistani counterpart Salman Bashir focused on trust-building measures between the two counties.
Prime Minister Manmohan Singh will not raise the issue of extradition of the former head of Union Carbide, Warren Anderson, with U.S. President Barack Obama when the two meet in Toronto during the G-20 Summit on June 26-27. India has been seeking to get Mr. Anderson extradited for almost two decades now.
Briefing journalists as the Prime Minister departed for Toronto, a top government official said India had already raised the matter with the U.S. and Washington responded by making certain queries. These would be enquired into by the Central Bureau of Investigation and only when the information was available would the time be "right" for the two leaders to take up the issue of extradition, said the official.
Time to move forward
On the G-20 Summit, the official made it clear that the meeting would mainly be about making an attempt at finding a way to move forward from where things were now. The steps taken until now by the G-20 were the easy part. The hard part would come now, because the immediate crisis was over.
The official said forward movement would involve hard negotiations on policy coordination on the continuation or otherwise of the stimulus because global and national interests had begun to diverge. The next G-20 Summit in November in Seoul is when there might be some concrete action.India was in a good position, the official added, referring to its high growth rate and the sound health of its banks.
Nuclear reactors issue
On China supplying nuclear power reactors to Pakistan, he said it was up to the Nuclear Suppliers Group to take a view on the legality of Beijing's proposal. Pakistan is neither a signatory to the NPT, nor has reactors under full safeguards. India, he said, made clear its position that it did not approve of the proposal.
To a question on the use of the Army against Maoists, the official said it would provide training and transport help to the State governments. It was the police who had to tackle the problem.
On the first day of the G8 summit in Canada, President Barack Obama and other world leaders held initial discussions on ways to strengthen the global economy and build on commitments from past summits. Senior U.S. administration officials point to what they call an emerging consensus on the issues of sustaining global economic growth, and fiscal responsibility.
Canadian Prime Minister Stephen Harper formally welcomed President Obama and other leaders to the resort north of Toronto, shaking hands with each before the G8 group went into a working lunch, and sessions with leaders from African, Latin American and Caribbean nations invited to the summit.
The G8 includes the eight leading industrial democracies, the U.S., Canada, Britain, Germany, France, Italy, Japan and Russia, while the larger G20 includes such major emerging powers as China, India and Brazil.
In remarks before he departed Washington, Mr. Obama said he hopes nations will decide to build on progress by coordinating efforts for economic growth, pursue economic reform, and strengthen the world economy.
The president has been strengthened by an agreement on Friday by House and Senate negotiators on a final version of legislation to reform the U.S. financial system. Both chambers of Congress will have to approve the bill before the president can sign it.
Senior administration officials said G8 leaders congratulated the president on the development, noting the impact it could have in putting positive rules in to place to prevent another U.S. financial crisis.
White House spokesman Robert Gibbs was asked earlier how this would impact president's efforts to steer the G8 and G20 summits toward outcomes he prefers. "I think it demonstrates to the world the steps that we have to continue to take globally in order to ensure that we don't find ourselves in a situation like we did two years ago," he said.
Many G8 leaders face demands in their countries for greater restraint in public spending and pressure to sharply reduce government budgets and deficits. Canada's Prime Minister Stephen Harper has called on G20 nations to cut their deficits in half by 2013.
Senior U.S. Administration officials said the president stressed the need to maintain durable growth while stressing that this also involves fiscal consolidation and debt reduction in the medium term.
The officials pointed to confidence about a convergence of views on a broad approach by G20 nations, and said Friday's discussions were a first step on the way to a final outcome on Sunday when the G20 concludes.
President Obama and other G8 leaders also turned their attention to the developing world, meeting with African leaders invited to the summit, and leaders from Haiti, Jamaica and Colombia.
Canada's prime minister said a new G8 initiative aims to direct new resources to reducing maternal and infant mortality, adding that Canada would contribute $3 billion over the next five years. He said the world's wealthier nations must follow through on commitments.
Saying G8 credibility rests on a willingness to honor past commitments, the White House put out a statement listing areas in which the U.S. has fulfilled pledges in areas such as aid to Africa, debt relief, and global health and HIV/AIDS prevention.
Trading sources said crude futures triggered buy-stop orders during as they moved up, and a strong move up by U.S. gasoline futures also helped pull the oil complex higher.
Posted: 26 Jun, 2010, 1158 hrs IST
Posted: 25 Jun, 2010, 1937 hrs IST
Posted: 25 Jun, 2010, 1959 hrs IST
Posted: 26 Jun, 2010, 1152 hrs IST
U.S. crude futures for August delivery rose $2.35, or 3.07 percent, to settle at $78.86 a barrel, the highest settlement since ending at $79.97 on May 5. Crude bounced from a session low of $75.90 and traded as high as $79.19, reaching the peak in post-settlement trading on the Globex electronic trading platform after the open outcry session ended.
Crude futures ended higher a second straight day and posted a weekly gain for the third consecutive week.
ICE Brent crude futures rose $1.65, or 2.16 percent, to settle at $78.12, after trading as high as $78.50.
U.S. July gasoline futures rose 7.43 cents, or 3.55 percent, to settle at $2.1678 a gallon.
"RBOB (gasoline futures) strength could be a jump start to the usual pre-July Fourth buying," said Michael Guido, associate director/hedge fund coverage at Macquarie Bank in New York.
"If this storm does become a threat, then the usual pre-holiday buy programs for gasoline will become much more expensive, hence the prompting people to act today, with shorts getting caught up in the mix," Guido added.
July heating oil also finished higher. The benchmark futures contract against which other distillates like diesel fuel are traded, rose 5.5 cents, or 2.67 percent, to settle at $2.1122 a gallon.
A tropical disturbance over the western Caribbean Sea has a high 80 percent chance of developing into a tropical depression Friday or Saturday, the U.S. National Hurricane Center said on Friday.
The system was expected to cross Mexico's Yucatan Peninsula over the next day or two. Weather models were divided on Friday about whether it will turn northwest toward Mexico or northeast to threaten energy production in the central Gulf of Mexico and BP Plc (BP.L) efforts to clean up its oil spill.
U.S. crude oil and product inventories remain much higher than year-ago levels. High inventories could cushion any price spikes that might result from weather-related supply disruptions. Prices jumped when hurricanes Katrina and Rita hit the U.S. Gulf of Mexico in 2005.
Support for crude also came from the weakening of the dollar index .DXY, measuring the greenback's strength against a basket of currencies and the euro's recovery against the dollar.
U.S. consumer sentiment rose in June to its highest since January 2008, while reports of job losses were down sharply from a year ago, according to Thomson Reuters/University of Michigan's Surveys of Consumers.
Early in the session, crude oil's rise was tempered by data showing slower-than-expected economic first-quarter growth in the United States and worries about the fragility of global recovery ahead of a weekend summit of Group of 20 nations.
U.S. crude oil is expected to average $79.86 a barrel in 2010, a Reuters poll showed, a slight drop from May's survey and the second consecutive lower monthly forecast after more than a year of rising expectations.
Front-month U.S. crude futures' $64.24 intraday low on May 20 was the weakest front-month price since $62.76 was struck on July 30, 2009. Prices recovered to a 2010 peak of $87.15 on May 3, but fell back.
But it okayed a key decision to offload 5mt of wheat and rice into the open market to cool cereal prices on day when the entire spectrum of political Opposition voiced strong reservations to the government's decision to hike fuel prices, including that of diesel (by Rs 2/lt) and LPG by Rs 35/cylinder and poor man's fuel, kerosene, by Rs 3/lt. The hike in diesel and kerosene prices, in particular, are expected to have a cascading effect on food and food commodity prices for the common citizen. The decision to rush through the release of 5mt of rice and wheat through a new Open Market Sales Scheme (OMSS) that pegs prices well below prevailing market price was necessary in order to kickstart the scheme this month or early July at the latest and make way for the fresh kharif crop in the offing by October.
(The country's rice production is expected to rise 12% to around 100 million tons during the 2010-11 crop year, starting July 1). Wheat will be sold from the government godowns between July and March at Rs 12.54/ kg against retail price of around Rs 14/kg in Delhi. The decision served to soften wheat prices in the market today. Open market wheat prices have been propped up high despite good stocks with the government (on April 1, when wheat stocks are at their lowest, the government had wheat stocks of 16.1mt against a buffer norm of 7mt) primarily on account of high wheat prices pegged by the food ministry for the OMSS (direct) to flour millers. States also failed to pick up any more than 20% of wheat allocated to them under the OMSS on account of high prices. Politically, too, the decision was seen as imperative given the impending hike in fuel prices.
