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Today's Hot Stories - January 31, 2013

10 Headlines for Today

(1) Need to revisit Cinematograph Act, I&B minister says
(2) EC raps Sidhu for poll code violation during Gujarat polls
(3) China to construct three more dams on Brahmaputra
(4) Burger King in talks to revive India plans
(5) Barclays upgrades ICICI Bank, SBI downgraded
(6) US economy unexpectedly contracts in fourth quarter
(7) Rooney at double as United sink Saints
(8) Real, Barca leveled in Clasico cup clash
(9) Aussies name 17-man squad to tour India
(10) Taking stairs as good as a trip to the gym

5 Stories for Today

(1) Anna launches 'Jantantra Morcha', aims to change system
(2) International court asks UK to explain 1965 acquisition of Diego Garcia
(3) Lenders cautious in cutting interest rates
(4) Toyota to recall 1.1 million cars globally for defects
(5) I have drawn red lines for Budget: Chidambaram

(1) Anna launches 'Jantantra Morcha', aims to change system

Anna Hazare on Wednesday launched a new outfit " Jantantra Morcha" at a rally in Patna.

"Now a change in the system is our aim. The change can be brought about by passing the Jan lokpal Bill and decentralizing power to gram sabhas and ward sabhas," he told a public meeting.

The social activist said the new outfit would not join electoral politics and the occasion marked the beginning of the "second freedom struggle". He said now he plans to tour the entire country to awaken people. "I wish to awaken only six crore of the country's 120 crore people. If six crore people are with me, government "ki naak dabaunga, munh khulegi" (government will be forced to talk)," he said. He said the government would be forced to give Jan lokpal to the country.

In his 45-minute speech, Anna did not refer to Arvind Kejriwal at all. Alleging the Congress-led government did not intend to bring the Jan lokpal because 15 of its ministers would be behind bars and that 163 of the MPs were tainted, he said after the demand of Jan lokpal was fulfilled they would force Parliament to empower people with the "right to reject" and "right to recall" their candidates if they were unworthy.

"None of the rejected candidates should be allowed to contest election," he said and added that parties would be forced to give tickets to clean candidates.

Hazare said he chose Bihar as the venue for his first 'Jantantra Rally' because the "pious land" was the "tapobhoomi" of JP and Mahatma Gandhi. "We have to realize the dreams of JP that have remained unfulfilled," said Anna in a bid to strike a chord with the crowd responding with an applause every time he used adjectives like "goonda", "lootera" and "ghotalebaaz" for the people in power.

Former army chief Gen VK Singh and former IPS officer Kiran Bedi were present at the rally as well.

(2) International court asks UK to explain 1965 acquisition of Diego Garcia

In a blow to the British government, the International Court of Justice in The Hague has asked Britain to explain its decision to acquire the Chagos Islands in the Indian Ocean from Mauritius in 1965 and sub-lease its biggest island Diego Garcia to the United States, much to India's discomfort, especially during the 1971 Indo-Pak war when Washington tilted in favour of Islamabad.

The ICJ rejected the UK's challenge to the court's jurisdiction and would now be compelled to disclose its rationale for its secretive move to buy the Chagos Islands from Mauritius, of which Diego Garcia was turned into a military base by the United States. The hearing will be on the basis of the UN law of the sea; and the final verdict will be binding on Britain.

Legal experts say fundamental questions like who has sovereignty over the Chagos Islands will arise in the arguments. The Mauritian government officials told the UK's Guardian newspaper that Britain's disputed claim will unravel and the territory will return to Mauritius.

Classified British government files made public last year revealed the British government apparently hoodwinked its parliament and public to provide a strategic location for a US military base in Diego Garcia.

In a memorandum marked 'Secret and Guard' and dated September 1966, a British official noted the object of acquiring and controlling the island was to build "defence facilities... without hindrance and political agitation".

Then PM Edward Heath told aides, "Any discussion between the United States and ourselves must remain confidential." US military presence in the Indian Ocean caused considerable concern to India during the Cold War; and for many years New Delhi opposed American armed forces at Diego Garcia.

After purchasing the Chagos archipelago, of which Diego Garcia is a part, Britain forcibly evicted around 1,500 islanders - deporting them to Mauritius and Seychelles - to pave the way for the US base.

The deportation of Chagos islanders is a matter of alleged human rights violation and legal battles in British courts. A defeat for Britain at the ICJ could result in a return of the islanders to their original habitat.

Diego Garcia is used by long range bombers belonging to the US Air Force and a staging post for missions in Iraq and Afghanistan. It is widely believed that in the event the US embarks on a campaign to eliminate Iran's nuclear plants, Diego Garcia will certainly be utilized.

(3) Lenders cautious in cutting interest rates

Lenders made some guarded cuts in interest rates a day after bank chiefs promised Reserve Bank of India governor D Subbarao that they will pass on the benefits of reduction in policy rates to borrowers. While HDFC Bank and Federal Bank have brought down auto loan rates, State Bank of India on Wednesday cut its Base Rate by 5 basis points. Union Bank of India announced that it has extended till March 2013 its festival offer of waiving processing fees on auto and home loans.

