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Today's Hot Stories - March 04, 2011

10 Headlines for Today

(1) ED notice to stop Hasan fleeing country
(2) Binayak moves SC against HC decision
(3) Burqa ban in France from April
(4) Cash-strapped Air India defers February pay
(5) SEC probing possible corrupt act by Cadbury: Kraft
(6) Facebook valued at $65 billion
(7) Somdev draws India level with Serbia
(8) B'desh fans stone West Indies team bus
(9) Davis Cup: Nadal puts Spain in control
(10) Honey on toast cures bad hangover

5 Stories for Today

(1) Rally against inflation, corruption
(2) Nepal Maoists rejoin government
(3) Sahara eyes buyouts abroad
(4) Russia to lose $4bn in arms exports to Libya: Official
(5) Insurers to lose 3.5k cr on motor claims

(1) Rally against inflation, corruption

Senior Citizen Forum and Lok Chetna Manch activists held a joint protest rally here on Friday against inflation and corruption in the country.

They gave a memorandum to the Prime Minister through Batala SDM, seeking appropriate measures to check these.Addressing the rally, president of Senior Citizen Forum Harbans Singh and Lok Chetna Manch chief Sukhdev Singh Premi said that multi-crore scams were surfacing every day, which showed "the UPA government was inept to handle the menace". Protesters said, "The government has not been able to solve the problems of the common man. The budget provision of 10% tax on AC hospitals and branded clothes should be withdrawn."

(2) Nepal Maoists rejoin government)

Nepal's tottering, one-month-old communist government received a shot in the arm on Friday when its major ally - and frequently major foe as well - the Maoists finally condescended to join the cabinet, after weeks of keeping Prime Minister Jhala Nath Khanal on tenterhooks.

However, remaining true to Nepal's politics of discord, the former guerrillas sent only a mini contingent of four ministers after differences erupted between Maoist supremo Pushpa Kamal Dahal Prachanda and his two deputies, Dr Baburam Bhattarai and Mohan Vaidya, preventing the party from naming all the 11 ministers which they have been allotted.

A relieved Khanal, who had been stumbling along with just three ministers under him, administered the oath of office and secrecy to the four Maoist ministers at the presidential office, Shital Niwas, in Kathmandu on Friday evening. Led by former Maoist information and communications minister Krishna Bahadur Mahara, who got the same ministry once again, the others are Khadga Bahadur Bishwokarma (tourism and civil aviation ministry), Top Bahadur Raymajhi (physical planning and works) and Barsha Man Pun Ananta (peace and reconstruction ministry).

While Mahara and Bishwokarma are former ministers, the latter having been women, children and social welfare minister in an earlier government, the other two are first timers. Though two women were being considered, none of them made it to the first lot of ministers. Bishwokarma comes from the Dalit community.

With the swearing-in, the Maoists return to power 23 months after the collapse of Prachanda's government in May 2009. The development comes as a matter of concern for New Delhi, especially the allocation of portfolios. With Ananta getting the peace and reconstruction ministry, India's concern about Nepal's halted peace process and the fate of nearly 20,000 People's Liberation Army combatants, is bound to mount. A succession of visiting Indian ministers and top officials had urged that the PLA should be disbanded before the promulgation of the new constitution and Indian Army top brass in the past have been on record as saying that the PLA should not be inducted into the Nepal Army. A Maoist minister will give the former rebels an advantage during planning and negotiations.

With growing Indian companies employed in infrastructure projects in Nepal, a Maoist minister ruling the roost will also add to Indian worries. The recently concluded bilateral trade talks in New Delhi had seen the Indian side harp on the protection of Indian investment in the republic with Dabur Nepal and United Telecom Ltd being enumerated as instances of harassment and discrimination.

The continued absence of a foreign minister also affects India's further diplomatic lobbying. South Block has been eager to discuss visiting dates for Indian External Affairs Minister SM Krishna but the visit has been put on hold due to Nepal's council of ministers functioning without a foreign minister.

