Lashkar has docs, engineers as recruits: report

The Pakistan-based terror group Lashkar-e-Taiba (LeT), which is blamed for the 26/11 Mumbai attacks, is now attracting "more young, educated men, some of whom even hold advanced degrees," a US daily reported on Thursday.

"The profile of those joining the militant group Lashkar-e-Taiba is changing," the Washington Times said citing Brig. Gen. Mahmood Shah, who served the Pakistani Army in the largely ungoverned tribal areas along Pakistan's porous border with Afghanistan.

"The big change is that until a few years back most of the militants were hailing from the [Afghan] frontier, but now the scenario has changed and young men from all over Pakistan are joining," Shah was quoted as saying in a report from Lahore.

A ripe breeding ground for the new militants is southern Punjab, he told the Washington Times. Since the school system in Punjab is better than in the tribal areas, most of the new entrants to militant groups are better educated, Shah said.

The only Mumbai attacker captured, Muhammed Amir Ajmal alias Kasab, had completed only the fourth grade, according to Indian and Pakistani press reports. But in a recent interview, a Kashmir-based LeT commander told the Times that members of the group include young men with master's degrees in business administration and bachelor's degrees in computer science.

The militant commander, who goes by the name Abu Aqasa, spoke by cell phone from Lahore and answered other questions in writing, the Times said.

"We have doctors and engineers and computer specialists working for us," he said. "These people don't necessarily fight wars with us. They mainly help us spread our message in cities and villages and also help us in our dispensaries, hospitals and other charitable works."

Abu Aqasa was quoted as saying the organisation uses educated people and especially those with good communications skills to recruit supporters in religious congregations. Once a young man has embraced the militants' ideology, he is inducted into the organisation and sent for further training.

An organiser for a Lahore-based religious organisation told the Times dire economic conditions are the main reason young, educated people are being attracted to militancy in Pakistan.

"People can't find jobs and have nothing to eat," said the man, who asked not to be identified to avoid attracting attention from the police.

"Families find it attractive that if one person is sent for jihad, then that means one less mouth to feed in their house."

Hundreds of thousands have joined the group in Pakistan-administered Kashmir and that while they have been affected by a government crackdown following the attacks in Mumbai, they are still going strong, he was quoted as saying.

Kashif Alam, senior superintendent of police in Peshawar, told the Times the profile of the average militant in that northwest Pakistani city near the border with Afghanistan has changed but that the number of educated Pakistanis was actually decreasing.

"We're seeing an increase in the number of criminals who are working for these militant organisations," he was quoted as saying. "More and more of their operations are being carried out by criminals. Some of the people we have captured were found with thousands of rupees in their pockets."

However, profiles of two would-be suicide bombers captured in the tribal areas and shown to the press contradicted Alam's views, the Times said.

Ali Raza, who surrendered to the police in November, was in his final year studying mass communications. In Dera Ismail Khan, a young man wearing a jacket loaded with explosives was intercepted inside a mosque. He was later found to have completed his high school matriculation.

Don't make the mistake of attacking us, Pak warns

India should not make the "mistake" of carrying out surgical strikes against Pakistan as such an action would provoke a strong response, Foreign Minister Shah Mahmood Qureshi said on Thursday.

Pakistan did not want war but is ready to defend its frontiers, Qureshi told reporters in his hometown of Multan. If India made the "mistake of carrying out a surgical strike", Pakistan will deal sternly with such an eventuality, he said. "We will be compelled to respond if it happens," he said.

Asked if the possibility of war could be ruled out amidst escalating tensions in the wake of the Mumbai terror attacks, Qureshi said: "If you are asking me, I am not ruling out anything. But if war is imposed, we will respond to it like a brave and self-respecting nation."

He added, "I want to give a message to India that we are the torch-bearers of peace and remain committed to our desire for peace...Contrary to our reasonable, cooperative and non-aggressive attitude, some elements from India are issuing provocative statements."

Regional tensions have escalated after India blamed Pakistan-based elements for the Mumbai terror attacks that killed over 180 people. India has asked for action against these elements, but Pakistan has been insisting that it needs evidence from India to take forward its investigation into the incident.

Qureshi said Pakistan condemns terrorism and wants to expose those involved in such activities. It has already promised cooperation to India in this regard, he said.

"We will not resort to provocation while remaining committed to cooperation but at the same time, we will not tolerate any pressure," he remarked. Pakistan, he said, should "hope for the best but be prepared for the worst".

The country and the armed forces are vigilant and keeping a close watch on developments. "The situation keeps changing and we will prepare a strategy after examining any change," Qureshi underlined. "We are continuously monitoring the situation on the ground and in the air. Our air force and armed forces are on alert."

Meanwhile, presidential spokesman Farhatullah Babar said "some elements in both India and Pakistan" did not want peace between the two neighbours.

"As Pakistan-India relations were improving...Mumbai happened. There are elements on both sides who not want Pakistan-India relations to improve. The Mumbai incident has occurred at that very moment when relations were not only improving but I think a strategic advancement was being made," he told Dawn News channel.

The two countries now have to decide whether the Mumbai incident "should be allowed to derail the peace process or be viewed as an obvious challenge to the process".

He added, "The government of Pakistan is determined that the Mumbai incident should not be allowed to derail the peace process and this is what we also urge the Indian government."

Mullah Omar's designs on India

Did you hear what Sitaram Yechury told the Rajya Sabha during the debate on the tragedy in Mumbai?

'With the Indo-US nuclear deal, with the strategic partnership that you are building with the United States of America, are you prepared to face the threats of Taliban Al Qaeda our shores, not that Indian Muslims will be converted but the attacks will come from outside India because you are seen as a strategic ally of the USA? Has this even entered our radar of thinking that because of this nuclear deal and the strategic relationship we are exposing ourselves to new types of terrorist threats, which did not exist in India earlier?'

First, I hope Comrade Yechury was merely letting his dislike of the United States come through. If he was sincere in what he said, doesn't that amount to handing a veto over Indian foreign policy to the likes of the Taliban?

Comrade Karat was quick to disown the Kerala chief minister's remarks about Major Unnikrishnan's family. May we expect a clarification soon, or was Comrade Yechury actually expounding the CPI-M's official policy?

Second, Sitaram Yechury was just plain wrong. This is scarcely the first time that India has emerged on the Taliban's or Al Qaeda's hit-list.

On October 26, 2001 the Arabic television channel Al Jazeera broadcast a message from Mullah Omar, the leader of the Taliban. The relevant passage read: 'This world has long been troubled, and full of wars and... these troubles will continue and these wars intensify. This is not caused by terrorism, but by the four countries which bear the responsibility for terrorism: America, India, Russia and Israel... This is why Muslims worldwide hate these states and want revenge.'