That rice price across the board has gone up by 13-15% over the last several weeks and procurement in the 2009-10 year is 5% lower than the previous year despite good stocks may have informed the decision of the EGoM headed by FM Pranab Mukherjee to also release cheap OMSS rice in the open market at a time of fuel price hike. Besides, the EGoM also deferred another proposal to lift the ban on non basmati rice export until after assessing the summer sown crop in October- November. Proposals to restart rice futures nwo have already been shot down.
The decision to shunt to the backburner the proposal to hike sugar import duty by 15% comes in the wake of apprehensions expressed by senior officials in the food ministry that sugar stocks could be below 2mt by the sensitive festival season starting September/October. That forced food minister Sharad Pawar, who had earlier proposed a duty hike of 40%, temper the proposal to 16%. Also deferred was a decision to slash levy sugar quota from mills down to 16% compared to the current 20%. "We see no problem at present in having additional sugar stocks for the PDS above what is actually needed. The government has already hiked the price of levy sugar to mills from Rs 12+/kg to Rs 18/kg for the entire 2009-10 sugar season. So, at 20% levy sugar, they will get a 30% hike in price," a government official said. Significantly, sugar's weightage in the WPI reflects only in monthly figures (1.67% in the new series compared to 3.6% earlier but indications are that the June figures for sugar could show a sharp hike over basic food articles.
The fact that global prices for both white and raw sugar have been going up consistently in the last few weeks, even as domestic prices remain static at a retail level of Rs 32/kg, could not have escaped the EGoM. That has made traders reluctant to contract fresh imports of refined sugar (around $530/tonne now compard to only 466/tonne in early May) now and, in either case, the duty hike decision is not expected to impact positively on retail prices of sugar, which could shoot up higher in the peak demand festival season and when the edgy government hopes to release excess levy sugar in its stocks to needy consumers.
|Friday June 25, 09:28 AM||Source: Hindustan Times|
FIIs are back again
Mumbai, June 24 -- The feathered friends of India's stock markets are back.
Foreign institutional investors (FIIs) who had flown to safety last month in the wake of uncertainties surrounding Greece and its impact on the global economy have already put in Rs. 8,850 crore in June, raising chances of market stability at higher levels.
They pulled out a total of Rs 9,436 crore in May from the Indian equity markets as there were growing concerns over the debt crisis in Greece spreading like a contagion to other European economies, especially Spain.
"However, contrary to the expectations, Spain managed to raise $4.3 billion worth of bonds in June, suggesting that confidence is coming back to Euro zone area," said Sanjay Sinha, CEO of L&T (LT.NS : 1759.1 -32.55) Mutual Fund.
"Also, crude prices strengthened against expectations that commodity prices may soften.
These two factors seem to have contributed to the FII inflow turning positive," he added.
With local investor support often lacking, FII money holds a lot of significance for the not-so-deep Indian capital markets and any outflow or inflow leads to tremors in the stock markets.
While the BSE (^BSESN : 17574.53 -155.71)'s 30-share Sensex fell by 3.6 per cent in the May with the FII exit, their re-entry into the markets had lifted the Sensex by 7 per cent in June.
Market experts said the overseas portfolio investors had pulled out of equities to park their funds in fixed-income securities and gold.
"In May, money moved out of riskier assets to risk-free assets and there was a general outflow from equities. But now ,with some stability around and India being one of the most promising destinations for economic growth, we are witnessing the money flowing back to India," said Vikas Khemani, co-head, institutional equities, Edelweiss Capital.
Government hikes fuel price, runs into opposition
New Delhi: The Indian government on Friday lifted decades of control on petroleum pricing as it hiked the prices of petrol, diesel, kerosene and cooking gas, inviting a barrage of protests from not only opposition parties but some of its own allies.
The Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee approved a proposal to make the prices of auto fuels market-driven and boost the revenues of oil exploring and marketing companies.
Announcing the decision, Petroleum Secretary S. Sundareshan said the prices of petrol "will be market determined both at the refinery gate and retail level".
As a result, petrol will now be costlier by Rs 3.50 a litre.
Simultaneously, the government hiked the prices of diesel by Rs.2 a litre, kerosene -- known as the poor man's fuel, and traditionally spared during periodic fuel price hikes -- by Rs.3 a litre and cooking gas by Rs.35 per cylinder.
"We are fully aware of the sentiments of the people. We are fully aware of some difficulty it may cause. But in the larger interest of the Indian economy, it is absolutely essential that the consumers also share the burden of rising prices of crude in the international market," Sundareshan told reporters here.
The government decision ran into opposition from its own allies, including the very vocal Trinamool Congress and the DMK.
The Communist Party of India-Marxist (CPI-M) and its allies accused the government of giving "false arguments to justify these measures" and demanded immediate scrapping of the price increase.
The Marxist-affiliated Centre of Indian Trade Unions (CITU) called for a 24-hour public transport strike in West Bengal Saturday.
The Bharatiya Janata Party (BJP) also demanded a rollback.
"The government has made a mockery of the people's trust after winning the (Lok Sabha) elections," BJP spokesperson Prakash Javadekar said.
Petroleum Minister Murli Deora admitted that Trinamool chief and Railway Minister Mamata Banerjee had not attended the EGoM meeting, but added that the other allies including the DMK were part of the decision.
However, DMK's Chemicals and Fertilizers Minister M.K. Alagiri later said the decision would put an additional burden on the public.
The move is likely to stoke inflation, which is already high, and further push up prices of essential commodities like vegetables and foodgrain.
The finance ministry's chief economic adviser, Kaushik Basu, admitted that there was likely to be an impact on the wholesale price index inflation, which was 10.16 percent in May.
"The (decontrol of petrol prices), coupled with price increase for LPG (cooking gas) and kerosene, will have an immediate positive impact on inflation. I expect an increase of 0.9 percentage points in the monthly Wholesale Price Index (WPI) inflation," he said in a statement.
However, he added that since the hike in fuel prices would push down fiscal and revenue deficit, "they will exert a downward pressure on prices".
Sundareshan said that even after the changes, the under recoveries will still be around Rs.53,000 crore at the current international price of crude, which stands at $75 a barrel.
"Government and upstream companies will have to find the funds to compensate the oil marketing companies," he said.
Mamata Banerjee said she was unhappy with the government decision but added that her party would not topple the Congress-led United Progressive Alliance (UPA) government.
"My party does not support this hike. This puts pressure on the people. The government should reconsider the decision," she said.
There was anger on the street too.
"These steps will break the back of the middle class. We are doomed," cried 31-year-old Pulkit Sharma.
The Congress vociferously backed the government move.
"We believe the government must have been constrained to take these steps and ensure that the impact is minimal as much as possible," spokesperson Jayanthi Natarajan said.
The new petrol and diesel prices would be as follows:
Petrol -- Rs 55.70 against earlier price of Rs 52.20
Diesel -- Rs 41.88 against Rs 39.88
Petrol -- Rs 51.43 against Rs 47.93
Diesel -- Rs 40.10 against Rs 30.10
Petrol -- Rs 55.17 against Rs 51.67
Diesel -- Rs 39.99 against Rs 37.99
Petrol -- Rs 55.63 against Rs 52.13
Diesel -- Rs 40.05 against Rs 38.05
The new prices for LPG cylinder would be as follows:
Delhi: Rs 316.20, Mumbai: Rs 325, Kolkata: Rs 328.70 and Chennai: Rs 350.90
The politically sensitive decision is likely to stoke inflation which is already high and lead to further rise in prices of essential commodities like vegetables and foodgrains.
"We are fully aware of the sentiments of the people. We are fully aware of some difficulty that it may cause. But, in the larger interest of the Indian economy, it is absolutely essential that the consumers also share the burden of rising prices of crude in the international market," Sunderashan told reporters.
Sundareshan said diesel would also be decontrolled eventually.
But the prices of kerosene and cooking gas will continue to be regulated by the government, he said.
