Rate cut signal to shake up economy
American arms swipe strains honeymoon
Cong sends message minus hope to Mamata
Nepal mission for Ghising hit men
Goon law slapped on quake builders
Calcutta Weather

Mumbai, Feb. 16: 
In an Alan Greenspan-esque act, Reserve Bank Governor Bimal Jalan today slashed the bank rate — the benchmark for the country’s interest rate structure — by half a percentage point to 7.5 per cent in a bid to revive the sputtering economy which is projected to grow at 6 per cent this year.

The rate cut has been widely anticipated but its timing — as US Federal Reserve chairman Greenspan’s last month — caught the banking industry by surprise.

As bankers went into a huddle to consider the implications of the rate cut, IndusInd Bank jumped the gun and announced a half a percentage point cut in its lending rate to 14.5 per cent. Large banks like Bank of Baroda have scheduled board meetings early next week to consider their response. However, the big daddy of the banking industry — the State Bank of India — chose to remain reticent about its moves.

In a related development, the RBI also cut the cash reserve ratio (CRR) by half a percentage point to 8 per cent. The CRR determines the amount of cash that banks are required to keep with the RBI.

While the bank rate is the rate at which the central bank lends to commercial banks, it is often used by banks to set their lending rates. On the other hand, CRR is that portion of deposits that has to be maintained mandatorily by commercial banks with the RBI.

The CRR has been reduced in two instalments by 25 basis points (0.25 per cent) each effective from fortnights beginning February 24 and March 10, respectively. The cut will pump Rs 2,050 crore into the banking system.

RBI explained that the reductions follow after a “review of recent developments in the international and domestic financial markets”.

With more resources now available with banks due to the CRR cut (since they have to maintain lower deposits with the RBI), the reduction is likely to bring down the cost of credit for companies, thus spurring industrial growth.

Welcoming the RBI announcement, bankers said the move was likely to lead to a reduction of 50 basis points (half a percentage point) in banks’ lending and deposit rates.

Bankers are now eagerly waiting for the Union budget as many expect finance minister Yashwant Sinha to bring down the interest rate on small savings by one percentage point. “It has to be seen whether today’s move will be followed by a further cut in PF and postal saving rates,” said Dr K.C. Chakrabarti, executive director of Bank of Baroda.

Last July, the RBI had raised the bank rate by one percentage point to 8 per cent and CRR by 50 basis points in two stages to 8.5 per cent to arrest the rupee’s slide against the US dollar.

Today’s cut is been seen by bankers and analysts as an effort on part of the central bank to kickstart the economy.

“The prime factor which was responsible for today’s cut is that the economy has not been doing well. As per the December industrial production figures, the manufacturing sector grew only by 3.3 per cent which is the worst performance in the last 26 months. Tax collections have also slowed down, indicating that the concerns about an economic slowdown were for real. Therefore, a cut in the bank rate and CRR was mandated,” said Sanjit Singh, senior debt analyst at ICICI Securities.

There are others who feel that by reducing the benchmark rates, the RBI has only been following the trend set by Greenspan in a desperate attempt to revive the flagging US economy where growth rate is down to less than one per cent.

Last month, Greenspan suddenly brought down interest rates by one per cent to give a boost to the US economy. The central banks in Japan and Australia followed suit. This had only fuelled expectations that the RBI would fall in line.

While the RBI had so far remained silent on reduction of interest rates, expectations about a cut however, had faded in the past few days. Today’s announcement therefore generated some amount of surprise among a few bankers.


Washington, Feb. 16: 
America’s new Republican administration has clubbed India with Iran and North Korea and accused New Delhi of being a proliferator in the technologies of mass destruction.

Worse, it has openly said that the US is threatened by such proliferation of missiles and other weapons.

The allegation, the most serious against India’s arms policies since Indira Gandhi ordered the Pokhran nuclear tests 27 years ago, was made by the new US secretary of defence, Donald Rumsfeld, in a highly respected TV programme, News Hour with Jim Lehrer.

The charge, which has the potential of quickly ending the honeymoon between the Bush administration and Delhi, came only days after Rumsfeld met India’s national security adviser Brajesh Mishra in Germany for the first high-level meeting between America’s new administration and the A.B. Vajpayee government.

Rumsfeld’s unexpected outburst against Delhi came when Lehrer asked the defence secretary why Russia was objecting to the Bush administration’s pet project for National Missile Defence (NMD).

“Let us be very honest about what Russia is doing. Russia is an active proliferator; they are part of the problem,” Rumsfeld told Lehrer. “They are selling and assisting countries like Iran, North Korea and India and other countries with these technologies which are threatening other people, including the US and Western Europe and countries in the Middle East.”

