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Today's Hot Stories - April 22, 2010

10 Headlines for Today

(1) India to arm Russia-built jets with BrahMos missiles
(2) Tax officials claim 'evidence' against Kolkata Knight Riders
(3) Europe's skies reopen, airlines press for compensation
(4) Now, HUL files contempt plea against P&G
(5) Sensex down 60 points in early trade
(6) Adani, Videocon refute charges of ‘sweat equity'
(7) IPL semifinal: Mumbai Indians beat Bangalore by 35 runs to enter IPL final
(8) Lalit Modi, BCCI ready for ugly divorce
(9) Bayern edges Lyon 1-0 in semis
(10) Abu Dhabi fund's new chief needs to find balance

5 Stories for Today

(1) Cooperation with India is part of plea agreement: Headley’s lawyer
(2) G-20 ministers recommend job creation to overcome crisis
(3) Power ministry opposes duty on Chinese imports
(4) GM repays full bailout money
(5) Investors need not worry over ULIP issue, says Khurshid

(1) Cooperation with India is part of plea agreement: Headley’s lawyer

The United States and Indian authorities are holding discussions on providing New Delhi access to Lashkar-e-Taiba operative David Coleman Headley who has confessed to his role in the Mumbai terror attacks and agreed to be interrogated by foreign agencies.

“Those discussions (of providing Indian investigators access to Headley) are going on between our government and the Indian government at this time. It is part of the plea agreement that Headley would cooperate with Indian authorities,” Headley’s lawyer John Theis said.

Mr. Theis said he is not part of the discussions going on between the U.S. and Indian governments but expects to be present when Headley is quizzed.

“I would expect to be present anytime that my client is interviewed by law enforcement officials, be it from India, U.S. or any other country,” he said.

Mr. Theis refused to give any more details.

The US has said it is working “at the highest level” to provide India access to Headley, who had scouted targets for the 26/11 Mumbai attacks during his several trips to India.

U.S. President Barack Obama had assured Prime Minister Manmohan Singh during latter’s recent visit to U.S. that India would get access to Headley. Dr. Singh had raised the issue with Mr. Obama when the two leaders met in Washington last week on the sidelines of the Nuclear Security Summit.

(2) G-20 ministers recommend job creation to overcome crisis

The Labour and Employment Ministers of the G-20 countries have stressed that better anticipation and matching of skills to jobs can help the workforce benefit from the post-crisis restructuring and new opportunities.They also stressed that education, life-long learning, job training and skills development should be prioritised and linked to growth strategies.

Looking at ways to help G-20 leaders put employment at the centre of international economic policy coordination, the two-day meeting of Labour and Employment Ministers from these countries called on to accelerate job creation to ensure sustained recovery and future growth and take measures to strengthen social protection systems.

The Ministers presented a set of five recommendations, on which they arrived at the end of the two-day meet, to U.S. President Barack Obama at the White House on yesterday afternoon.

The meeting was held at Mr. Obama’s initiative.

Union Labour and Employment Minister Mallikarjun Kharge attended the meet chaired by Hilda. L. Solis.

“We looked at ways to strengthen our social safety nets and employment services to help those still out of work and others who would have to adjust to changes in our economies,” Ms. Solis said.

“We discussed ways to improve labour and social policies to make sure that workers share in productivity growth in the form of rising living standards and that worker’ rights were fully respected in the workplace,” she said.

Noting that the G20 ministers have recommended to accelerate job creation to ensure a sustained recovery and future growth, Ms. Solis said: “As some countries begin to experience economic recovery, we recommend that continued attention be paid to job creation and job preservation, including vigorous implementation of existing policies and consideration of additional employment measures.”

In countries with extensive underemployment, informal sectors or high rates of poverty, G20 recommended targeted efforts to generate employment for poor households and vulnerable groups, utilising lessons learned from recent policy innovations.

Calling to strengthen social protection systems and promote inclusive active labour market policies, Ms. Solis said: “We recommend where needed social protection systems and active labour market policies be strengthened, because significant numbers of people, including the most disadvantaged, will remain unemployed even after recovery takes hold. Others will need help to adjust to changes in our changing economy.”

The G-20 meetings also recommend that all countries establish adequate social protection systems, so that households have sufficient security to take advantage of these economic opportunities, she said.

Noting that employment and poverty alleviation be placed at the centre of national and global economic strategies, Ms. Solis said the ministers recommend that the G-20 leaders prioritise employment and poverty alleviation, as they lay the foundation for a strong, sustained and balanced growth that is beneficial to all.

Asking to improve the quality of jobs for people, the Ministers recommend renewed attention to labour—market policies and institutions to improve the quality of jobs and respect for fundamental rights to work.

Better anticipation and matching of skills to jobs can help the workforce benefit from post-crisis restructuring and new opportunities, she said.