The eGoM took the decision based on the recommendations of the Kirit Parikh Committee, which had suggested decontrol of fuel prices.
"This price which is likely to be very reasonable, being market-determined, can be easily accommodated by users of petrol in the country," added Sunderashan.
He said the impact of the hike on a petrol-driven four-wheeler would be only an additional Rs.190 per month, while a two-wheeler user may have to spend out an extra Rs.30-35 per month.
"If the eGOM had not done this, the under-recoveries for diesel alone would have been Rs.23,000 crore, which is a burden which the government and upstream oil companies cannot bear," he said.
Kerosene, which is distributed by the government on subsidized rates to below poverty level families, saw the largest hike of 33 percent.
"It has to be borne that the price of kerosene has not increased since 2002," said the petroleum secretary. In Delhi, the current price of kerosene before the hike is Rs.9.09 per litre.
Oil marketing companies, which were bearing huge losses on selling cooking gas at subsidised rate, also heaved a sigh of relief.
Sundareshan said that even after the changes, the under-recoveries will still be around Rs.3,000 crore at the current international price of crude at $75 per barrel.
"Government and upstream companies will have to find the funds to compensate the oil marketing companies," he said.
BJP and the Left parties condemned the hike and have threatened to launch an agitation.
After dilly-dallying, the Empowered Group of Ministers (EGoM) agreed with Oil Minister Murli Deora's proposal to free petrol prices from government control. Union Railway Minister Mamta Banerjee and Agriculture Minister Sharad Pawar did not attend Friday's meeting.
There was near-unanimity among other members of the EGoM on bringing about market-linked prices for petrol, a fuel generally used by the well-off.
However, sources said that freeing diesel prices was out of the question because the fuel was used by the transport and agriculture sector and, therefore, had close links with the inflation rate.
Freeing of petrol prices would reduce the Rs 74,300-crore deficit by about Rs 5,000 crore. A one rupee per litre hike in diesel prices would cut losses by Rs 3,800-4,000 crore. Deora had, on more than one occasion, briefed the Prime Minister Manmohan Singh and Mukherjee on the crisis that would befall oil PSUs if no decision was taken in this regard.
But the UPA government seems wary of freeing fuel prices as such a move can add to the already-high inflation. In May, WPI-based inflation provisionally entered double digits at 10.16 per cent.
State oil firms currently lose about Rs 215 crore per day on selling fuel below the imported cost. At present, petrol is being sold at Rs 3.73 a litre below its cost, diesel at a loss of Rs 3.80 per litre, kerosene at Rs 18.82 a litre and domestic LPG at a discount of Rs 261.90 on every 14.2 kg cylinder.
India's annual domestic oil product sales in May rose 6.3 per cent, its highest jump since October, to 12.38 million tonnes, on higher demand for auto fuels, government data showed on Thursday.
Petrol sales during the month rose an annual 13.1 per cent to 1.25 million tonnes on a 30-per cent jump in car sales as rising incomes and a rapidly expanding economy coupled with subsidised fuel prices perk up the demand.
Diesel sales grew by 11.1 per cent to 5.30 million tonnes in May, indicating higher demand from farm and industrial sectors. Diesel runs pump sets used for irrigating farm lands. Auto fuel sales rose as dealers stocked the fuel anticipating hike in prices.
Crude oil imports, fell 14.1 per cent to 11.54 million tonnes, or 2.73 million barrels per day (bpd), in May. In May, fuel exports were down by 40.1 per cent from a year earlier, while imports grew 3.4 percent.
The government data does not include imports and exports by Reliance Industries' new 580,000 bpd export-focused refinery at Jamnagar, in western Gujarat state.
Source: India Syndicate/Agencies
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Special: Football World Cup 2010
- Column: Aadisht Khanna on motivation and exercise
- Indian supermodel Viveka Babaji found dead in Bandra
- Yuvraj back for Sri Lanka Test tour
- India to Pak: Time to act against Saeed, 26/11 terrorists
- No option for government but to hike fuel prices: Cong
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The meeting comes against the backdrop of an emerging sovereign
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Germany and Britain are bent on cutting back government deficits sharply and swiftly, while many European majors worry that such pullback would derail their own fragile recovery. The US is guardedly against a fast switch to fiscal consolidation, so is France under president Sarkozy.
The demand for a universal bank tax is another divisive factor, with countries like India with relatively sound banking sectors seeing little merit in such a tax. Action on reform of financial sector regulation remains mired in controversy in the US, while the British reform in the organisational structure of the regulatory apparatus is yet to prove its substantive benefits. The mood, even before the summit begins, is to prepare for a more vigorous outcome at the next summit scheduled for November in Seoul.
As far as India is concerned, its own reasonably robust domestic growth and relatively low dependence on global demand give it ample wiggle room, allowing PM Manmohan Singh to take the moral high ground, advocating policy that is globally sound, unconstrained by any anxiety that what is good for the world would be bad for his own country. That is more than can be said about the majority of the G-20 members.
A remarkable feature of the buzz in the run-up to the summit is the downplaying of the Doha Round of trade talks, conclusion of which in 2010 had been an emphatic goal set by the Pittsburgh summit of September 2009. India has every reason to vocally argue for early completion of the trade talks, to guard against protectionist constraints on its growth.
The Prime Minister's bilateral engagements at the summit, originally confined to host Premier Stephen Harper, has proliferated to take in US President Barack Obama, France's Nikolas Sarkozy, British Premier David Cameron, Japanese Prime Minister Naoto Kan and, in what has come to be a fixture at such international gatherings, leaders of fellow Bric nations.
|Friday June 25, 10:30 AM|
Possible outcomes for fuel price reforms
By Nidhi Verma
NEW DELHI (Reuters) - The government on Friday will once again grapple with the political hot potato of deregulating fuel prices, seeking a way to improve its financial health as it tries to shield its 1.2 billion citizens from high prices.
A panel of ministers, empowered by the cabinet to decide the country's fuel policy, will review the policy at 1 p.m. (0730 GMT).
Earlier this month, the panel deferred the decision due to political concerns that the move would hurt voters already hit by high food prices.
Asia's third-largest economy has been looking for new ways to reduce subsidies and set prices of motor and cooking fuel since the failure of its 2002 bid to get state-owned refiners to fix prices every two weeks in step with global rates.
But this is a political minefield in a country where 410 million people live on less than $1.25 a day and any decision by the panel of ministers who debate the issue must have the approval of Sonia Gandhi, the left-leaning powerful chief of the Congress party that has led coalition governments since 2004.
Analysts worry that maintaining the status quo could discourage private sector investment in India's under-developed energy sector and send a signal that the government would rather please its mostly poor and rural political base than push through pro-market reforms.
B.M. Bansal, chairman of state-run Indian Oil Corp on Wednesday said the current petrol price, 47.93 rupees ($1.03) per litre, was 3.20 rupees, or nearly 7 percent, lower than market rates, while diesel rates were 9 percent lower.
Shares of IOC (IOC.NS : 377.95 +36.55) and other state refiners Bharat Petroleum (BPCL.NS : 620.7 +69.95) Corp Ltd and Hindustan Petroleum Corp Ltd were up 1.1 percent to 1.2 percent, outperforming the benchmark index, which was down 0.5 percent at 0355 GMT on Friday.
* Raising fuel prices would stoke inflationary pressures, already at levels uncomfortable enough for voters to slam Congress in municipal elections this week in the swing state of West Bengal.
* An economically sound decision may help India narrow its fiscal deficit, but could yield electoral losses for the Congress in the half-dozen state elections scheduled this year and next.
* Many coalition allies would be unhappy with the unpopular measure, which is sure to be pounced upon by opposition parties including the communists who tried to unseat the government over a February hike in motor fuel prices.
* Rival Asian giant China, with its own billion-plus population, abandoned similar fuel price subsidies from January 2009 to great effect for then-struggling refiners grappling with losses, as Indian state-owned refiners do now.
* If India does reform its refined fuel policy during a window stretching from the end of the lawmakers' budget session in May until parliament gathers next for its monsoon session in August, here are the possibilities that could play out:
* Lifting subsidies would trigger spikes of up to 15 percent in retail prices of diesel and gasoline -- adding to the political pressure on a government already facing protests over rising prices of food and consumer goods.
* This option looks even more difficult in the wake of two fuel price hikes since the end of February.