Mullah Omar was speaking almost seven years before the United States Senate approved of the Indo-American nuclear deal. His dislike for India stems from his belief that India must revert to Muslim rule.

That is not an isolated view. In the wake of the Mumbai tragedy, an article appeared in Time magazine under Aryn Baker's byline. It carried the following: 'We (Muslims) were the legal rulers of India, and in 1857 the British took that away from us,' says Tarik Jan, a gentle-mannered scholar at Islamabad's of Policy Studies. 'In 1947 they should have given that back to the Muslims.'

If that is what 'gentle-mannered scholars' believe in Pakistan would you care to imagine what 'militants' think?

There is no reasoning with such men, no amount of 'promoting people to people ties' is going to convince the likes of Mullah Omar to back off. It is quite possible that he sees himself following in the footsteps of certain earlier residents of what is now Afghanistan, men such as Mahmud of Ghazni and Mohammed Ghori.

Sitaram Yechury spoke in the Rajya Sabha of a 'total lack of appreciation.' One might argue that the blindness, deliberate or otherwise, is squarely that of the Left. One point, however, on which I might agree with the Marxist leader is that there is -- or could be -- a larger strategic aim behind the Mumbai tragedy. Previous attacks proved that Mumbai cannot be brought to a halt by terrorism. (Assuming the official statistics are correct, 173 people were killed in the November 2008 attack, fewer than the 209 who lost their lives in the Mumbai trains blasts of July 11, 2006.) So what was the terrorist objective?

Mullah Omar has made his dislike of India amply clear. But take a look at the map of Asia, and you will find that there is a rather large chunk of territory between India and any Afghan warlord with visions of conquest, namely Pakistan.

Was the deliberate public savagery of the Mumbai tragedy intended to push India to war with Pakistan? Many in Delhi believe that this was indeed the case. But why would the Taliban and Al Qaeda want to do so?

The answer may lie in the rise to power of Barack Obama. He is famous for his opposition to the war in Iraq; less publicised is the fact that Obama has been a consistent proponent of fighting more vigorously in Afghanistan. Both during the election campaign and after it, Obama supported the call for sending 20,000 additional troops to Afghanistan. More, he has refused to put a ceiling on the number of men or the time they will be there.

Where do the Taliban and Al Qaeda turn for sanctuary if they are pressed in landlocked Afghanistan? The Russian-dominated areas in Central Asia will provide little help. (Russia, please recall, is one of the four foes identified by Mullah Omar.) The Shia rulers of Iran to the west have no love lost for the Sunni fanatics led by Mullah Omar and Osama bin Laden. That leaves only Pakistan.

There is no dearth of terrorist outfits in Pakistan who would support the Taliban and Al Qaeda, the Jaish-e-Mohammed, the Lashkar-e-Tayiba, and the rest of that crew. But the Pakistan Army itself -- possibly even elements of the Pakistan public -- would rather not face American wrath.

But there is nothing that unites Pakistan more quickly or more vehemently than the threat of 'Hindu' India. As the war clouds loom the Taliban, Al Qaeda, and that alphabet soup of terrorist groups get the opportunity to become heroes in Pakistan, the sword-bearers of militant Islam against Hindu India as they would love to be seen. (And as some of them genuinely think of themselves.)

There are sure to be several in the Pakistan Army that would support a bid to overthrow the civilians and instal a fundamentalist government in Islamabad. War with India -- or even a credible threat of war -- would offer the perfect cover.

And control of Islamabad would give the Taliban and Al Qaeda the ultimate prize -- Pakistan's nuclear arsenal.

But you need India to go to war with Pakistan for all this to fall into place. This is where the Mumbai tragedy comes in, or rather the public outrage that followed the wanton attacks. The Taliban and Al Qaeda might well have calculated that a weak government in Delhi could not resist public pressure, that it would be forced to order surgical strikes on terrorist camps either in Pakistan occupied Kashmir or in Pakistan proper, and that this would result in outright war.

Once upon a time Pakistani strategists defended their support for the Taliban by saying that Afghanistan provided 'strategic depth' in case of a war with India. Mullah Omar has turned that theory on its head; to him Pakistan represents 'strategic depth' in his war with the United States, then a staging camp for the conquest of India.

We in India remember Mahmud of Ghazni best today as the man who sacked Somnath. But there were several steps he took over many years on the road from Ghazni to Gujarat -- first securing his base in Lahore and Multan before moving on to what is now India. I am sure that Mullah Omar has not forgotten his history.

Mullah Omar is generally referred to as the leader of the Taliban. He has a grander vision of himself, acknowledged even by Osama bin Laden as the 'Amir-ul-Momineen,' the 'Leader of the Faithful', the title once claimed by the Caliphs, superior even to Mahmud of Ghazni who was a mere sultan. To a man of such overweening ambition, wouldn't the attacks in Mumbai be well worth the throw of the dice?

How fake currency funds terror

Investigations into the Mumbai attacks have revealed that a large part of the money to fund the terror operation were obtained through fake currency rackets and hawala channels.

Intelligence Bureau sleuths say the menace of fake currency is on the rise and there is a specific information that this money is being used extensively for terror operations.

IB sources told this correspondent earlier that Pakistan's Inter Services Intelligence raises Rs 1,800 crore (Rs 18 billion) annually to fund terror operations and that a major chunk of this amount comes in through fake currency rackets.

IB officials say Rs 30 lakh (Rs 3 million) of the Rs 50 lakh (Rs 5 million) spent on the attack on the Indian Institute of Science, Bangalore, in December 2005 was obtained through the fake currency racket.

Investigating agencies claim that the amount of fake currency in India is a shocking Rs 170,000 crore (Rs 17 trillion).

Reserve Bank of India [Get Quote] officials dispute this figure and say that as on July 2008, the total currency available with the Indian public was Rs 603,000 crore (Rs 63 trillion) and if what the IB is saying is true, then it would mean that 28 per cent of the currency in the country is fake.

The fact that fake currency is being generated with the ISI's blessings in Pakistan is no secret. IB dossiers suggest that the notes are printed in Pakistan and then transferred to Dubai. In Dubai, the money is collected by hawala operators and dumped in India.

All fake currency reaches Maharashtra first, according to investigators. This is because it is familiar terrain for fugitive gangster Dawood Ibrahim. His proximity with the ISI grew after he took over responsibility of pumping fake currency into India.

IB officials say while Dawood controls most of this racket, Aftab Bhakti, originally from Mumbai, and Babu Gaithan, from Hyderabad, take care of operations in Dubai. The duo are in charge of collecting the money and then transporting it to India. This money is transported through individuals travelling between Dubai and India.