HDFC Bank on Wednesday brought down interest rates on auto loans from 10.75% to 10.5% and on commercial vehicles from 11.25% to 11%. Kerala-based Federal Bank also announced a sharp reduction in its auto loans from 11.7% earlier to 10.45%. State Bank of India's slicing off 5 basis points from its Base Rate will have a tiny impact on most individual borrowers. However, with this reduction, SBI's Base Rate is now on a par with HDFC Bank, which has been vying with SBI for the number one position in market capitalization and is the most valuable private bank.

"We have a Rs 10 lakh crore balance sheet and we wanted to pass on the benefit uniformly across all borrowers — old and new — so that there is no heartburn," said SBI chairman Pratip Chaudhuri. "After this rate cut, interest rate for borrowers with loans up to Rs 30 lakh will be 9.95%, back in single digits after a very long time." According to Chaudhuri, rates are unlikely to fall further. "Some banks are raising deposit rates."

Chaudhuri had said on Monday said that the bank would pass on the benefit of the reduction in cash reserve ratio and the repo rate to its borrowers. Chaudhuri had said that the benefit was to the extent of Rs 300 crore and the bank had that much headroom to bring down borrowing costs.

SBI has gross advances of Rs 9,56,000 crore and a reduction in Base Rate will bring down the return on a large chunk of these loans.

Besides, the difficulty in bringing down lending rates without a corresponding reduction in deposit rates, the asset-liability committee also took into account that the bank would have to set aside a large chunk of its earnings for provisions towards restructured loans, bad loans and for a likely increase in salaries. All these pressures would put pressure on the bank's net interest margins.

On Tuesday, following the RBI announcement of a 25 basis point reduction in both the repo rate and the cash reserve ratio, two lenders — IDBI Bank and Royal Bank of Scotland — brought down their Base Rates. While IDBI Bank cut its base rate by 25 basis points to 10.25%, RBS brought lowered its benchmark rate to 9% from 9.75%.

Other lenders such as Central Bank of India will take a call on interest rates on Thursday when the bank's asset-liability management committee meets to review lending rates.

(4) Toyota to recall 1.1 million cars globally for defects

Toyota Motor Corp will recall 1.1 million cars globally for defects, including 752,000 Corolla and Corolla Matrix vehicles in the United States to fix airbags that could be deployed inadvertently, the automaker said on Wednesday.

The airbag problems have caused minor injuries such as abrasions in 18 cases that have been reported, Toyota spokesman Naoto Fuse said. Two accidents have been reported by customers outside Japan, although Toyota has not been able to confirm them, he said.

An IC chip in the airbag control unit can malfunction when it receives electrical interference from other parts in the car, causing the airbags to deploy when it is not necessary, Fuse said.

Toyota will add an electrical signal filter to the airbag control module to the recalled vehicles -- repairs expected to take an hour to hour-and-a-half, he said.

The spokesman declined to disclose the costs involved.

Separately, Toyota will also recall 385,000 Lexus IS and its series, including 270,000 Lexus IS vehicles in the United States over wiper problems, Fuse said.

The wiper arm nut of the front wiper in these vehicles may not be tight enough and the wiper may not work under certain weather occasions, including in snow.

Toyota will exchange the nut in repairs that will take about 30 minutes, Fuse said.

(5) I have drawn red lines for Budget: Chidambaram

Red lines have been drawn for next month's Union Budget, finance minister P Chidambaram has said ruling out abandoning of all subsidises while non-merit ones could be eliminated over a period of time.

"I have drawn the red lines. The red lines are that the fiscal deficit for the current year will be no more than 5.3 per cent (of the GDP) and the fiscal deficit for the next year will be no more than 4.8 per cent.

"That's a red line and I will not breach that red line," he said in an interview to British daily 'Financial Times'.

He said government has taken measures to augment revenues, especially through tightening tax administration. It has promised the people that next year higher growth rate between 6 and 7 per cent will be aimed at.

"So I think all that we have said and all that we have done points to a responsible Budget. The Budget can be nothing except a responsible Budget," he said.

Asked whether the government would be strong enough to cut fuel subsidies, he said he would not make any "declarations from the pulpit".

The government has already corrected diesel prices and allowed oil companies to make small corrections periodically over a period of time.

Maintaining that the government has to still correct about Rs 10 a litre in diesel, the Minister said a beginning has been made this month and the government should be judged by the steps it took.

"And in a country where there are a large number of poor people, the correction can be gradual and in small steps at a time. That's the politically wise course to take," he said.

In reply to a question whether the direction of travel is clear, he said replied, "absolutely".

Asked whether the government would like to abandon fuel subsidies as a long term goal, he said not all subsidies can be abandoned.

Citing the example of kerosene, Chidambaram said if the subsidy on it is corrected completely, it would make the fuel unaffordable to the rural poor and they would demand wood for cooking purpose that could lead to destruction of forest.

"One has to balance these things and take a prudent decision. Some subsidies in India are indeed merit subsidies. What might appear to be non-merit subsidies from the vantage point of London and Frankfurt, some of them are indeed merit subsidies in India.

"So my approach, our approach is merit subsidies - we have to maintain a certain level of merit subsidies but non merit subsidies we should eliminate over a period of time," he said.

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