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Today's Hot Stories - March 14, 2011

10 Headlines for Today

(1) New faces galore in West Bengal Left list
(2) India to send woolen blankets to Japan
(3) 'Radiation level at Fukushima Daiichii plant under control'
(4) Maruti Suzuki falls 3 p.c. after Japan quake
(5) TVS Motor launches Apache RTR 180 with ABS
(6) Japan central bank injects funds as stocks plunge
(7) Australia wins match, Kenya hearts
(8) New Zealand batsmen have another rollicking ride
(9) Egypt dominates England to win the title
(10) Water melons offer juicy respite

5 Stories for Today

(1) Jammu & Kashmir rights violations must be probed, say interlocutors
(2) Japan facing worst crisis since WWII: Premier
(3) Taxpayers: nothing to write home about
(4) Japanese investors race to repatriate assets
(5) Oil near $99 as Japan disaster stuns economy

(1) Jammu & Kashmir rights violations must be probed, say interlocutorss

Demanding a thorough probe into the alleged violations of human rights, the Centre's interlocutors on Sunday said that a judicial process should begin to punish the guilty. They also wanted to put an end to the “new cycle of arrests” in the valley.

At the end of the two-day women-specific conference organised by the three-member team of Dileep Padgaonkar, Radha Kumar and M.M. Ansari, they said that the meet would help arrive at a consensus on the Kashmir problem. Speaking to journalists, Mr. Padgaonkar said that all acts of violence — no matter, who had committed them — and all acts of alleged human rights violations must be thoroughly probed. “Such acts must be swiftly judged and punishment should be meted out to the guilty in a judicial manner,” he said.

“We have recommended that everything must be done by the Centre and the State government to help the families of missing youth,” Mr. Padgaonkar said. “We monitor our recommendations on a daily basis in New Delhi, Srinagar and Jammu,” he said. The team is likely to give its report on the “contours of a political solution” very soon.Prof. Radha Kumar said that it was “unfortunate” that the cycle of arrests had again started in Kashmir and hoped “our recommendations would end this soon.”

She expressed satisfaction over the “fact” that the Army had started cooperating in the cases of disappearances and rights abuses. “Though they have their own courts, they have started cooperating with civil courts as well,” she said.

Troop reduction

On the deliberations during the conference, she said that many women advocated the need to reduce troops in residential areas. “Our attention was also drawn to the continuing arrests of youth and the slapping of Public Safety Acts [PSAs] on the youth,” she said.

Prof. Kumar expressed concern over the absence of juvenile protection law.

Sources said that delegates had raised issues of detention of minors under the PSA.

“The Legislative Assembly here could consider whether similar legislation was required along with the amendments to restrict the use of PSA,” she said.

Prof. Kumar said that the panel had recommended issuing of passports on a fast-track basis. “At least 20,000 applications out of a backlog of 45,000 have been dealt with,” she said.

She said that their recommendations were in implementation mode. “One of the important recommendations was easing of travel and trade across the Line of Control [LoC]. I was really happy to see the Home Secretary announcing that they are going to

set a counter on LoC for granting of permits to all residents of Pakistan-occupied Kashmir who want to come here,” she said. “Pakistan has not yet reciprocated but we hope that in times to come, they will,” she said.Prof. Kumar said that a special task force comprising eminent women from all the three regions in the State should be set up to address the problems of women victims.

(2) Japan facing worst crisis since WWII: Premier

Japan was currently facing its worst crisis since World War II, Prime Minister Naoto Kan said on Sunday, as the death toll from the earthquake and tsunami crossed the 1,000 mark and amid fears of a meltdown at a quake-damaged nuclear power plant. Radiation levels had surpassed the legal limits at the Fukushima I plant in northeastern Japan, officials said on Sunday, raising concerns over radiation leaks and a possible core meltdown.

After Japan’s most severe earthquake on record and in view of a looming nuclear catastrophe, Mr. Kan said that the situation at the Fukushima plant “continues to be in an alarming state,” according to the Kyodo News agency.

