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Monday, September 30, 2013

17 years on, CBI court convicts Lalu and 44 others in Bihar fodder scam


RJD Chief Could Face A Stiff Jail Term

 


Ranchi: A CBI court on Monday convicted former Bihar chief minister Lalu Prasad in a fodder scam-related case. The judgment, which has far-reaching political consequences, clears the way for the RJD chief's disqualification from the Lok Sabha and will debar him from contesting elections for possibly as long as 13 years. 
    In all, 45 people were convicted including another former Bihar CM and former Union minister Jagannath Mishra and several former bureaucrats of Bihar. The verdict is a rare instance of two CMs, that too belonging to rival political parties, convicted in one case: something which underlined the pervasive nature of the scam in which politicians of different stripes connived with bureaucrats to siphon off huge 

funds meant for expenses, including provision of fodder, on livestock. 
    The conviction, which comes at a time when Lalu is struggling to regain his onceformidable influence in Bihar politics, is the second of an important politician after July 10 when the Supreme Court stripped convicted lawmakers of the immunity they enjoyed from disqualification. Earlier, a CBI court had convicted former Union minister Rashid Masood for allegedly trying to 
influence admissions to medical colleges. Masood's sentence has not been announced. 
    Although the court said it would announce the quantum of sentence on October 3, it granted bail to all eight persons who were convicted for up to three years in the case of fraudulent withdrawal of Rs 37 crore from Chaibasa treasury: a certain indication that the Rashtriya Janata Dal strongman is in for a bigger sentence. The Representation of People Act, as it stands after the July 
order of SC, prescribes instant disqualification of politicians who have been convicted for offences punishable with terms of two years or more. 
    This threatens to be a career-debilitating move for the 66-year-old former CM if he does not win an acquittal from a higher court swiftly enough: a dodgy prospect given the pace of judicial administration. After he has served his term, estimated to be between 5-7 years, Lalu will have to sit out for another six 
years under the law before he can contest an election. 
    Considering that the RJD is no longer the force it was and Lalu's appeal has waned since the heady 1990s, the political exile could cause serious trouble for the once-formidable chieftain of Bihar. The sentence can, in the immediate run, energize the party's base, particularly among Yadavs who see the case as an upper caste frame-up. 

COULD BE OUT OF POLITICS FOR 13 YRS 

    RJD chief Lalu Prasad first Lok Sabha MP to be convicted 
after Supreme Court's July 2013 order disqualifying MPs, MLAs convicted by any court for crimes with punishment of two years or more 
    Lalu plus 44 accused, including former Bihar CM Jagannath Mishra, six politicians and four IAS officers, convicted for fraudulent withdrawal of Rs 37.7 crore from Chaibasa treasury 
    The fodder scam, also called treasury scam, broke in 1996. Nexus of politicos, senior state officers and suppliers siphoned off govt 
money against inflated and fictitious bills for medicines, fodder for cattle and animal husbandry equipment 
    Lalu will lose LS seat, become ineligible for 
contesting elections for at least six years after completion of sentence. If he gets maximum term of 7 yrs, Lalu could end up out of electoral politics for 13 years 
WHAT IT MEANS FOR LALU, HIS PARTY, HIS FAMILY 
    
Massive fall in the fortunes of the man who dominated Bihar for a decade and a half. His political career is eclipsed if not terminated. RJD's core Yadav support may rally around in immediate future. But as it is not clear who in his family will take charge, RJD faces a rough passage 

FALLOUT IN BIHAR AND DELHI 
    
Congress may intensify efforts to align with JD(U). In Delhi, Congress will be happy with JD(U)'s 20 MPs to RJD's 4. Should help Nitish Kumar pull in more non-Yadav backward and Muslim votes. BJP will hope to gain a share of backward votes. If Congress-JD(U) move closer, Bihar politics can become more bi-polar 

RAHUL EFFECT 
    
Rahul Gandhi's attack on the ordinance was intended to retrieve ground for Congress, but Lalu has become its first victim in terms of losing his Lok Sabha seat
RJD chief in jail, party faces leadership vacuum 
Ranchi: The conviction of Lalu Prasad in the fodder scam could result in the adverse effect of a leadership vacuum in the RJD in the long run, and a strong possibility of Bihar CM Nitish Kumar poaching the support of Muslims. The risk is higher because the succession line is not clear. 
    There was a moment of stunned silence both inside the special CBI court No. 4 which was packed to capacity with lawyers and Lalu loyalists as well as outside as the news of conviction wafted out around 11.15am. Lalu cited the looming Durga Puja vacation as he pleaded with the judge that he pronounce the sentence on Monday itself so that he could appeal in the high court as well as move for bail. The court, however, expressed its inability to do so since the judgment would go up to 500 pages divided into several parts. "Aap to bhagwan hain,'' Lalu then told the judge, urging him to at least consider doing so. 

    The order was widely anticipated and had led the former Bihar CM to approach the SC to seek transfer of the case from the court of CBI judge Pravas Kumar Singh by alleging bias, as well as to successfully lobby the UPA government to bring the ordinance designed to save convicted politicians from being unseated. The ordinance was shot down by Rahul Gandhi who called it "nonsense" and rebuked the government for being influenced by political considerations: a code for UPA managers' anxiety to protect Lalu who has been a steadfast Congress ally even before UPA was formed. 
    The case, RC-20A/96, is part of a bunch of 
cases CBI took up at the instance of the judiciary which accepted the argument that the state government, then led by Lalu himself, could not be expected get to the bottom of the scam. The investigation was conducted by a team led by U N Biswas, now a minister in the TMC government in West Bengal, which included current CBI chief Ranjit Sinha. 
    The investigation climaxed in 1997 when the then CBI chief Joginder Singh ordered the registration of a case against the then Bihar CM. It forced Lalu to resign and appoint his wife Rabi Devi, then a homemaker, as his successor. Lalu's arrest shortly afterwards was accompanied by tension as Biswas approached the area commander of the army to deploy troops to deal with any trouble: again acontentious move which was rejected by the local commander. 
    For the full report, log on to www.timesofindia.com

Lalu Prasad arrives at the special CBI court in Ranchi


The conviction was widely anticipated and had led the former Bihar CM to approach the SC to seek transfer of the case


Wednesday, September 25, 2013

Power consumers in suburbs to witness 22% drop in bills

Mumbai: With the Maharashtra Electricity Regulatory Commission (MERC) giving a go-ahead to RInfra to rationalize power tariff for the next two years, one can expect power bills to drop by 22% in the suburbs. The Tata Power Company (TPC) already provides power in these areas at cheaper rates, with a recent survey showing that those who switched from RInfra to TPC saved up to 46% on monthly bills. 
    "It is a win-win situation for power consumers in the suburbs," said consumer rights activist Ashok Pendse. 
    Power expert Sandeep Ohri said he, along with several activists, had fought for the past five years to make power cheaper in the suburbs. "We encouraged competition and now electricity will be cheaper and services better." 
    RInfra spokesperson Vivek Devasthali said, "After the MERC's multi-year tariff order, our average billing rate will drop from Rs 7.98 a unit in 
2013-14 to Rs 6.23 a unit in 2015-16. The MERC order has taken into account input costs such as transmission and distribution losses till 2016." 
    The TPC has announced that it has signed an MoU with Energy Efficiency Services Ltd, a joint venture of public sector units under the power ministry. 

