Oil decontrol a sham

The government has raised basic excise duty on petrol and diesel for the second time in roughly two weeks to mop up gains made by fuel retailers from a sharp fall in global crude prices, a benefit that was supposed to be passed on to consumers under a much touted decontrol of prices in the sector.
Basic excise duty was raised by Rs.2.25 per litre of petrol and Rs.1 on a litre of diesel.The duty was raised by Rs1.50 on both fuels in mid-November, which the fuel retailers offset against their gains to leave retail prices unchanged. In a true market pricing regime, this benefit should be going to consumers by way of hefty reduction in prices. With the government raising the basic excise duty on petrol and diesel, the benefits of fall in crude prices are unlikely to be passed on to the consumers. The government is estimated to mop up Rs.20,000-21,000 crore per year from the two rounds of excise duty revisions. The paltry price cuts announced on Sunday and the move to raise excise duty have dashed the hopes of consumers eyeing a substantial reduction in their fuel bill. On Sunday , the state fuel retailers had reduced petrol price by 91 paise a litre and diesel by 84 paise on the basis of the average crude price in the fortnight ending November 30.
On Friday , the last trading day of that fortnight, the cost of India's crude purchase stood at $70.29 per barrel. This declined to $67.72 a barrel on Monday , December 1, the first day of this fortnight, a drop of $2.57 per barrel in two days. With global benchmarks at five-year low, this gain is expected to widen in the days to come as $60 a barrel price looms. It is this gain that the government is mopping up to garner additional resources for containing the fiscal deficit in the face of a sluggish economy and tepid revenues. Petrol pricing has been deregulated since January 2013 and diesel was deregulated in October. Global crude prices have been declining since June-July , coming down some 36% since then. While petrol price has been reduced seven times since August, diesel price was cut thrice since its deregulation.
The government has reasons to revise the basic excise duty , say government officials.“Excise and customs duty are tools for any government for not only raising resources but also to protect consumers at times of economic exigencies. Customs duty on crude was reduced from 5% to 0%, excise duty was cut on products by Rs.5, even customs on products was also reduced when oil prices were going through the roof around 2008-09,“ said an official.

Somewhere in Delhi....

A mysterious, early morning fire destroyed one of east Delhi's big churches, St Sebastian's Church in Dilshad Garden, prompting allegations of foul play by the Christian community . Police have registered an FIR against unknown persons under section 436 (mischief by fire with intent to destroy house) of IPC.
The blaze started in the early hours of Monday and reduced to ashes the church's interior, including the altar, and all images and statues. Several churchgoers stood outside the charred 13 year-old shrine the entire afternoon, protesting against what they believed was a planned arson. Delhi archbishop Anil Couto has in a memorandum to PM Narendra Modi and home minister Rajnath Singh demanded a judicial inquiry into the incident. Couto also alleged that police took a long time to react and were late in sending officers and forensic units to collect evidence. Archbishop Couto, in his memorandum, demanded that the government must repair the building before Christmas, ensure that policemen guilty of dereliction of duty are punished and that special police investigation teams are set up to trace the guilty .
The fire department said they received a call at 7.26 am. Four fire tenders took less than five minutes to reach the spot, officials said. “We found the whole place burning furiously .It took us 40 minutes to control the blaze,“ said a senior Delhi Fire Services (DFS) official.
Police officials aren't ruling out a planned assault. “ All angles are being probed. The statements of various people have been recorded and evidence is being examined. The crime and forensic teams have inspected the site and lifted samples, including fingerprints and others,“ a senior officer said.
The first to arrive on the scene, apart from a permanent chowkidar, was the parish priest, Father Antony Francis. “It was around 6.30 am. Within 10 minutes of receiving a call from the chowkidar, who suddenly saw flames coming out of church windows, Father Francis reached the spot. He called others and everyone got busy trying save the church,“ said Father Stanley , another priest.
He added that there was an overwhelming stench of kerosene in the entire church when he reached it. “Traces of it could be seen floating on water with which fire tenders had flushed our church. Undoubtedly this was planned vandalism,“ said Father Stanley .Visitors on Sunday didn't recall observing anything strange. “While Sunday prayers are important, yesterday was especially important for me as children were receiving their first holy communion and my daughter was among them. We left the church around 11 pm and there was nothing amiss,“ said Anthony Joseph. He said around 600 people attend the Sunday mass.
The church is surrounded by religious sites. On one side lies Varadha Ganesh Mandir, in front of which is a crematorium, and on its other end is an Orthodox Syrian church. Local Christians, of whom there are about 1,500 families, say they have always lived peacefully in the area. However, they recall one instance of vandalism against the same church. “In 2010, it was stoned by some people.We still don't know why ,“ said Roby Matthews, a regular at St Sebastian's.

