PM-Sharif meet to focus on trade

 
While the situation on the Line of Control in Jammu and Kashmir will definitely be discussed when Prime Minister Manmohan Singh meets his Pakistani counterpart, Nawaz Sharif, in New York on the sidelines of the United Nations General Assembly, it was emphasised by high-level sources on Wednesday that progress on trade would be made, as there is a concrete agenda to be followed for that.

The sources, who spoke on the condition of confidentiality, said that a significant step forward in exporting electricity to Pakistan could happen as early as next week. It had been held up, they claimed, not for political reasons but because the Pakistani side was evaluating its technical and commercial viability. However, it is believed that process is close to conclusion, and Pakistan may express formal interest in cross-border electricity trade, sending a delegation on the subject, within a week. Sharif and Singh are likely to meet on Sunday.

In another significant development, the Nuclear Power Corporation of India Limited, or NPCIL, will likely move forward within a few days on evaluating the terms of a possible contract with nuclear supplier Westinghouse. A limited exploratory agreement might be in place between the two companies, according to the highly-placed sources, before Singh meets US President Barack Obama on Friday. This is in spite of concerns expressed domestically that US companies, including Westinghouse, wish to dilute the nuclear liability legislation passed by the Parliament beyond recognition.

A lack of progress in transforming the US-India civil nuclear agreement of 2008 into real projects on the ground is often cited as a major cause for a chill in bilateral relations. However, officials close to the prime minister strongly denied that the United States had any ground for disappointment, and suggested that such claims may just be an American negotiating tactic.

Singh will also make a pitch for more US investment in India. Although the recent diplomatic coolness between India and the US has been driven in large part by the souring of US business on the India story, officials insisted that the outreach was not unusual. Reporters were told that a ramped-up pitch for investment will be the one consistent theme of all major upcoming foreign visits, including to China. The PM is scheduled to meet a group of US CEOs in New York City later this week.

Risk of a sovereign downgrade increases after SBI downgrade by Moody's

The risk of a sovereign downgrade risk has only become exacerbated after international rating agency Moody’s downgraded State Bank of India’s senior debt and local currency deposit to ‘Baa3’, and now has a negative outlook. The market is viewing this as a proxy for the sovereign rating. The State Bank of India and group entities account for 25 per cent of the country’s banking system. Currency strategists say that despite the recent euphoria after the Fed’s “no taper” decision, India is far from the comfort zone.

The stress is not only in the banking system, India Ratings and Research in a report has said that the default rate of corporate finance issuers in the country has risen to 4.5 per cent in FY13 from 3.5 per cent and 0.3 per cent in the previous two years. What this implies is that the RBI’s move to ease liquidity conditions will have little bearing on the current financial condition of borrowers and their ability to repay loans. Scotia Bank’s currency strategist Sacha Tihanyi says that this should remind the market of the risk to the sovereign of a credit rating downgrade, as Standard & Poor’s currently has the country’s BBB– investment grade rating on a negative outlook (other major agencies have it on stable).

Modi, Advani share dais at Bhopal rally

The Bharatiya Janata Party (BJP) tried to put up a show of togetherness at a massive rally in Bhopal, where Narendra Modi was the star. The rally was the first to have party patriarch L K Advani share the dais with Modi, who seemed to do all the right things by referring to Advani as the BJP’s guiding light and publicly touching his feet (although almost as an afterthought, after seeing Shivraj Singh Chouhan doing so). Elsewhere, squabbles within the BJP broke out over the question of its allies, suggesting the road to forming a government at the Centre was not easy.

In his speech, Advani referred to the power sector reforms pioneered by Modi that ensured 24-hour power supply, a model then followed by other BJP-ruled states including Madhya Pradesh. He said on all indices of governance, the BJP-ruled states had stolen a march over others. Recalling the National Democratic Alliance (NDA) led by Atal Bihari Vajpayee formed the government at the Centre in coalition with many parties and that BJP came to power in many states under a similar arrangement, Advani said no other party can challenge BJP’s performance and track record.
“In the coming assembly and Lok Sabha elections, we will win on the basis of the record of the BJP and NDA. No other party can compare with BJP or NDA... It is our achievements, which will fetch a victory for us. We will not win elections merely on the basis of speeches but on the basis of the performance, leadership, achievements and the work done by us,” he said.