Labourers, who go to Dubai in search of employment, are the usual targets. When they return to India to visit relatives, they are lured with incentives to carry the fake currency. The notes are covered in carbon paper and stashed in suitcases and covered with perfume, clothes and other goodies. IB sleuths say there have been instances where notes have been packed in photographic albums.

While a large chunk of the fake currency is sent from Dubai, a sizeable amount of money also comes in through India's borders with Bangladesh and Pakistan.

Majid Bilal, Harkat-ul-Jihad-al Islami terrorist Shahid Bilal's brother, during his interrogation, said that Pakistani agencies had made it compulsory for terrorists to carry fake currency into India each time they crossed the border. He said the point men were based in Uttar Pradesh, Rajasthan, Andhra Pradesh and Maharashtra. The fake money is exchanged for original notes on a 2:1 basis. The money generated is then passed onto various terror networks in India to fund operations.

Majid mentioned that Rs 5 crore (Rs 50 million) was spent on last year's Hyderabad blasts and all this money was generated through the distribution of fake currency.

Both RBI and IB sources say it is difficult to differentiate between real and fake currency notes.

But an RBI official says there are prominent differences between the real and fake notes.

In a fake note, the security thread or the silver bromide and the logo are hazy. The three watermarks on each note -- the Ashoka Pillar, Mahatma Gandhi's image, denomination and the words RBI -- are not as prominent compared to original notes. In the fake currency, the sprinkled blue dots are not visible when seen through ultra violet light. Lastly, the superimposed digits are not visible when seen horizontally.

RBI officials, who have closely observed fake notes printed in Pakistan, say:

• The distinctive numbers are smaller in size.
• The alignment of series prefix are not in line when carefully examined.
• Thick lettering is used to print the issuing authority's name.
• Continuity of the security thread is not maintained.
• Alignment of the register on the left hand side of the watermark is not proper.
• Watermark on the left hand side bears a thicker image of Mahatma Gandhi whose eyes and spectacles are thicker in size.
• Intaglio printing is absent.
• Optical fibre marks are present when exposed to ultra violet light, but these are few when compared to genuine notes.
• The security thread does not glow under ultra violet light.
• The paper used is made of wood pulp while compared to the security paper, cotton and special ink used in the manufacture of the notes by the RBI.

There is a growing concern that more and more fake notes make their way into the Indian banking system. A bank official, speaking on condition of anonymity, explained that there are two ways in which such fake currency reaches banks.

Business establishments are targetted by the counterfeiters and the fake notes passed on to such entities in the course of business. The unsuspecting establishments innocently deposit the fake notes in the bank.

In some cases the perpetrators of the racket themselves deposit the fake cash, usually during peak hours and during busy periods like the festive season. Bank tellers, who are under tremendous pressure at these times, accept the notes without authenticating them.

While the RBI says that banks ought to be more careful and should have a fool-proof screening process, bankers say it is extremely difficult to keep a tab on every currency note.

Although the fake currency racket is a huge threat to the Indian economy, the conviction rate is a mere 6 per cent across the country. Explains R G Sadashiv Reddy, a senior advocate, "Such cases are incomplete unless the person, who originally floated the note, is caught. Usually, the case comes to light only when the fake currency has changed hands several times and there is no point in convicting a man who was last in possession of the notes."

Another hindrance is the law relating to such cases. An amendment to the Criminal Procedure Code now seeks to resolve this problem. This amendment proposes for the inclusion of more scientific experts to give evidence in cases relating to fake currency notes, in addition to officers of the Indian Mint or India Security Press, Nashik. Section 292 of the Criminal Procedure Code is proposed to be amended to enlarge the list of offices whose expert opinion on counterfeit currency can be considered as evidence.

By January 2009, the RBI proposes to withdraw all currency notes printed from 1996 and 2000. The RBI says that counterfeit notes are largely in the 1996 and 2000 series and hence it would be best to withdraw this series and introduce a new series of currency notes. The RBI says the new series will have enhanced security features. RBI officials, while understandably refusing to divulge the features, say these notes would be hard to copy.

The Central Bureau of Investigation plans to develop a national data bank of fake currency notes to help identify its origins.

Maruti may cut production if demand remains sluggish

Maruti Suzuki said on Wednesday it may consider production cut if the market does not improve.

The company, which has been negotiating contract manufacturing deal for its A-Star model with Nissan, also expects to start exports for the Japanese car maker by around February-March next year.

Maruti Suzuki India managing director Shinzo Nakanishi said that across the world there has been a slowdown in demand, including China, India and other BRIC countries.

"I hope not but if we are obliged then we will do it," he told reporters here when asked if the company would go for a production cut.

On the company's planned export of the A-Star for Nissan, an agreement on the volume has not been signed as yet but shipment to Europe is "expected by about February-March next year," he said.

"Our focus is on the network stocks. If the network stock is overflowing, then the company would take appropriate measure," he added.

In the April-November period, the company's sales growth witnessed a negative growth of three per cent compared with the corresponding period last year.

BCCI to come under tax net

The income tax department has come out with a circular that redefines the term "charitable purpose", that is likely to bring associations like Confederation of Indian Industry or Ficci and Board of Control for Cricket in India, one of the world's richest sports bodies, outside the purview of exemptions.

The circular, which was published on December 19, now says any entity that does business or trade in exchange for a fee or income cannot claim exemption from paying income tax.

Many organisations avoid paying taxes by taking advantage of the definition under Section 2 (15) of the Income Tax Act, which defined "the advancement of any other object of general public utility" as a "charitable purpose".

The government moved an amendment in March 2008 to plug this loophole by tightening the definition of what constitutes a charitable purpose. After nine months, the tax department has now come out with a definition that will exclude commercial activities undertaken by entities like BCCI and industry associations like Confederation of Indian Industry, to name a few, from claiming exemption.

The tax rate will be 30 per cent plus cess and surcharges as applicable.

The Central Board of Direct Taxes had, in fact, constituted a committee to examine the taxability of BCCI earlier this year.

BCCI, registered under Section 12 (A) of the Income Tax Act as a trust, was availing of an income-tax exemption under Section 11 by claiming to be a charitable organisation. It had said the promotion of cricket is a public utility.

BCCI, however, may find it difficult to continue as a tax-exempted entity, especially after it launched the money-spinning tournament Indian Premier League this year. It may be asked to pay taxes on income from commercial activities like IPL, sale of television rights, tickets and advertisements from financial year 2008-09.