While India has so far sought to quietly push the defence secretary’s allegations under the carpet, hoping that they would go away, Russia swiftly reacted to the charges yesterday.

“Even America’s allies don’t believe in the US fairy tales about missile threats that Rumsfeld talks about,” Gen. Leonid Ivashov, head of the Russian defence ministry’s international relations department, said in Moscow.

“Russia is irreproachably fulfilling its international obligations, including those under the regime of non-proliferation of missile technologies,” he said and ruled out any early meeting between Rumsfeld and his Russian counterpart Igor Sergeyev.

Ironically, only last week, India had bent over backwards to please the Bush administration by refusing to join China in condemning America’s plans for the NMD.

China had sought India’s support for the global campaign which is building up against the NMD when its assistant foreign minister Wang Yi met officials in South Block for security talks.

Rumsfeld’s on-the-record charges against India and the clubbing of Delhi with North Korea and Iran, renegade states in the eyes of Washington, show that South Block’s calculations about bonhomie with the Bush administration are thoroughly misplaced.

The defence secretary’s comments on India’s acquisition of weapons technologies came even as a four-member Congressional delegation left for India and Pakistan after announcing its intention to play a role in settling the Kashmir dispute.

They also coincided with reports that Delhi and Moscow were close to finalising a deal to lease a Russian nuclear submarine for the Indian Navy.

Curiously, the charges were made by the defence secretary at a time when military contacts between India and the US are at their height because of the Gujarat earthquake.

US military planes have been flying to India with supplies from the Pentagon and American military personnel have been on the ground helping with relief work in Gujarat.

Besides, an American naval ship is in Mumbai for the International Fleet Review, signalling a renewal of defence links between India and the US after the Pokhran-II nuclear tests in 1998.

Rumsfeld’s comments are, however, a reminder to Delhi that relations with the Bush team will strictly be on America’s terms and not the other way round as was with the Clinton administration.


New Delhi, Feb. 16: 
The Congress has authorised senior Bengal leader A.B.A. Ghani Khan Chowdhury to meet Mamata Banerjee tomorrow with a proposal to dump the BJP and join the secular platform.

The mission is unlikely to pay dividends as the Trinamul Congress chief has made it clear that she is not willing to part ways with the BJP just yet.

The Trinamul’s prospective allies in the Congress prepared for a split with Saugata Roy, who is spearheading the pro-mahajot campaign, meeting Mamata tonight along with a few other MLAs.

In an effort to keep options open, Roy had earlier in the day met Sonia Gandhi, as had Chowdhury. Chowdhury, a former Bengal Pradesh Congress Committee president, admitted after the meeting that “nothing had materialised”.

The Congress leadership made a last-gasp attempt to prevent a breach in the Bengal unit by asking the pro-mahajot MLAs to persuade Mamata not to field candidates against them in exchange for a similar gesture.

Kamal Nath, the Congress’ new general secretary in charge of Bengal, suggested a three-way alliance to break the deadlock. According to the plan, the Congress will not put up candidates against the Trinamul but will fight the BJP.

The proposal, however, is unlikely to be approved by the AICC high command. Sonia Gandhi indicated as much. “We will not have any indirect or direct understanding with anti-secular forces,” she said.

Sonia, however, sought to build bridges with Mamata. Asked whether the Trinamul leader was anti-secular, Sonia replied: “No.”

According to the Bengal Congress leaders, the proposal for a three-way alliance was floated by Kamal Nath to pass his first major test after being entrusted with the job of looking after the state.


Siliguri, Feb. 16: 
A team of investigators is leaving for Nepal tomorrow to track down Gorkhaland leader Subash Ghising’s assailants who are believed to have taken shelter there.

An officer connected with the case told The Telegraph that hand-picked personnel, chosen from the special investigation team that was set up in the aftermath of last Saturday’s ambush, will leave for the neighbouring kingdom to hunt down the militants who are learnt to be hiding in Chandaguri area of Nepal’s Jhapa district.

“We have information that the assailants are holed up in a hideout near Chandaguri in Jhapa district of eastern Nepal. A team will leave for Nepal tomorrow and will be assisted by our Nepal counterparts. Though we had information that the attackers had sneaked into the neighbouring country, our hands were tied due to diplomatic hurdles,” the official said.

Security has been tightened around Ghising after a bomb threat call was made to the Siliguri nursing home where he is recovering.

The investigators claimed to have succeeded in getting Dimple Dewan, the 32-year-old housewife whose house near Siliguri was allegedly used by the conspirators as a control room, to talk.

Information revealed by Dimple has given the police vital clues on the plot to eliminate Ghising.

The investigators who were working on the evidence found from the killed militant, including a cellphone and a diary, said they had managed to crack the coded entries.

