Jadeja chase takes sleuths to Jaitly home
Mamata goes for gold
Sena jitters as PM keeps hands off
Interest rate up in trend reversal
Calcutta weather

New Delhi, July 21 
Armed with a search warrant, income-tax investigators had swooped down on Samata Party president Jaya Jaitly�s south Delhi house last morning but were stopped at the doorstep.

Jaitly�s daughter Aditi is said to be the fiancee of cricketer Ajay Jadeja, who is under investigation for alleged links with bookies. The tax sleuths had searched Jadeja�s Greater Kailash residence as part of yesterday�s nationwide raids. Jadeja often stays in Jaitly�s Khirki village house.

I-T sources said Jaitly refused to let the team in, saying they had no business to search her house. An officer then contacted the top brass and was told to abandon the search after recording her statement.

Finance ministry sources said an irate Jaitly later complained to finance minister Yashwant Sinha that the taxmen had �exceeded their brief� as they could not raid a house that did not belong to Jadeja. She is also learnt to have informed party colleague George Fernandes, currently in Sierra Leone, of the investigators� �high-handedness�.

Jaitly confirmed the I-T bid to raid her home but denied she had used her influence in government to stall the operation. �The men who came initially refused to identify themselves and only wanted me to open the door. When I refused, one of them asked a gunman to take aim, at which point I said I was not going to be cowed down. I wanted them to at least identify themselves but they just wanted me to open the door. Then another official came and explained they had mistakenly thought it to be Ajay Jadeja�s residence. He said he wanted to ask some questions, so I let them in. If you want to talk to me in a civilised manner, I will talk,� Jaitly said.

She acknowledged that the sleuths did have a warrant but did not search her premises after talking to a �senior I-T officer� on phone from her residence. �They obviously were given the wrong impression that this is Jadeja�s house and I explained to them that he is just a long time friend of my son and my daughter. They have known each other since school,� Jaitly said.

A member of the search party said some of Jadeja�s belongings, such as a pair of gloves and shoes, were found inside the house while his car was parked outside.

Jaitly said she told the officials that Jadeja�s golf kit and some of his T-shirts were there in the house. �Jadeja and my son often go to play golf so he (Jadeja) changes here. When he is out of town, he leaves the car with Aditi,� she said.    

Calcutta, July 21 
The run-up to next year�s Bengal Assembly elections virtually began today as Jyoti Basu and challenger Mamata Banerjee crossed swords, threatening to wipe out each other in the ballot box.

Deftly turning a commemorative event into a high-octane celebration of the Trinamul-BJP�s capture of the Calcutta Municipal Corporation, Mamata enthused thousands of loyalists � who assembled braving incessant rain � as she called for an assault on Writers� Buildings.

�Drive out the Red, save the state,� she thundered at the annual rally to commemorate the deaths of 13 youth in police firing seven years ago.

�When we take Writers�, mark my words, we will turn Bengal into a golden state in four years.�

As Mamata threatened to savage the Left, the crowd that almost brought the city to a standstill during morning peak hours roared in approval. �Go, go, Left Front,� they chanted, along with her. They went into a frenzy when she sought their �help in taking over that big red building�.

About a km away in the Assembly lobby, Basu took a swipe at Mamata, saying she and her men had tried to �capture Writers� once with arms and learnt their lesson... again they are talking about it.�

Declaring the rally �illegal� because Mamata had not sought police permission to hold it, Basu dared her to put even one step inside Writers� Buildings.

Mamata waved away Basu�s comment, saying even Left leaders did not seek sanction, but city mayor Subrata Mukherjee declared: �The city falls under my jurisdiction and I shall decide who holds rallies and where.�

Mamata announced that her next rally would be held at the Brigade Parade Grounds in November to �sound the death knell� of the CPM.

�But, don�t forget,� she said, �this will be followed by another one at the same venue in January where we will celebrate the freedom of Bengal from the clutches of jallad CPM.�

Mamata also raised slogans against the CPM, carrying the crowd with her. �Aar nei darkar, baam front sarkar�, �lal hatao, desh bachao�, they yelled.

�After our performance in the Calcutta and Salt Lake civic elections, Jyotibabu is scared... but remember Assembly polls will be held under the Election Commission and it will not be easy for the Left to rig them,� she said.

Mamata was buoyed by Youth Congress leader Paresh Pal joining her rally, signalling that mahajot was a possibility before the elections.

Several leaders, including junior external affairs minister Ajit Panja, announced to loud cheers that Mamata would address next year�s rally as �chief minister of Bengal.�

n Another report on Page 8    

New Delhi, July 21 
On a day the Supreme Court blasted the Centre for speaking in different voices on the Srikrishna Commission report on the Mumbai riots and the Congress leadership goaded the Maharashtra government to take �legal action� against Balasaheb Thackeray, Prime Minister Atal Behari Vajpayee did not make any commitment to troubled Sena leaders he would intervene to ensure Thackeray was not arrested.