In 2007-08, BCCI earned a total income of Rs 1,000.41 crore and a surplus of Rs 303.15 crore. This fiscal, the board is likely to earn Rs 200-300 crore less because the Pakistan tour has been cancelled, said a BCCI official. Niranjan Shah, secretary of BCCI, declined to comment saying he needed to take a look at the circular.

Similarly, organisations like CII, Assocham and Indian Medical Association will have to pay taxes on income earned from rendering services to non-members. For example, if a hall belonging to an industry association is rented out to non-association members, this income would now attract tax.

However, the CBDT has provided some leeway to charitable entities that may be undertaking some incidental commercial activity to support public good like relief to the poor or medical relief.

In the event of a dispute, the tax department has retained the right to determine whether an activity is commercial in nature or not, based on facts, the circular said.

Did you know?

Olympic sprint champion Usain Bolt is aiming to break Michael Johnson’s 400 metres world record, which has withstood the efforts of the world’s best sprinters for nine years. “There are no major championships in 2010 so I could go for the 400 record that year. The training for 400 is so much harder, but I’m thinking about it,” Bolt said recently.

***

Spin bowler Pragyan Ojha was born on Teachers Day and his favourite festival is Holi although he hasn’t been able to celebrate it for the past three years owing to his cricketing travels. He is also an avid reader and his friend and fellow cricketer Robin Uthappa recently presented him with a copy of Robin Sharma’s book The Monk who sold his Ferrari.

***

Swimmer Michael Phelps is beginning to train again after a long lay off. He wants to return to the pool in Baltimore where he first learnt the sport. “You get different sorts of people there, not just professionals. Next to me you might have a baby in swimmer-diapers and in another lane you may see a little old lady taking her daily exercise — it’s fun,” he says.

***

Olympic bronze medallist, wrestler Sushil Kumar was the star attraction at the national wrestling championship which was held in the rural environs of Nawabganj in Uttar Pradesh. His gesture of coming all the way to a remote place and taking part in the competition gave the tournament a huge facelift.

***

Footballer Lionel Messi’s skills have drawn wide acclaim from his fellow players. “It is as if someone commands him from the stands, like in a video game,” said Everton player Mikel Arteta. “I have never seen a human run with the ball at that speed. I have not seen Diego Maradona so I cannot compare, but Messi is simply unbeatable.”

BSP MLA remanded in judicial custody

BSP MLA Shekhar Tiwari, arrested in connection with the brutal murder of an Uttar Pradesh PWD engineer, was on Thursday remanded in judicial custody for 14 days by a court here.

The order remanding 48-year-old Tiwari in judicial custody was passed by Chief Judicial Magistrate Samarpal Singh. The MLA will be lodged in Etawah jail.

Tight security arrangements were made in the court premises in the wake of violent protests against the killing of PDP engineer M K Gupta who was allegedly beaten to death by Tiwari and his associates after he turned down their demand for a huge sum for birthday celebration of Chief Minister Mayawati, a charge denied by the state government.

PWD engineer's body bore 32 torture marks

Marks of torture and electric shock have been found on the body of an Uttar Pradesh engineer who was allegedly lynched by a ruling Bahujan Samaj Party (BSP) legislator for refusing to pay for Chief Minister Mayawati's birthday celebrations, according to the autopsy report, officials said on Thursday.

Slain Public Works Department (PWD) engineer MK Gupta's body bore 32 injury marks, while one hand was fractured. He had been given electric shocks, and his hair had been pulled out in clumps, the report revealed.

BSP legislator Shekhar Tiwari, who has been arrested for the murder, was presented at a court in Auriya district at noon Thursday.

Activists of the Opposition Samajwadi Party, which has called for a state wide shutdown on Thursday to protest the killing, were stopping trains at many places in the state. State government engineers have also called for a shutdown to protest the killing.

Tiwari was arrested Wednesday from Rania town in Kanpur (rural) district.

The state administration has said the incident had no connection with Mayawati.

The police are on the lookout for two more suspects named in the FIR (first information report) filed by the victim's wife Shashi Gupta.

The state police chief sought to term the incident as a "fallout of kickbacks in contracts in the PWD".

Tiwari and his musclemen had allegedly barged into Gupta's house around 2 am on Wednesday, locked up his wife in the bathroom and thrashed the engineer after stripping him.

Around 5 am, Tiwari carried a severely injured Gupta to the nearest police station and told the police to register a case against the engineer for "indulging in hooliganism".

The police, however, took him to hospital around 7 am where he was declared dead.

According to the victim's cousin Sharad Gupta, the engineer was under pressure to shell out a hefty amount for Mayawati's birthday celebrations.

"On earlier occasions too, Tiwari visited his house a number of times, demanding money. But my (cousin) brother expressed inability to give the money and his refusal led to this incident," Sharad Gupta told reporters.

He also said, "My cousin had apprised PWD Minister Naseemuddin Siddiqui about Shekhar Tiwari's oft-repeated demand for money, but nothing concrete was done to restrain the MLA."

Every year on January 15, the BSP supremo holds a big birthday bash and party leaders at various levels are reportedly directed to make their assigned contributions, a practice that Mayawati has openly admitted in the past.

Maya rejects CBI probe into engineer's murder

Rejecting the demand for a CBI probe into the murder of a PWD engineer in Uttar Pradesh allegedly by a BSP MLA, Chief Minister Mayawati on Thursday strongly condemned what she claimed to be a mischievous campaign" by the Opposition to defame her government by linking the killing to her birthday celebration.

To counter the campaign, Mayawati told reporters here that her party would observe her birthday on January 15 by organising huge rallies across the state against the Congress, BJP and Samajwadi Party's "wrong doings" during their rule in the State.

"Where is the need for a CBI probe when the state police, on my orders, have arrested all the accused in the case," Mayawati said at a crowded press conference a day after PWD engineer M K Gupta's murder - allegedly by BSP MLA Shekhar Tiwari - shook the state.

Quoting preliminary investigation reports, the BSP chief said it seemed that the prime cause of the murder was a tussle over the issuance of PWD contracts among the employees of the department.

"The charges against my party MLA will be probed. He has already been arrested and sent to jail. No other party has ever taken such stern action against their own members," she said.

In reply to questions, Mayawati acknowledged that the legislator, Tiwari, earlier belonged to the Congress party and "had a criminal past".

"When he wanted to join our party, we asked him about it. He said he was framed by the opposition parties. So, we told him to prove his innocence through his actions after he joined our party. We told him 'you will have to prove through your work'. Strict action will be taken if you are found to be doing the same things, we also told him. And we took strict action against him yesterday," she said.