Dadar-Matunga suffers 30 min outage 
here was a power outage for half an hour in parts of Dadar, Matunga and Mahim on Tuesday night due to a cable fault. A BEST official said the feeder line was switched to an alternate cable after the tripping and electricity was restored. Meanwhile, industry associations have decided to go on a statewide demonstration on October 18 against the recent increases in power tariff by 22-25%. Representatives will burn copies of electricity bills and take a delegation to the government, said activist Pratap Hogade. TNN



Thursday, September 19, 2013

SBI surprises with rate hike

Mumbai: Home and auto loans have become costlier with State Bank of India (SBI) hiking its benchmark rates and revising the pricing in retail loans. The bank has also raised its deposit rates to increase the pace of fund mobilisation. 

    A Rs 30-lakh home loan from SBI will now cost 10.1%, while loans for a higher amount will attract 10.3%. Earlier, the rates were 9.95% and 10.1%, respectively. Existing borrowers will, however, see their rates rise by only 10 basis points. This is perhaps the first time that existing borrowers will pay a lower rate than new borrowers following a revision in the spread. The spread refers to the mark-up over the benchmark base rate, which has been revised from 9.7% to 9.8%. 
    Similarly in auto loans the 
bank has hiked the spreads. Existing borrowers will see their interest rate going up from 10.45% to 10.55%. But new borrowers will pay 10.75%. On Tuesday, SBI chairman Pratip Chaudhuri had said in an interview to TOI that the bank was being forced to increase its 
rates given the sluggish growth in deposits. A bank official said that in the past 45 days the bank has been experiencing an increase in cost of funds. Based on the higher cost of funds, the bank has decided to hike its lending rate. 
    SBI's move has surprised other lenders as the move comes a day ahead of the Reserve Bank of In
dia's mid-term policy review. Bankers have made a representation to RBI seeking a one percentage cut in cash reserve ratio to provide some relief on liquidity. An SBI official said the decision to increase rates was taken by the bank's asset liability committee, which meets on Thursday. Before SBI, HDFC, HDFC Bank ICICI Bank, and Axis Bank had increased their lending rate. But SBI is the first major public sector bank to hike rates. The future course of interest rates will depend on the measures announced by RBI governor Raghuram Rajan in his policy review on Friday. Even after the increase in rates, SBI's home loans continue to be the cheapest among all lenders. Govt gets breathing space Fed Move Gives Time To Policymakers On Forex, Growth
New Delhi: The US Fed's decision to retain the fiscal stimulus is a huge relief for Indian policymakers who are trying to restore order in the foreign exchange market and revive faltering growth. 
    The gloom that had engulfed Asia's third-largest economy seems to be lifting for now due to a combination of factors like soft global crude prices and some domestic demand drivers showing signs of a revival. Stability in the foreign exchange market after weeks of upheaval is also expected to have a sobering effect and 
help in reviving confidence. 
    The expected push to rural demand from a good monsoon, step up in spending in the run up to the 2014 general elections, some improvement in business confidence in the second half of the fiscal year and a possible easing of interest rates in the 
months ahead are promising for growth. Economists have cautioned that the challenges are still huge for the economy. 
    "The euphoria over the US Fed tapering being deferred will probably last only a quarter because after that the fear will again come back. Certainly it will lead to some near term improvement, but beyond that we still have several challenges," said Samiran Chakraborty, regional economist at Standard Chartered. 
    The challenges would require decisive action to lift the economy from the severe downturn. Containing price pressures and reviving investment remain the most critical 
challenges in the short term. The relative calm in the global financial markets and advanced economies may also help India find some breathing space to repair its economy. Exports have showed signs of a recovery and if the pace is sustained it should have a positive impact. 
    The farm sector is expected to post robust growth on the back of healthy monsoon rains."I expect interest rates to come down in the second half of the year as inflation eases. As crude prices stabilize, they should have a positive impact," said D K Srivastava, economic adviser at Ernst & Young.



BACK ON TRACK?

Indian Markets On Fire As FIIs Pump In 3,544Cr In A Day Sensex close to 3-year high, 2nd-highest gain ever for

Global Cheer As US Stimulus To Continue


Mumbai: In the most dramatic U-turn in the history of India's currency and stock markets, the rupee and the sensex extended their scorching-hot streak on Thursday. The rupee made its second-highest gain ever of 161 paise against the dollar while the sensex recorded its second-sharpest rise of 684 points in four years to close 
at a 34-month high of 20,647 after the US Federal Reserve dropped plans to cut back its fiscal stimulus—a plan which had sent emerging markets into a free fall since May. 
    A day after the US Fed surprised markets by deciding to continue with its $85 billion-amonth bond buyback, a wave of optimism swept global markets from Indonesia to Turkey and South Africa to Brazil with stocks and currencies gaining across the board. The Indian rupee, which was the second best performer after the Indonesian 
Rupiah on Friday, appreciated to 61.78 from its previous close of 63.39.Foreign institutional investors scrambled to buy stocks, pumping in Rs 3,544 crore in a single day, one of the highest ever, fuelling a 2.43% increase in the sensex. 
    Ben Bernanke, chairman of 
the US Federal Reserve, chose to continue with the stimulus fearing that higher interest rates in the US could trip growth. The decision has ensured that there won't be any disruption through withdrawal of stimulus at least until December. 
    "If there are measures to in
crease liquidity, they would not be positive for the exchange rate. However,since the overall sentiment has turned positive, I do not expect any major impact," said Ashutosh Raina, head of forex trading at HDFC Bank. 
Home, auto loans get costlier as SBI springs surprise, hikes rates 
he State Bank of India on Thursday hiked its benchmark rates and revised the pricing of retail loans, making home and auto loans costlier. It has also raised its deposit rates to increase the pace of fund mobilization. A Rs 30 lakh home loan from SBI will now cost 10.1%, while loans for a higher amount will attract 10.3% interest rate. In case of auto loans, the interest for existing borrowers will go up from 10.45% to 10.55%, while new customers will pay 10.75%. It is perhaps the first time that existing borrowers will pay a lower rate than new customers. The bank's decision, coming a day ahead of the RBI's mid-term policy review, has surprised other lenders. P 21 Banks, auto drive sensex rally 
    He added that there was scope for further appreciation of the rupee. 
    "There is a strong support level at 60.50 and we could see the rupee moving into that range," he added. 
    The rally in the sensex was driven by banks, auto and real estate companies. These stocks are described as interest rate-sensitive as their earnings are directly affected by a rise in interest rates. One of the main strategies used by the Reserve Bank of India to prevent the rupee from de
preciating is to raise interest rates. The rupee rally gives RBI governor Raghuram Rajan some wiggle room in framing his first monetary policy review on Friday—particularly on two fronts, inflation and growth. 
    The rupee has recovered at a much faster pace than it has fallen. The local currency has gained by nearly 8% in the last 11 trading sessions. The highest gain recorded by the rupee was on August 29—a day after the RBI announced a special window to lend dollars to oil companies. The rupee had gained 
by Rs 2.23 paise then as oil companies, which account for 40% of dollar demand, were no longer required to buy dollars only from the market. 
    The RBI's move to lend dollars was seen as a bit of a gamble. It was under the assumption that the rupee would firm up in future and 
oil companies could then buy dollars cheap and return them to the RBI. With the sharp appreciation in recent days the gamble appears to have paid off. But some fear that this sudden largesse might breed complacency as reforms to correct the economy's fundamentals are yet to take off. For Indian traders this would mean that the problem of dealing with a volatile exchange rate has merely been postponed; exporters are not rushing in to sell their dollars as they know that there could be a fresh round of uncertainty in three months.


