India

Former finance minister P Chidambaram, who feels the Union Budget for 2017-18 is aimless and directionless, says the government should immediately cut indirect taxes across the board to revive the sagging economy. Demonetisation, he said, damaged India’s GDP growth in 2016-17 and fears that its shadow will fall on 2017-18 and some parts of 2018-19.

He also said lack of creation of jobs for the youth is a powder keg and a small spark can lead to a large explosion. Resentment may not be visible but it can be a “silent killer”. “What is the overarching goal of this budget? It is aimless and directionless,” said Chidambaram, who has presented nine Union Budgets in a span of nearly two decades. “Sometimes, you chase growth. Sometimes, you chase financial and monetary stability. Sometimes, the goal is boosting growth in a slowing economy,” he told media.

Chidambaram said Finance Minister Arun Jaitley missed an opportunity at reviving the economy hit by demonetisation. “That (cutting indirect taxes) is a tried and tested and proven method of boosting economy. He could have easily cut between 4-8 per cent (tax) across the board. “It is only up to GST time and when GST comes, GST will take over. He had a window of about 8 months to cut indirect taxes. It would come into force from 1st of February and I don’t think GST is going to come before October 1. So, he had eight full months to give a boost to economy by cutting indirect taxes,” he said.

Asked if the finance minister should still cut indirect taxes now that the Budget has been presented, he said, “Yes, he should. Even now it is not too late.” Chidambaram said slashing indirect taxes would push consumption and in turn perk up production.

“If you cut indirect taxes by 4-8 per cent, there is going to be a revenue loss, I am not denying that. But just imagine the signal that would have gone to both producers and consumers. And if consumption rises much above the level of the cut, some of the cut will be made up. The idea is to boost consumption which in turn will boost production,” he said.

Chidambaram disputed the government’s contention that the Budget has stepped up investment. “It is not correct. Total expenditure of the government as a proportion of GDP has fallen. Look at the number for the three years 2015-16, 2016-17 Revised Estimate and 2017-18 Budget Estimate. Total expenditure was 13.09 (per cent of GDP), increased to 13.36, but falls to 12.74 in BE of next year. That is a decline of 0.62 per cent and 0.62 per cent of the GDP represents about Rs 90,000 crore.

“Why did you cut back expenditure as a proportion of GDP by about Rs 90,000 crore that could have been used for enhancing spending on infrastructure as well as on social welfare schemes… expenditure in several social welfare schemes as proportion of GDP has fallen. You don’t look at absolute number, absolute number will look larger but as proportion of GDP, it has fallen,” he said.

Chidamabram further said the government should not have reduced expenditure as percentage of GDP and it should have spent on projects and schemes that stimulate the economy. On demonetisation, he said, it is now universally accepted it has damaged GDP in the current year – from 7.6 per cent in 2015-16 to 6.9 per cent as RBI says or 6.75 per cent as Economic Survey says or 6.6 per cent as IMF says or 6.0 per cent as CMIE says. “It is now common ground that the GDP has been affected. The damage is one percentage or more. This will not stop with 2016-17. The shadow of demonetisation will fall on 2018-19 also. 2017-18 definitely and part of 2018-19,” he said. He said 75 per cent of all small, micro and medium enterprises have shut down post junking of 500 and 1,000 rupee notes.

“And if you shut down an industry or business, revival is not easy. He has to go through several hoops again. From going and stabilising credit with banks, beginning with that he has to go through hoops all over again,” Chidambaram said. Jaitley, he said, did not make any revised estimate of direct tax collection for 2016-17 and has kept both personal income tax and corporate tax receipts at the same level to the last digit of the budgetary estimates.

On indirect taxes, the finance minister made an additional gain of Rs 16,000 crore in service tax, but lost Rs 13,000 crore in Customs revenue, Chidambaram said, adding that the only gain made was in excise duty of Rs 69,000 crore. “Which means he has sought to tax the people of India on diesel and petroleum to get this additional (about) Rs 70,000 crore,” he said.

Talking of the present global situation, he said most countries of the world have slowed down or are in a recession. Even the mighty Chinese economy has slowed. “There are only four engines of growth -- one is government expenditure, other is exports, third is private investment and fourth is private consumption. “Of the four engines, three engines are not firing at all. The fourth engine of private consumption suffered a serious damage after demonetisation. Which is the engine you can rev up today? The only engine you can rev up today is government expenditure. The other three engines are sputtering. Therefore, I advocate that you must step up government expenditure,” he said.

AIADMK general secretary VK Sasikala left for the resort in Kuvathoor outside Chennai to meet party MLAs on Sunday evening, in hopes of achieving a breakthrough in her quest to capture power in Tamil Nadu.

