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Austerity measures needed, says Pranab

NEW DELHI: India will issue some austerity measures to aid the fiscal consolidation process, Union finance minister Pranab Mukherjee said in Rajya Sabha on Wednesday. Mukherjee's comments came after the Indian rupee hit a record low against the dollar as risk aversion in global markets added pressure on a currency already under fire from fiscal and current account deficits that are weighing on growth.

Pranab Mukherjee on Wednesday said in Rajya Sabha that the government is concerned over slowdown in country's economic growth and it is taking steps to address the issue.

While speaking in the Upper House of Parliament, the Finance Minister also said that the country's growth story was intact and the eurozone crisis was affecting the Asian markets. 

As the rupee touched a record low, Opposition today questioned the government in the Lok Sabha on the steps being taken to tackle the situation as it feared that there could be a repeat of 1991, when India saw severe balance of payments problem and even had to mortgage gold.

"The crisis in our economy is growing. Are we heading towards 1991," senior BJP leader Murli Manohar Joshi said during Zero Hour, adding the situation was becoming backbreaking for the common man due to price rise.

Expressing concern over rising prices and a falling rupee in the international market, Joshi wondered whether the economic meltdown of US followed by that of Europe was now taking India in its grip.

The Indian rupee on Wednesday hit a record low against the dollar as risk aversion in global markets added pressure on a currency already under fire from fiscal and current account deficits that are weighing on growth.

Repeated currency intervention by the central bank and a rash of other measures targeting deposits and exporters have failed to stem the slide in the currency, the worst performing emerging Asian currency by far since March.

The rupee dropped as low as 54.46 per dollar, breaching its previous record low of 54.30 in December. It was last trading at 54.34/36 compared to a close of 53.79.

The Reserve Bank of India (RBI), will continue to face a losing battle in trying to check the rupee's fall, analysts say.

The downturn in global markets raises the prospect of capital outflows when India needs inflows to shore up its balance of payments, which slipped into the red in the December quarter for the first time in three years.

Stalled policymaking in government ahead of general elections due by 2014 are also playing a key role in undermining confidence in the currency.

Frequent currency intervention by the central bank would further sap rupee liquidity from the economy at a time when the country is facing a severe cash crunch in its banking system, analysts said.

The rupee has fallen nearly 10% since its 2012 peak in February.

The rupee was further undermined by controversial government proposals for taxes on foreign investment. Agencies




Yeddyurappa seeks anticipatory bail after CBI raids

NEW DELHI: Former Karnataka Chief Minister B.S. Yeddyurappa on Wednesday filed an anticipatory bail plea in the CBI court after the CBI conducted raids at his residence in an illegal mining case. The CBI on Wednesday raided his and his family members' residences and two mining firms as it launched a probe into his alleged role in illegal mining in line with a Supreme Court directive.

A day after registering an FIR, CBI officials conducted the raids at eight premises belonging to Yeddyurappa, his sons BY Raghavendra, a Lok Sabha member, and BY Vijayendra as well as son-in-law Sohan Kumar in Bangalore and Shimoga district.

The CBI also raided the offices of JSW Steel and South West Mining Company Limited in Bellary, besides searching the house of a mining leaseholder, police sources said.

The crackdown by the central agency came after it registered a case for offences under IPC, including criminal conspiracy and criminal breach of trust besides under the provisions of the Mines and Minerals (Development and Regulation) Act and Prevention of Corruption Act.

Yeddyurappa has been accused of granting undue favours to the two firms in lieu of donations made by them to a charitable trust run by his family.

The raids, which began at 6.15 am, were being conducted by a joint team of CBI officials from Hyderabad and Bangalore.

The searches were held at Yeddyurappa's residences in Dollars Colony and Race Course Road here and a firm owned by one of his sons.

The Supreme Court order for the CBI probe came after an empowered committee set up by it submitted its report and pointing out several allegations against Yeddyurappa and corporate entities and recommending a CBI probe.

Meanwhile, JSW Steel in a press statement maintained "It has neither done any illegal activity nor was it connected with any wrong doing." PTI



US slaps sanctions on Dawood aides

Washington: The United States has slapped sanctions on Chhota Shakeel and Ibrahim Tiger Memon,  two top aides of underworld don Dawood Ibrahim, the alleged mastermind of the 1993 Mumbai bombings that left over 250 dead, in a move "to target the nexus of crime and terrorism in South Asia".

The treasury department on Tuesday designated the two as narcotics traffickers citing their ties to D Company,  which it called "one of the world's most notorious criminal organizations" that is run by kingpin Dawood Ibrahim, who is believed to be currently residing in Pakistan.

As a result of the US sanction, Shakeel and Memon will have any assets under US jurisdiction frozen. In addition, US citizens are prohibited from entering into transactions with the pair.

"Treasury continues to target the nexus of crime and terrorism in South Asia with today's action against one the world's most notorious criminal organizations," said Adam Szubin, director of treasury's office of foreign assets control, in a statement.

According to the treasury, Dawood Ibrahim's lieutenant Shakeel coordinates D Company activities with other organised-crime and terror organizations.Back







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