Saturday, September 14, 2013

Air fares skyrocket 55% in two weeks, biggest rise in 3 yrs

Mumbai: The past two weeks have witnessed the steepest air fare hike—55% on an average. This is the first time in three years that air fares have scaled so high in such a short span of time. 

    The hike is so brutal that even the diligent early birds who book their tickets months in advance have not been spared. So, to board a flight around November-end, a passenger booking an air ticket now would need to pay approximately 55% more than the passenger who was prudent enough to book the same ticket in the last week of August. 
    Data released on Saturday by an online travel portal compared advance purchase fares as they shot up over the past two weeks across six advance purchase categories, starting with tickets purchased a week in advance from the date of travel to those booked three months in advance. 
    The data covered average one-way fares on 20 domestic routes including Mumbai-Delhi, Bangalore-Hyderabad, Mumbai-Kolkata, Mumbai-Bangalore and so on. The highest hike—which was 64%—was observed in the seven to 13 days advance purchase category (see box). Others were equally high. For instance: If one had 
booked a ticket zero to 
six days in advance on, 

say, the Mumbai-Delhi route on August 25, one would have paid Rs 4,900. The same advance purchase fare is now priced around Rs 7,600. 
    As on September 11, a zero to six days' advance purchase fare was priced at an average of Rs 7,900 while for seven to 13 days' advance purchase it was Rs 6,800. For a ticket on a flight three months from now, the fare is Rs 4,200. The data shows that fares have been consistently on the rise since August. 
    Keyur Joshi, co-founder and chief commercial officer of makemytrip.com, said, "This is the steepest air fare hike witnessed in the past three to four years. While customers have faced exponential air fare hikes in the past, the increases are typically spread out over several weeks. This time around, though, the hike has occurred in a matter of a few days." Joshi further said while the fares needed to be rationalized to sustain the airline business, the current fare increase is too steep, especially in the longer advance purchase category. 
    "The 30-day advance fares should have been left untouched—this would have helped manage traveller concerns and avoided sudden drop in bookings. While air tickets need to be rationally priced to ensure sustainability in the long run, it is equally important that flights have a 
    healthy load factor."



Tuesday, September 10, 2013

Good News Comes In Economy Pack, More May Be On Way Rupee in 63 zone, 727-point sensex rise sharpest in 4 years Positive Signs At Home & Abroad Cheer Markets

Mumbai: The rupee gained 142 paise to appreciate to 63.84 and the sensex jumped 727 points (the highest one-day rise since the 2,111-points rise on May 18, 2009) to close three points short of the 20,000-mark as a series of positive news sharply improved sentiment in the markets. The forex and equity markets opened stronger on the back of the Reserve Bank of India's weekend measures and gained steadily on news of improved balance of trade. On the global front, Syria appeared to have averted a potential US strike by agreeing to hand over control of its chemical weapons and China reported a better-than-expected 10.4% jump in industrial output. 

    "Today's appreciation of the rupee was largely sentiment driven. Some of the fundamental issues are still there. But the rupee should open strong tomorrow as some of the late global news has also been positive," said Ashutosh Raina, head, forex trading, HDFC Bank. He added that even at present levels the rupee continued to be undervalued. "Technically, 63.30 is a strong support level for the rupee. We have to see if it breaches this level on Wednesday." 
    The rupee has gained in the last four consecutive trading sessions, which coincide with the start of new RBI governor Raghuram Rajan's tenure. Rajan has announced a host of measures, which include subsidizing the cost of hedging dollar deposits for banks and giving foreigners more freedom to buy shares. 
Oil prices fall nearly 2% on Syria's offer 
Mumbai: News that Syria had accepted Russia's proposal to give up control of its chemical weapons, averting a US strike, led to a fall in oil prices on Tuesday. Brent crude on ICE Futures Europe was off $2.14, or 1.9%, to $111.07 a barrel. Oil prices have been a big drag on the Indian economy as it is one item where imports do not decline as prices rise. 
    India's exports rose to a twoyear high of 13% in August on account of the improved global situation, enabling trade deficit to fall to a four-month low of $10.9 billion from $14 billion in August 2012. "A significant decline in gold imports and weak capital and consumption goods' imports, due to subdued domestic demand, will help lower growth in non-oil imports during this year. Lower merchandise trade deficit, along with a healthy growth in IT/ITes exports, could help in bringing India's current account deficit in 2013-14 to even below our current forecast of 4.2% of GDP," said Crisil in a statement. 
    On Tuesday, after Monday's holiday on account of Ganesh Chathurthi, the sensex opened below 19,450 and gained steadily to close at 19,997—up 727 points or 3.77% from its previous close on Friday.

TERRIFIC TUESDAY TRIGGERS TURNAROUND TALK 
Sensex rises 727 pts — the sharpest single-day increase since May 2009 — as US offer to defer attack on Syria and Chinese economic data lift sentiment 
The rupee closed at 63.84, up 5 since hitting a historic low of 68.85/$ on Aug 28 
Exports grew nearly 13% in Aug, helped trim trade deficit to $10.9bn compared to $20bn a few months ago. Lower trade 
deficit augurs well for current account deficit and rupee 
Car sales rose over 15% in Aug, reversing a 9-mth falling trend 
Hiring survey showed Indian employers positive about hiring in next quarter 
There were gains for govt bondholders too as prices rose 
In Delhi, gold prices gained by 270 to 31,370/10gm. In global markets, price dropped 

WHAT TO WATCH OUT FOR US Fed Reserve's Sep 18 statement is being keenly tracked to see if it will begin withdrawing the stimulus Situation in Syria will have impact on global markets, commodity prices. A resolution would boost markets Oil prices have risen. A spike will affect fiscal maths Industrial production and inflation data due to be released in next few days. Will be keenly watched Outcome of the elections in Germany will be critical for EU

Saturday, September 7, 2013

Rahul ideal for PM’s post after 2014 polls: Manmohan ‘I’ll Be Very Happy To Work Under Him’

New Delhi: Prime Minister Manmohan Singh on Saturday strongly backed Rahul Gandhi to be the Congress's choice for PM after the 2014 election, pushing the party towards a presidential-style showdown with the BJP's likely PM nominee Narendra Modi. 