The visit, a second in as many days, came on a day when five more MPs landed at chief minister O Panneerselvam’s residence in Chennai to join the rebel rank.

On Sunday morning, four Lok Sabha members - Jaisingh Thiyagaraj Natterjee (Thoothukudi), B Senguttuvan (Vellore), RP Marutharaja (Perambalur) and S Rajendran (Villupuram) – and Rajya Sabha member R Lakshmanan had joined Panneerselvam.

Panneerselvam has seven MLAs with him along with the support of ten MPs (eight Lok Sabha and two Rajya Sabha). Insiders from Panneerselvam camp claim they will eventually win over as many as 45 out of the total 50 AIADMK members in both houses of the Parliament.

“My support is reflective of the people's choice, a collective decision that was taken on basis of self-respect. The post of the chief minister is won by winning people’s affection, as OPS has done,” said Lakshmanan.

Joining him in addressing the gathering, Rajendran said he, like others, faced questions in their districts about who among Panneerselvam and Sasikala they supported. “The people told us OPS is their choice,” said Rajendran.

There also are a large number of youngsters volunteering at the rebel HQ. However, they denied any political affiliation. They were there just to ensure Sasikala did not assume power, they said.

The faction backing Sasikala had warned of taking its displeasure to a different level if the governor delayed the decision any further.

“The governor has accepted Panneerselvam’s resignation and the MLAs of the party unanimously elected Sasikala as the legislature party leader. Now, the governor should invite her to form the next government,” said senior leader R Vaithilingam.

“We are waiting for his reply. If nothing comes by this evening, the general secretary will announce the next move, whether to approach the court or to agitate,” he added.

Three army jawans were killed and two others injured in an encounter with militants in Jammu-Kashmir’s Kulgam district on Sunday. Four militants have been neutralised in the encounter after security forces, in a joint operation with police, conducted searches in Frisal.

Director General of Police S P Vaid told PTI that security forces have achieved a “major success” by gunning
down the four militants. “However, it is unfortunate that two soldiers were martyred and son of the house owner got caught in the cross-fire and succumbed to injuries,” he said.

The forces launched a cordon and search operation in Frisal area of Kulgam district around 4.30 am following information about presence of a large number of militants in the area, a police official told PTI. He said as the security forces were closing in on the position of the militants, the ultras opened firing resulting in injuries to five soldiers.

Asked about the encounter, Minister of state Jitendra Singh told reporters in Delhi that terrorism on Indian soil is being sponsored by Islamabad. “There has been a series of evidences and it is now no longer a secret that the entire terrorism on Indian soil, particularly in Jammu and Kashmir, is being promoted, perpetuated and sponsored by Islamabad,” he said.

The minister lauded the forces for working under difficult circumstances. “They (forces) are operating under most difficult circumstances and have beyond doubt proven themselves as one of the best forces in the world,” he said.

Out of the four militants, three have been identified as Mudasir Ahmed Tantray, Farooq Ahmed Dar and Azhar Ahmed Clashes between protesters and law enforcing agencies broke out soon after the encounter ended, the police official said, adding further details were awaited.

Earlier on February 4, the security forces shot dead two top Kashmiri militants while they were trying to enter politically sensitive Sopore town in Jammu and Kashmir’s north-western Baramulla district. Two police officials were injured in initial response from the duo during the encounter.

A night after a "report" from the governor to the Centre on not being inclined to invite AIADMK general secretary VK Sasikala to form the government surfaced (which was duly denied by the Raj Bhavan), a State cabinet minister and two MPs crossed over to join the rebels headed by caretaker Chief Minister O Panneerselvam on Saturday.

Minutes later, Sasikala sent a letter to Governor Ch Vidyasagar Rao seeking an audience, ostensibly to parade the MLAs who are supporting her. She then came out of Veda Nilayam in Poes Garden to address the cadre, though the message was for the governor: "The party has been staying patient so far in the interests of democracy. But we can remain so only up to an extent; after that, we will do what is required."

Meanwhile, a deputy superintendent of the State police visited the resort near Mahabalipuram where the AIADMK MLAs pledging allegiance to Sasikala have been accommodated, following allegations that they were being detained. The matter had reached the Madras High Court and it had sought a report from the police.

Even as all eyes were on the MLAs, the day started with the information that two MPs were to join the rebel rank - PR Sundaram and Ashok Kumar. The duo reached the rebel HQ, the chief minister's official residence on Greenways Road, where they launched a scathing attack on Sasikala and family. Sundaram claimed all MPs - there are 50 in all from both Lok Sabha and Rajya Sabha - except M Thambi Durai would join Panneerselvam.