* It could stoke inflation, forcing a tightening of monetary policy. The government's fiscal deficit, now projected at 5.5 percent of the budget for the year ending March 2011, would probably shrink, freeing up capital for other programmes.
* In the fiscal year that ended March 31, India spent 149.5 billion rupees ($3.35 billion), or nearly 1.5 percent of all government expenditure, on oil subsidies, compared with initial estimates of 31.1 billion rupees.
* Revenue would spike dramatically at retailer Indian Oil Corp, as well as Hindustan Petroleum and Bharat Petroleum, and upstream firms ONGC (ONGC.NS : 1263.4 +74.05), Oil India and GAIL (GAIL.NS : 484.15 +7.4) (India).
* Higher retail prices could briefly dampen demand for fuel and vehicles.
* Scrapping government intervention would hit poor consumers, who have no access to electricity and use kerosene for lighting and cooking.
PARTIALLY LIFT CONTROLS
* India may end pricing controls on petrol, viewed as the rich man's fuel, and gradually remove controls on diesel, which could spur higher inflation but ease its fiscal burden.
* It would help cut losses at state oil firms, but fuel demand may be hit briefly and could draw some opposition from the automobile sector.
* It may spur a change in fuel use. A large gap between diesel and kerosene prices may see the cheaper fuel being used to adulterate diesel.
* Introduction of a Unique Identity/Smartcards framework may follow to ensure a transparent public distribution system of kerosene and domestic LPG.
To see February recommendations of a government panel set up to reform the fuel sector, click http://r.reuters.com/jad57h
* The government may decide to continue with the populist mechanism of subsidising fuel prices but would then face the risk of a ballooning fiscal deficit, and jettison its plan to trim the deficit to 4.1 percent of GDP by the end of March 2013.
* The finances of the public sector oil marketing companies would be hammered. Projected losses for the firms are estimated at $24.4 billion this year, based on an average crude price of $85 a barrel.
(Editing by Ed Lane and Malini Menon)
(For more business news on Reuters India click http://in.reuters.com)
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WHAT BHOPAL EXPOSES- A strategic alliance cannot be based on inequality and injustice
|Sunanda K. Datta-Ray|
Barack Obama should be left in no doubt that India expects the yardstick of accountability he is applying to BP for Union Carbide too. But the root causes of the Bhopal disaster lie at home, and despite Thursday's promise of generous funding, nothing has been done to tackle them. There's possibly little that a coalition government can do in the short term, which means that repetitions of the nightmare, not necessarily in the same form, cannot be ruled out as India, sloppy, corrupt but on a roll, actively encourages big industry.
Few events so severely indict a society and its values and operations. BP's oil spill was caused by an explosion, Exxon's by a grounded tanker. Both could be called acts of god. The Turkish Airlines DC-10 that crashed just after taking off from Paris, killing all 346 people on board, more closely resembled Bhopal, for the checkers had overlooked a flaw in the aircraft. Distillers' notorious thalidomide pill for pregnant mothers, which resulted in some 10,000 deformed babies, comes nearest for the pharmaceutical testing was grievously at fault. But whereas individuals were to blame in these last two instances, the guilt in India is collective and more indigenous than foreign. The power that multinational corporations undoubtedly wield is so effective here because of our combination of self-seeking politicians, slothful bureaucrats, an instinctive subservience to Americans and a criminally inefficient legal system.
It seems clear now that corners were cut and rules waived to grant Union Carbide's manufacturing licence. Early warnings of danger were ignored though it was known that waste was being dumped and contamination spreading. The likely effects of cost-cutting measures and poor maintenance (like soldering instead of replacing broken pipes) were overlooked. Everything can be arranged in India. Even local champions to argue lustily that companies like Enron must be lily-white since bribery is a federal offence in the United States of America.
A senior New Delhi bureaucrat sought me out after the tragedy because the paper I worked for had published a strong editorial demanding firm action against Union Carbide. He urged me to soften our line since American law and Union Carbide would never concede what the paper was demanding. One might excuse Nani Palkhivala opposing the Union of India in New York or Fali Nariman appearing for Union Carbide since lawyers claim not to prejudge an issue, but this readiness among highly-placed officials to plead the American case recalls Natwar Singh's comment that South Block is pro-American because eight out of 10 diplomatists want green cards for their children.
I came across another instance of that syndrome though in a different context when researching Waiting for America: India and the US in the New Millennium. Indians had reason in 1948 to accuse Josef Korbel, the Jewish Czech head of the United Nations Commission for India and Pakistan (also Madeleine Albright's father), of toeing the American-Pakistani line. Adapting Wilde, middle-class Indians might go to New York (New Jersey more likely) before they die, but Korbel, who was then waiting for American naturalization, might have died if he was refused citizenship. He would have been deported to Czechoslovakia which had become communist since the previous regime sent him to the UN.
My adventures with the book, which emphatically asserted that while countries are never "natural allies", India needs the US for economic and strategic reasons, stressed that the connection must be consonant with national self-respect. India cannot be the new Pakistan, as Sitaram Yechury scathingly puts it. Her size, population, resources, strategic potential and civilizational heritage demand American recognition of a more equal partnership. Hence the title Waiting for America.
I was living abroad when the book appeared and received good reviews all round. Then I learnt to my surprise that the publisher had asked the American ambassador to release it and that, having asked for a copy, His Excellency had declined the honour. Anyone who was aware of the book's contents and knew anything of how American politicos think would have expected nothing else. This ambassador, moreover, was a close friend of the president who famously justified Operation Enduring Freedom with the if-you-are-not-with-us-you-are-against-us mantra.
There was no launch and no publicity after that mark of ambassadorial disapproval. Waiting for America disappeared from bookshops. It was not visible at the Calcutta Book Fair. Shopkeepers told me they presumed it was out of print since requests for fresh stock were ignored. Direct approaches to the publisher were rebuffed. Eventually, the publisher emailed me to say the book had "not sold well" and would be pulped. A minor incident but revealing, perhaps, of attitudes.
Subservience goes beyond calculations of self-interest. The excitement when Obama attended a reception for S.M. Krishna or an ethnic Indian won the Spelling Bee competition has no logic beyond the complex of a colonized people. As The New York Times reported of George W. Bush's "accidental" encounter with Jaswant Singh in the White House in May 2001, "No one in the American press took any notice, but in India the photo of Mr Singh grinning next to Mr Bush was front-page news."
It was like the flurry in a Dhaka hotel lobby with flower pots carted in, carpets unrolled and people rushing about. The man I stopped to ask the cause breathed "Ambassador!" and sprinted away. Which ambassador? It was Saudi Arabia's envoy. America's ambassador may not occasion quite the same excitement in New Delhi but the joint secretary I had just sat down to interview in his South Block office (after two abortive appointments) when I was researching Waiting for America jumped up with alacrity when a burly white man strode in.
"Hope I'm not disturbing anything," said the acting US ambassador breezily. "I'd come to see So-and-so and thought I'd drop in!" Overwhelmed by the intrusion, my host didn't even bother to acknowledge my goodbye as I slipped out, questions unasked. He is now one of India's senior ambassadors. Why blame a Bihar Lok Sabha member for vowing not to wash for three months the hand that Bill Clinton had shaken? Or Bhopal's police for taking Warren Anderson to the comfort of his company guest house when he was supposedly under arrest? Grovelling is the norm.
Anderson's flit isn't the only unsolved mystery. Why have we heard nothing about the saboteur that American papers hinted at? Are some of Bhopal's social activists on the make like American ambulance chasers? A Delhi High Court judge, S. Muralidhar, called the settlement the Supreme Court approved in February 1989 "severely flawed". The Supreme Court decision in 1996 to dilute the charge against Union Carbide prompts more questions. Arun Jaitley and Abhishek Singhvi, legal luminaries at two ends of the political spectrum, argue that Dow Chemicals, which took over Union Carbide in 2001, has no liability for the tragedy. But common sense suggests liabilities go with assets. Guinness, which absorbed Distillers, thinks so, too, since it gave £37.5 million for thalidomide victims. As Britain's Sunday Times, which fought relentlessly for compensation, observed, "The law is not always the same as justice."