    The PM's remarks to the media while returning from the G-20 summit in Russia are bound to sharpen the debate in the Congress over Rahul's formal projection at a time when the BJP is close to declaring the Gujarat CM as its PM hopeful. 
    BJP spokesperson Sudhanshu Trivedi lost no time in daring the Congress to name Rahul as its PM candidate with the saffron party seeming keen to probe the Congress's perceived reluctance 
to the Rahul vs Modi match. Singh's statement marks a shift from his "we will cross the bridge when we reach there" response when asked about a third term in March. 'But PM has not hung up his boots' 
New Delhi: Asked about a third term in April, PM Manmohan Singh had maintained suspense, saying, "I am not ruling it in, I am not ruling it out". But on Saturday, he seemed more categorical, saying, "I have always said Rahul Gandhi will be an ideal choice for the prime minister's position after the 2014 election." He added, "I would be very happy to work for the Congress party under the leadership of Rahul Gandhi." 
    The PM's statement seemed to prod the Congress towards a decision on Rahul, deviating from the leadership's script to maintain tactical ambiguity over the leadership issue in order to dodge a Modi versus Rahul matchup. Not surprisingly, sources insisted that Singh has not made himself unavailable for the top job either. "The PM expressed a view on Rahul, but has not hung up his boots," a source said, reflecting the leadership's reluctance to show its hand yet. 
    Singh's presence at the helm helps duck questions about the reluctance to pitchfork Rahul in the arena. Justifying the silence over leadership, Congress sources cited past chiefs to say that no one was projected in 2004 and that Singh, despite being the incumbent, was projected in 2009 only at the 
time of the release of the manifesto. As part of the party's posture of ambivalence, AICC media head Ajay Maken had rebutted general secretary Digvijay Singh when he ruled out Rahul's projection as PM as a matter of policy—something which was read as the party keeping open the possibility of naming Rahul for the post at a later date. 
    However, there is unanimity that the PM's latest statement, if in response to a question, is a shift from earlier proforma acknowledgement of Rahul. Singh's stated willingness to work under Rahul is seen to point towards an impending transition.



I have always maintained that Rahul Gandhi would be an ideal choice for the PM post after 2014 elections. I will be very happy to work in the Cong under the leadership of Rahul Gandhi 
MANMOHAN SINGH | PM


PM talks of happily working under Rahul Gandhi's leadership next year! Wasn't he doing the same all these years? Misleading the nation again? 
    — NARENDRA MODI | GUJ CM 
If he (PM) says something clearly we will...walk on the way shown by him. We also know the desire of party workers and leaders 
    — SALMAN KHURSHID | 
    EXTERNAL AFFAIRS MINISTER



Friday, September 6, 2013

Indian Slump Story Receives a Strong 1k-Point Rebuttal RBI governor Raghuram Rajan’s bold moves prop up rupee and markets

SOME RELIEF

 Indian stocks rose again on Friday, capping a week in which the economic mood of the nation got a dramatic lift, thanks in large part to the overwhelmingly positive vibe that accompanied the accession of Raghuram Rajan as governor of the country's central bank on Wednesday. 

The benchmark BSE Sensex surged more than 1,000 points in the last three trading sessions while the rupee staged a strong recovery to 65.24 a dollar from a record low of 68.85. 
The measures announced by the Reserve Bank of India to support the ailing currency on Wednesday have boosted the confidence of investors unnerved by the country's worst economic performance in a decade, the slump in the currency and a ballooning current account deficit. 
Underpinning this upturn in sentiment is the optimism exuded by 100 top Indian chief executives polled before Rajan took over. According to the ET CEO Confidence Survey released Thursday, 42% CEOs expect economic growth to exceed 5% this year and the next. Growth hit a 5% decade low in the year ended March. The week's stock market rally has been led by index heavyweights such as ICICI Bank, BHEL and ONGC. 
The 30-share Sensex rose 1.53% on Friday to end at 19,270 points, its biggest weekly surge in four months, led by financial companies and capital goods makers. The 50-share NSE Nifty rose 1.56% to close at 5,680, above its key technical level of 5,600. 
The advance-decline ratio favoured the bulls. On BSE, 1,311 stocks advanced against 996 that declined while 
146 remained unchanged. 
"The intentions and initiatives of the new RBI governor helped change sentiments in equity and currency markets. Banking stocks and other rate-sensitive stocks were the major gainers," said Dipen Shah, head, private client group research, at Kotak Securities. "However, defensive sectors like IT and FMCG under-performed." 
Private banks gained for the second day after seeing their biggest single-day gains in over four years on Thursday. The country's biggest non-state lender ICICI Bank jumped 7.37% to . 959, extending Thursday's gain of 9.2%. 
"The prices of high-beta wholesalefunded banks like YES Bank, Axis Bank and ICICI Bank were significantly undervalued two days back," said Rajiv 
Mehta, research analyst at IIFL. "Assuming a very moderate growth, they are looking very attractive in terms of valuations, as these banks are trading near one time or one-and-a-half times book." Foreign institutional investors (FIIs) returned to join the party — they bought shares worth $166 million, or . 1,100 crore, in the cash market and about . 1,200 crore of index futures on Thursday, exchange data showed. FIIs sold equities worth $902 million, or . 5,922 crore, in August, and $47.4 million, or . 324 crore, in September. 
In the foreign exchange market, the rupee strengthened against the dollar after Foreign Minister Salman Khurshid said the oil minister will announce plans for lowering fuel consumption on September 16. 

The partially convertible rupee ended at 65.24, 1.17% stronger than its close of 66.32 on Thursday. 
Analysts see the rupee as being the key to the prospects for market revival. "The market will bottom out once the currency stabilises at a certain level. When the rupee stabilises, it will appreciate strongly and that will bring a lot of positive sentiments," Neelkanth Mishra, India equity strategist at Credit Suisse, told ET NOW. "If the currency starts to appreciate, the sense of goodwill about the country will suddenly improve dramatically. A lot of people will jump in to buy some attractive stocks, which are now waiting on the fringes for the currency to stabilise." 
Key stock movements on Friday included BHEL, the nation's top producer of power equipment, rising 3.17% to . 141. Analysts believe a weak rupee will help shield the company from cheap Chinese imports. 

