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Today's Hot Stories - March 23, 2011

10 Headlines for Today

(1) India reduces mission in Libya
(2) ED conducts searches at Hasan Ali CA’s residence
(3) Russia, China call for immediate cease-fire in Libya
(4) FM scraps ‘misery tax’ on health
(5) Satyam faces 617 cr tax, accounts attached
(6) Car makers face challenges from Japan crisis, rates hike
(7) Pak vs WI: clash of the unpredictables
(8) Somdev to play Starrace in first round
(9) Lahiri leads the way at SAIL, Open
(10) Mumbai beats Delhi in per capita income

5 Stories for Today

(1) Cash-for-votes scam: Opposition mounts attack on PM
(2) Quake, tsunami could cost Japan $235 billion: World Bank
(3) Cabinet approves 6% dearness allowance hike for Central Government employees
(4) Prices of luxury cars set to zoom
(5) Japan crisis adds to volatile mix of global growth threats

(1) Cash-for-votes scam: Opposition mounts attack on PM

A united opposition on Wednesday mounted attack on Prime Minister Manmohan Singh over the cash-for- votes scam, wondering as to how he could wash his hands off the matter as he had headed the government in 2008 and was the "biggest beneficiary" of the trust vote.

Leader of the Opposition Sushma Swaraj made a stinging attack on Singh in the Lok Sabha telling him that as head of the government, he should take responsibility instead of making others scapegoat for the omissions and commissions of his regime.

"It is the habit of the Prime Minister to blame others. If it is price rise then (Agriculture Minister) Sharad Pawar is responsible, if it is 2G then (former Telecom Minister) A Raja is responsible and if it is Commonwealth Games then Suresh Kalmadi is to blame," she said.

"The issue involves your leadership," she said, quoting an Urdu couplet which means one should not make any excuse but tell how the caravan got looted. The Prime Minister was present in the House and was listening intently to the debate.

Earlier, initiating the discussion on the Prime Minister's statement on the Wikileak's expose in connection with the cash-for-votes scam, CPI leader Gurudas Dasgupta accused Singh of resorting to "parliamentary piracy" to win the vote of confidence in 2008 and demanded that he come clean.

He said that the report of a Parliamentary panel on the scam had clearly recommended "investigation by an appropriate agency" into the alleged attempts to purchase votes to win the trust vote on the Indo-US civil nuclear deal.

"It's a case of parliamentary piracy because some members were hijacked. The suspicion is that organised group of political gangsters were at work," he said.

Bharatiya Janata Party (BJP) leader Arun Jaitley said that PM's statement was misleading and nobody can say that Wikileaks cables are not verifiable.

The BJP also said that it was a 'retail purchase of Parliamentarians to gain majority on the issue and even the MPs of BJP were approached for the same.

Dasgupta's remarks terming the alleged scam as an act of "parliamentary piracy" and the handiwork of "organised groups of political gangsters" drew an angry retort from the ruling benches.

(2) Quake, tsunami could cost Japan $235 billion: World Bank

The massive quake and tsunami of March 11 could cost Japan's economy up to $235 billion, or 4.0 percent of output, but reconstruction will spur recovery later this year, the World Bank said on Monday.

"If history is any guide, real GDP growth will be negatively affected through mid-2011," the World Bank said in its latest East Asia and Pacific Economic Update report.

It added that growth should pick up in subsequent quarters "as reconstruction efforts, which could last five years,accelerate".

The lower end of the World Bank's estimate of the twin disasters' impact was $122 billion, equivalent to 2.5 percent of gross domestic product.

(3) Cabinet approves 6% dearness allowance hike for Central Government employees

Nearly 50 lakh central government employees and 38 lakh pensioners can look forward to a 6% increase in their dearness allowance which the Union Cabinet approved the proposal on Tuesday.