“At the end of the day, recovering from the crisis, restoring sustained and balanced growth that creates enough good jobs for our people is something that we cannot do alone in our own countries. It is an integrated global economy. We have to work together,” Ms. Solis said.

(3) Power ministry opposes duty on Chinese imports

The power ministry has opposed a move for immediate imposition of import barriers, including slapping of upto 14% safeguards duty, on power generation equipment from China to protect domestic manufacturers such as state-run Bhel. Instead, the ministry favours introduction of such measures from April 2012, or the beginning of the 12th Plan, to avoid tripping ongoing projects and raise cost of electricity.

In a letter to cabinet secretary K M Chandrashekhar, power secretary H S Brahma has said the Planning Commission report recommending such measures has wrongly projected agreement of his ministry. Expressing ‘‘serious reservations’’ on the report by Plan panel member Arun Maira, Brahma says the duty barrier should not be imposed before April 2012.

Indian power producers have sourced equipment from China worth Rs 250,000 crore, largely because of the inability of local manufacturers to meet demand. Chinese equipment is cheaper due to state incentives and undervalued currency. Assocham recently said in the last one year, the domestic manufactures have lost supply opportunities aggregating 50,000 mw.

The 2008-09 Economic Survey too had raised concerns over zero-duty import of power generation equipment. In contrast, locally manufactured equipment, even after getting ‘deemed export’ status, attract duties and taxes of nearly 6% whereas Chinese manufacturers get plenty of government incentives.

In case the Maira report is implemented immediately, the ultra-mega power projects and other big plants under construction will see their costs escalating, which will also push up cost of power. It will also effect equipment made by firms such as Shanghai Electric Group, Dongfang Electric and Harbin Power Equipment.

(4) GM repays full bailout money

Distressed automaker General Motors Co repaid its government loans way ahead of schedule and is now on a strong path to viability, the Treasury Department said on Wednesday.

The Treasury confirmed that GM had repaid in full the $4.7 billion balance it owed under the government’s Trouble Asset Relief Program, five years before the loan maturity date and ahead of an accelerated repayment schedule set last year. “We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability,” Treasury secretary Timothy Geithner said.

The company has now repaid a total $6.7 billion in debt owed to the treasury after a bailout last year. GM emerged from bankruptcy in July 2009.

“This continued progress is a positive sign for our auto investment — not only more funds recovered for the taxpayer but also countless jobs saved and the successful stabilization of a vital industry for out country,” Geithner said. After the repayment, the remaining Treasury stake in GM consists of $2.1 billion in preferred stock and 60.8% of the common equity, the department said. Total repayments the government’s finance rescue program, known as TARP, stand at $186 billion — well ahead of last fall’s repayment projections for 2010.

With this repayment, less than $200 billion in TARP disbursements remain outstanding, the department said.

(5) Investors need not worry over ULIP issue, says Khurshid

Corporate Affairs Minister Salman Khurshid on Wednesday downplayed fears that investors would lose confidence due to the row between SEBI and IRDA over market-linked insurance policies, as the issue will be resolved in favour of either one regulator or the other by the courts.

“Investors will have confidence that at the end of the day, even if there is disagreement between regulators, one regulator will prevail (over ULIP issue). It’s only a matter of time, one regulator will prevail. So investors need not worry,” Mr.Khurshid told reporters on the sidelines of an Assocham event on transparency and accountability.

He said regulators are new institutions and there are bound to be overlaps in their functioning.

“There are overlap rules that are supposed to apply... Engagement rules... If we find there is a gap in engagement rules, we clarify. I think that is what the Finance Ministry wanted to do, either do itself or let courts do it. In this case, the Finance Ministry seems to have suggested that let the courts decide the overlap rules,” he said.

Engagement rules refer to practices followed in situations of opposing interests. ULIPs are products which combine insurance features with market investment.

Mr. Khurshid said conflict may arise between the Competition Commission of India and SEBI or the Central Electricity Regulatory Commission, but engagement rules are supposed to resolve these issues.

“Everywhere, in the Competition Commission for instance, there will be an overlap with SEBI, electricity commission, and we have engagement rules. They are supposed to resolve any such issue, any potential or actual conflict. It is not an impossible task,” he said.

Conflict between market regulator SEBI and insurance regulator IRDA arose when the former banned 14 life insurers from raising money from market-linked insurance schemes (ULIPs), following which the latter asked the companies to ignore the order.

Subsequently, the Finance Ministry intervened and the two regulators agreed to jointly seek a legally binding mandate from the court as to who has jursdiction over ULIPs.

Till then, status quo ante was restored by the Finance Ministry.

After the agreement, SEBI amended its order and banned only new ULIPs launched after April 9, when the first order of SEBI was issued.

IRDA, however, has asked companies to ignore this directive as well.

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