Oil marketing companies rose on reports that a decision on raising diesel prices by . 3-5 per litre, kerosene by Rs 2 and LPG by up to . 50 per cylinder will be taken after UPA Chairperson Sonia Gandhi returns from the US. 
Indian Oil Corp rose 4.13% to . 231 while ONGC rose 7.17% to . 289. 
India's biggest telecom company, Bharti Airtel, rose 5.47% to . 313 after Nomura upgraded the stock to 'buy' from 'neutral', citing its optimistic outlook on operational trends and forex impact. 
Reliance Communications rose 2.61% to . 139 after the company said it had appointed a new CEO for its India enterprise business, where revenue and profit are seen growing 30% annually over the next five years.


TOP-DECK REJIG Infosys’ Balakrishnan Gets More Powers

In addition to existing role, he will oversee division that caters to cos in utilities & resources sectors in N America

 Infosys chairman NR Narayana Murthy has carried out his first significant reshuffle since he returned in June, further enhancing the powers of his close confidant V Balakrishnan, who is now perceived as the front-runner to succeed SD Shibulal as chief executive officer. 

In addition to heading Infosys BPO, consulting subsidiary Lodestone, banking software unit Finacle and the India business, Balakrishnan will now oversee the division catering to companies in the utilities and resources sectors in North America, according to people aware of the matter. 
Also gaining in the reshuffle is Chandrashekar Kakal, who will manage the consulting and systems integration business in addition to his existing role as global head of business IT services. Stephen R Pratt, managing partner for consulting and systems integration, will report to Kakal. The changes will become effective from October. "High-level restructuring is a sign that In
fosys is trying to manage aspirations of its senior-level executives, especially after high-level exits," said Harit Shah, senior research analyst at Nirmal Bang Institutional Equities. Shah was referring to the recent resignations of board member and Americas head Ashok Vemuri and global sales head Basab Pradhan. 
Murthy, who is being assisted by his son 
and executive assistant Rohan Murty, has said that he wants to build a "desirable" Infosys within three years. He was recalled from retirement after two years of underperformance by India's second-largest software exporter. "A few senior leaders have seen their roles enhanced as part of this reorganisation as well as a result of Ashok Vemuri's resignation," the company said in an e-mailed response. It did not provide more details. The founders of Infosys have taken turns as chief executives of the 32-year-old company, not unlike a Swiss-style democracy where ministers take turns being the mountainous country's president for one year at a time. 
People familiar with the mood in the Bangalore-based company said that several senior executives who are restless are may consider moving to greener pastures, possibly even mid-sized firms. Recently, Sudhir Chaturvedi, a senior vice-president and head of financial services in the Americas, left to join NIIT Technologies as chief operating officer. 
n.shivapriya@timesgroup.com 

Balakrishnan

Rules Eased for Foreign Parents to Raise Stake in Listed Firms


New norm to apply to all non-resident entities


In a move to quicken dollar inflows, the Reserve Bank of India (RBI) has changed the rules to make it easier for foreign and NRI promoters to raise stake in listed Indian companies. 
Offshore parents of such local companies can now freely purchase shares by using the services of registered Indian brokers. Such acquisition of shares can also be funded with dividend amounts paid by Indian companies to these non-resident promoters. 
The new rule will apply to all non-resident entities, including non-resident Indians (NRIs). 
At present, foreign institutional investors (FIIs), qualified foreign investors (QFIs) and NRIs are eligible to buy shares on Indian stock exchanges in compliance with foreign exchange reg
ulations. 
On Friday evening, the central bank opened another door to encourage inflows by adding all nonresident promoters to the list. 
"The move is keeping in mind the necessity to bring in more dollars as well as to address is
sues that have been raised by foreign promoters. Open offers and delisting were failing due to tax disincentives…This will also discourage dollar outflow as dividend received can be used to buy shares," said H Jayesh, founder partner at law firm Juris Corp. There is no long-term capital gains tax on shares sold on the exchange. Payment Via Inward Remittance 
According to the RBI circular, a foreign promoter using dividend to increase its shareholding will have to park the money in a "specially designated non-interest bearing rupee account for acquisition of shares on the floor of stock exchange". 
The consideration for purchase of shares can also be paid by way of inward remittance through normal banking channels and debiting NRE/ FCNR bank accounts of NRIs. However, if a non-resident sells the shares in a subsequent off-market transaction to another non-resident, the pricing cannot be below the floor set by the foreign ex
change regulations. 
RBI has told all banks to bring the contents of the notification to the "notice of their customers/constituents concerned". Earlier this year, the government had come out with new rules to attract foreign residents to invest directly in the Indian stock market. 
In this route, custodians, typically MNC banks that hold the shares on behalf of these offshore investors, are responsible for collecting the tax on capital gains and meeting anti-money laundering rules. "This, besides a sluggish market, was one of the reasons why not much has come in through the QFI route," said a banker.



India, Japan in $50bn currency swap

The rupee surged 87 paise on Friday after Japan extended support to India's fight against currency volatility by agreeing to more than treble the scope of the bilateral swap arrangement to $50 billion. 

    The facility between the Reserve Bank of India and the Bank of Japan enables both countries to swap Japanese yen or the Indian rupee for US dollars in an unforeseen situation. It is essentially an arrangement to tide over short-term foreign exchange crunch. The deal was first signed in 2008 and was limited to $3 billion, but the size was increased to $15 billion when the arrangement was renewed in 2011. 
    The rupee opened at 66 up from its previous close of 66.12 against the dollar and gained during the day to close at 65.25 against the dollar. "The swap arrangement with Japan was a positive factor for the rupee. This supplements RBI's earlier measures 

whereby it has agreed to swap dollars raised by banks through long-term non-resident deposits and borrowings at 350 basis points," said 
Ashish Vaidya, head of fixed income, currencies and commodities, at UBS India. He added that these measures under which RBI borrows dollars will complement its swap facility with oil companies where it lends dollars. 
    "The two governments expect that this will contribute to the stability of global financial markets, including 
emerging economies," India and Japan said in a joint statement after a meeting between Prime Minister Manmohan Singh and Japanese deputy PM Taro Aso on the sidelines of the G-20 summit. 
    Forex dealers said that the tide appears to have turned for the rupee and this could result in unwinding of long dollar positions. But uncertainty continues to hang over the market in respect of the situation in Syria and the outcome of the meeting of the US Federal Reserve on September 17. "A reduction in the Fed's bond buyback has already been factored in. The question now is how much?" said a dealer.


Govt to announce steps to cut fuel use

New Delhi: The government will announce steps to control fuel consumption on September 16. Foreign minister Salman Khurshid said on Friday that oil minister Veerappa Moily would address this issue with a set of new initiatives. "Conservation is an imperative. We cannot continue the way we are," Khurshid told TOI. 