Party president Rajnath Singh said BJP workers and sympathisers had been booked under the specious charge of Hindu terrorism and harassed. Singh, who spoke after Advani, said: “Modi can become the Prime Minister of the country and Chouhan the chief minister in Madhya Pradesh only if the worker of the BJP at booth level works hard.”

Party leader Uma Bharti also sought the blessings of the people to make Chouhan the chief minister and Modi “the destiny-maker of the nation”.

The rally was largely a congregation of party workers, called Karyakarta Mahakumbh.

Modi also shared his concerns about the Central Bureau of Investigation (CBI). He said the Centre would not hesitate to use the CBI against political rivals, so the BJP needed to be conscious of this. Modi’s remarks were in the context of the case against former Gujarat home minister Amit Shah for his role in fake encounters after former DIG D G Vanzara turned against Modi and Shah.

Asking workers to make India ‘Congress-free’, Modi said: “I throw a challenge to Congress leaders: that they may choose any tactics in the coming polls but India’s voters will pay them back for each of their misdeeds during the last 10 years.”

In his typical style, he said during the United Progressive Alliance’s regime, there was a scam for every letter of the alphabet. If one were to count the money that the UPA-led government had siphoned off from the average Indian, the counting would start from Bhopal and end at Jan Path in Delhi (residence of Congress president Sonia Gandhi), he added.

“Mahatma Gandhi wanted to dismantle Congress after Independence, but the party did not honour his wish. We will have to work to make his dream come true and rid the country of the Congress party”, he said amid wild applause.

While ‘togetherness’ was the theme of the Bhopal rally, in Andhra Pradesh, the party unit sounded the bugle of rebellion when it rejected the overtures being made to Telugu Desam Party leader Chandrababu Naidu.

BJP’s Andhra unit president Kishan Reddy said the TDP was a ‘sinking ship’ and the BJP would make sure there would be no alliance with it. “If necessary, I will go to Delhi and explain why the alliance will hurt the BJP,” Reddy said in Hyderabad.

Modi said: “Congress harps on inclusive growth but one must know that the term had come out of BJP-ruled states like Madhya Pradesh where leaders like Chouhan have done tremendous work for the poorest of the poor. Those state governments that are working in the interest of the poor in country either belong to BJP or are part of the NDA. It doesn't suit them (UPA) to talk about inclusive growth.”

 

But while togetherness was the theme of this rally, in Andhra Pradesh the BJP unit sounded the bugle of rebellion when it rejected the overtures being made to Telugu Desam Party leader Chandrababu Naidu.

 

BJP AP unit President Kishan Reddy said the TDP was a sinking ship and the BJP would make sure there would be no alliance with it. “If necessary, I will go to delhi and explain why the alliance will hurt the BJP” reddy said in Hyderabad, putting the TDP leaders’ back up immediately.

Before polls, govt sets up pay commission

all it a poll compulsion or genuine desire to help government servants, the Centre on Wednesday decided to constitute the seventh pay commission for its five million employees and three million pensioners — three years before the commission’s recommendations will actually take effect. “Prime Minister (Manmohan Singh) has approved the constitution of the seventh Central Pay Commission,” Finance Minister P Chidambaram said in a statement here.

The pay commission awards, analysts say, might entail a Rs 1-lakh-crore annual burden. But the finance ministry doesn’t want to think about it yet: “don’t pre-judge the issue; let the terms of reference be decided first”.

According to officials, the move might soon be followed by a decision to increase the retirement age of government employees to 62 years from the current 60.

A look at earlier instances suggests the constitution of the pay commission at this time could be aimed at reverting to the usual practice, breached when the sixth pay panel was set up. The Cabinet had approved setting up of the sixth pay commission in July 2006, and its recommendations came into effect retrospectively from January 2006. But, that was because the Bharatiya Janata Party (BJP) -led National Democratic Alliance (NDA) government, in power then, had initially refused to set up the commission. The Congress-led central government on Wednesday tried to beat the BJP, the main Opposition at present, on this count.

“NDA had rejected the legitimate formation of the sixth pay commission in 2003. The Congress set up the sixth pay commission in 2005 and now the seventh one in 2013,” Party general secretary incharge for communication, Ajay Maken, tweeted.

The NDA finance minister had said there was no need to constitute the sixth pay commission, as 50 per cent dearness allowance had already been merged with the basic pay.

