5 Stories for Today (1) India unable to accept any legally binding cut in greenhouse gas emissions: Ramesh
(2) Honduran crisis talks break down
(3) BSNL's profit erosion rings alarm bells
(4) 'Question marks' over Opel bids
(5) Silver lining: FII inflow crosses $6 bn
(1) India unable to accept any legally binding cut in greenhouse gas emissions: Ramesh
Environment minister Jairam Ramesh asserted that India would never take legally binding commitments to cut down on emissions at the conference on climate change he addressed along with the visiting secretary of state Hillary Clinton to mark the opening of ITC's Green Centre building in Gurgaon.
"India's position is clear and categorical that we are simply not in a position to take any legally binding emissions reductions," Ramesh said. His remarks came against the backdrop of growing pressure on India and China from the US-led bloc of developed countries to take quantifiable targets to reduce greenhouse gas emissions. Prime Minister Manmohan Singh alluded to the growing US-led insistence that India relent on its stand not to accept targets.
Ramesh drew the red lines clearly. "There is simply no case for the pressure that we, who have been among the lowest emitters per capita, face to actually reduce emissions. And as if this pressure was not enough, we also face the threat of carbon tariffs on our exports to countries such as yours."
Clinton defused what could have been an airing of differences between US and India when she said the US would do nothing to limit India's economic growth. "The US does not and will not do anything that will limit India's economic progress. We believe that economic progress in India is in everyone's interest and not just in the interest of Indians," Clinton said.
But despite her efforts to sound accommodative of India's development concerns, Ramesh's speech made it clear that climate change was emerging as a hot button issue on the bilateral agenda in the run-up to the UN-sponsored Copenhagen summit on the global challenge scheduled for December.
In fact, Clinton, while acknowledging US's responsibility as the biggest historic emitter of greenhouse gases, also spoke of across-the-board responsibility for tackling climate change. "To lift people out of poverty and to give every child born in India a chance to live up to his or her given potential is a goal that we share with you. But we also believe that there is a way to eradicate poverty and develop sustainability that will lower significantly the carbon footprint of the energy that is produced and consumed to fuel that growth," she said.
"The US and India can devise a plan that will dramatically change the way we produce, consume and conserve energy," Clinton stressed.
Ramesh tried to counter the view that India was fighting shy of taking measures to arrest climate change. After the conference, he said, "It is not true to say that India is running away from mitigation (efforts). India has been saying that its primary focus will be adaptation but there are specific areas where we are already in a policy framework that envisages mitigation which means actual reduction of emission."
No breakthroughs are expected during Clinton's official engagements beginning today, this essentially being a trip where she is trying to do a couple of things - to set out an agenda for future US-India ties, cutting across areas as diverse as non-proliferation and education, agriculture and civil nuclear energy, climate change and microfinance.
Today, Clinton is scheduled to meet the PM for lunch and thereafter meet foreign minister S M Krishna, Leader of Opposition L K Advani and Sonia Gandhi.
On the list of announcements today, an end-user monitoring agreement (EUMA) is tottering after US and Indian officials failed to come to an agreement on two words, "legitimate self-defense and security". Officials expect a political push to cover the last mile, and there is expectation that will happen during the PM's meeting on Monday.
There will be a science and technology fund announcement, which is a holdover from the Bush visit of March 2006, a technology safeguards agreement on civilian space launches and an overarching strategic dialogue between Clinton and Krishna, which will also include a non-proliferation and security dialogue with US undersecretary Ellen Tauscher. India is expected to announce two nuclear sites for US companies in Andhra Pradesh and Gujarat, while in Vienna, India and US officials get ready for talks on a reprocessing agreement.
Ultimately, Clinton's visit is a charm offensive, which seeks to recapture the magic of Bill Clinton's visit in 2000 and to say that the Obama guys are not as uninterested in India as they are made out to be, given their overriding interest in Pakistan and China, two countries India is not overly enamoured with. In fact, US special envoy on Af-Pak Richard Holbrooke will be here next week to consult with India on the latest in the Af-Pak strategy.
Clinton arrived in Delhi from Mumbai on Sunday afternoon and was received at the airport by India's ambassador to the US Meera Shankar and Gayatri Kumar, joint secretary in charge of the US in the MEA.
Speaking at the climate change conference in Gurgaon, Ramesh said the two sides had agreed on the "need of partnerships, concrete partnerships, on projects in various fields like energy efficiency, solar energy, biomass, energy-efficient buildings of the type that you are seeing here today".
Proposing an Indo-US Foundation for Climate Change Technology with initial kick-start contributions from both governments, Ramesh said this would catalyse private investment into the corpus as well. "The focus of this foundation should be on transformative, discontinuity technologies that will enable leap-frogging."