Some reasons to cheer

After remaining sluggish for a significant period, the manufacturing sector had something to cheer about as data showed the core sector — comprising energy, cement, steel and fertilizer — rising to a four-month high in October, along with signs of recovery in car sales and factory activity hitting a near two-year high in November. The robust core sector data, which accounts for nearly 40% of the index of industrial production (IIP), came a day ahead of the Reserve Bank of India’s (RBI’s) monetary policy review. The core sector grew an annual 6.3% in October compared to 1.9% expansion in the previous month and a decline of 0.1% in October 2013. The sharp rebound, which augurs well for industrial output data due later in the month, was powered by coal and electricity sectors, which posted strong expansion.Three sectors — cement, fertilizer and natural gas — remained sluggish.
Separate data showed that manufacturing activity hit a near two-year high in November on the back of strong foreign and domestic orders. Rising from 51.6 to 53.3, the HSBC Purchasing Managers’ Index (PMI) reached a 21-month high in November, the 13th consecutive month of expansion.
Car sales recovered after two straight months of decline in November, providing some relief to the sector weighed down by slowing demand and high interest rates.
Maruti stayed strong with a growth of 17% in the domestic market at sales of one lakh units against 85,510 units in the same month last year. Hyundai, the second-biggest maker, also reported positive numbers as its domestic volumes were up 6% at 35,511 units against 33,501 units in November last year.
Sales for the car industry had slackened in the festive months of September and October, and year-on-year volumes were negative. Wholesale deliveries were down 1% in September compared to 3% in October.
A few companies as well as industry body Society of Indian Automobile Manufacturers (Siam) fear that sales may slip into the negative for the third year in a row if the economy does not pick up in pace and excise duty relief packages are not extended.
High interest rates have been a key factor behind the decline in the car industry for the last nearly three years. The players are still worried as sales have been up only 3% in the April-October 2014-15 period.
The government, meanwhile, reduced import tariff value on gold to $388 per 10 grams and on silver to $540 per kg, following global price trends, reported agencies. The tariff value on imported gold was $401 per 10 grams and silver at $575 per kg for the last fortnight of previous month.
The import tariff value is the base price at which customs duty is determined to prevent under-invoicing. It is revised on a fortnightly basis taking, into account global prices. The increase in tariff value on imported gold has been notified by the Central Board of Excise and Customs. Globally, gold in Singapore, which normally sets price trend on the domestic front, fell 2.1% to $1,142.88 an ounce, the lowest level since November 7 and silver nosedived by over 8% to $14.42 an ounce, the lowest price since August 2009.

India & Bangladesh

A parliamentary standing committee on external affairs has ratified the land boundary agreement (LBA) with Bangladesh, paving way for New Delhi and Dhaka to conclude their biggest pact so far.
The BJP , which as the main opposition stoutly opposed the bill during the Manmohan Singh-led UPA government, has changed its stand on the agreement. On Sunday , PM Narendra Modi declared in Assam that his government would ratify the LBA because it would help curb illegal migration. The government is now expected to bring a bill to amend the Constitution to make the necessary changes on India's official boundaries with Bangladesh. The Constitution (119th Amendment) Bill, 2013 is aimed at ratifying the LBA under the Indira-Mujib pact of 1974 to exchange areas and people on either side of the border.
Shashi Tharoor, who heads the committee, said the decision was unanimous.Sounding confident that the bill would sail through Parliament, he said, “It's important to understand that we are not losing any territory , because we don't actually have access to the enclaves inside Bangladesh. We are merely regularizing the reality on the ground.“
In its report presented to Lok Sabha, the panel said coming into force of the pact may result in a “modest“ demographic change in bordering areas. It observed that the security dimension due to influx of population should be considered seriously by the government. “Not only would some Indian citizens return to the mainland from previously held enclaves but a number of currently Bangladeshi nationals would also be given Indian citizenship after the area is ceded to India,“ it said.
The passage of the amendment will give India an unprecedented advantage of a secure boundary and be able to curb illegal migration, smuggling and other criminal activities. India's map will be redrawn as it will get 2,777 acres of land and transfer 2,267 acres to Bangladesh.
Officials said, “The exchange is notional. The exchange of enclaves will legalize a situation which already exists. The exchange of adverse possessions confirms that each country will legally possess the territories it's already holding.“