Common sense also suggests that the top man is responsible for everything that happens in his company. If there is "no concept of vicarious liability" (citing Nariman), how could Keshub Mahindra, Union Carbide India's non-executive chairman, be convicted, no matter how frivolous the sentence? I was only following established practice when as editor I appeared before the West Bengal assembly's privileges committee and took the rap for a junior colleague's indiscretion.
Obama will be an honoured guest in November. But there is little reason to go overboard, and none to forget that no enduring strategic alliance can be based on injustice and inequality. India is still waiting for America.
"We already have in place plans to increase significantly the number of retail fuel outlets across India," said Essar Oil managing director and CEO Naresh Nayyar. The company plans to increase the number of outlets to 2,500 from 1,450."We are well-placed to capture additional sales for fuel and non-fuel items and expect to see significant volume growth in both areas," said Mr Nayyar, who is also CEO of Essar Energy.
Likewise, Reliance Industries and Shell India are also planning to increase their number of outlets. Some of these companies have already prepared a growth blueprint plans, said an executive of state-run Indian Oil Corporation (IOC)."They were sure that the government will finally de-regulate prices and did not want to miss on the opportunity," he said.
The fuel retail ambitions of private players were doomed from the start because of the policy of subsiding state-run refiners for selling fuel at government-set prices—these companies were compensated with Rs 12,000 crore to the year to end March.
Consumers kept away from private fuel outlets because the prices were costlier. For example, petrol and diesel sold at Shell pumps are costlier by up to Rs 5 a litre, depending on the location, compared to a public sector fuel station.
The price differential drove Reliance Industries out of the retail business. RIL's share in the diesel market, nearly 14% in 2006, fell to 1% in early 2008. The company, which earlier had around 1,400 retail outlets up and running, now has only 600, mainly in Rajasthan, West and South India.
Shell, the country's only international fuel retailer, owns a licence to open 2,000 outlets since its entry in 2004. But the company has to date opened only 74-odd pumps. Shell and Essar filed a petition with the government demanding subsidy for private retailers.
Posted: 25 Jun, 2010, 1404 hrs IST
Posted: 25 Jun, 2010, 1301 hrs IST
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Posted: 24 Jun, 2010, 1931 hrs IST
The re-entry of private retailers is expected to ease off the pressure on resources of the public sector oilmarketers and will allow them to redeploy manpower and operate infrastructure such as terminals, depots and pipelines more efficiently . '' This move will benefit the consumer in the long run through competitive pricing of fuel and an offering of better services across outlets. As the largest active private sector fuel retailer in India, we are well placed to capture additional sales for fuel and nonfuel items and expect to see significant volume growth in both areas,'' Essar Oil CEO Naresh Nayyar said.
While Essar has continued to operate its 1,342 outlets thought the control era, Reliance Industries and Shell had shut down most of their petrol pumps some years back when they could not compete against the government-capped price being offered by the public sector firms. While the Centre provided subsidy to its own companies , no such comfort was available for private firms.
In a decontrolled environment , private retailers may be able to offer cheaper rates since they do not have historical baggage of location or manpower and enjoy the advantages of new technology, more efficient operation and competitive sourcing of crude. They are able to keep their crude costs down through hedging and high-sea trading, which staterun entities are not allowed. The private refineries also have the latest technology that allows them to extract more high-value products from inferior crude varieties that come cheaper and maximise returns on refining.
The re-entry of private firms will also bring back to life their idle infrastructure, built at huge investments. This will take off pressure on state facilities, though they are sure to lose market share. But executives of state firms say even a lower market share returns on their investments will be much better if they did not have to stretch manpower , finances or infrastructure to unviable options. They may now also take a rationalise their outlets. The state-run companies will also benefit as their cash flows will improve and revitalise financial health. Though the petrol volumes, at 5-6 million tonnes a year, are half of the diesel or kerosene, profitability in the motor fuel and reduced losses in kitchen fuels will certainly shore up their financial muscle and may resurrect many expansion projects.
But it may still be early days to expect foreign companies to rush in. This is because the government has said it will suitably intervene beyond a threshold. When that point will be reached will depend more on politics than economics. And if the intervention comes without a level field of subsidies for both public and private sector it will be back to square one for private retailers.
Fuel hike impact: a life far more expensive
New Delhi: Col Bhatia, a 62-year-old retired ex-service man, is already feeling the pinch of fuel hike. A retired Army officer, he runs a tourism business and drives around 100 kms daily from Noida to Delhi and back. He recently switched to a diesel car to save money on fuel but the Rs 2 hike on diesel has left him disappointed.
"I do drive about 80-90 kms everyday for work and another 20 kms to pick up my wife from school. The hike in fuel prices will hit us very badly," said Col Bhatia.
But the concern for the Colonel and Mrs Bhatia is not merely the rise in fuel prices but also the repercussions that are likely to follow, like a rise in vegetable prices.
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G8 pledges $7.3 billion towards mother and child aid
World leaders and donor groups have pledged 7.3 billion dollars in aid by 2015 to reduce child mortality and save women in poor countries from dying in childbirth, Canadian Prime Minister Stephen Harper said Friday.
The leaders of the Group of Eight (G8) industrial economies have pledged 5 billion dollars, while non-members such as New Zealand, Norway and the Bill and Melinda Gates Foundation have pledged a further 2.3 billion dollars, Mr. Harper said.
The pledge is a "historic commitment," he said: "Women in developing countries will not suffer and die any more for reasons of pregnancy and childbirth." Aid groups have sharply criticized the bloc for not living up to past commitments, and the money pledged falls far short of the 24 billion dollars sought by international organizations and the United Nations to improve maternal and child health.
Robert Fox of Oxfam said that the pledge for the maternal health initiative was "lower than our lowest expectations." Mr. Harper admitted that budget constraints brought on by the economic crisis of the last two years had played a role in the decisions of wealthy countries. But he insisted that all the money came in new pledges, rather than shifting money from other sources.
"Despite financial difficulties, we still take seriously our obligations to developing countries," Harper said.
The G8 leaders were to sound an alarm bell over progress toward international aid and development goals, according to a Friday draft of the G8's final communique to be released Saturday.
Ten years ago, the U.N. set the Millennium Development Goals (MDGs), which were meant to eradicate extreme poverty and many diseases by 2015. But progress toward the targets has been uneven.
The economic crisis "has jeopardized advancement towards meeting some of the 2015 targets," read the draft summit statement seen by the German Press Agency dpa.
Among the goals were pledges to reduce dramatically the incidence in developing countries of child mortality and deaths of mothers from childbirth. Official figures show that neither figure has changed significantly in the last decade.
Canada, this year's G8 president, had led a push to boost aid on the issue and promised 1.1 billion dollars toward the final total.
The U.S. promised 1.35 billion dollars. Other pledges were to be announced on Saturday.
Progress on reducing maternal deaths, estimated at more than 500,000 per year, "has been unacceptably slow" and "is also too slow" on reducing child mortality, the draft communique said.
Marwin Meier of aid group World Vision said Canada's commitment as the G8 hosts had marked a disappointing start for the initiative: "That was not the starting signal on the financial side that we had hoped for." The G8 members are Britain, Canada, France, Germany, Italy, Japan, Russia and the United States, with the European Union as a permanent observer.
The leaders debated development policy with key African leaders invited to the talks Friday in the secluded resort town of Huntsville, Canada. The larger Group of 20 (G20) bloc, which includes emerging economies, will meet over the weekend in Toronto.
G8 members have not yet managed to live up to their earlier aid pledges, made as part of the MDG process in 2000 and reinforced at a 2005 G8 summit.
Ahead of the meeting, the G8 members published a comprehensive list showing how close each one was to meeting its targets and recommending how each country could improve its performance.
The draft summit statement revealed a split between participants on how to react to the list. Britain, Canada, the EU, France and the United States want the summit to promise to "follow up its recommendations." But Germany and Italy, whose aid donations are well short of their pledges, simply want to the summit to "acknowledge its findings".
But not all donors are meeting their promises
Photo: Courtesy: Kiskeya Aqua Ferme
Five nations will receive the first grants from a new and unusual fund aimed at helping developing-world farmers.
Bangladesh, Haiti, Rwanda, Sierra Leone and Togo will receive a total of $224 million from the Global Agriculture and Food Security Program, a new World Bank-administered fund set up following a pledge by leaders of the Group of 8 countries last year to commit more development aid to agriculture.