But Copenhagen will be a sore point between the two countries. "Both of us reiterated our commitment to arriving at an agreement at Copenhagen that takes note of the imperative of doing something quickly but also takes note of the special concerns of countries like India for continuing with their path of economic growth with the objective of poverty eradication," Ramesh said. "I think this has been a good beginning," he added.
(2) Honduran crisis talks break down
Honduras's interim government has rejected a proposal to solve the country's political crisis, in effect ending talks with the ousted president.
The delegation's head said Costa Rica's proposal, which would see Manuel Zelaya return as leader of a unity government, was "absolutely unacceptable".
Mr Zelaya's representatives said they would no longer negotiate with the interim leaders' current delegation.
Mediators have asked both sides to resume talks in three days. "It was not possible to reach a satisfactory agreement," said President Oscar Arias of Costa Rica, who is leading mediations and has presented both parties with a seven-point proposal. "The Zelaya delegation fully accepted my proposal, but not that of Don Roberto Micheletti."
Mr Arias has warned of possible civil war if the talks fail and urged both sides to continue. "My conscience tells me that I cannot give up and must continue working for at least three more days and that is what I propose to do," he said.
Mr Zelaya, who is currently in Nicaragua, said one "must never close the door on actions of good faith" but that he doubted the mediators could achieve much. "I do not think that efforts with coup-mongers, just as with terrorists and kidnappers, will work," he said. "Their take on power is based on terror and force instead of peace and reason." He later said his supporters were "organising internal resistance" in preparation for this return to the country, which he indicated could happen at the weekend. Mr Zelaya called on the international community to act in his support and to "back us in restoring democratic order".
I'm very sorry, but the proposals that you have presented are unacceptable to the constitutional government of Honduras," said Carlos Lopez, the head of the interim government, led by Roberto Micheletti. He said Mr Micheletti's side objected in particular to the first point of Mr Arias's plan, which proposes "the legitimate restitution" of Mr Zelaya as the head of a reconciliation government until early elections are held in October.
Mr Arias also proposed an amnesty for political crimes committed before and after the 28 June coup.
Mr Zelaya's representatives had previously said they accepted the proposal for reinstating the deposed leader and were "willing to discuss all the other points". But following Sunday's statement from the interim government, the delegation said the talks were effectively over, although it had not ruled out future talks with the coup leaders. "This dialogue with this commission of the de facto, military coup government is finished," said Rixi Moncada, one of Mr Zelaya's representatives.
Mr Zelaya was forced into exile on 28 June. The interim government has said he will be arrested if he comes back which prevented an earlier attempted homecoming on July 5.
On Sunday, Mr Zelaya said it was his right as a Honduran to return to the country and "absolutely no-one would stop him”. He later suggested he would return at the weekend, saying by then his supporters would have "all the necessary activities" in place, "as laid out in the law and the constitution and international mandates".
It would not be hard for Mr Zelaya to cross the long and mountainous border between Nicaragua and Honduras, but there is great concern that it will lead to bloodshed if he does.
Mr Arias said he was concerned that a "good part" of the Honduran population own firearms. "What happens if one of those arms shoots a soldier or if a soldier shoots an armed civilian? "There could be a civil war and bloodshed that the Honduran people do not deserve," he said.
Mr Zelaya said he would not agree to anything that gave concessions to the people who ousted him from office.
Arturo Corrales, representing Mr Micheletti, had accused Mr Zelaya of bad faith. He said Mr Zelaya's insistence on forming a unity government went against the spirit of the talks and showed "a wish in Honduras to keep violating our constitution and our laws".
The negotiations in Costa Rica have benefitted the interim government by buying it time, and also because it has been treated with an equal status to the elected leaders.
Mr Micheletti heads a military-backed government, which ousted Mr Zelaya amid a dispute with Congress and the courts. Mr Zelaya had planned to hold a non-binding public consultation to ask people whether they supported moves to change the constitution. His critics said the move was unconstitutional and aimed to remove the current one-term limit on serving as president and pave the way for his possible re-election.
(3) BSNL's profit erosion rings alarm bells
Government-owned telecom giant Bharat Sanchar Nigam Ltd (BSNL) appears in need of surgical intervention, with warning signals emerging that a critical 97% erosion in net profit within two years could soon plunge it into the red.
Confirming government anxiety over the issue, telecom minister A Raja said, "I am meeting key officials on Monday to review the overall situation." He chose not to divulge specific details of the proposed review.
BSNL is a top ranking government employer after the Army and Railways. Clearly, ensuring its health is critical to economic growth as it contributes between Rs 24,000 to Rs 30,000 crore every year to the government by way of taxes and levies.
BSNL's profit after tax (PAT or net profit) fell sharply to hit Rs 104 crore at the end of 2008-09 from Rs 3,009 crore in 2007-08, a 96.7% fall. Since 2006, while its mobile subscribers grew by 70%, mobile revenues showed a dismal 11% growth.