If the move is approved, the dearness allowance, which is linked to the consumer price index, will rise from 45% currently to 51%, triggering a further change in the allowance structure. For instance, payments like conveyance allowance and children's education allowance will also increase by 25%.

Further, special compensatory allowance for those posted in remote areas such as the north-east and Jammu & Kashmir as central government employees in these areas are entitled to a Special Compensatory Allowance. Their special allowance goes up by 25% the moment the 50% trigger is breached.

While the move will provide some relief to government employees and pensioners whose salaries and pension are usually revised once a decade, the increase will cost the exchequer Rs 1,500 crore annually. Households have been combating high inflation, which, in recent weeks, was led by rising fruit and vegetable prices. Wholesale price index-based inflation is expected to be around 8% at the end of March.

Sources said that the additional installment of DA will be released with effect from January this year. Typically, the increase takes place in two installments effective January 1 and July 1.

(4) Prices of luxury cars set to zoom

Luxury cars from companies like BMW, Audi and Mercedes are set to become costlier, with the government hiking customs duty on assembled cars to 30% from 10% before Budget. While companies refrained from making comments, analysts said that prices of cars assembled from CKD (completely-knocked down) kits may see an upward revision—to the extent of Rs 4 lakh.

While the industry is not happy with the development, it heaved a sigh of relief as FM Pranab Mukherjee brought down the duty to 30% from 60% proposed in Budget, reacting to protests by the luxury carmakers. "We are evaluating the same (FM statement) on a case-to-case basis and will prepare a final assessment. We will thereafter share further details," a Mercedes Benz official said. Officials at BMW and Audi refused to comment.

The duty hike on CKD kits in Budget had taken the industry by surprise. Most had reacted sharply to the move with Audi even threatening to "scale back" investments, while Mercedes asking for a one-year grace period so that companies could adjust production according to the new norms.

At the heart of the matter lies the change of definition that the government made in classifying a CKD vehicle. Since most CKD kits have pre-assembled engines and gearboxes, all of them were affected by the new definition.

(5) Japan crisis adds to volatile mix of global growth threats

The decision by G7 countries to intervene against the yen reflects growing concern that Japan's nuclear disaster and conflicts in Libya and the oil-rich Middle East could turn back the global economy at a time when recovery remains extremely fragile.

Private economists have been largely sanguine about the global repercussions of the devastating earthquake and tsunami that hit Japan's northeast coast a week ago, killing thousands and sparking the worst nuclear accident in a quarter century.

In a research note published on Friday, Deutsche Bank said that the impact of Japan's triple-disaster on global growth was likely to be so negligible as to be "caught in rounding error."

But top policymakers from the world's richest nations are sounding a very different note, even if they have largely steered clear of voicing their concerns about systemic risks in public until now.

One senior official from a G7 country who requested anonymity dismissed the benign forecasts of many banks on Friday with an air of disgust, pointing to the nuclear threat in Japan, the acute market volatility it has produced and risks associated with bloody conflicts in the Middle East.

A top G7 central banker told earlier this week that he feared the world economy was headed "right down" at a time when financial markets are still fragile in the face of an unresolved European debt crisis and high oil prices .

Spooked by events in Libya and Bahrain, traders have pushed oil up to levels not seen since shortly before the collapse of Lehman Brothers in 2008.

The United Nations approved military action to contain Libyan leader Muammar Gaddafi on Thursday and OPEC's largest oil producer Saudi Arabia has sent troops into the Gulf Arab island state of Bahrain to quell unrest.

Indeed, it is the still-fresh memory of Lehman's bankruptcy, and the speed with which it sent markets and economies spiralling downwards, that has many officials on edge now even if the world economy has rebounded and is projected to grow by 4.4 percent this year and 4.5 percent in 2012, according to the latest IMF projections.

The "known unknowns" -- in the words of former U.S. Defense Secretary Donald Rumsfeld -- have multiplied exponentially in recent weeks, unsettling the sense of comfort that had returned to G7 capitals over the past year.

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