NaMo in the North East

Prime Minister Narendra Modi said the government wants to develop the north-eastern region as the gateway to the proposed economic corridor with India's eastern neighbours and Tripura would power that plan as an energy hub. “If 21st century belongs to Asia, then north-east will be the gateway to Asia,“ the PM said after dedicating to the nation the second unit of a Rs.10,000 crore power plant built by ONGC-Tripura Power Company Ltd at Palatana, 65 km from the state capital. Oil minister Dharmendra Pradhan, who was earlier the BJP point person for the state and coordinated Modi's visit, said at the outset the PM's mantra for governance “clearly says the country cannot grow without development in the north-east“.
Modi drove the point about his government's commitment to the region's development by saying, “I have spent the last three days in the north-east. I wonder when was the last time that the people in the region had the PM's company continuously for three days at a stretch. It is time to act east, rather than look east. “My first engagement had to do with speed (railway line).This is my concluding engagement in the region and has to do with energy (power plant).You not only need speed and energy but direction also for development.“
The PM used the power station as backdrop to draw the contours of his plan for turning Tripura into a hub for promoting regional cooperation for the benefit of a Bangladesh energy delegation under Tawfiq-e-Elahi Chowdhury , PM Sheikh Hasina's energy advisor, attending the function. “We are now capable and willing to supply Bangladesh as much power as it wants,“ he said by way of clearing sale of 100 mw sought by Dhaka and thanked the Bangladesh government for allowing movement of heavy equipment for the plant through its ports and roads. In his speech, Chowdhury enumerated Bangladesh government's desire for sourcing fuel and power from India as well as establishing a regional energy network along with Bhutan and Nepal.
In a development package for the Northeast, PM Narendra Modi on Monday promised to provide Rs.28,000 crore for laying new railway lines and announced sanctioning of Rs.5,000 crore for 2G mobile coverage in the region.
On the last day of his hree-day visit to the region, the PM said in Kohima that the Centre has earmarked Rs.53,000 crore in the budget for the development of the Northeast and would focus on developing he “untapped“ tourism potential of the region and laying of new railway lines for he purpose.

Somehwhere in Maharashtra....

A new port at Karanja near Uran is slated to start operations in a year's time. Located 16 km from Gateway of India and around 7 km from the Jawaharlal Nehru Port Trust (JNPT), the port will have both cargo handling and ship repairing facility. Chief minister Devendra Fadnavis performed the project's bhoomipujan on Monday .
While the 10-jetty project, costing Rs.750 crore, will get completed only by 2020 with 8.5 million tonne per year cargo handling capacity , the first jetty with half a million tonne facility will start in the next 12 months. JNPT currently handles 60 million tonnes of cargo every year. The project will be developed by the Karanja Terminal and Logistics Private Ltd (KTLPL) on a build-operate-and-transfer (BOT) basis.
“In the next two years, there would two jetties in place with cargo handling capacity of over 1 million tonne,“ CEO of Maharashtra Maritime Board Parag Jain said. He pointed out that this would be the first multipurpose port with ship repairing facility and is expected to attract many ship operating companies.

Reds strike in Chhattisgarh

Maoists struck in Sukma district on Monday , killing 14 Central Reserve Police Force (CRPF) personnel, including two officers. The Maoists allegedly adopted a cowardly tactic, using villagers as shields for the ambush that took place about 6 km from Taarmetla, where 76 CRPF jawans were killed in April 2010 in the deadliest single-day insurgent attack yet on Indian security forces.
“The Naxals used villagers as shields, so our troops couldn't retaliate with full force as that would have cost villagers’ lives,” a senior CRPF officer said.
“The slain officers included deputy commandant D S Verma and assistant commandant Rajesh Kapuriya. At least 13 to 14 jawans were also injured,” a senior CRPF officer supervising the rescue operations said over phone from Jagdalpur, the divisional headquarters of Bastar. The toll could rise further as the wounded jawans would have to survive the night on first-aid at CRPF medical camps. The nearest hospital is about 100 km away . Helicopters have left for Jagdalpur to carry the injured to the state capital, but the evacuation can be done only on Tuesday morning. CRPF officer said A there cold be some ca sualties on the Maoist side as well. The attack took place on a day when a team of National Security Advisory Board was in Chhattisgarh to meet the CM and top officials on the security situation in Maoist hotbeds. Chhattisgarh CM Raman Singh is learnt to have drawn the team's attention towards Maoist cadres surrendering in Bastar and expressing hope that the region was on track to normalcy .
CRPF personnel, drawn from paramilitary's 223 and 206 battalions, were on an area domination exercise in the forests between Elmaguda and Errabore, where the rebels attacked. The precise location of the ambush is Kasalnar village, near Chintagufa and Chintalnar, close to Dornapal-Jagargunda road in Sukma district. “Our forces retaliated and engaged the rebels in a fierce encounter,“ a CRPF officer said. Security forces in Bastar have been on a propaganda drive in recent weeks following the surrender of a number of Maoists, with many rebels saying they want to join the political mainstream. But there has also been criticism that those surrendering were small-time cadres facing court cases for giving support to the Maoists.
Union home minister Rajnath Singh condemned the attack as an act of cowardice. He will visit Raipur on Tuesday to assess the situation. “My condolences to the families of our brave CRPF men who sacrificed their lives in the line of duty. It was an act of cowardice. I strongly condemn this dastardly act of violence,“ Singh said.He spoke to the CM, asking him to closely monitor the situation.
Reinforcements were being sent to the area and the offensive was being led by CRPF inspector general (Chhattisgarh), H S Sidhu.