Race against Ramzan
Suicide strike on air base
Cash kick to sluggish growth
India sends up spy in the sky
Kidnappers face death
Stalin fate in Chennai balance
Hegde set to part ways with NDA
Calcutta Weather

Washington, Oct. 22: 
Wiser from secretary of state Colin Powell�s shuttle diplomacy in South Asia last week, the US appears to have significantly shifted its position on post-Taliban governance in Afghanistan.

Appearing on CNN from Shanghai yesterday, Powell attributed solely to Pakistan�s president, General Pervez Musharraf, the idea of �moderate elements of the Taliban� being given a role in a future government in Kabul.

Powell said: �My position and the US position is rather clear. There is no place for any element of current Taliban leadership in a new Afghanistan.

�But at the same time, there are many people within the Taliban movement in a leadership position who have not been active and who may well want to become part of a new Afghanistan. And unless you are planning to ethnically cleanse them all or ship them off to other countries, they are going to be there and they will have to be accommodated in what we hope will be a new arrangement that represents all of the people of Afghanistan. But there can be no place in a new regime for the current leaders of the Taliban regime.�

Reflecting this change, the US air force today bombarded the Taliban�s frontline positions outside Kabul and Mazar-e-Sharif.

The opposition Northern Alliance has been complaining that US planes were unwilling to target the Taliban�s frontlines lest the Alliance advanced into Taliban areas. Today�s attacks were to help the Afghan opposition forces advance on major cities.

The Taliban�s official news agency, Bakhtar, confirmed heavy bombing of the militia�s frontlines, about 50 km north of Kabul.

If the Northern Alliance can take control of Mazar-e-Sharif, it will enable the opposition to streamline supplies of arms, fuel and food from Tajikistan and Uzbekistan to the rest of Afghanistan for its forces and people.

During his South Asian trip, Powell found himself buffeted by conflicting pressures from Pakistan, India, Afghanistan�s former king Zahir Shah and the Northern Alliance over the future set-up in Afghanistan.

He was also exposed to the constant intrigues in Afghanistan�s politics and mutual suspicions among key players which would have made any united front tenuous.

Powell said �we also are noticing that the Northern Alliance, which we are supporting, has become more aggressive in their actions up north and moving toward Kabul in the very near future�.

The change in US strategy may have persuaded Musharraf to once again appear on CNN to �hope and wish that this (military) campaign comes to an end before the month of Ramadan, and one would hope for restraint during the month of Ramadan because this would certainly have some negative effects in the Muslim world�.

It is unlikely that the Northern Alliance would be able to take Kabul before Ramadan, even with US air support.

Powell said �we are very interested in seeing them take the town in the north, Mazer-e-Sharif...Whether they actually go into Kabul or not or whether that is the best thing to do or not, remains to be seen. It is an issue that is under continuing discussion�.

Powell said he �would yield to my colleagues in the Pentagon as to what we will do as we approach the season of Ramadan�.


Srinagar, Oct. 22: 
A suicide squad tried to storm an air force base in Jammu and Kashmir this afternoon, triggering a heavy exchange of fire that killed all four militants, a sentry and a driver.

In the first attempt to penetrate a forward air base, militants struck at Quil Pulwama, 30 km from here, around 2.30 pm.

They drove from Pulwama to the base in Avantipur by a Santro (JK01E 1109) posing as policemen. Army, air force and paramilitary forces use the facility, popularly known as Technical airport and considered one of the most secure bases.

The four got off just outside the main gate, firing indiscriminately and lobbing grenades. �Forces engaged terrorists for 40 minutes near the outer gate of the airport and finally shot them dead,� a defence spokesman said.

The Lashkar-e-Toiba has claimed responsibility for the attack on the main air force base in the Valley. The organisation, which had targeted Srinagar airport last December, said two local militants were part of the suicide team. Two of the attackers have been identified as Abu Umar of Pakistan-occupied Kashmir and Mohammad Zakaria.

The initial burst by militants killed a sentry at the gate and the driver of another vehicle. Messages were flashed immediately, bringing troops from the nearby army camp rushing to the spot even as security forces returned the fire. Three personnel of the Indian Air Force and the Border Security Force were injured in the encounter and are in hospital.

There was no damage to the air base, sources said. The encounter took place about 2 km from the runway. Journalists only saw a damaged bunker and bullet marks near the gate.

�It was a fierce gun battle. The militants made several attempts to storm the base but could not, in view of the tight security at the main gate,� an air force officer said. Senior defence officers have ordered search operations in the area and stepped up security at the base.

The strike on the airport followed renewed exchange of gunfire between Indian and Pakistani troops across the Line of Control.

An army officer was killed and three soldiers were wounded last night when Pakistani troops fired across the Line of Control near Nowshehra sector, 176 km north of Jammu. Heavy exchange of fire continued till this morning.