Fixed line revenues were far worse. In the last five years, BSNL's revenues halved from Rs 22,814 crore in 2004-05 to Rs 11,505 crore in 2008-09. BSNL officials say this is a worrying trend that could soon plunge the telecom major into negative territory. "Lifetime schemes, millions of sleeping customers, sharp increase in operating expenses and the massive impact of the Sixth Pay Commission are all to blame for BSNL's financials," a senior BSNL official said.
"Its inability to shine in a top-performing sector which has shown itself to be recession-proof is all the more alarming," admitted the official. However, BSNL CMD, Kuldeep Goyal remains optimistic. "We plan to add 100 million subscribers and double turnover in the next three to five years. This through a management restructuring exercise, expansion of mobile and broadband networks and focus on sales, marketing, IT and customer care for customer acquisition," he said.
BSNL has been struggling to expand its network amid multiple controversies, litigations and delays surrounding its mobile equipment tenders. Further, till recently BSNL has carried a disproportionate burden of connecting rural India.
Senior officials at BSNL offer a three-pronged strategy as the only way to save the company from crumbling. First, BSNL needs to push for an IPO as it requires cash to compete with powerful private competitors. However, this may not be easy as the government is yet to outline its disinvestment policy and BSNL's powerful unions are fiercely opposed to this move.
Second, BSNL needs agility with its tendering process to allow its mobile network to keep pace with India's 10 million a month new mobile customer acquisitions.
BSNL needs a major revamp in branding, marketing and distribution network including reorientation and training of its workforce. And, unless government allows it a free hand to raise funds either through an IPO or strategic sale, reduce disproportionate burden for rural connectivity and revamp the leadership team to equip it to engage with the unions and take on competition, BSNL's decline will be swift and irreversible, says a senior telecom consultant familiar with the company's working over the last decade. The high-level meeting planned for today may prove to be a small but significant step in this direction.
(4) 'Question marks' over Opel bids
There are still lots of question marks surrounding the three bids for a majority stake in Opel, Germany's economy minister has said.
Karl-Theodor zu Guttenberg said that the bidders needed to take on more risk if any deal was to be agreed.
The German government is closely involved in talks between Opel's owner General Motors and the bidders, having pledged considerable financial support.
If a deal is not agreed, he said, Opel could ultimately face bankruptcy.
"There are still lots of question marks. For example, the bidders have to ensure that the new Opel company can start with a strong capital base. Otherwise, the EU Commission will not accept the rescue," Mr zu Guttuenberg said.
"If everything fails, what we do not want to happen - Opel's bankruptcy - cannot be ruled out ultimately," he added.
In May, the German government backed a bid from Canadian car parts maker Magna to take a stake in the troubled carmaker.
However, relations between Opel's owner, General Motors (GM), and Magna have soured in recent weeks, leaving the door open for two further bidders - Belgian private equity firm RHJ International and Chinese firm Beijing Automotive Industries.
Just last week, RHJ said it was in "advanced" negotiations with GM.
Magna wants control of some GM intellectual property rights, as well as distribution rights in Russia, something which the US carmaker is not willing to hand over.
Now it appears there are doubts in Germany about all three bids.
GM has just emerged from bankruptcy protection after losing billions of dollars following a massive slump in sales due to the global economic downturn.
As part of its cost-cutting measures, the carmaker is selling GM Europe, which employs a total of 54,500 workers across Europe, with 25,000 based in Germany.
Under the Vauxhall brand, the firm employs 5,500 UK workers and has plants in Luton and Ellesmere Port.
There have been worries that UK workers will suffer sharp job losses as financial support for Opel from the German government safeguards German jobs.
(5) Silver lining: FII inflow crosses $6 bn
p>In a sign of confidence in the Indian markets, Foreign Institutional Investors pumped in over $6 billion, or about Rs 29,940 crore this year, with over $1 billion coming in July alone. An analysis of FIIs activity shows that overseas investors are the net purchasers of Indian stocks worth $6.18 billion (Rs 29,940.30 crore) from January to July this year.
According to the data with the Securities and Exchange Board of India, FIIs were the gross buyer of shares worth Rs 2,98,675.70 crore while they sold equities valued at Rs 2,68,735.30 crore, resulting in a net inflow of Rs 29,940.30 crore ($6.18 billion).
In July, FIIs made a net investment of Rs 5,637 ($1.16 million) in the domestic equity markets, showing their confidence in an emerging market like India.
Significantly, during the same period, the Bombay Stock Exchange's barometer sensex has lost nearly 2%.
However, it seems that the overseas investors are still skeptic about debt market as they have not turned into net investor in this segment this year. Till now, FIIs are the net seller of debts worth Rs 973.60 crore ($151 million), even as the overseas investors infused Rs 4,485.10 crore ($932 million) so far in July, the Sebi data said.