Advocates praise the new fund, but say not all of the G8 nations are living up to their pledges.
Food price crisis
When G8 leaders met in L'Aquila, Italy, last July, the 2008 food price crisis was fresh in their minds. High prices for staple foods had pushed more than 100 million people into poverty and hunger and triggered riots in several countries.
Led by the Obama administration, the G8 pledged $22 billion to boost food production in developing countries. Last September, in Pittsburgh, the G20 called for a fund to be set up at the World Bank to channel some of that pledge.
The five grants announced this week are the first to come from that fund.
'Making good on promises'
"It is...the first real and strong signal that the international community is serious," says Navtej Dhillon, senior advisor with the U.S. Treasury Department. "It's about some of the donors making good on their promises."
The donors are an unusual group. It includes G8 members the United States and Canada, but also Spain and South Korea, as well as the private foundation of software tycoon Bill Gates.
And it's not just the donors that are unusual. The funds are administered by the World Bank, and program manager Christopher Delgado says there is an unusual amount of coordination among the donors and with the recipient countries.
"It's not just an individual donor showing up one day and saying to the minister, 'Gee, what can we do for you today?" he says. "Or, worse, in some cases, 'Gee, we've got something we'd like to do and we hope you agree.'"
Delgado says countries come up with their own plans to help farmers, after consulting with civil society groups and the private sector. They put up some of their own money. Outside experts review the proposals. And the countries collect data to measure whether their programs are working.
"This is a tough economic time for a lot of people, including in the donor countries," he says, "and if we're going to be spending money, we really have to show that we're achieving results."
David Beckmann, president of the charity group Bread for the World, says, "What they are planning to do is just excellent...The broad plans are right. The donor countries are trying to be receptive to what the recipient countries want. The idea of investing in poor farmers is right on track."
Other G8 countries lagging
Beckmann praises the Obama administration for its leadership on the issue, and says Canada, the United Kingdom, and the European Union are living up to the commitments they made in L'Aquila last year.
But as G8 leaders meet again in Canada this week, critics say not all of them can make that claim.
The advocacy group Oxfam says Italy, France, and the Netherlands counted existing funds as their part of the $22 billion pledge. And although the group praises the United States for putting forward new money, the group's David Waskow says, "It appears as though there's some double-counting going on, and the U.S. is counting the same pot of funds both to its L'Aquila commitments from the G8 last year and toward its Copenhagen commitments on climate."
Others point out that even $22 billion would be far less than what is needed to meet the goal nations set for themselves to cut hunger and extreme poverty in half by 2015. But there is broad agreement that it's a step in the right direction after agriculture worldwide suffered decades of neglect.
The Emergency (India)
From Wikipedia, the free encyclopediaSee also State of Emergency in India
The Indian Emergency of 25 June 1975 – 21 March 1977 was a 21-month period, when President Fakhruddin Ali Ahmed, upon advice by Prime Minister Indira Gandhi, declared a state of emergency under Article 352 of the Constitution of India, effectively bestowing on her the power to rule by decree, suspending elections and civil liberties. It is one of the most controversial periods in the history of independent India.
 Political unrest
Opponents had long made allegations that Indira's party, Congress, had practiced electoral fraud to win the 1971 elections. The Gandhian socialist Jaya Prakash Narayan had been agitating in Bihar for a change in provincial government, and increasingly sought to direct popular action against the Central Government through satyagrahas.
Narayan and his supporters sought to unify students, peasants, and labour organisations in a 'Total Revolution' to nonviolently transform Indian society. Indira's party was defeated in Gujarat by a coalition of parties calling itself the Janata Party (People's Party), and even faced an all-party, no-confidence motion in Parliament.
 The Allahabad convictionSee also State of Uttar Pradesh v. Raj Narain
Raj Narain, who had been defeated in parliamentary election by Indira Gandhi, lodged cases of election fraud and use of state machinery for election purposes against Mrs. Indira Gandhi in the Allahabad High Court. On 12 June 1975, Justice Jagmohanlal Sinha of the Allahabad High Court found the Prime Minister guilty on the charge of misuse of government machinery for her election campaign. The court declared her election null and void and unseated her from her seat in the Lok Sabha. The court also banned her from contesting any election for an additional six years. Some serious charges such as bribing voters and election malpractices were dropped and she was held responsible for misusing the government machinery, and found guilty on charges such as using the state police to build a dais, availing the services of a government officer, Yashpal Kapoor, during the elections before he had resigned from his position, and use of electricity from the state electricity department. Because the court unseated her on comparatively frivolous charges, while she was acquitted on more serious charges, The Times described it as 'firing the Prime Minister for a traffic ticket'. However, strikes in labor and trade unions, student unions and government unions swept across the country. Protests led by J.P.Narayan, Raj Narain and Morarji Desai flooded the streets of Delhi close to the Parliament building and the Prime Minister's residence. The persistent efforts of Raj Narain, was praised worldwide as it took over four years for Justice Jagmohan Lal Sinha to finally pass judgement against Indira Gandhi. The ruling later became the primary reason for the imposition of emergency by Indira Gandhi. It also encouraged greater belief in the judiciary and democracy in India.
 Declaration of Emergency
Siddharth Sankar Ray, then the West Bengal chief minister, proposed to Mrs Gandhi the imposition of "internal emergency". He drafted a letter for the President to issue the proclamation on the basis of information Mrs Gandhi had received that "there is an imminent danger to the security of India being threatened by internal disturbances". He showed how democratic freedom could be suspended while remaining within the ambit of the Constitution.
As the constitution requires, Indira advised and President Ahmed approved the continuation of Emergency over every six-month period until her decision to hold elections in 1977. The GDP growth was least during the era.
 The Emergency Administration
Elections for the Parliament and state governments were postponed. Invoking article 352 of the Indian Constitution, Indira granted herself extraordinary powers and launched a massive crackdown on civil liberties and political opposition. The Government cited threats to national security, as a recent war with Pakistan had just been concluded. It claimed that the strikes and protests had paralyzed the government and hurt the economy of the country greatly. In face of massive political opposition, desertion and disorder across the country and the party, Indira stuck to the advice of a few close party loyalists and her younger son Sanjay Gandhi, who had become a close political advisor.
The Government used police forces across the country to arrest thousands of protestors and strike leaders. J.P. Narayan, Raj Narain, Morarji Desai, Charan Singh, Jivatram Kripalani, Atal Bihari Vajpayee, Satyendra Narayan Sinha and other protest leaders were immediately arrested. Organizations such as the Rashtriya Swayamsevak Sangh, along with some opposition political parties were banned. Numerous Communist leaders were arrested along with many others involved with the party.
Indira attempted to re-write the nation's laws with the help of the Parliament, where the Congress controlled over a two-thirds majority. She felt her powers were not amassing quickly enough, so she utilized the President to issue "extraordinary laws" that bypassed parliament altogether, allowing her to rule by decree. She constructed a 20-point economic program to increase agricultural and industrial production, improve public services and fight poverty and illiteracy. Also, she had little trouble in making amendments to the constitution that exonerated her from any culpability in her election fraud case, declaring President's Rule in Gujarat and Tamil Nadu where anti-Indira parties ruled (state legislatures were thereby dissolved and suspended indefinitely), and jailing thousands of opponents.
One of the consequences of the Emergency era was that the Supreme Court of India ordered that, although the Constitution is subject to amendment (as used by Indira), changes that are ultra vires to its basic structure cannot be made by the Parliament of India.
 Sikh opposition
With the leaders of all opposition parties and other outspoken critics of her government arrested and behind bars, the entire country was in a state of shock. Shortly after the declaration of the Emergency, the Sikh leadership convened meetings in Amritsar where they resolved to oppose the "fascist tendency of the Congress". The first mass protest in the country, known as the "Campaign to Save Democracy" was organized by the Akali Dal and launched in Amritsar, 9 July. A statement to the press recalled the historic Sikh struggle for freedom under the Mughals, then under the British, and voiced concern that what had been fought for and achieved was being lost. The police were out in force for the demonstration and arrested all those who raised the Sikh call of "Jo Bole So Nihaal, Sat Sri Akal" (Whoever speaks, shall be fulfilled, Truth is Undying), including the Shiromani Akali Dal and Shiromani Gurdwara Prabandhak Committee (SGPC) leaders.