Claiming that BSP had restored law and order in the state which was in shambles in the past, Mayawati said bureaucrats and engineers used to live in an atmosphere of fear when Samajwadi Party ruled the state. "Corruption and criminalisation of politics had become chronic then."

She said it was "criminal and highly condemnable" to link the engineer's murder to her birthday celebrations and alleged fund raising for that occasion.

Mayawati also charged the media with carrying out the Opposition's campaign "without any evidence" and said "if you have proof, those can be investigated. But if not, then you should apologise."

Describing the incident at Auraiya as "tragic", Mayawati blamed the Congress, BJP and Samajwadi Party for trying to take "political mileage" out of it, instead of condoling along with the grieving family.

Charging the Congress-led UPA, supported by SP, and the BJP-led NDA with being "the epitome of corruption", she said these opposition parties were so perturbed over their shrinking mass base, that they had no other issue against the BSP government but to link the engineer's murder to her birthday celebrations.

The Chief Minister accused the opposition parties of "dancing to the tunes of corporate houses and big business" and framing policies according to their diktats.

"The UPA Government's policies are made in the drawing rooms of corporate honchos. The stories of corruption of Samajwadi Party are on the lips of every citizen. Therefore, these parties should not open their mouths," Mayawati said, adding that these parties had been thoroughly exposed among the masses.

The BSP supremo said she had asked all her party legislators and MPs not to collect any fund for the upcoming general elections. "This job will be done by those in the party organisation," she stated.

Meanwhile, Samajwadi Party General Secretary Amar Singh said, "Mayawati is trying to eliminate Samajwadi Party workers and crush our agitation. She accepted her MLA's role in the PWD engineer's killing. She has also accepted that she takes money from the public."

Pakistan says ready to retaliate if India strikes

The Pakistan National Assembly has passed a unanimous resolution condemning the November 26 Mumbai terror attack but has also warned India against undertaking surgical strikes in any part of Pakistan.

Pakistan's army chief General Ashfaq Parvez Kayani has said Pakistani armed forces would give an "equal" response within few minutes if India carried out any surgical strike inside their territory.

Kayani said this at a meeting with President Asif Ali Zardari at the Aiwan-e-Sadr on Wednesday.

The Army chief apprised the President of operational preparedness of the armed forces.

"The armed forces are fully prepared to meet any eventuality, as his men are ready to sacrifice for their country," Pakistan daily The News quoted Gen Kayani as telling the President.

Zardari believed in gearing up efforts for peace, which should otherwise not be taken as a sign of weakness, the paper said.

He said, "Pakistan wanted peaceful and cordial relations with all its neighbours, but the threatening statements of Indian leadership were creating an atmosphere of aggression and harming the regional environment."

The President added, "We are keeping a close watch on all the latest developments and threatening tones of Indian leadership."

He said all the national security agencies, the army, political leadership and public were completely united to befittingly meet any aggression against Pakistan.

"Islamabad is in touch with all friendly countries, which were being briefed about Pakistan's peace efforts and the hostility shown by India."

"We do not want any war with India, as that would prove detrimental to both our nations," the President was quoted as saying.

Zardari, however, expressed his satisfaction over the preparedness of the Army and said all necessary resources would be provided to the armed forces. He said, "We have the right to defend our borders in case of any aggression."

Meanwhile, Pakistan's Prime Minister, Yousaf Raza Gilani said he believed that Dr Manmohan Singh was under pressure, but that Pakistan now wants the international community to urge India to defuse the hostile environment.

"I think there is tremendous pressure of the public on him (Dr Manmohan Singh) otherwise we had good working relations with each other. We also urge the world to to convince India that they should diffuse the situation which is at the moment," Gilani stated.

IT job losses in India can top 50,000 in Jan-June 2009

Over 50,000 IT professionals in the country may lose their jobs over the next six months as the situation in the sector is expected to worsen due to the impact of global economic meltdown on the export-driven industry, a forecast by a union of IT Enabled Services warned. ".

There would be 50,000 job losses (IT and BPO put together) over the next six months," Karthik Shekhar, general secretary of UNITES India, a politically neutral union of ITES professionals told PTI. The job loss in the IT and BPO sector in the country topped 10,000 in the September-December period, Shekar said. While employees of medium-sized companies bore the brunt of job losses in the September-December period, it's going to be their counterparts in the big and small firms who would increasingly face the axe in the coming six months, he said.

UNITES India, affiliated to the global union United Network International, suggested that the companies in trouble could resort to salary and incentive cuts without trying to "squeeze" the staff, rather than adopting the "layoff path". Employees are willing to take such cuts for 12-16 months till the demand picks up again, when such benefits should be restored to them.

Shekhar said senior officials of the industry had concurred with the figure of 10,000 job loses in September-December, stating that it accounted for "bottom five per cent of the performers". Consultations with the union's counterparts in the US and UK suggested that slowdown would continue to hit the offshore sourcing space, he said.

He said factors like continued slowdown, likely "tax application" to companies outsourcing jobs under the new US regime and tightening in regard to H1B visas were among the key reasons cited for the acceleration in issue of pink slips. PTI.

Six easy steps to lose weight

Okay, now for the lecture!

This is a glimpse of how we eat empty calories on a daily basis.
The listed food items are in addition to what you normally eat in a day. Often, we eat these items mindlessly, because they are tempting.
You ALWAYS have the choice to skip these foods and avoid excessive amounts of sodium and cholesterol that go with them.