New Delhi, Oct. 22: 
If money can buy growth, Reserve Bank governor Bimal Jalan will not be blamed for not trying hard enough.

In a windfall at the time of war and a worrying economic slowdown, the RBI today fired two weapons in its armoury. First, it cut the cash reserve ratio (money banks keep as cash deposit with the RBI) by two percentage points from 7.5 to 5.5 per cent in two phases. This will put an additional Rs 6,000 crore in the hands of banks to lend from November 3. Another Rs 2,000 crore will become available on December 29.

The second weapon the RBI has unleashed is a bank rate reduction from 7 to 6.5 per cent. Banks will now be able to raise money from the RBI at a rate that is the lowest since 1973. The cut is expected to cause a ripple effect with banks themselves slashing lending and deposit rates. If wishes were horses, this would have been the immediate result.

Banks, barring perhaps the State Bank of India, are not likely to rush through rate cuts. They will wait for the cost of funds to come down before acting decisively. There are two reasons for banks not to act in haste. First, deposit rates are already low. Depositors are looking for safe avenues of parking money where they may get higher returns. If deposit rates come down again, such shifts away from banks will escalate.

Second, banks do not have many avenues to lend. Quality borrowers can raise money easily directly from the market. It is not exactly lack of funds that is hurting industry, but a lack of demand. More and cheaper money will not help correct that. Banks, therefore, cannot expect to push credit offtake just by reducing lending rates. For that, the uncertainty in the form of war clouds has to go first.

Since most banks are currently flush with funds, there is an intense effort to increase activity in the retail loan segment, marked by aggressive marketing of housing and car loans. With a further drop in the bank rate, such activity will pick up further.

The other activity that is expected to pick up is trading in government securities. With the fall in bank and interest rates (the yield) as a result, prices of securities bearing higher interest rates will rise.

This, dealers feel, will help banks earn a decent profit from the money market.

The RBI has done whatever it could do. The chances are it may not fetch the result many, including finance minister Yashwant Sinha, are hoping for.

�The RBI has come out with a forward-looking policy for the next six months. Overall, the credit policy announced today is pro-growth and it is now up to trade and industry and the government to play their part,� he said.

Industrial production has been growing at 2.2 per cent in April to August this year against 5.6 per cent in the corresponding period of the previous year.

Export growth was negative in the same period. �Exports in dollar terms during this period declined by 2.3 per cent against a growth of 21.1 per cent in the corresponding period last year,� the RBI said.

Industry appears to believe today�s steps will stimulate a turnaround. Sanjiv Goenka, president of the Confederation of Indian Industry, said: �It was an ideal combination of measures and would send positive signals to the stock market and industry.�

Ficci said: �This (the measures) must lead to reduction in prime lending rates by at least one percentage point.�


Chennai, Oct. 22: 
India today blasted off into an exclusive club of countries capable of launching spy satellites.

One of three satellites launched simultaneously by the Polar Satellite Launch Vehicle (PSLV-C3) this morning carries a very sophisticated �panchromatic camera for remote sensing�, Isro chairman K. Kasturirangan said. He described the Technology Experiment Satellite (TES) as a �one-metre satellite�, which can give very high-resolution pictures.

Kasturirangan said any �one-metre satellite� is immediately dubbed a �spy satellite�. But, he said, after the camera is activated, �it depends on the user�.

�I (Isro) am not an user, I am only a builder of systems,� the Isro chairman added emphatically.

The 1,108-kg TES, built for a three-year duration, is a dual-use experimental satellite with civil and defence applications. It can be used to demonstrate and validate several advanced technologies, Kasturirangan said.

PROBA, a Belgian satellite sent into space with TES, also has a security application and can be used to pin point specific objects. The third satellite, BIRD, belongs to Germany.

The lift-off, kept secret till Doordarshan flashed the first images of the launch from Isro�s Sriharikota base, has demonstrated that PSLV is a �promising vehicle with prospects for commercial launching of satellites�.

�We had a very successful flight,� said Kasturirangan, the fifth in the PSLV series.


Calcutta, Oct. 22: 
Shaken by the recent spate of kidnaps, the state Cabinet today cleared a draft Ordinance that proposes capital punishment for the perpetrators of organised crime. The Ordinance has been modelled along the lines of the Maharashtra Prevention of Organised Crime Act and will cover kidnaps and hijacks.

But some Front partners protested during the Cabinet meeting to clear the draft, saying the issue should have been discussed at a Front committee meeting before a final decision was taken.

Chief minister Buddhadeb Bhattacharjee clarified that the proposed Ordinance was �in no way comparable to Tada or any other Draconian law�.


Chennai, Oct. 22: 
The Chennai mayoral election promises to snowball into a major controversy even as the ADMK-led front scored impressive victories in a majority of the local bodies in Tamil Nadu today. Direct elections for the Mayor�s post are being held under the new Nagarpalika Act.