Asked whether the fiscal consolidation exercise of the government would not be affected, as it was estimated the exchequer would take a hit of Rs 1 lakh crore due to the recommendations of the seventh pay commission, a senior finance ministry official said: “How can you estimate the burden on the exchequer. The terms of reference have yet to be decided.”

The year 2016-17 would be the terminal year of a five-year fiscal consolidation road map announced by the finance minister. By that time, the government aims to bring down the Centre’s fiscal deficit to three per cent of gross domestic product. In 2012-13, the first year of the road map, the deficit had stood at 4.9 per cent of GDP. The plan is to lower it further to 4.8 per cent this financial year, and then by 0.6 percentage points each year.

 

To a query on whether the government should be allowed to set up the commission — the model code of conduct would come into effect as Assembly polls are due in five states — the official said the decision had been announced, so setting up of the commission would not violate the election commission’s guidelines.

He said the department of personnel would now start discussions with staff associations of government employees for announcing the constitution of the commission, as well as its terms of reference. It would be set up in about a month’s time, he added.

According to the 2011 census, there were 725 million voters in India. The finance ministry tried to brush aside the view that the government had set up the commission to woo the eight million government employees, pensioners and, indirectly, their dependents ahead of general elections.

It rather said the commission had been set up three years in advance to ensure that the recommendations did not have to be implemented retrospectively and there wasn’t any sudden financial burden in a single year.

According to the finance ministry’s statement, the average time taken by a pay commission to file its recommendations is about two years. “Accordingly, allowing about two years for the seventh pay commission’s report, the recommendations are likely to be implemented with effect from January 1, 2016.”

Traditionally, pay commissions have been set up after every 10 years to revise the pay scales of central government employees. States also accept these recommendations for their employees after certain modifications. However, since the sixth commission, headed by Justice B N Sri Krishna, was set up three years later because of NDA’s initial rejection, the gap between the fifth and the sixth commissions had become 13 years. The seventh, being advanced by three years, could also differ from the usual 10-year pattern.

The key area that the sixth pay commission focused on was removing the ambiguity in various pay scales and reducing the number of scales. For that, it introduced running pay bands for all government posts. It had recommended pay hikes of 20-40 per cent and also suggested a new system of four pay bands with 20 grade pays which was accepted with minor changes.

It had also recommended the minimum basic pay of Rs 6,660 a month. However, that was increased to Rs 7,000 by the Cabinet. The financial implications on account of these recommendations were to the tune of around Rs 22,000 crore for 2008-09.

Prem Watsa, the 'richest, savviest guy you've never heard of'

MUMBAI: Prem Watsa, the 63-year-old Canadian billionaire behind the $4.7-billion BlackBerry deal, is seen as the saviour of the struggling smartphone maker. Born in Hyderabad in 1950 and son of a school teacher, Watsa is a first-generation entrepreneur who moved to Canada in the early '70s where he went on to build a multi-billion-dollar financial services and investment empire virtually out of scratch. Fondly referred to as the 'Warren Buffett' of Canada in some circles for his sagacious and mostly long-term bets, against short-term gains, Watsa today controls a business empire that spans across continents, including an exposure in India.

After passing out from the Hyderabad Public School, Watsa went on to complete a degree in chemical engineering from IIT, Madras. After cracking the IIM entrance test in the second attempt, he dropped the plan and went on to pursue an MBA at the University of Western Ontario Business School (later known as the Richard Ivey School of Business) in Canada, as his elder brother was settled in that country. He left India with $8 in his pocket and he had to sell air conditioners and furnaces to fund his education at the university.

After MBA, Watsa began his professional career in 1974 as he joined the investment wing at the now-defunct Confederation Life Insurance Co in Toronto as a research analyst. Watsa concedes that it was a lucky strike for him as he was the only one who turned up for the interview out of four candidates called. He proved his mettle soon enough and became one of the stock portfolio managers for pension clients. His manager, John Watson, was the first major influence on his professional career and taught him all that he knew about investing based on British-born American investor Benjamin Graham's theories of value investing. Graham's theories of safe investing have remained with Watsa all through his career as he rejected theories of quick returns, rather focusing on long-term investments, something that he shares in common with Buffett whom he idolizes.