(3) Sahara eyes buyouts abroad

After acquiring the landmark Grosvenor House hotel in London, the Subrata Roy-led Sahara group is eyeing two more properties in the United States and Europe.

The group is in advanced talks for these two properties which are likely to be finalized this year, industry sources said. The Sahara India Pariwar had paid about $800 million for buying the London hotel. Sources also said that the group was looking at other hotel properties as well. After Sahara's acquisition of London hotel, several other groups have started scouting for hotel properties in Europe and the United States, said sources.









(4) Russia to lose $4bn in arms exports to Libya: Official

Russia is to lose $4 billion in arms exports to Libya due to the imposition of UN sanctions against Moamer Gaddafi's regime, the head of state industrial holding Russian Technologies said today.

State arms exporter "Rosoboron export's lost income from the situation in Libya amounted to USD 4 billion," Sergei Chemezov was quoted as saying by the Interfax and RIA Novosti news agencies.

Russia was initially slow to echo Western condemnation of Gaddafi amid his bloody crackdown on an uprising but on Saturday it joined other UN Security Council members in ordering an arms embargo against Libya and other sanctions.

The Arab world is the main export market for Russian arms after traditional partners China and India.

Libyan Defence Minister Yunis Jaber had gone on a major spending spree during a January 2010 visit to Moscow, signing 1.3 billion euros (USD 1.8 billion) worth of deals including for six Yak-130 military planes.

Meanwhile, Libya had also been expected to become the first foreign buyer of Russia's new Su-35 fighter and a contract worth USD 800 million for 12-15 planes had been ready for signing, reports have said.

A range of other contracts for helicopters and missile systems were also being discussed.

(5) Insurers to lose 3.5k cr on motor claims

The non-life insurance industry stands to lose almost three times the profit that it made last year by way of additional provisions for motor third party insurance claims. The government has said that the non-life industry runs the risk of insolvency if motor insurance premiums are increased.

"The insurance companies would incur a loss of approximately Rs 2,500-3,500 crore in the current year (2010-11) on account of this (motor insurance) business of which a substantial portion will be borne by the public sector insurance companies," minister of state for finance Namo Narain Meena said in a written reply to the Lok Sabha on Friday. Last year, profits made by the non-life industry had managed to touch Rs 1204.51 crore after growing three-fold over the previous year.

Meena said that the government has asked the insurance regulator to implement the proposed increase in motor insurance premium as the losses could adversely affect the companies. "If the situation was allowed to continue, there will be a severe dent on the solvency of insurance companies which could lead to both solvency and liquidity issues for these companies," Meena added.

The non-life industry is suddenly staring at a Rs 3500cr hit on its profit and loss statement because it now turns out that companies had under-provisioned for third-party claims by grossly underestimating the compensation awarded by courts. Under an earlier industry agreement pushed by the regulator, all claims and losses under third-party insurance are shared by the industry. For instance, if the total premium collected was Rs 100 and the claims paid was Rs 110, the Rs 10 loss would be shared among all insurers according to their share in gross written premium of all business.

Going by this formula in which losses are shared, large insurers like New India stand to lose between Rs 495 to Rs 693cr. Large private insurers like ICICI Lombard and Bajaj Allianz would lose between Rs 230-Rs 322cr and Rs 173 to Rs 242cr depending on whether the hit is Rs 2500cr or Rs 3500cr. A small company like Shriram General would also take a hit between Rs 30 to Rs 40cr.

In January, the Insurance Regulatory and Development Authority (IRDA) had proposed a review of motor insurance premium rates for third party liability cover. If the draft is implemented, it would result in a 10 per cent increase in premium for private cars and two wheelers and up to 80 per cent for goods carriers.

"The exposure draft envisages an increase of 10-80 per cent in the premium rates of third party motor insurance," he said. Third party motor insurance is mandatory for all classes of vehicles. Though regulation of the tariffs in the non-life sector was withdrawn in 2007, third party motor insurance continues to be regulated. The rates were last revised in 2007. The IRDA has already taken views of various stakeholders for effecting hike in premium rates.




           
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