Mr. Kan told reporters that more than 12,000 people had been rescued since Friday. But as local and international search-and-rescue teams continued their search for survivors, police said that more than 1,000 bodies had been found.

The number of casualties from Friday’s earthquake, upgraded on Sunday by Japanese authorities to 9.0 and which triggered a devastating tsunami, was expected to increase dramatically.

Takeuchi Naoto, the police chief of the hardest-hit Prefecture of Miyagi, said that he had “no doubt” the death toll would rise above 10,000 in the prefecture alone, according to public broadcaster NHK.

The Prime Minister said that more than 600,000 people in the worst-hit areas had taken refuge in schools and community centres.

“In some places, we saw that houses and buildings had been completely destroyed,” Mikiko Dotsu, the coordinator of a team from Medecins Sans Frontieres, said after she arrived in Sendai near the quake’s epicentre.

She said that 90 disaster medical assistance teams were deployed in Miyagi, of which Sendai is the capital.

“At the moment, there is very little electricity and no water supply,” Dotsu said. “People need food, blankets and water. These needs are bigger than medical needs at the moment.” The USS Ronald Reagan aircraft carrier arrived off northeastern Japan and began relief operations on Sunday after being diverted from war games with South Korea.

The U.S. Navy is to help transport food and people into the disaster area and helicopters on the aircraft carrier began airlifting food aid on Sunday, Japan’s Defence Ministry said.

A municipal official in Futaba town in Fukushima prefecture told Kyodo news that about 90 per cent of the houses in three coastal communities had been washed away by the tsunami.

Mr. Kan doubled the number of soldiers sent to the disaster areas to 100,000, as rescue workers were struggling to reach them, as many roads were blocked by debris.

“I ask for utmost efforts to save the lives of as many people as possible,” Kyodo News quoted Mr. Kan as saying after a meeting of the government’s emergency disaster headquarters. “We will put all-out efforts into rescuing people who have been isolated.” Drinking water was transported to quake-hit regions by truck, and witnesses said that residents were rushing to stock up on supplies at supermarkets and petrol stations, buying food and heating oil.

Railway links to the quake-hit regions are to remain closed, Japan Rail said, but it resumed operations in the Tokyo metropolitan area. Highways were also closed.

(3) Taxpayers: nothing to write home about

The latest budget has proposed very few new measures for income taxpayers. As stated by Finance Minister Pranab Mukherjee, the imminent adoption of the Direct Taxes Code (DTC) at the start of the next financial year (April, 2012) has weighed with the government.

Aligning the budget proposals with the DTC has been one of the key tasks. Towards that end, the budget seeks to increase the exemption limit for the general category of taxpayers from Rs.1.60 lakh to Rs.1.80 lakh. This measure will provide a uniform tax relief of Rs.2,000 to every taxpayer of this category.

All other proposals are targeted at senior citizens. The most significant of the proposals has nothing to do with the tax rates or slabs. It is an administrative decision to lower the qualifying age of a senior citizen from 65 to 60. Simultaneously, the exemption limit for senior citizens is increased from Rs.2.40 lakh to Rs.2.50 lakh. A new category of very senior citizens (80 and above) has been announced. They will be eligible for a higher tax exemption of Rs.5 lakh. On the face of it, these measures promise much but in practice they will deliver little. The intention to expand the number in the senior citizens category (anyone above 60) is laudable. It is also true that they do get concessions in the form of higher tax exemptions. But are these sufficient to ameliorate the lot of senior citizens, who as the Finance Minister rightly says, deserve our special attention?

Consider the following: Tax concessions based on higher exemptions are fine but quite obviously they are relevant only to those having a matching income. It would be wonderful if a vast majority of senior citizens have taxable incomes beyond the exempted limit of Rs.2.50 lakh (Rs.5 lakh for those above 80). But the truth is only a minority of senior citizens will have that kind of incomes and hence benefit from the budget proposals. Again, it is highly unlikely that there would be many 80 year olds filing tax returns. Perhaps the Finance Minister would clarify during the budget debate. Knowing the number of taxpayers in each of these categories will give a better perspective on the tax proposals.