    "It's a double whammy because we are subsidizing fuel but we have to controlour consumption," he added. The commerce ministry is making arrangements for oil trade with certain countries through escrow accounts in rupees. The finance ministry, meanwhile, is trying to maintain the health of the Indian currency. 
    Reports have said the government could announce a steep hike in diesel prices to bring down a spiraling oil bill by about $20 billion. The sliding rupee has raised India's oil bill by an estimated 50% since May 1. The import bill in the last fiscal year 
stood at $144 billion. 
    "No matter what happens, we will have to cut down on fuel consumption," Khurshid told a news channel. "You can't keep subsiding costs of fuel and not restrict the use of the fuel," he added. 
    Since January, oil marketing companies have been allowed to raise diesel prices in small bits at regular intervals, while bulk buyers have to buy diesel at international market rates. Petrol pricing has already been freed. India imports almost 80% of its fuel.



Infosys rejigs top mgmt, creates new stars

Bangalore: Two new stars have emerged in Infosys following a major restructuring initiative, and at least one of them now appears to be a likely contender for the post of CEO when incumbent S D Shibulal retires. 

    Chandrashekar Kakal, the global head of business IT services (BITS), has been given the additional responsibility of overseeing the consulting and systems integration (CSI) business. BITS contributes 61% of Infosys's overall revenue, and consulting and systems integration contributes 33.6%. So Kakal now has a say over 95% of the company's $7-billion revenue. Stephen Pratt, the head of CSI, is likely to report to Kakal. 
    Given the scale of that responsibility, Kakal should be in contention with V Balakrishnan and B G Srinivas for the CEO position. Balakrishnan is the former CFO and 
now head of the BPO and India businesses, and chairman of Lodestone, the Switzerlandbased consulting company that Infosys acquired last year. B G Srinivas is the head of Europe and global head of the financial services andinsurance unit, the company's biggest industry vertical. 
    Another executive who has seen his role being dramatically expanded is Dheeshjith V G, who till now headed the life sciences vertical. Dheeshjith will now head a newly created unit 
called Growth Markets Unit, which combines the operations of Australia, New Zealand, Japan, China, Middle East, South East Asia, France and Germany. All the heads in these countries and regions will report to Dheeshjith. 
    France and Germany are Infosys's big focus markets in Continental Europe, and these previously came under B G Srinivas. So Srinivas's role appears to have been squeezed. It could not be confirmed if Dheeshjith will continue to lead 
the life sciences vertical, which reports to Pravin Rao, the head of retail, consumer packaged goods, logistics and life sciences. Dheeshjith has had previous experience with country responsibilities. 
    Infosys declined to provide details of its reorganization, but sent the following statement to TOI: "We have undertaken certain reorganization within the company to further improve our client focus and competitiveness. A few senior leaders have seen their roles 
enhanced as part of this reorganization as well as a result of Ashok Vemuri's resignation." 
    Kakal's extended responsibility flummoxed HR experts. "It's unusual for a client facing role (consulting) to report to a delivery head (Kakal's role in BITS)," said a Mumbaibased analyst who didn't want to be named. The only rationale seems to be that the company is trying to increase Kakal's breadth of exposure. 
    Kakal, who joined Infosys in 1999, is responsible, in his BITS role, for application development, maintenance, testing, and infrastructure management services worldwide. He oversees 60,000 employees serving clients across all industry verticals from a global network of delivery centres. 
    Infosys has created a new vertical called utilities and resources for the North America market, which will be managed by Stephen Pratt. 

ANOTHER CEO CONTENDER 

• Global head of Infosys's business IT services (BITS), Chandrashekar Kakal, has got additional charge of consulting and systems integration (CSI) business 

• As BITS accounts for 61% of the IT co's total revenue and CSI nearly 34%, Kakal is now responsible for 95% of Infy's turnover 

• The new responsibilities have catapulted Kakal as a contender for the CEO post along with V Balakrishnan and B G Srinivas after incumbent S D Shibulal retires 

LatAm exec quits 
    
Infosys BPO Latin America head Humberto Andrade has quit the company to join Capgemini as VP of consumer products, retail and distribution BPO in Americas. Aniket Maindarkar, who was with Infosys BPO earlier, has rejoined as head of Americas for Infosys BPO. TNN


CNG price up, brace for fare hike

Mumbai: Commuters in the Mumbai metropolitan region are in for a round of hike in taxi, autorickshaw and bus fares as the price for compressed natural gas (CNG) was raised by Rs 3 per kg on Saturday. This is the third price hike in less than a year and will have a direct impact on the three modes of transportation all of which ply on CNG. And if that's not all, high-end consumers of piped natural gas (PNG) will have to pay at least Rs 2 more per unit of gas from Saturday due to a slab revision. 

    While BEST is contemplating a hike of at least Re 1 in its bus fares, auto unions on Friday demanded a hike of Re 1 per km and taxi union leaders Rs 4, in Mumbai, Thane and Navi Mumbai. 
    Taxi union leader A L Quadros demanded that the minimum fare be raised to Rs 25 
from Rs 19 and subsequently Rs 16 per km from Rs 12.35. Auto union leader Shashank Rao said fares in Mumbai should be hiked by at least Re 1. Auto, taxi unions pitch for hikes 
Mumbai:AsCNG prices roseby Rs3 per kg, various transport unions pitched in with their demand for a fare hike. Auto union leader Thampy Kurien said, "The fare should rise by Rs2 asCNG pricehasincreasedby Rs 6 in three hikes in the past one year." Someunions plan totake a delegation to the transport chief with their fare hikedemand. 
    A senior transport official, though, told TOI that the fare hike case wasbeing heardin Bombayhighcourt. "Till the court gives its verdict, the fare will not increase by a single paisa," hesaid.Another officialfrom Mantralaya said the transport ministry had resolvedtohikefaresonly in 2014. "We will try not to burden the common man with a farehikethis year." 

    BEST officials pointed out that the majority of buses ran on CNG and the rest on diesel. "Now, after price hikes in both diesel and CNG, we will submit a proposaltoincreasefaresby atleast a rupee," hesaid. 
    BEST spokesperson A S Tamboli said, "The transport undertaking will incur an annual burden of Rs 18 crore, with an annual gas consumption of 680lakhkg." 
    Kalpana Doshi, an investment consultant, said, "It is becoming increasingly expensive to travel by autos and taxis. A further hike in fares will really addtoour woes." 
    Consumer activist Shirish Deshpande said the last fare hike in October 2012 was being challenged in court and the transport department will not take any decision as the matter was "subjudice". 