While the ADMK has wrested the municipal corporations of Coimbatore, Salem and Tirunelveli, and ally TMC has captured Tiruchi, the DMK just retained Madurai.

But it is in Chennai � a DMK stronghold for nearly four decades � that the DMK�s youth wing leader, M.K. Stalin, faces a grim battle despite being ahead of his nearest rival, N. Balaganga of ADMK, by a margin of over 21,000 votes. Stalin�s victory may still not help the DMK attain a majority in the 155-member Chennai corporation council.

With counting considerably slowed down since last night and reports of ruling party musclemen intimidating DMK booth agents at counting centres, Stalin today accused the ADMK of using their goons to influence the counting of votes.

Alleging that the ADMK and its police-backed hoodlums had entered three counting centres last night and forced out the DMK agents, Stalin said it was a clear attempt to �tamper with the votes�.

Realising that he could not be defeated, the ADMK had resorted to the present game-plan to forcibly capture the wards and reduce the DMK to a minority in the corporation council, Stalin said, adding that he would go on a protest hunger-strike from tomorrow in front of the Raj Bhavan.

DMK general secretary K. Anbazhagan sent a memorandum to the governor, the Union home minister and the Prime Minister, listing these irregularities and demanding a re-count in the affected wards.

Elsewhere in the state, the ADMK-TMC-CPI alliance captured a large chunk of the seats for panchayat union ward members, district panchayat ward members and town panchayat ward members.

For the 102 municipal chairperson posts in Tamil Nadu, both the ADMK and DMK-led fronts shared the honours, while the DMK had an edge over the ADMK in the elections to the 3,346 municipal councillors posts throughout the state.

The Congress under E.V.K.S. Elangovan, leading a third front which included P. Chidambaram�s Congress Janayaga Peravai, fared better than the Vaiko-led MDMK at the various rural and urban local bodies.

The CPI (M) and the Dalit Panthers of India made small inroads into ADMK territory and vote bank in several districts. Even the BJP made moderate gains from its alliance with the DMK.

However, it was the Vanniyar-dominated PMK that came up with an unexpectedly poor performance.


New Delhi, Oct. 22: 
Miffed at the re-induction of bete noire George Fernandes as defence minister, Janata Dal (United) leader Ramakrishna Hegde is likely to quit the National Democratic Alliance. The Karnataka unit of the party is expected to follow suit.

The Hegde camp�s growing alienation with the NDA stems from the fear that the BJP leadership may not oblige the veteran Dal leader with a Rajya Sabha renomination this time. Hegde�s term in the Upper House ends in March he is hoping to get support from the Congress, which can transfer its surplus Rajya Sabha vote to him, sources said.

The Dal (U) has 25 MLAs in Karnataka. With Congress support and five of the eight Independent legislators backing him, Hegde could return to the Upper House.

Chief minister S.M. Krishna is believed to have a good rapport with the Dal leader. Krishna presided over Hegde�s birthday bash in Bangalore on August 29.

Though BJP Union ministers Sushma Swaraj, Venkaiah Naidu and Anant Kumar were invited at the bash, they failed to turn up. Cinestar and BJP leader Shatrughan Sinha went all the way to Bangalore, but he could not make it on time, sources close to Hegde said.

Party leaders in the state are waiting for Hegde to return from France on October 28 to take a decision about the pullout timing.

On October 15, a day after Fernandes was reinstated, the Karnataka leaders passed a resolution that the party would quit the NDA. The leaders discussed how Fernandes had �sabotaged� Hegde�s induction into the Vajpayee Cabinet in 1999. Dal (U) state president C. Byre Gowda, general secretary M. Raghupathy and floor leader P.G.R. Scindia were among the leaders who okayed the resolution.

Deshbandhu Sharma, the Delhi unit president of the party, issued a statement in the capital last week urging Hegde to quit the NDA. �Whatever decision has been taken by the Prime Minister is beyond political ethics (re-induction of Fernandes), a day after the Venkataswami Commission said that the Tehelka tapes were not doctored,� Sharma added.

The Dal (U), which lost to the Congress in 1999, is still a force to reckon with in Karnataka despite its poor performance in Bihar under Sharad Yadav�s stewardship. Party sources said they tried to impress upon Dal (U) president and Union labour minister Sharad Yadav to quit, but he had refused.

�Yadav said without power politics, we cannot do anything. But we are going ahead. In any case, the Dal (U) mainstay is in Karnataka after Paswan (Ram Vilas) split the party in Bihar to launch his Lok Jana Shakti Party. With 11 MLAs now, Sharad Yadav�s Dal (U) will not cross half-a-dozen mark in Bihar in the next elections,� said a leader close to Hegde.

Dal (U) general secretary Mohan Prakash, however, said the matter would be sorted out after Hegde�s return.




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