After nearly a decade with Confederation Life, Watsa worked with a start-up asset management firm, but quit a year later to start his own venture Hamblin Watsa Investment Counsel with a few partners in 1984. His big break finally came in 1985 when he took control of a small Canadian trucking insurance company Markel Financial, which was nearing bankruptcy. That became the base for today's Fairfax Financial Holdings. He re-organized this company and in May 1987, renamed it Fairfax Financial Holdings (Fairfax: short for "fair, friendly acquisitions"). Fairfax has served both as an insurance holding company and Watsa's investment vehicle.

The company thrived under Watsa's leadership. The compounded annual growth in book value per share for Fairfax has been 23% between 1985 and 2012, while the common stock price has compounded at 19% annually. In 2012, gross premium earned was $7.2 billion across the group compared to $17 million in 1985. While Watsa's business success has been legendary, he remained away from the media glare for the most part of his initial professional life. For first 15 years at the company, he barely spoke to a reporter, and he only started holding investor conference calls in 2001. It was for the same reason that one of the magazines described him as the "richest, savviest guy you've never heard of".

While not being very aggressive in his positioning, Watsa showed his fighting spirits when he launched a $6-billion lawsuit against a group of hedge funds in 2006, accusing them of conspiring to drive down Fairfax's shares so they could be shorted. A short position enables an investor to profit when a stock drops.

He has also shown an uncanny sense of sensing trouble, when everybody is gung ho.

He predicted the crash of 1987, the Japanese collapse of 1990 and also the 2008 meltdown in the US. He gained from the US slowdown by picking up shares at rock-bottom prices when others were counting massive losses. And, it is not just business that Watsa is dedicated to. In an interview, he counted his family as one of the pillars behind his success. He met his wife, Nalini Loganadhan, during the final year at IIT and married her a few years later. The couple today has three children - two daughters and a son.

Apollo-backed Sapien Biosciences to work on personalised medicines

It is a new company focused on personalised medicines. Sapien Biosciences, launched on September 23, will initially focus on patients who undergo heart surgeries and angioplasty. It finds the right dosage of the blood thinning medication required by them.

Typically, after surgery and angioplasty, a procedure to clear blocked arteries, patients are prescribed blood thinning medication for three to 12 months. However, many patients don't respond fully to treatment.

Sapien Biosciences is now offering a lifeline to patients by offering a "personalised platelet response test" called 'MyPlatelet'. The company will take blood samples of the patient, conduct tests to study the genetic mutations and blood platelets. It will subsequently, in two to three days, suggest to the doctor the dosage of medicine that is most likely to be effective for the concerned patient.

'MyPlatelet' will cost patients Rs 6,500.

Sapien Biosciences is a collaborative effort of Apollo Hospitals and Saarum Innovations - while Apollo holds 70 per cent share in the venture, Saarum holds the rest of the equity.

The new company, eventually intends to create a "world-class bio-bank that will enable cutting-edge life sciences research and support discovery and development of novel biomarkers, diagnostics and personalised medicine applications."

It is housed in the Apollo Hospitals campus at Jubilee Hills in Hyderabad. Apollo has far invested over Rs 20 crore in the new venture.

Sapien Biosciences hopes to collaborate with Apollo, other healthcare enterprises or companies and drug discovery companies "to study disease epidemiology, validate new diagnostics and identify new drug targets".

"The bio-bank will collect high-quality, ethically consented and 'anonymized' human samples along with medical and sample level data across various diseases - cancer, cardiovascular and diabetes," says Jugnu Jain, co-founder and the Chief Scientific Officer of Sapien Biosciences.

Probe begins into case against The Hindu RE

For the third day running, Resident Editor of The Hindu S. Nagesh Kumar was made to go to the Punjagutta police station here by the police in its ongoing witch-hunt against the newspaper.

The harassment has been going on in connection with the case registered against the newspaper for publishing a report about the visit of Director-General of Police V. Dinesh Reddy to a godman in the Old City. The police commenced investigation into the case registered against the Resident Editor on Tuesday, a day after his bail order was executed.

Accompanied by his advocate Balwanth Reddy and medical practitioner K. Ramakrishna, he reached the station at the designated time. He sought another date for his examination on medical grounds and showed all relevant records.

Mr. Nagesh Kumar said he would appear on September 28, for the questioning. Station House Officer N. Tirupathi Rao, who is the investigating officer, however, insisted that he appear again on September 26. After prolonged discussions, his next appearance was fixed for September 27, in line with a notice that was served on Monday but superseded immediately.

During the 100-minute meeting, the investigating officer questioned the Resident Editor in a general manner.