    Whilejustifying thehike, a Mahanagar Gas (MGL) spokesperson said, "In order to recover a part of the increase in input costs, especially towardssudden and rapiddepreciation of the rupee against the dollar, MGL isconstrainedtoincreasethe priceof CNGby Rs3." 
    In the case of PNG prices, while there is no hike, the MGL has changed the slabs for consumers from Saturday. Due to this, high-end consumers will have to pay more (nearly Rs2.77 per scm). "Itisunlikely toimpact normalconsumers.However,it may have a minor impacton consumers using gas for purposes other than normal domestic cooking or for commercial activities," said an MGL spokesperson. 
Commuters can hope for lower BEST bus fare hike 
Mumbai:Despitecostlier diesel and the Rs 3 hike in CNG prices from Saturday, you can expect a lower hike in your BEST bus fare the next time it is announced. For, the BEST power wing has made a profitof Rs125crore. 
    Since BEST has a system of cross-subsidy between its electricity andtransportwings,sources said the losses suffered by its transport department will soon be "nullified" with profits madeby its power wing. 
    Sources said the impact of thefarehike may notbe "too much" as the undertaking's electricity wing has earned Rs 1,087 crore morein 2012-13 than in the previousfiscal year, and posted a net profitof Rs125crore. 
    The latest working accounts statement shows this also led to a dip in the total BEST losses from Rs 847crorein 2011-12toRs 508 crore in 2012-13. The statementwas releasedtoBESTcommittee members at a meeting on Thursday. 
    BEST has begun collecting Transport Division Loss Recovery's charges from 9.5 million power consumers in the island city. The TDLR charges have alsobeen a contributory factor for BEST to increase its revenue in the power wing,sourcessaid.
    Though BEST has been undertaking several measures to save costs, it has not been able to seek subsidy from the state government. 
    Committee chairman Nana Ambole said, "We have planned totake a delegation tochief minister Prithviraj Chavan to give us subsidy so that we don't have to hike fares in Mumbai at all. ButtheCMis yetto giveus an appointment."


L&T Realty Puts 3 Chandigarh Assets on the Block, Eyes Valuation of up to 1.4k cr

Move signals realty co's plan to exit non-core businesses


L&T Realty has put its 1.15-million sq ft mall, a 400,000-sq ft office building, and its under-construction Hyatt Regency Hotel in Chandigarh on the block, signalling its intent to exit non-core businesses, said three people with direct knowledge of the development. 
The company is looking at a valuation of around . 1,200-1,400 crore for the three assets, says a property consultant, who is helping the company with the sale. "They are realising that it is not their core competence and are planning to exit these businesses," said a top executive of a prominent mall chain in Mumbai that is currently in talks with the company to buy the mall. "This is more of a strategic deci
sion," he added. 
Two senior executives of New Delhi-based mall developers also said L&T Realty has approached them with sell-out plans for their mall in Chandigarh. Spread over 20 acres, the Elante project has been their flagship venture with 
1.15 million sq ft of mall space, an office building and a hotel. An L&T spokesperson said the company does not comment on market speculations, but claimed that the Elante Mall "has been an outstanding success". 
The three top mall developers quoted above agree that the Elante Mall, launched barely six months earlier, has already gained popularity in Chandigarh, a city with good discretionary spending. 
The mall is almost fully leased and boasts of one of the best mix of local and international retailers, including Big Bazaar, Pantaloons, Shoppers Stop, Zara, Mango, Marks & Spencer, among dozens of other prominent brands. One mall operator based in Delhi, who has been doing due diligence on the property, says one problem with the mall is that all the stores are leased for nine years with only room for 5% annual hikes and "that makes it a little bit less attractive as against the current norm of revenue-sharing". 
The revenue-sharing model has been a hit in India where both mall owners and retailers see each other 
as partners in growing businesses and not mere tenants. In that model, retailers generally part with a small-to-significant portion of their revenues to their landlords. "In a revenue-sharing model, we also benefit from growing consumerism in India and we will take the upside. At Elante, the rentals are fixed for nine years, so there is no upside for us," said a senior executive of the Delhi mall developer quoted above. 
"Otherwise the mall is excellent and up to international standards. The fixed rentals are the only mistake they have made," she added. The Mumbai mall operator too said they are currently doing due diligence of the property. "Some appraisal is going from our side and we are in very early days," he said. 

Exit Route 

• SPREAD OVER 20 ACRES, the Elante project has been their flagship venture with 1.15 million sq ft of mall space, an office building and a hotel 

• MALL IS ALMOST FULLY leased and boasts of one of the best mix of local and int't retailers 

• REVENUE-SHARING MODEL 
has been a hit in India where both mall owners and retailers see each other as partners in growing businesses

Take Heart, India. CEOs Say Economy is on the Mend CEO CONFIDENCE SURVEY: 42% forecast a minor uptick in GDP growth to over 5% this year and next, while 66% see rupee recovering to below 66

 Indian chief executives, who have been struggling to cope with an unrelenting slowdown over the past two years and battered by a rupee in free fall, are showing the first, faint signs of optimism. 

In an 'ET CEO Confidence Survey' of the country's 100 top business leaders, 42% were brave enough to predict a minor uptick in the GDP growth rate — from 4.4% recorded in the first quarter of FY13 to over 5% this year and the next. Growth slumped to a decade-low 5% in the year ended March. 
Any recovery, however minor, seemed improbable even last fortnight, when HSBC, JPMorgan, 
Nomura and Goldman Sachs, among others, slashed India's growth forecast to the 4-4.2% range. "I do not think it (the economic situation) is going to get worse than this," says Ajay Piramal, chairman of the Piramal group. He's optimistic that GDP growth could climb back to over 6% if the economy is managed well. 
Only 9% of CEOs polled fear the GDP growth rate will slip any further to below 4% while 46% said it would remain in the 4-5% range. 
Almost two-thirds of CEOs interviewed also believe the rupee will recover, and strengthen past 66 to the dollar one year from now. Twentynine per cent even went to the extent of saying the currency will be stron
ger than 62 to the dollar. This is a fairly bold consensus, given that the rupee depreciated sharply — from 61.25 to the dollar all the way down to 69 — during the fortnight in which a bulk of the interviews for this survey was conducted. 
The optimism on GDP and currency fronts, coupled with the investment plans and profit expectations from their respective businesses that the CEOs shared in the survey, suggests that large swathes of India Inc now believe that the worst is probably over. 
But is this optimism warranted? "Frankly, I think the question should be what drove this exaggerated pessimism over the last three months in the first place," answers 
Janmejaya Sinha, chairman, Asia-Pacific, Boston Consulting Group (BCG). 
Raghuram Rajan's swashbuckling start as RBI governor on Wednesday has edged out some of the "exaggerated pessimism" that BCG's Sinha is referring to. The bulk of the survey, though, was completed before Rajan took over on Wednesday. On Thursday, the BSE Sensex soared more than 400 points and the rupee shot up 1.6% in an obvious turnaround of sentiment. "The worst is over for the rupee," Piramal says. 
CEOs also seem to be taking a measured view of currency and stock market volatility. 
Spirit of Enterprise is Still Alive 
At a time the rupee has been extraordinarily weak, business heads haven't been swayed by it. Continuing infrastructure bottlenecks, policy ambiguity and lack of reforms, they said, were bigger challenges than a weak currency. 
"Yes, there is volatility, but fundamentally I think India is in a much stronger place today," says Sonjoy Chatterjee, chairman, Goldman Sachs India. "When I think about India over the past two decades, I remember us being a far weaker country trying to deal with volatility in the 1990s, the Asian crisis of 1997, and then the difficulties of the early 2000s," he said. 
Says Rajiv Bajaj, managing director of Bajaj Auto: "The government must acknowledge the downturn as a symptom of a chronic disease and heal through long-term measures such as improvement in infrastructure, labour laws, power, etc." 
The survey also provides at least some evidence that In
dia Inc hasn't allowed the slowdown to kill the spirit of enterprise. Only 22% CEOs admit they have withdrawn to a defensive, cost-cutting frame of mind. The rest, 78%, are still looking to either invest or innovate their way through the slowdown. 
"The smarter companies will live by 'less is more' and 'deep before wide' by focusing their strategy to create a few strong brands that can dominate," says Bajaj. 
Companies with superior strategies will create new segments through new products and technologies, thus emerging stronger, according to him. "The weak will perish," he adds. 
There are also some clues that business efficiency has improved across the board. Despite the many pressures on costs due to raw material, fuel and capital, 51% companies are confident of at least 10% growth in net profit over the next 2-3 years. 
The survey was conducted between August 1 and September 4 by Nielsen on behalf of The Economic Times.