“We have managed to decipher the coded entries in the diary found on the slain militant. Entries in the diary had codenames with a set of numbers against them. Dimple, who had initially proved to be tough nut to crack, has started singing now. She is not divulging much and is only giving us information we already knew. She is very shrewd but with time, we expect to break her completely,” the official said.

According to the investigators, Dimple was given the codename “kangaroo” while Om Raj Kothwal, the car-hijacker-turned-drug dealer, was known as “Gangu”.

“While we’ve managed to piece together Dimple’s role in the conspiracy, the part played by Kothwal is not very clear. Calls recorded on the cellphone recovered from the slain militant were made from both Dimple’s land line, which has been sealed, and Kothwal’s mobile. But we’re still not sure to what extent Kothwal was involved in the conspiracy,” the official said.

Sources said that Kothwal, an ex-armyman from Doda district of Jammu and Kashmir, had settled down in Darjeeling district in 1992. He also claims to be the Shiv Sena’s Darjeeling district vice-president.


Ahmedabad, Feb. 16: 
For the first time in the country, the Prevention of Anti-Social Activities Act (Pasa) was today invoked against two builders in Gujarat whose constructions had collapsed.

Rakesh Saratchandra Shah and Nirav N. Shah, who are missing, had constructed three multistoreyed buildings in Maninagar — Kalsmriti Apartments, Pujal Apartments and Utsav Apartments — which came down during the earthquake, killing more than 200.

Police have warned the duo that if they do not appear within two days, they will be declared absconding and all their properties will be attached.

Earlier in the day, the Union home ministry contacted state home minister Haren Pandya and asked him to take some action before Parliament meets on Monday. Union home minister L.K. Advani is the Gandhinagar MP.

Coming under sharp attack for allowing the “killer” builders to escape, the government has been forced to take some action. Four builders have so far been arrested and 70 criminal cases have been registered.

Fighting charges of a BJP-builder nexus, the home department issued a statement iterating that none of the builders responsible for nearly 1,000 deaths in the city would be spared.

But Ahmedabad residents are not convinced. “Everyone knows that the builders are a very significant funding lobby for the BJP,” said Hitesh N. Shah, a doctor. “They have been charged with criminal conspiracy. But the question the BJP has to answer is how much they were themselves involved in the conspiracy.”

For Ahmedabad, where most of the deaths were caused by buildings that collapsed, a few arrests are not enough. As Hitesh Shah says: “The disaster in Ahmedabad has been called manmade by experts. If the government is innocent as it proclaims, the builders will have to be hanged because they are killers.”

The decision to invoke Pasa came amid reports of blatant violation of building rules.

In one rubble-clearing operation, army jawans found that sacks of sand had been used instead of bricks in the walls of the Mansi Apartments which collapsed, killing 33. Undersized steel rods in the columns crumbled 20 seconds after the earthquake.

Only 10 of the city’s more than 1,000 highrises had building use permission, a recent survey by the Ahmedabad Municipal Corporation and the Ahmedabad Urban Development Authority revealed. The rest of the buildings were, therefore, not fit to house people who had paid hefty sums for the apartments.

Only two highrises had obtained building use permission in the past 10 years, investigators found. More than 99 per cent of buildings in the corporation area alone did not have the permission.

Of 2,000 building plans cleared annually by the corporation, building use permission is sought for only 20. In the rest, swimming pools are constructed on terraces, construction plans are changed at the last minute and cheap and outdated material is used, flouting norms.

Himgiri Apartments, which took 20 lives, had an undeclared and illegal cellar and penthouse.

In Visat Apartments, which claimed 12 lives, 16 flats were sanctioned in the building plan. But when the building came down, it had 24 flats and three shops.

An army officer involved in rescue operations said what surprised him was that while one whole portion of a twin building remained intact, the other had totally collapsed. “The so-called twin buildings was a very easy way to hoodwink flat buyers who would be shown how sturdy the first building was,” he said.

Officers in the town development department appear to have been rewarded generously for turning a blind eye to all the irregularities. A house owned by one town development officer, drawing a salary not more than Rs 16,000, has been judged one of the best bungalows in the city. The officer, now wanted by the police, has been to the United States more than 16 times in his career.

Rakesh Shah was part of the town development department till he chose to switch to the real estate development business — an indicator of the cosy relationship between the department and the builders.

When surviving residents of Shikhar Apartments that killed nearly 100 approached builder Subhash Shah, he sent gun-toting goons to beat them up in a blatant show of his clout. Subhash Shah was, however, arrested later.




Maximum: 30.2°C (0)
Minimum: 16.1°C (-1)



Relative humidity

Max: 96%
Min: 51%


Mainly clear sky, with possibility of morning mist. Minimum temperature likely to be 17°C.
Sunrise: 6.12 am
Sunset: 5.28 pm

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