So while not grudging the concessions given to a few, it must be pointed out that for a majority of senior citizens, the higher exemption limits ought to be of academic interest only. For the record, the lowering of the qualifying age to 60 and the enhanced exemption limit will give a tax relief of around Rs.9,200 to senior citizens. The very senior citizens can save on taxes up to Rs.26,780 with their exemption limit enhanced to Rs.5 lakh.

Plight of salaried class

The salaried class is unlikely to benefit from the Finance Minister's munificence. The retirement age in India varies from 58 to 60 in government and private sector services. Unless someone has a job post-retirement, the tax exemptions will not be relevant. The plight of the salaried class ought to be addressed in its totality. Pension benefits wherever available will not offset the steep fall in incomes post-retirement. Many benefits that went with their jobs, notably medical benefits, are automatically scaled down or withdrawn. (There are some enlightened employers who do provide health care benefits even after retirement).

But it is precisely in the advancing years that health care costs will go up. The chance of a major illness impoverishing even a reasonably well off pensioner is real. Unlike many developed countries, health insurance is still in its infancy.

Besides, health cover to those above 60, where available, comes with many restrictions and conditionalities. The sad fact is that many of today's senior citizens did not have means and the wherewithal to plan for their retirement during their working years. For instance, there were few opportunities to insure oneself or take a home loan to buy a residential property. All those have made them extremely vulnerable at a time when living expenses have soared. Much more needs to be said about the pensioners' plight. One area not highlighted is what should be called the alienation of the senior citizen in the face of large scale technology adaptation by banks and the financial sector. This is an every-day experience and something which affects many, besides senior citizens. Technology has made financial services impersonal. Online banking and indeed any activity through the net requires a fair mastery of computer applications. Starting with a need to remember a 14 or 15-digit bank account number to getting a grasp on demat procedures, the average citizen's interface with his bank has become more complex.

None of these may be in the realm of the budget. Nobody has transformed banking in a positive way. But while focussing on tax exemptions for some senior citizens, it is appropriate to focus on the plight of the majority.

(4) Japanese investors race to repatriate assets

The effects of the devastating earthquake that hit Japan were felt across global markets on Friday last as oil prices fell, stock markets wobbled and the yen rose on the foreign exchange markets.

Japanese companies and investors raced to repatriate their assets, selling dollars and other foreign currencies, and were also expected to sell European and U.S. government bonds, to prepare for the cost of rebuilding their domestic economy.

Early estimates of the cost of the quake for major insurers were put at $10-15 billion, while the leading economist Nouriel Roubini — known as Dr Doom for predicting the credit crunch — warned that the quake could not have hit at a worse time for a Japanese economy struggling with a budget deficit of almost 10 percent of gross domestic product.

“This is certainly the worst thing that can happen in Japan at the worst time,” Roubini said.

The Japanese economy contracted 1.3 per cent from October to December and there were concerns about the impact that the tragedy might have on the global economy.

Analysts at the investment house Brown Brothers Harriman said: “The typical expectation, based on past experience, is for Japanese investors to repatriate funds.” The Bank of Japan — which has no scope to cut rates, because they are already at zero per cent to stimulate growth — moved quickly to promise a policy update on Monday, rather than Tuesday.

“The bank will continue to do its utmost, including the provision of liquidity, to ensure that the stability in financial markets and to secure the smooth settlement of funds, in the coming week,” the central bank said.

The dollar fell to 81.99 yen by lunchtime on Friday in New York while the price of U.S. crude fell to as low as $99 a barrel, although Brent crude was at $113 a barrel. There were concerns that major insurers such as Munich Re and Swiss Re might have to issue profit warnings as their budgets for natural catastrophe claims had already been depleted by the Australian flood and New Zealand earthquake. The FTSE 100 in London closed at 5828, its lowest level since December.