The Prime Minister seemed genuinely surprised at the strength of the response from the Sikhs. Fearing their defiance might inspire civil disobedience in other parts of the county, she offered to negotiate a deal with the Shiromani Akal Dal that would give it joint control of the Punjab Legislative Assembly. The leader of the protests, Sant Harchand Singh Longowal refused to meet with government representatives so long as the Emergency was in effect. In a press interview, he made clear the grounds of the Save Democracy campaign."The question before us is not whether Indira Gandhi should continue to be prime minister or not. The point is whether democracy in this country is to survive or not. The democratic structure stands on three pillars, namely a strong opposition, independent judiciary and free press. Emergency has destroyed all these essentials."
While the civil disobedience campaign caught on in some parts of the country, especially at Delhi University, the government's tactics of mass arrests, censorship and intimidation curtailed the oppositions's popularity. After January, the Sikhs remained virtually alone in their active resistance to the regime. Hailed by opposition leaders as "the last bastion of democracy", they continued to come out in large numbers each month on the day of the new moon, symbolizing the dark night of Indian democracy, to court arrest.
According to Amnesty International, 140,000 people had been arrested without trial during the twenty months of Indira Gandhi's Emergency. Of them, 40,000 had come from India's two percent Sikh minority.
 The tribunal
The efforts of the Janata administration to try government officials and Congress politicians for Emergency-era abuses and crimes were largely a flop due to a disorganized, over-complex and politically-motivated process of litigation. Although special tribunals were organized and scores of senior Congress Party and government officials arrested and charged, including Indira and Sanjay Gandhi, police were unable to submit sufficient evidence for most cases, and only a few low-level officials were convicted of any abuses.
The people lost interest in the hearings owing to their continuous fumbling and complex nature, and the economic and social needs of the country grew more important to them. An impression was created that corruption and political subversion stalled the process of justice.
 The debate over its legacy
Indira's Emergency rule lasted 21 months, and its legacy remains intensely controversial.
 Support for Indira's decisions
The Emergency was endorsed by Vinoba Bhave (who called it Anushasan parva or Time for discipline) and Mother Teresa. Pioneer industrialist J. R. D. Tata and writer Khushwant Singh were among the other prominent supporters, though Tata regretted later that he spoke in favor of emergency as cited in his biography Beyond the Last Blue Mounatin by RM Lala. Some have argued that India badly needed economic recovery after the 1971 Indo-Pakistan war had strained the exchequer. Indira's 20-point economic program increased agricultural production, manufacturing activity, exports and foreign reserves. The national economy achieved high levels of growth and investment, and as strikes were non-existent, productivity increased rapidly. Communal Hindu-Muslim riots, which had re-surfaced in the 1960s and 1970s, virtually ceased, and initially the government seemed to be working with vigour. Police in cities had sweeping powers to destroy gang and syndicate structure
 Charges against the Government
Criticism and accusations of the Emergency-era may be grouped as:
- Detention of people by police without charge or notification of families
- Abuse and torture of detainees and political prisoners
- Use of public and private media institutions, like the national television network Doordarshan, for propaganda
- Forced vasectomy of thousands of men under the family planning initiative. Indira's son, Sanjay Gandhi, was blamed for this forcible treatment of people .
- Destruction of the slum and low-income housing in the Turkmen Gate and Jamaa Masjid area of old Delhi.
The Emergency years were the biggest challenge to India's commitment to democracy, which proved vulnerable to the manipulation of powerful leaders and large parliamentary majorities.
 In fiction
The plot of the Indian film Hazaaron Khwaishein Aisi revolves around the period during which the Indira Gandhi government declared a state of emergency. The film, directed by Sudhir Mishra, also tries to portray the growth of the Naxalite movement during the Emergency era.
The book Midnight's Children by Salman Rushdie has the protagonist Saleem Sinai in India during the Emergency. His home in a low income area called the "magician's ghetto" is destroyed as part of the national beautification program. He is sterilised as part of the vasectomy program. The principal antagonist of the book is the Widow (a likeness that Indira Gandhi sued Rushdie for).
- 25 June 1975: Emergency declared, censorship imposed and opposition leaders arrested.
- 5 August 1975: MISA bill approved by the parliament.
- 26 September 1975: Thirty-ninth Amendment of the Indian Constitution placing election of Prime Minister beyond the scrutiny of judiciary approved
- 9 January 1976: The government suspends seven freedoms guaranteed by Article 19 of the Constitution of India.
- 4 February 1976: Lok Sabha's life extended by one year.
- 2 November 1976: Lok Sabha passes Forty-second amendment of the Indian Constitution Bill making India socialist secular republic and laying down fundamental duties of citizens
- 18 January 1977: The President dissolves Lok Sabha
- 21 March 1977: Emergency promulgated on 25 June 1975 withdrawn.
- 22 March 1977: Janata Party gains absolute majority.
 Film adaptations
- 1988 Malayalam film Piravi is about a father searching for his son Rajan, who had been arrested by police (and allegedly killed in custody) accusing as a Naxalite during the Emergency
|This article includes a list of references or external links, but its sources remain unclear because it has insufficient inline citations. Please help to improve this article by introducing more precise citations where appropriate. (March 2009)|
- ^ "India in 1975: Democracy in Eclipse", ND Palmer - Asian Survey, vol 16 no 5. Opening lines.
- ^ Yes, Prime Minister, KULDIP NAYAR, June 25, 2000
- ^ J.S. Grewal, The Sikhs of the Punjab,(Cambridge, Cambridge University Press, 1990) 213
- ^ Gurmit Singh, A History of Sikh Struggles, New Delhi, Atlantic Publishers and Distributors, 1991, 2:39
- ^ Ram Narayan Kumar, Georg Sieberer, The Sikh Struggle: Origin, Evolution and Present Phase, Delhi, Chanakya Publishers, 1991, 250
- ^ J.S. Grewal, The Sikhs of the Punjab,(Cambridge, Cambridge University Press, 1990) 214; Inder Malhotra, Indira Gandhi: A Personal and Political Biography,(London/Toronto, Hodder and Stoughton, 1989) 178
- ^ Gwatkin, Davidson R. 'Political Will and Family Planning: The Implications of India's Emergency Experience', in: Population and Development Review, 5/1, 29-59;
- ^ Mathur, O.P. (2004). Indira Gandhi and the emergency as viewed in the Indian novel. Sarup & Sons. ISBN 978-8176254618.
- The Judgement by Kuldip Nayar
- India Country Study
- "Memories of a Father," a book by Eachara Varier, father of a student killed in police custody during the emergency
- Indira Gandhi: A Personal and Political Biography by Inder Malhotra, (London/Toronto, Hodder and Stoughton, 1989) 165-97; Northeastern Univ Pr (1991) ISBN 1555530958
- Economic policy and political insights into the Emergency
- A History of Sikh Struggles by Gurmit Singh, (New Delhi, Atlantic Publishers and Distributors, 1991) 2:36-40
- The Sikhs of the Punjab by J.S. Grewal, (Cambridge, Cambridge University Press, 1990) 213-14
- The Sikh Struggle: Origin, Evolution and Present Phase by Ram Narayan Kumar, Georg Sieberer, (Delhi, Chanakya Publishers, 1991) 250-51
- A. Z. Huq Democratic Norms, Human Rights and States of Emergency: Lessons from the Experience of Four Countries
G20: Merkel insists there are no divisions with Obama
Page last updated at 04:18 GMT, Saturday, 26 June 2010 05:18 UK
Germany's chancellor has insisted that Europe's leaders are making good progress in talks with the US about how to bolster fragile economic growth.
Angela Merkel told journalists at the G8 summit in Canada there was "mutual understanding" with President Barack Obama over deficit reduction plans.
The G8 leaders will be joined later by China and other rising economic powers for the G20 summit.
Dominating the agenda are the global economic situation and banking reform.
The twin summits, being held in and near Toronto, have come at a time when the world's largest economies are divided over whether to pursue austerity measures to cut deficits, or continue public spending to stimulate economic growth.
Mr Obama is worried that a series of deep budget cuts announced by European countries may delay global recovery.
But on Friday, after an initial meeting of the G8 - US, Canada, Germany, UK, France, Italy, Russia, Japan - Mrs Merkel said there was much common ground.