Obama set for showdown at G20 over Syria Host Putin Poses Major Challenge To Attack Plan



St Petersburg: President Barack Obama faced growing pressure from world leaders not to launch military strikes in Syria on Thursday at a summit on the global economy that was eclipsed by the conflict. 
    The Group of 20 (G20) developed and developing economies met in St Petersburg to try forge a united front on economic growth, trade, banking transparency and fighting tax evasion. 
    But the club that accounts for two thirds of the world's population and 90% of its output is divided over issues ranging from the US Federal Reserve's decision to end its programme of stimulus forthe economy to the Syrian crisis. 

    Russian President Vladimir Putin wants to use the meeting in a seafront tsarist palace to talk Obama out of military action against Syrian President Bashar al-Assad over a chemical weapons attack which Washington blames on government forces. 
    Obama wore a stiff smile as he approached Putin on arrival at the summit and grasped his hand. Putin also maintained a businesslike expression. It was only when they turned to pose for the cameras that Obama broke into a broader grin. The first round at the summit went to Putin as China,the EU and Pope Francis — in a letter for G20 leaders — aligned themselves more closely with him than with Obama over the possibility and legitimacy of armed intervention. 

    Putin, Assad's most important ally, was isolated on Syria at a G8 meeting in June, the last big meeting of world powers. 
    He could now turn the tables on Obama, who recently likened him to a "bored kid in the back of the classroom." Only France, which is preparing to join US military action, rallied behind Obama. 
    "We are convinced that if there is no punishment for Assad, there will be no negotiation,"French foreign minister Laurent Fabius said. Putin has no one-on-one talks scheduled with Obama but hopes to discuss Syria at a dinner with all the leaders. REUTERS 

GOING AFTER ASSAD 

THE STRIKE WHAT ARE THE TARGETS IN SYRIA? 
Not chemical weapon sites, which could set them off and create a bigger disaster 
INSTEAD THEY ARE TARGETING: 
    
Military units that carry out these strikes 
    Operational headquarters 
    Rockets and artillery that are used to launch the attacks 
    Air bases for the attack helicopters 
    Command and control centres 
The main attack is expected to be carried out by 
Tomahawk cruise missiles 
from the four Arleigh Burkeclass destroyers currently in the Mediterranean — the Mahan, the Barry, the Gravely and the Ramage 

WHO PAYS WHAT FOR THE MILITARY OPERATION? 
Chuck Hagel told Congress they would be asking for 'tens of millions of dollars' which makes it surprisingly cheap. The Libya operation cost $1 billion. John Kerry said Gulf's Arab states have offered to foot the entire bill for the operation
SCENARIOS FOR MILITARY STRIKES 
Scenario 1 
Tomahawk cruise missiles hit chemical delivery targets, military units, artillery and rocket bases 
Deterrent, limited tactical effect Would not affect war or Assad's future Signal of no tolerance for chemical attacks, Obama's self-imposed 'red line' Cruise missiles cannot penetrate underground bunkers or mobile targets which means some of Assad's arsenal would survive Possible civilian casualties 

Scenario 2 
Wider attack to hit communication nodes, infrastructure, impose a 'no-fly' zone, crater airfields used to ship in conventional weaponry from Russia and China 
    This would imply a deeper intervention, including suppression of air defences. Involve hundreds of sorties 
    Would hurt Assad's military capability 

Scenario 3 Big sustained attack, going over a few weeks, target leadership, degrade and possibly lead to the removal of Assad. This would need more expensive involvement 

THE DAY AFTER 
    
Strikes against Syria would open US to charges that it is trigger-happy when it comes to attacking Muslim countries, deepening divide between Islamic societies and the West 
    If Assad is removed as a result, the world could see cocktail of Sunni jihadi groups in charge 
    Military strikes in Syria could bring US & Russia on confrontational path 
    Iran, Syria's biggest supporter, could retaliate, either through terrorist 
attacks by Hezbollah or through other means like attacking Turkey or Jordan SYRIA FIRE, WEST ASIA INFERNO 
Syrian civil conflict has turned into a sectarian strife Sunni and Shia communities seizing on religious symbols, sowing sectarian passions Saudis and Iran support rebel groups for regional supremacy Religious fighters, radicals making a beeline to the region Within Syria, 1,200 rebel groups split along sectarian lines Sunni vs Alawite civil war in 
Syria merging and growing into Sunni vs Shia tensions in Gulf, re-igniting other violent intra-faith strifes 
    The Sunni-Shia strife has spiked violence in Iraq and Lebanon 
    Spreading violence can destabilize not just Lebanon and Jordan, but also Turkey, Bahrain, Kuwait and even Pakistan 
    Sunnis expect Washington to back them 

OBAMA'S TIGHTROPE WALK 
THE RED LINE TALK 
    
First mentioned by Obama last year for Iran's drive for nukes. Red lines include any development by Iran seen as decision to make nukes or enrich uranium 
    In Syria, initial talk of strike alluded to red line of 'no 
chemical weapon use' 
On way to G 20 meet, Obama said, "I didn't set a red line. The 
world set a red line" On Syria, the US not first to call for military intervention France, Turkey, UK for action UK MPs vetoed military strike Obama got Republican support No decision till Congressional debates and votes next week PRO-STRIKE ARGUMENT | Disregard for red lines may embolden Iran to make nukes, Syria to use chemical weapons 
WHY THEY DON'T WANT TO STRIKE 
RUSSIA 
    
Anti-strike, hasn't ruled out support to UNSC resolution authorizing force 

CHINA 
    
One of Syria's main arms suppliers, warned strike will hurt world economy 

IRAN 
    
Strong support to Assad regime. Looking to cement its role as regional superpower

Rebels of Free Syrian Army atop a tank that belonged to forces loyal to Syria's President Assad


Placard with altered image of Obama at a rally in Kiev


AYATOLLAH ALI KHAMENEI | IRAN'S SUPREME LEADER




 

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