Logix Microsystems bags Deloitte award

In a fast changing technology world, Logix Microsystems has been selected for the prestigious Deloitte Technology Fast 500 Asia Pacific company award for the second consecutive year. The award ranks the top 500 technology companies in the Asia Pacific according to their revenue performance over the last three years. Deloitte is of the largest consulting firms in the world. We are proud to receive this status which, recognises our growth as a world leader in this space, says Sanjay Soni, MD, Logix Microsystems Ltd. It was in 1996 that he along with his brother established Logix Microsystems. Prior to starting Logix, he was running a firm selling UNIX hardware and software solutions to companies. The company was set up to provide SAP. consulting and implementation services to customers across the world. It was a very challenging phase for the company as they were building a world-class implementation practice from scratch. Logix started with implementing small projects for large software companies such as Hewlett Packard, Cap Gemini and Origin. As the Company gained experience and confidence it started pitching for implementation contracts directly in the Middle East. The business grew steadily and also added CRM to the list of competencies in the year 2000. The company went public in October 1999. The company went through a very tough phase during 2000-01 as the entire industry went through a downturn and many companies closed down. Soni realised that unless Logix re-invented and built up domain expertise it would be extinct very soon and that s how he decided to get into software products. 3i Infotech seeks to connect rural India 3i Infotech, global information technology company, has announced the launch of I-Serv, a brand for its retail services through which a comprehensive range of services like banking, insurance, mobile will be provided to consumers in remote areas and empowering them in their daily activities. While announcing the first of its kind service, catering to the rural pockets, Anirudh Prabhakaran, executive director and president, South Asia of 3i Infotech Limited, said that it (I-Serv) will bring the benefits of technology to the doorsteps of the common man. Prabhakaran, a product of BITS Pilani, has a long experience of working with the IT sector and has worked with Wipro (WIPRO.NS : 232.45 -10.5) Infotech for over 14 years before joining 3i Infotech in June 2006. The newly launched I-Serv will cater to rural customers through 12,500 stores across nine states including Haryana, Uttar Pradesh, Madhya Pradesh, Tamil Nadu and Delhi. To ensure maximum utility to rural customers, I-Serv stores will be managed by trained operators and equipped with the latest IT infrastructure including PCs, scanners, telephones and round-the-clock connectivity. Laying stress on the techniques to leverage technology for the benefit of the masses, Prabhakaran says, The real benefit of technology is when the common man in rural areas starts benefiting from the IT-enabled rural retail services. Our idea of technology is to use it as a medium of service and not the end in itself. Talking about the viability of the I-Serve in rural areas, Prabhakaran highlights that rural India houses more than 70% of India s population and represents a unique opportunity to employ technological capabilities for bridging the existing urban-rural divide. We are proud to be one of the pioneers to roll out a service, he says. Plethico Pharma acquires Tricon Holdings At a time when companies are cautious about outbound mergers and acquisitions, Plethico Pharmaceuticals Limited recently acquired a subsidiary of Tricon Holdings Limited in Hong Kong, which is a leading pharma retail company with sourcing base in the UAE. Under the agreement, 20% of outstanding shares will be acquired in the subsidiary for a cash purchase of $20 million. The company had few months back acquired Natrol, a leading manufacturer and marketer of branded nutritional products in the US, and expanded its global footprint to the regulated markets of the US and Europe. Says Chirag Patel, CEO and director of Plethico, The acquisition will help Plethico to consolidate its position in the Commonwealth of Independent States market. Plethico Pharmaceuticals Limited is a leading pharmaceutical company with a strong emphasis on the herbal and neutraceutical segments. The company, which was established in 1991 and focused on manufacturing and marketing a range of branded generic pharmaceutical formulations, has rapidly evolved and now engages in manufacturing, marketing and distribution of pharmaceutical and allied healthcare products in the neutraceutical and herbal segments in India and internationally. Domestically, Plethico operates in the segments of sports nutrition, confectionary and OTC. In addition to the OTC segment, Plethico is also a leading player in the CIS, Africa, South East Asia, and Latin America. Contributed by Ashok Kumar

Pak hacker attacks E Rlys site, threatens cyber war on India

In the first instance of cyber attack on Indian government websites, the attack on Eastern Railways site on Wednesday popped open vulnerability of government websites in the country.

While Eastern Railway took almost two and half hours to restore the site to normalcy, visitors to the site continued to be attacked by Trojan virus. ER officials could only primarily trace the roots to Toronto in Canada after repeated top-brass meetings all through the day.

As spotted by FE in the morning, the official site of the Eastern Railway-www.eastern railway.gov.in—was hacked on Wednesday. When opened, the scroll on the site— which normally consists of official announcements—had unusual notes. The first note read: "Cyber war has been declared on Indian cyberspace by Whackerz- Pakistan (24 Dec-2008)." This was followed by two other notes: "Indians hit hard by Zaid Hamid" and "We are f**ked up Indians. You are hacked."

When clicked, the scroll opened into a new window which claimed that 'Mianwalian of Whackerz" has hacked the site in response to the air violation of Pakistan. It also claimed that it will continue to hack more Indian military and government sites. The threat note also claimed that servers of Indian financial institutions will also be hacked with the help of the group's members working in computer departments of "foreign companies". Data belonging to "Indian nationals (only Hindus)" will be destroyed eventually, it added.

Another threat note asked the visitors of the website to watch the real Indian conspiracy in Mumbai attacks on the website-www.brasstacks.pk. Brasstacks claims to be "a unique Pakistani think tank devoted to the study of regional and global political events and their implications for Pakistan's security and interests." The note ended with the slogan "Long live Pakistan".

The third note, which showed the hackers' apathy towards India, Israel and USA, challenged Indians to save their 'motherland' from turning into pieces.

When contacted, ER officials seemed unaware of the entire incident and the site remained as it is for almost an hour, till 11.40am, after which ER blocked it. The website resumed to normalcy after 12, when the threat notes in the scroll as well as in the news and events section were removed.

"Our sites have cyber security certificate from US-based Thawte," said an ER official. "We have informed the service provider and will get a detailed response from them only after 24 hours," he added.

According to a cyber security expert, similar attacks can be done through SQL injection method. In case of a SQL injection attack, webpages with active content like feedback forms are used. Attackers can write malicious commands in the forms through a rich text format and get control over the database of the target site.

The controversy over Basmati's DNA

Basmati, on the other hand, is one item which really doesn't need any promotion. It commands a premium over other varieties which it is steadily pushing off the table.Last year, its exports fetched Rs 3, 548 crore (Rs 35.48 billion) compared with Rs 2, 282 crore (Rs 22.82 billion) in 2006-07 and are projected to grow substantially since the area under this crop is increasing year on year. And here lies the rub: The DNA and geography of the rice are changing significantly, making it difficult for Basmati to fulfil the requirements for GI.This has stirred the pot once again because three years ago, Pusa 1121 was notified as a non-Basmati variety, a classification that the commerce ministry has stuck to despite lobbying by the export lobby. The problem is complex. Enticed by the export potential, the government has widened the definition of Basmati to include newer varieties, Pusa 1121 being the latest. The changing definition of Basmati, which now includes six traditional varieties and three hybrids, has in turn enlarged the geography of Basmati cultivation. From its original turf in Punjab (both sides of the India-Pakistan border), Haryana and UP, Basmati has now spread to Karnataka and Andhra Pradesh where farmers have taken enthusiastically to the new variety.It has a prized aroma, impeccabits pedigree and an awesome global reputation. None of this has helped Basmati to get the special label it deserves.

Basmati is to India -and Pakistan - what Champagne is to the French, Parma ham to the Italians and Scotch whiskey to the Scots.

This fragrant, long-grained rice from the Gangetic plain, which has become the most favoured variety in Europe and West Asia, is stuck in a sackful of grit that makes a geographical indications (GI) label elusive if not impossible for one of India's top export earners.