After meeting the Prime Minister at his Race Course Road residence, anxious Sena ministers, Suresh Prabhu and Manohar Joshi, who resigned on Wednesday, shrugged and said whether they would return to office depended on Vajpayee and Thackeray.

Vajpayee has not accepted their resignations, but has given no assurance he would prevent Thackeray�s prosecution, belying hopes in the jittery Sena camp. All that Vajpayee told Prabhu and Joshi was that he would consult his Cabinet colleagues.

Neither Joshi nor Prabhu was in any mood to stay back for the Cabinet meeting this evening that was held immediately after they had finished their discussion with the Prime Minister. They left for Mumbai.

It appeared that the Supreme Court reprimand to the Centre, which came with a directive to file an affidavit to make clear its stand on the Srikrishna report on the 1992-93 riots in six weeks, had made Vajpayee further reluctant to send a message that he was prepared to stand up for Thackeray.

On the contrary, the court�s observation that the Centre should come out with a consistent position on the report that censured Thackeray for writing incendiary articles in Sena mouthpiece Saamna seemed to have emboldened the Maharashtra government.

Chhagan Bhujbal, deputy chief minister, said on a TV channel: �The Supreme Court observation has strengthened the hands of the law.�

The Congress Working Committee, meeting on the day, prodded chief minister Vilasrao Deshmukh to deal with Thackeray with an �iron hand�.

Faced with a Hobson�s choice, the Centre was looking at several legal options but did not wish to be seen as openly siding with the Sena at this stage. With only a few days left for Parliament�s monsoon session, the government wants to tread carefully.

Vajpayee was consulting disinvestment minister Arun Jaitley and law minister Ram Jethmalani. Both have been practising Supreme Court lawyers in the past.

In the presence of home minister L.K. Advani, Vajpayee went into details of the case and asked these legal brains to look for solutions without raising a political storm.

He dropped broad hints to suggest that he would not act under pressure from Thackeray. The Prime Minister has already spoken to Sharad Pawar, head of the Nationalist Congress Party, partner in the Maharashtra coalition with the Congress, but Pawar did not make any commitment.

Jethmalani reacted sharply to the Supreme Court observation and said he knew law �as well as anyone else�.

In Mumbai, where he met Sena and BJP leaders today, Jethmalani issued a statement, a copy of which was released in Delhi, saying that he was willing to �illuminate judicial minds� on the Supreme Court bench on the subject.    

Mumbai, July 21 
The Reserve Bank today attempted to scoop out the excess cash swirling about in the banking system by raising the Bank Rate � the reference rate for the country�s interest rate structure � by one percentage point to 8 per cent and the cash reserve ratio (CRR) by half a percentage point to 8.5 per cent. The twin measures were designed to prop up the badly battered rupee which plunged to a historic low of 45.0250/0300 per dollar on Friday.

The cash reserve ratio is a percentage of the incremental deposits that banks are statutorily required to keep with the central bank.

The RBI took the steps after consulting the Union government which was obviously as worried as the bank over the slide in rupee value. With the rupee value corroding fast, the government decided to err on the side of caution by tightening money supply within the economy.

Finance minister Yashwant Sinha told reporters in Delhi the decision was �unpleasant but unavoidable.� He refrained from giving a time-frame by when the rates would be reversed. Compounding the government�s worry was a creeping rise in the inflation rate to almost 6 per cent from about 3 per cent a few months back.

The RBI went a step further when it cut cash outflows to the banks by pruning the limits on refinance � money given to banks for specific activities � by 50 per cent. While the increase in the cash reserve ratio will be implemented in two phases, money market circles estimate that the measures would cull over Rs 6,000 crore from the banking system. This is because the CRR revision would absorb resources of scheduled commercial banks to the extent of Rs 1,900 crore at each stage (Rs 3,800 crore in all) and the reduction in the refinance limits would deprive the banks of over Rs 2,000 crore.

The twin moves, which stunned the entire banking and money market circles was an obvious step to rescue the battered rupee. Highly placed banking circles said the RBI decision was primarily aimed at �squeezing out the extra liquidity in the banking system which had resulted in the rupee chasing too few dollars��.

The RBI said the increase in Bank Rate is effective after today�s close of business; the CRR increase is effective from the fortnights beginning July 29 and August 12. There will, however, be no change in the limits under liquidity support facility to primary dealers in the government securities market, the statement said.

One of the country�s apex chambers � Ficci � said the increase in bank rate by one percentage point would mean an increase in the prime lending rate by three quarters of a percentage point. This would spark a rise in the PLR from a current level of 11.25-11.75 per cent to 12.5 per cent - 13 per cent.

But today�s bid to reign in the money supply to cool down money markets and the inflation rate is also expected to have a flip side. Said Arun Bharat Ram, CII president, �these measures might prove to be a double edged sword.� With interest rates going up, investments could be expected to falter and working capital costs turn dearer.    

Temperature: Max: 2.7�C (-5), Min: 26.4�C (normal) Relative Humidity: Maximum: 98% Minimum: 85% Rainfall: 25.7mm Today: A few spells of light rain Sunset: 6.21 pm, Sunrise: 5.06 am    

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