Work at factories run by major companies such as Toyota and Sony was suspended and oil prices fell because Japan — the third largest oil importer — was expected to need less. The expected reduction in demand took the heat out of oil prices which have been inflated by the instability in the Middle East.

However, there was an impact on wholesale gas prices, which rose by almost 4 per cent in the U.K., for example, after six of Japan's reactors were shut down.

Japan generates about a third of its electricity from nuclear and it could be months before all its reactors are back online.Analysts said that it was likely Japanese utilities would buy up extra cargoes of liquefied natural gas (LNG) to power reserve gas plants to make up the shortfall.

Analysts were searching for comparisons with the quake that hit the port of Kobe in January 1995 and had a total economic cost of $100 billion, or 2 per cent of GDP. It also caused a 1,000 point fall in the Nikkei — an event that led to rogue trader Nick Leeson being exposed. Barings Bank, his employer, collapsed as a result of the vast losses Leeson had run up, just a month later.

“When the Kobe earthquake hit, markets reacted by selling Japanese stocks. The Nikkei 225 fell by 7.5 per cent in the days following. By contrast, Nikkei futures show only a 2 per cent fall for Monday. There was little, if any, discernible effect on the yen during the Kobe disaster. Currently, the yen is holding up well and may even be supported by insurance claims which may require substantial conversion of dollars to yen,” said analysts at Dutch bank ING.

But economists were concerned that the Japanese authorities had fewer options to stimulate the economy than they did in 1995. Julian Jessop, chief international economist at Capital Economics, said: “At the very least, the scope for fiscal stimulus to mitigate the economic damage is much less than it was in 1995.”

He thinks that the authorities will repeat their actions and introduce special loan facilities to help those areas most affected.

Joy Ferneyhough, head of insurance research at Banco Espirito Santo, noted that the quake had not hit Tokyo, where the heaviest insurance losses could be expected. Major insurers will now be scrambling teams of loss adjusters to the affected areas. Some of them will be trading at the Lloyd's of London market, which said that it was “far too early” to assess the potential cost. “Our efforts will be focused on dealing with claims quickly and helping people and businesses recover,” Lloyd's said.

(5) Oil near $99 as Japan disaster stuns economy

Oil prices dropped to near $99 a barrel on Monday in Asia after a massive earthquake and tsunami devastated north-eastern Japan and threatened to send the world’s third-largest economy into recession.

Benchmark crude for April delivery was down $1.63 at $99.53 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $1.54 to $101.16 on Friday.

In London, Brent crude was down $2.02 at $111.82 a barrel on the ICE futures exchange.

Officials estimate that a 10-meter (33—foot) wall of seawater triggered by an 8.9 magnitude quake off the coast of northern Japan on Friday killed at least 10,000 people and severely damaged the country’s energy infrastructure. The benchmark Nikkei 225 stock average fell more than 6 percent Monday.

“This disaster has in effect temporarily frozen the world’s third largest economy,” said Richard Soultanian of NUS Consulting. “It seems clear that Japan’s appetite for crude oil may be diminished in the near-term, which should provide previously unforeseen slack in international oil markets.”

Three of Japan’s five largest refineries have been shut down, which will immediately crimp demand for crude. Japan is the world’s third-largest crude consumer at 4.5 million barrel a day, the second-largest net oil importer and the biggest importer of liquefied natural gas and coal.

Traders were also selling on Monday on disappointing U.S. February retail sales data released Friday, which suggest that the recent jump in crude prices is beginning to hurt demand for gasoline.

“Put simply, demand destruction is taking place, whether that’s in Japan or in the U.S. at the pump,” energy consultant The Schork Report said, “A very bearish picture for crude oil.”

Investors had been concerned about possible unrest in OPEC leader Saudi Arabia but police prevented a protest organized by pro-democracy activists on Friday in the capital, Riyadh.

In other Nymex trading for April contracts, heating oil was down 1.2 cents at $3.02 a gallon and gasoline dropped 2.3 cents to $2.96 a gallon. Natural gas rose 3.0 cents at $3.92 per 1,000 cubic feet.

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