But more surprising was the switch over by Education Minister K Pandiarajan, an entrepreneur-turned-party hopper who, only yesterday, had painted Panneerselvam as a betrayer, coward and an opportunist. That clearly weren't the lines this morning when Pandiarajan was at Panneerselvam's house this morning. "People want OPS," he said. Interestingly, he had complained of being trolled when being bombarded by phone calls, supposedly from his voters, asking him to be with Panneerselvam.

These desertions from unexpected quarters jolted the Sasikala camp to seek an urgent audience to prove majority, followed by a clear and direct warning that patience is running thin. What seems to have stung is the report that Governor Rao purportedly sent to the Centre.

The report cites the verdict in the disproportionate assets case against Sasikala which the Supreme Court is expected to deliver soon. This understandably made many in the Sasikala camp nervous about their own political career.

The Raj Bhavan in Chennai denied sending any report to the Union Home Ministry or the President, but the matter did not die with that. That the news about the report was broken by the media in Hyderabad, which incidentally is the governor's home base, is not viewed as a coincidence by many among Sasikala camp.

Buoyed by the developments, rebel leader Chief Minister O Panneerselvam is receiving more support from within his party. Following the IT wing, a section of the AIADMK advocates' wing too switched sides this morning.

Former Rajya Sabha MP PH Manoj Pandian is leading this faction of 100 advocates.

Welcoming them, Panneerselvam launched a signature campaign they initiated, to turn Veda Nilayam in Poes Garden into a memorial for late Chief Minister J Jayalalithaa.

The day is still young, and there is a lot more to come. Stay tuned.

Terming demonetisation as the "century's biggest scam", senior Congress leader Anand Sharma today asked the Centre to issue a white paper on it, saying if his party came to power, it will order a Supreme Court-monitored inquiry into the move.
    
According to the third quarter projections, the growth rate has dropped by one per cent due to demonetisation and there is a downturn in both investment and industrial production, he said at a press conference here.
    
Though the step was taken to fight corruption, black money, the scourge of counterfeit currency and funding of terror activities, it had failed to achieve these goals, he said.
    
"All cash is not black money. Black money is in the bullion market, real estate and in foreign exchange. By withdrawing 85 percent currency in circulation, Rs 15 lakh crore cash has been turned into trash in one go, but after note ban, 58 percent cash returned to the banks defeating the very objective of the move," he alleged.
    
The former Union minister, who was here to campaign for Congress for the February 15 Uttarakhand Assembly polls, said the Centre was talking about going cashless at a time when the whole country has to do without basic facilities like toilets.
    
Sharma said Congress had not boycotted Parliament but the Prime Minister over the latter's "raincoat" barb at his predecessor Manmohan Singh.
    
He also accused Narendra Modi of insulting people of Uttarakhand by making a light-hearted reference to the recent earthquake in the state during a speech in Parliament.

Interceptor missile off the Odisha coast was successfully tested on Friday from Abdul Kalam Island  (Wheeler Island) of ITR at about 7.45 AM by achieving  a significant milestone in the direction of developing a two-layered Ballistic Missile Defence system.

The interceptor mission is termed as "PDV mission is for engaging the targets in the exo-atmosphere region at an altitude above 50km of earth's atmosphere", said a Defence Research DevelopmentOrganisation (DRDO) official.

"Both, the PDV interceptor and the two stage target missile, were successfully engaged," he said.

The main reason and main target behind this mission was developed for mimicking a hostile Ballistic Missile approaching from more than 2000 km away was launched from a ship anchored in the Bay of Bengal. In an automated operation, radar based detection and tracking system detected and tracked the enemy's ballistic missile.

The computer network with the help of data received from radars predicted the trajectory of the incoming Ballistic Missile.

PDV that was kept fully ready, took-off once the computer system gave the necessary command for lift-off. The Interceptor guided by high accuracy Inertial Navigation System(INS) supported by a Redundant Micro Navigation System moved towards the estimated point of the interception.

Once the missile crossed the atmosphere, the Heat Shiel dejected and the IR Seeker dome opened to look at the Target location as designated by the Mission Computer. With the help of Inertial Guidance and IR Seeker the missile moved for interception. All events were monitored inreal-time by the Telemetry/Range Stations, at various other locations.

AIADMK supremo VK Sasikla today sacked presidium chairman and party’s second-in-command E Madusudanan from the party's primary membership, a day after he joined caretaker Chief Minister O Pannnerselvam's camp.

At the same time, she appointed former minister KA Senkottaiyan as presidium chairman of the party, PTI reported.

