5 Stories for Today
(1) Israeli Embassy car blast a terror attack: Chidambaram
(2) Fresh violence in Syria as U.N. warns of civil war
(3) High prices of edible oil, milk push food inflation: Pranab
(4) Pakistan seeks more time to finalise negative list
(5) Inflation moderates to 6.55 p.c.
(1) Israeli Embassy car blast a terror attack: Chidambaram
Home Minister P. Chidambaram on Tuesday termed the attack on a Israeli diplomat as a terror strike and said a well-trained person orchestrated the crime.
Condemning the incident, Mr. Chidambaram said diplomats of every country were entitled to live and work in India in peace and security.
“It is quite clear that a very well-trained person has committed this attack. There is reason to believe that the target was the Israeli diplomat’s wife and, therefore, one has to proceed on the basis that it was a terrorist attack,” he said.
The Home Minister was speaking for the first time on the terror attack on Monday in which an Israeli embassy car was targeted with a magnetic bomb.
Mr. Chidambaram said the Delhi Police Commissioner and the officer concerned (leading the probe) briefed him about the incident.
The Home Minister said that investigation was on and it appeared that a motorcycle rider — single person — came from behind when the Innova car was stopped at a junction because the traffic signal light was red.
He said the assailant attached the device at the rear door of the car, the trunk area of the vehicle on the right side, and zipped past it, presumably turning either left on Safdurjung Road or proceeding straight on Kamal Attaturk Marg.
Mr. Chidambaram said CCTV cameras located in the vicinity were being scanned and the investigators have got some images but so far there has been no clear image of any motorcycle or the number plate of the two-wheeler.
Special teams have been deployed to locate the motorcycle and identify the person who drove it, he said.
“We condemn the incident and, at the moment, I am not pointing a finger at any particular group or any particular organisation but whoever did it, we condemn it in the strongest terms,” he said.
(2) Fresh violence in Syria as U.N. warns of civil war
Syrian government forces renewed their assault on the rebellious city of Homs on Tuesday in what activists described as the heaviest shelling in days, as the U.N. Human Rights Chief raised fears of civil war.
Troops loyal to President Bashar Assad have been shelling Homs for more than a week to retake parts of the city captured by rebel forces. Hundreds are believed to have been killed since last Saturday, and the humanitarian conditions in the city have been worsening.
Another activist group, the Britain-based Syrian Observatory for Human Rights, said that it was the heaviest shelling in days.
With diplomatic efforts bogged down, the conflict in Syria is taking on the dimensions of a civil war, with army defectors clashing almost daily with soldiers.
U.N. Human Rights Chief Navi Pillay warned on Monday that the Security Council’s failure to take action has emboldened the Syrian government to launch an all-out assault.
The uprising began last March as mostly peaceful protests against Assad’s authoritarian rule, but has become more militarized in the face of the brutal military crackdown.
Ms. Pillay told the General Assembly that more than 5,400 people were killed last year alone, and the number of dead and injured continues to rise daily.
She said that tens of thousands of people, including children, have been arrested, more than 18,000 reportedly are still arbitrarily detained and thousands more are reported missing. In addition, 25,000 people are estimated to have sought refuge in neighboring countries and more than 70,000 are internally displaced.
“The breadth and patterns of attacks by military and security forces on civilians, and the widespread destruction of homes, hospitals, schools and other civilian infrastructure indicate approval or complicity by authorities at the highest level,” Ms. Pillay said.
Also on Monday, the Obama administration said that it backs Arab League plans to end continuing violence in Syria but noted several obstacles to deploying a proposed international peacekeeping force to the country and withheld full endorsement of the idea.
The administration has said repeatedly that it does not see a military solution to the crisis in Syria, yet U.S. officials indicated that they would consider the Arab League call for peacekeepers and discuss it with various countries to see whether such an idea is feasible. However, they stressed that there would be difficulties in getting required U.N. Security Council authorization for a force.
Chief among the hurdles is opposition by Russia and China, which vetoed a far less ambitious Security Council action already this month. Russia has said that peacekeepers could not be sent without Syrian government approval; officials in Damascus already have rejected the proposal, calling it unjustified interference in internal affairs.
(3) High prices of edible oil, milk push food inflation: Pranab
With inflation falling to a two-year low, Finance Minister Pranab Mukherjee hoped that it will drop further to 6 per cent by March, but warned that high prices of edible oils and milk could stoke food inflation, which is currently ruling in the negative.
“I think it (inflation) should be further reduced since it is still not at acceptable level,” he said.
Mr. Mukherjee was confident that moderation in overall inflation would continue in the coming months also and the March end inflation would be “closer to 6 per cent”.
While the Wholesale Price Index (WPI) based inflation declined to a 25-month low of 6.55 per cent in January, there has been a significant drop in food inflation. The monthly food inflation is negative (at -0.52 per cent in January) for the first time in recent times.
However, “the main worry going forward is on edible oils, milk and some animal proteins which may continue to threaten food inflation, as the required institutional reforms in agricultural marketing and improvement in storage and cold chains will...(happen) with a lag,” he added.
The inflation in edible oil and milk in January was high at 9.59 per cent and 12.6 per cent, respectively, while egg, meat and fish were at 18.63 per cent.