"I have made it clear that we need sustainable growth and that growth and intelligent austerity measures don't have to be contradictions," Mrs Merkel told journalists.
"The discussion was not controversial, there was a lot of mutual understanding," she said.
President Obama voiced his concerns about the speed of budget cuts in a letter to G20 leaders last week, while Treasury Secretary Timothy Geithner told the BBC that Europe should focus on growth as well as cutting spending.'Growth and confidence'
"Europe can make a choice to put in place the reforms and policies that will provide the possibility of stronger growth rates in the future," Mr Geithner said.
"This [G20] meeting gives us the chance to sit together and look at whether we've got a broad strategy across countries that's going to strengthen this recovery.
"Our job is to make sure we're all sitting there together to focus on this challenge of growth and confidence because growth and confidence are paramount."
AnalysisContinue reading the main story
The US has made quite clear its fear that European efforts to cut national deficits could actually make the current rocky economic situation much worse. In other words, let's not go back to the 1930s, when the economic orthodoxy actually turned the Wall Street crash into an horrific depression.
But it has one less thing to worry about than European leaders - a shaky currency. So as world leaders gather in Toronto there may be squabbles over fears that the EU has +-overreacted to the Greek debt crisis.
But from the European perspective the consequences of drastic cuts are less worrying than the economic fire storm that nearly engulfed the region just a month ago.Why Europe and US split on cuts
Earlier on Friday Mr Obama called for the G20 to pull together to promote economic growth, saying that world economies are "inextricably linked".
The president was speaking just hours after US lawmakers agreed the biggest reform of financial regulation since the Great Depression.
Mr Obama said that the G20 had made progress in its last two meetings in responding to "the worst financial crisis of our time".
"This weekend in Toronto I hope we can build on this progress by co-ordinating our efforts to promote economic growth, to pursue financial reform, and to strengthen the global economy," Mr Obama said.'Big risk'
UK Prime Minister David Cameron denied that he was at odds with Mr Obama over the speed with which budget cuts should be made.
But Mr Cameron told the BBC before the G8 met that those countries with the biggest deficits "have to accelerate the process of dealing with them because the big risk to our economies is actually not dealing with the deficits."
Herman van Rompuy, the president of the European Council, has said that the EU's key words this weekend would be "growth, confidence and medium term".
"The restoring of confidence in budgetary policies go hand in hand with effective growth strategies," he said ahead of the meetings.
Meanwhile, reports suggested that the Brazilian President, Luiz Inacio Lula da Silva, would miss the G20 summit to stay in Brazil after a series of floods struck the north-east of the country.
Campaigners dismiss Bhopal compensation as insufficient
Page last updated at 10:32 GMT, Friday, 25 June 2010 11:32 UK
A $280m compensation package announced by the Indian government for victims of the Bhopal gas disaster has been denounced by campaigners.
The compensation announced late on Thursday is the latest is a series of pay-offs made by the authorities to victims of the disaster.
The money will go into cleaning up the polluted factory site and improving medical treatment of surviving victims.
Some 3,500 people died within days and more than 15,000 in the years since.
The move follows public outrage after seven former managers at the plant were given two-year jail sentences.
The convictions are the first since the disaster at the Union Carbide plant - considered to be the world's worst industrial accident.
AnalysisContinue reading the main story
Campaigners say that the $280m compensation package is based on outdated numbers of the dead and the maimed. They say that 525,000 people have died or been disabled by the toxic gas during the leak and its aftermath.
Campaigners also want the government to treat the bulk of victims as "permanently injured", instead of "temporarily injured", since they have to visit hospitals regularly for treatment. They also want them to receive more compensation.
It has taken more than two decades for the government to announce this package, but clearly it will not mark the closure of the tragedy in any way.
The government says Thursday's announcement will double the payout to families of the dead to $22,000, and increase payments for those with health defects.
It paid "interim compensation" of 3.6bn rupees ($78m) to victims in 1990.
And 20 years ago Union Carbide paid $470m (£282m) in compensation to the Indian government.
Amid rising public and media pressure the government appointed a group of senior ministers to look again at issues such as increased compensation for those affected, and what to do about continued pollution at the now abandoned plant.
Campaigners and groups working for the gas victims are meeting in the capital, Delhi, on Friday to protest against what they call the failure of the government to give "enhanced compensation" for the victims.'Severely affected'
"We are not satisfied with the compensation, we are not satisfied with the rehabilitation [plan for victims] and we are not satisfied about the approach to corporate liability [in the new compensation package]," Rachna Dhingra told the BBC.
BHOPAL'S DEATH TOLLContinue reading the main story
- Initial deaths (3-6 December): more than 3,000 - official toll
- Unofficial initial toll: 7,000-8,000
- Total deaths to date: over 15,000
- Number affected: Nearly 600,000
- Compensation: Union Carbide pays $470m in 1989
Source: Indian Supreme Court, Madhya Pradesh government, Indian Council of Medical ResearchBhopal voices: 'Justice denied' 'Travesty': Indian papers react
Information Minister Minister Ambika Soni said the government would also gather new evidence against Warren Anderson [the then chairman of the US-based Union Carbide parent group] and "thereafter press the request for [his] extradition".
Mr Anderson is retired and lives in the US.
"More than 45,000 victims who were affected most severely by the tragedy will receive additional ex gratia payments," Ms Soni was quoted as saying by the AFP news agency.
The funds will be also used to upgrade local medical facilities and set up a research centre in Bhopal.
They will be used to clean up the polluted factory site which will be dismantled by 2012, Ms Soni said.
Dow Chemicals, which bought the company in 1999, says this settlement resolved all existing and future claims against the company.
But campaigners like Satinath Sarangi, who heads a group of survivors, said that the government must take "strong action" against Dow Chemicals.
"The government has failed to understand the scale of damage," Mr Sarangi said ahead of Thursday's announcement.
"There is no mention of the second and third generation victims and the constant medical complications being caused by the contamination," he added.
Correspondents say the fact that the Bhopal tragedy is back in the news at the same time as the huge oil spill in the Gulf of Mexico has added to the sense that victims of the 1984 disaster have been terribly let down.
An extradition treaty does exist between India and the United States - but so far all requests by India for Warren Anderson's extradition have been turned down by the American government.
08 June 10South Asia
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Protests challenge Ecuador indigenous summit
Page last updated at 00:29 GMT, Saturday, 26 June 2010 01:29 UK
Left-wing Latin American leaders have signed a declaration to promote indigenous rights.
The presidents of Ecuador, Venezuela and Bolivia signed the document at a summit in Ecuador.
Cuba, Nicaragua and Dominica were also represented.
Outside the venue, Ecuador's main indigenous organisation protested, saying it had not been consulted.
The "Declaration of Otavalo" is the latest initiative of the Bolivarian Alliance for the Americas (Alba), a left-wing grouping founded by President Hugo Chavez of Venezuela.
It promises to build societies that respect the rights of Latin America's indigenous people, as well as those of African descent.
It also pledges to protect the "Mother Earth" with development that respects the environment.
"We have to get rid of capitalism and protect the earth, protect nature" said Bolivian president Evo Morales, who is an indigenous Aymara.Indigenous unity?
President Rafael Correa of Ecuador said the main challenge was to pull indigenous people out of centuries of poverty and exploitation.
But outside the venue, representatives of Ecuador's main indigenous confederation, Conaie, staged an angry protest, saying their views were not being represented.
Indigenous leaders tried to get into the summit to hand a written statement to Mr Morales, but were held back by police.
Conaie - the Confederation of Indigenous Nationalities of Ecuador - was one of Rafael Correa's main allies when he won the presidency in 2006, and again in elections last year.
Together with other indigenous organisations, it represents around 40% of Ecuador's population.
But they have since fallen out over mining and oil development, as well as water rights.
Conaie has accused Mr Correa of betraying them by approving a mining law that could see foreign companies open huge new mines on their ancestral territories.
They also want him to give indigenous communities in the Andes mountains and Amazon rainforest more powers to manage their own affairs, something Evo Morales has done in Bolivia with the creation of a "plurinational state".
President Correa has accused Conaie of "separatism" and playing into the hands of the political right and says it has been manipulated by foreign non-governmental organisations.
The summit ended with calls for indigenous unity from all three presidents.
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