In a statement issued here, Sasikala said that Madhusudanan violated the party's principles and brought disrepute to it and so was being ousted from the party post and the AIADMK's primary membership.

She also urged party members not to have any truck with Madhusudanan.

The dismissal came a day after Madhusudanan joined hands with Panneerselvam, who has revolted against Sasikala by saying that he quit as Chief Minister under pressure.

The development also comes close on the heels of Madhusudanan’s petition to the Election Commission urging not to recognise Sasikala as general secretary of Tamil Nadu’s ruling party.

Madhusudanan argued that Sasikala was not a party member for a continuous five years and hence she was not qualified to be the General Secretary.

“As per the party by-law, a person can become general secretary of AIADMK only if he/she is a member for a continuous period of five years,” Madhusudanan said.

Earlier this week, Sasikala had sacked O Pannerselvam from the party’s treasurer post for indulging in anti-party activities. He had, however, refused to accept the decision and even wrote to banks to seek his consent before allowing anyone to access the AIADMK’s funds.

In December, after then Chief Minister Jayalalithaa’s demise, Sasikala was elected the general secretary at a general council meeting of the AIADMK.

The CBI has initiated a probe into an alleged cheating case wherein the Army was being made to pay rent for land situated in Pakistan Occupied Kashmir.

As per the FIR registered by the agency, the criminal conspiracy was allegedly hatched in 2000 by the then Sub-Divisional Defence Estate Officer, Patwari, Nowshera along with several private persons.

"It has been learnt that as per 'Jamabandhi' register for the year 1969-70 of the land in question, Khasra no...it is under the occupation of Maqbooza Pakistan but rents are being paid by Defence Estate to the alleged owner," CBI alleged.

It has surfaced that then Sub-Divisional Defence Estate Officer R S Chanderwanshi, Patwari, Nowshera Darshan Kumar along with several private persons including one Rajesh Kumar, allegedly showed the Pakistan Occupied Kashmir (PoK) land as "on rent to Army."

The board comprising an Army officer, estate officer and other officials kept disbursing rental worth Rs 4.99 lakh for the land measuring over 122 karnals because of forged documents submitted to them, the FIR said, adding that a loss of Rs 6 lakh has been caused to the exchequer in the case.

"It has been further learnt that the Army acquired the land on rent from civilians.

A board comprising Army officer, defence estate and revenue department approved the rent after physically verifying the land, but in this matter the Board of Officers, in criminal conspiracy with each other wrongly verified that the land was acquired by the Army, whereas the same is situated in PoK," the FIR alleged.

CBI claimed that the board proceedings were convened in 2000, wherein Chanderwanshi and Darshan Kumar were declared to be under the occupation of defence forces, and the rental compensation to the tune of Rs 4.99 lakh was disbursed to Rajesh Kumar.

A moderate intensity earthquake measuring 5.8 on Richter Scale struck mountainous region of Uttarakhand late on Monday and tremors were felt in Delhi and other parts of northern India. Tremors that lasted for nearly 30 seconds were felt in Chandigarh, Punjab, Himachal Pradesh and parts of Uttar Pradesh also. According to National Seismological Bureau, the epicentre of the earthquake measuring 5.8 magnitude on the Richter Scale was in Rudraprayag of Uttarakhand.

According to the U.S. Geological Survey, an earthquake with preliminary magnitude of 5.6 struck Uttarakhand late on Monday. There were no immediate reports of any loss of life or damage to property.

Nestled in the Himalayan belt, Uttarakhand is known for high seismic activities. “The depth of the quake was 33 km and it occurred at 10.33 PM,” J L Gautam, Operations head at the National Seismological Bureau, a unit of Ministry of Earth Sciences, was quoted as saying by PTI.

In the aftermath of earthquake, Prime Minister Narendra Modi spoke to officials to take stock of situation. Meanwhile, Union Home Minister Rajnath Singh has asked for detailed report on earthquake, while National Disaster Response Force has been put on high alert. According to reports, two NDRF teams have been rushed to Rudraprayag, the epicentre of the earthquake.

Panic-stricken residents ran out of their houses. In many colonies of Dehradun, men, women and children were seen hanging outside their homes in anticipation of aftershocks.

Reflecting on the news, Uttarakhand Chief Minister Harish Rawat said that he spoke to district magistrates and sought a report. “I have spoken to District Magistrate and getting information from various sources through out the state. There is no loss of life but there may be some cracks developed in the houses in far-flung areas. We are still in the process of collecting the information,” he was quoted as saying by PTI.

Earlier in the day, a 5.7-magnitude earthquake also hit central Colombia, shaking large cities including the capital Bogota, officials said, indicating there were no immediate reports of casualties or damage.