Conflicting perspectives of the ministries of agriculture and commerce, farmers' lobbies and the vested interests of millers have all combined to make the award of a GI tag a problematic issue. Add to this the complication of a cross-border dispute with Pakistan and the case for Basmati's GI status seems doomed.

Does a GI matter if these products are already top export earners? Yes, indeed. A GI is a form of intellectual property (IP) protection based on geography and tradition that is key to preserving a country's natural resources and cultural heritage along with some unique means of production.

Instituted by the WTO, GI identifies a product as originating from a particular place and whose quality, reputation or other characteristics are attributable to its geography. For the EU, it is a crucial trade tool. European communities, says an EU brief, have registered some 4,800 GIs, the bulk (4,200) of them for wines and spirits alone.

These products bring in sizeable export revenues. For instance, France's 593 GIs (466 for wines and spirits) generate �19 billion and "constitute a lifeline for 138,000 agricultural outfits".

In India, not much attention is paid to developing the market potential for GI products, although the tag is being handed out (indiscriminately, in my view) to a wide assortment of primary products and manufactured goods.

In the circumstances, can Basmati still claim purity of line and geographical exclusivity? The October 29 notification on Pusa 1121 by the agriculture ministry has only added to the confusion.

The ministry says Pusa 1121 can be called Basmati only if it is grown in Punjab and Haryana, although scientists say there is no rationale for this since the rice does not lose its innate characteristics if it is grown elsewhere. Was the ministry worrying about the implications on the GI front?

It's hard to tell since it is the commerce ministry which appears to be rooting for Basmati. In September, the Union Cabinet approved an amendment in the law to enable the Agricultural and Processed Food Products Export Development Authority (APEDA) - an autonomous statutory authority sponsored by the commerce ministry - to register and protect IP rights, including GIs, for certain special agriculture products, such as Basmati, in India and elsewhere.

The move to empower APEDA comes in the wake of an abortive attempt by the Heritage Foundation of Karnal to secure GI status for Basmati.

The 2004 application by the foundation, which represents rice millers and exporters, was turned down by the controller general of patents, design and trademarks ostensibly because it was technically flawed. One suspects though that the government did not wish the GI to be vested with a private trust that did not represent the primary stakeholders - the cultivators - adequately.

While this clears some of the ground, the bigger problem is getting Pakistan on board. There were reports that India and Pakistan had decided, and quite sensibly too, to seek a joint GI for Basmati globally.

A meeting of officials and scientists from the two countries was scheduled for early 2009 to sort out the grain from the chaff. But that report came before Pusa 1121 was notified. And it came before the terror strike on Mumbai. It's doubtful if the meeting will take place as scheduled. Basmati's GI status remains a sticky mess.

Bhuvan, India's response to Google Earth

Bhuvan, India's response to Google Earth, will be launched in March 2009 and will provide high resolution imagery data of the order of five metres which would be of great help for real-time exercises, including disaster management and military operations.

"Google Earth is providing high resolution data in the order of less than a metre. But the data is two to three years old. But Bhuvan will provide the relevant data for any real-time exercise," SK Pathan, head, Geo Informatics Data Division, Isro, told PTI.

For real-time exercises, the latest data is a guiding force, he said. It can show the topography, altitude and other features of a location. The data could be of use to manage public services, internal security, town planning and infrastructure development activities.

However, it is not yet decided whether the data can be put on the web as it could be misused. Some locations can, however, be blurred or blocked due to security reasons. "Bhuvan will be created by March next year. Then we will seek the government's permission to put it on the web," Pathan said.

How good is Haydos?

Far out in Kingaroy, Queensland's peanut-growing heartland, Gary Hayden used to rehearse leaving the ball. His young brother Matthew, to Gary's consternation, would almost never let a ball go unhammered, and he has done a lot of hammering and not much leaving ever since. The result is a batting average as bulging as his sun-browned forearms. Bigger than Victor Trumper, Bill Ponsford, Arthur Morris, Hanif Mohammad, Bob Simpson, Bill Lawry, Geoff Boycott, Sunil Gavaskar, Gordon Greenidge, Graham Gooch, Desmond Haynes. Bigger than nearly every opening batsman in history's daydreams. Bigger than 50. Fifty-one-point-three-four. It is a good average. "Poor Matthew Hayden looked as comfortable as a white man on an unescorted tour of a black township." So wroteAge sage Peter McFarline, gazing down on the slingshots and slitherers of Allan Donald and Fanie de Villiers, when Hayden played Test cricket for the first time. And it is McFarline's words, rather than 51.34, that sum up the man's batting right now, as he fronts up for the 102nd time, and for what any dark day soon could be the last time. Nearly three years skipped by after that hostile beginning at Johannesburg's Bullring. At last Hayden surfaced once more. Bill Lawry, in his second Test, had scraped out 130 at Lord's, battered black and blue on a pitch not merely green but sporting an unmistakable ridge at the Nursery End. Hayden, in his, got clobbered on the elbow and stuttered to 5. Fifth ball of the second innings, a Curtly Ambrose straight one, pitched on off stump and deviated not a centimetre. Instead of hammering it, Hayden yanked his bat up high and left it. The MCG laughed, and he was discarded soon after, for three more years. He returned not as Hayden, but Haydos. Feet a yard out of the crease, battleaxe at the ready, bottom sticking out, chest puffed up, a mound of muscle between breastbone and neck, covering his stumps like a sightscreen on tree trunks… With a pinch more imagination, team-mates might have nicknamed him Haydox. Hundreds piled up, against Indians, New Zealanders, South Africans. When he got to 100, he'd draw a cross in the air, then shoot for 200. Someone from the formerly critical press pack asked him what had changed. Hayden's first thought, as Greg Baum has observed, was to reply: "Only your mind." For how long he thought it, and whether he went close to actually saying it, no one knows. But the thought was, on reflection, a touch too hubristic. For one significant change, seldom remarked on, was that Hayden's earliest tormentors - Donald and de Villiers; Ambrose, Courtney Walsh and Ian Bishop - had all conked out. Shaun Pollock's zippiest days were behind him, Chris Cairns' too. The few lethal quicks still in circulation were playing on the same side as Hayden. More hundreds poured forth, against Pakistanis, Poms, West Indians, Zimbabweans - Zimbabweans especially. Haydox was unrammable. All those hours under the sun made his skin glow almost orange; when he took off his helmet, sweaty tufts of hair spiking out in every direction, it was as if Queensland's own Giant Pineapple was bestriding the crease. No critic now thought to query what had changed. But Hayden himself remembered his three seasons of county cricket, not long ago, when bowlers kept ducking balls into his pads and he kept slugging them through midwicket. Was that what had changed - had he converted a weakness into a strength? Or was it that Test bowlers were now bowling like county bowlers? Nineteen Test hundreds was his career's haystack coming up to the 2005 Ashes tour. A couple against India, in 2001, twinkled brightest, two fits of sweeping so majestic as to put Cinderella out of business. Another, his Boxing Day 102 against England, made hearts beat faster under blue singlets. When Craig White bowled to Hayden, spectators beyond the long-on fence jumped for their lives, twice. He was elegantly violent that day. None of these hundreds passed the classic test of greatness: a bewitching pace attack, a tricky pitch, a team in trouble. But that was surely to do with circumstances, not Hayden, and something an Ashes tour would surely rectify. He returned not as Hayden, but Haydos. Feet a yard out of the crease, battleaxe at the ready, bottom sticking out, chest puffed up, a mound of muscle between breastbone and neck, covering his stumps like a sightscreen on tree trunks England had Steve Harmison, Andrew Flintoff, Simon Jones and Matthew Hoggard, and for four Tests Hayden had the horrors. In the fifth Test he played an innings most curious. He edged and groped and miscued and scratched at imaginary scuff marks and edged some more. Australia needed desperately to win. But Hayden went off twice for bad light and was outscored by Justin Langer and draped 138 runs over three murk-affected days. And when the Test was over, the Ashes lost, the selectors let him stay in the team. The hundreds resumed, at the same rate as before, built on the same method too: one giant step forward, then one brutal swing. He made half the textbook look obsolete. Back-foot play? Why bother, mate? The bowlers once more had a happy malleability about them. The trends of the time seemed to suit him: helmets, dead pitches, few quicks, fewer swingers. The old West Indian awesome foursome was by now a clueless threesome. Dillons, Drakeses, Collinses, Lawsons, Blignauts, Ervines, Mahwires, Agarkars, Nehras and Zoysas abounded. Hayden hundreds abounded, as well. And then, three months ago, he encountered a bowler named Zaheer. Another named Ishant. Then Southee and Steyn and Ntini. And when critics now ask him what has changed in three months, it is possible he still thinks: "Only your mind." He never did play an innings like Bill Lawry's at the Battle of the Ridge in 1961. When we think of audacious openers, we picture Gavaskar perplexing irate West Indians under his skull cap and sunhat, Gooch clipping bouncers off his moustache, Hanif swaying and blocking for 16 hours while most others quailed, Trumper whistling up centuries before lunch on uncovered English mudheaps. It is safer perhaps not to put Hayden a rung above them. Safer simply to note that he has given us rich entertainment and hit many hundreds. To entertain and make hundreds in hard situations against great fast bowlers, you need to see those bowlers off sometimes. You need to know when to hammer, when to leave. Or else you get peanuts.