Also, inflationary pressure continued in manufactured items, which have a weight of around 65 per cent in the WPI basket. Prices of manufactured products went up by 6.49 per cent year-on-year in January, as against 7.41 per cent in the previous month.
“...softening in the prices of manufactured goods despite the rapid decline in non-food primary inflation, may be more gradual,” the Finance Minister added.
Headline inflation was near double digit for most of 2010 and 2011. The apex bank hiked key policy rates 13 times, totalling 350 basis points between March 2010 and October 2011, to tame inflation.
(4) Pakistan seeks more time to finalise negative list
In what could lead to delay in taking giant step towards removing trade barriers and enhance economic engagement between Pakistan and India, Pakistan on Monday said that it would not be possible to announce the pruned ‘negative list' by February-end deadline, as some more work needed to be done on the issue.
Pakistan's Trade Minister Makhdoom Amin Fahim said that some more ground work needed to be done and the commerce secretaries from both sides would hold extensive parleys to sort out the issues that had been hampering progress on reaching an agreement. “We will be studying in detail all the issues. I cannot give you another deadline but we will certainly make efforts to sort out the issues as soon as possible,” he said.
Mr. Fahim said that a lot of groundwork had also been done to agree on the issue of putting in place a liberal visa regime and granting multiple entry visas to businessmen. “We will be taking a decision on this matter very soon,” he added.
Stating that granting of Most Favoured Nation (MFN) to India had been taken, in principle, by the Pakistan Government, Mr. Fahim refused to set a deadline for formally issuing a notification in this regard but asserted that a lot of progress had been made in that direction. The Pakistan Trade Minister said that it was the desire of Pakistan and its people that not only trade but people to people exchange should also increase in the coming times.
It is estimated officially that a pruned negative list of trade items between India and Pakistan can increase their bilateral trade to around $10 billion in the next five years. Union Commerce and Industry Minister Anand Sharma and Mr. Fahim also took part in the closing ceremony of the first ever ‘India Show' in Lahore. The show has been organised by industry body Federation of Indian Chambers of Commerce and Industry (FICCI) and the Ministry of Commerce and Industry of India and the Trade Authority of Pakistan.
The volume of bilateral trade between the two countries stood at nearly $2.718 billion last year. India can now export only 1,946 items to Pakistan from the 8,000 tradable goods between the two countries. A negative list includes items which cannot be traded legally. Once the negative list came into effect, it would also reduce the illegal border trade between the two countries. Mr. Sharma said he would like to finalise the details of a multiple entry visa regime at the earliest. “Both the governments have talked on the issue. The drafts have been exchanged. We are in favour of an early conclusion of singing of an agreement for a multiple entry visa regime to facilitate the movement of business leaders of India and Pakistan.”
(5) Inflation moderates to 6.55 p.c.
Headline inflation fell to an over two-year low of 6.55 per cent in January on cheaper food items, which may prompt the Reserve Bank to cut policy rates in the coming months.
Headline inflation, as measured by the Wholesale Price Index (WPI), had stood at 7.47 per cent in December 2011. It was 9.47 per cent in January last year.
The latest numbers are the lowest since December 2009 when headline inflation was at 7.15 per cent.
On inflation, Finance Minister Pranab Mukherjee said that the rate of price rise was still not at an acceptable level and should fall further.
“I think it (inflation) should be further reduced since it is still not at acceptable level. I do hope (further) moderation will come,” Mr. Mukherjee said.
As per the official data released on Tuesday, food inflation was (—) 0.52 per cent in January against 0.74 per cent in December.
Vegetables were cheaper by 43.13 per cent and wheat by 3.48 per cent on an annual basis. Potato and onion prices also fell by 23.15 per cent and 75.57 per cent year-on-year in January.
Food articles have 14.3 per cent share in the WPI basket and experts attributed the moderation in inflation to cheaper food articles.
Prices of manufactured items, which have a weight of around 65 per cent in the WPI basket, went up by 6.49 per cent year-on-year in January, as against 7.41 per cent in the previous month.
Inflation in manufactured items has been high since February 2011, when it crossed the 6 per cent mark.
Among manufactured items, iron and semis grew dearer by 18.46 per cent and edible oil prices rose by 9.59 per cent.
The cost of tobacco products moved up by 9.36 per cent and basic metals became 11.99 per cent expensive year-on-year.
Inflation in overall primary articles stood at 2.25 per cent in January, compared to 3.07 per cent in December, as per today’s data.
Non-food primary articles, which include fibres and oilseeds also showed moderation to 0.55 per cent in January, compared to 1.48 per cent in the previous month.
Inflation in the fuel and power segment stood at 14.21 per cent on an annual basis in January, against 14.91 per cent in the previous month.
Meanwhile, inflation for November 2011 has been revised upwards to 9.46 per cent from provisional estimate of 9.11 per cent.
Experts said that the moderation in inflation will give more leeway to RBI to consider cuts in interest rates in the next few months.
Headline inflation was near double digit for most of 2010 and 2011. The apex bank hiked key policy rates 13 times, totalling 350 basis points between March 2010 and October 2011, to tame inflation.
India Inc has said that the string of rate hikes, which have raised the cost of borrowing, have acted as a dampener to fresh investment and hindered growth.
As per the advanced estimates, Indian economy is projected to grow by 6.9 per cent this fiscal, lowest in three years, on account of slowdown in manufacturing and agriculture.