Severe pressure on balance of payments

It seems mystifying that exports fall even with a weakening rupee

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The fall in merchandise exports in October is just one of the several pressure points. It is unfortunate that neither a lower petroleum import bill nor a depreciating rupee are positives for exporters at this juncture.

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The fall in India’s merchandise exports in October is one of several developments that point to increasing stress on the country’s external economy. It is for the first time in seven years that monthly exports have contracted.

However, for all its eye-catching headline appeal, it is not the sharp decline in a particular month that is the principal cause for worry. Although exports in the first seven months have grown by 23 per cent in dollar terms, the deceleration since September is equally disturbing.

Falling exports

October exports at $12.82 billion were more than 12.1 per cent below the performance a year ago ($14.58 billion). It is little consolation that in rupee terms these grew by 8.2 per cent during the month.

The important point is that exports measured in dollars fell at a time when the rupee was depreciating sharply. In September, the rupee was 44 to a dollar. By November, it was down to 50 and is now trading around that level. In normal times, a strengthening dollar (or a weaker rupee) is good for exports: it improves the competitiveness of Indian exporters.

The opposite — a rupee appreciation as was experienced last year — hurts them. Indeed, exporters had then lobbied and won some concessions from the government by way of partial compensation. Not all exporters stand to gain automatically from a cheaper rupee however. Export receivables are often sold forward at the then prevailing exchange rate applicable to forward contracts. Even so, it seems mystifying that India’s exports have witnessed a fall at a time of rapid decline in the rupee’s value.

One reason is that our closest competitors have also aligned their currencies with the dollar in such a way that they do not lose out. A second reason is that a substantial portion of exports depend on imported inputs. A dearer rupee obviously inflates their manufacturing costs.

The third and the most fundamental reason is of course the global slowdown. Practically all countries including those relying on exports to a greater degree than India have seen falling exports. This has been an inevitable consequence of the global slowdown. Recently, the U.S. was officially declared to be in recession, a tag which nearly all countries in the Euro zone as well as Britain and Japan already have.

The IMF, the World Bank and others expect the developed economies to contract during 2009. Developing countries in comparison will fare better but far below their recent sterling performance. Weak demand from the developed world will become even weaker as the recession spreads and deepens. Various countries are therefore trying to boost domestic demand through tax rebates, large public sector spending and a variety of unprecedented monetary measures.

Imports too suffer

The growth in imports too has been modest in October. Compared to last year they grew by 10.6 per cent in dollar terms. The petroleum import bill has naturally been lower and will drop even further reflecting the downtrend in crude prices. The cost of India’s crude basket peaked at $142 a barrel on July 3 but has been coming down. (Somewhat belatedly the government reduced the retail prices of petrol and diesel by Rs. 5 and Rs. 2 a litre, respectively, on December 5).

Lower global oil prices augur well for inflation management. The RBI estimates that inflation could well go down below 7 per cent, the monetary policy’s target for March 2009. But on the negative side, the fall in global oil prices is due to lower demand, a consequence of the slowdown. Non-oil imports grew by just 5.5 per cent, partly due to lower commodity prices. But inasmuch as fewer capital goods and consumables are being imported, a lower non-oil import bill is a cause for worry as it corroborates the ongoing slowdown in industrial activity.

Widening trade deficit

The trade deficit has gone up to $73 billion during April-October 2008 from $46 billion during the corresponding period last year. What makes this development particularly worrying is that capital inflows are reversing themselves sharply. Also, invisible earnings — inward remittances and earnings from software — will also be affected by the global slowdown. The IT industry’s sterling performance over the post few years cannot possibly be repeated.

The U.S. has been its main focus and much of its earnings have come from the banking and financial sector, worst hit by the ongoing economic crisis. The widening current account deficit is such that it might put pressure on the balance of payments for the first time in several years. Conventional remedies to bridge the deficit such as boosting exports are themselves hostage to the deteriorating global situation.