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Former Goldman Sachs Group Inc director Rajat Gupta will begin serving a two-year prison term on June 17 after a US federal appeals court rejected his bid to stay free while he appeals his insider trading conviction.In a brief order on Friday (30 May), the 2nd US Circuit Court of Appeals in New York rejected a request by Gupta, a former global managing director of consulting firm McKinsey & Co, to delay his surrender and remain free on bail.Gupta, 65, was convicted in June 2012 of feeding tips from Goldman board meetings to longtime friend Raj Rajaratnam, founder of the Galleon Group hedge fund firm.Evidence included a September 2008 phone call, just before Goldman announced a $5 billion investment from Warren Buffett's Berkshire Hathaway Inc, in which Rajaratnam was heard telling a trader that he learned from a source, who prosecutors said was Gupta, that "something good might happen to Goldman."It also included an October 2008 conversation in which Rajaratnam told a colleague that a Goldman director had tipped him that the bank would post a quarterly loss.A three-judge 2nd Circuit panel rejected Gupta's appeal on March 25. Gupta sought to stay out of prison while the full 2nd Circuit Court, and perhaps the US Supreme Court, reviews his case.Rajaratnam is appealing his conviction to the Supreme Court. He is serving an 11-year prison term.Seth Waxman and Gary Naftalis, two of Gupta's lawyers, were not immediately available for comment on Friday.His lawyers have argued that Gupta's conviction was tainted by US District Judge Jed Rakoff's decision to admit wiretap evidence at trial, and the judge's refusal to tell jurors that Gupta's good character could raise a reasonable doubt of guilt. The lawyers also said Gupta is neither a flight risk nor a danger to the community.Gupta is the highest-ranking corporate official and Rajaratnam the highest-ranking portfolio manager convicted in a broad insider trading probe unveiled by federal prosecutors in October 2009. Roughly 80 people have been convicted or pleaded guilty.Rakoff has agreed to recommend that Gupta be assigned to a medium-security prison in Otisville, New York, about 70 miles (113 km) northwest of New York City.(Reuters)
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The rupee ended a touch weaker on Wednesday (9 April) despite domestic shares hitting record highs as caution prevailed ahead of the release of minutes from the U.S. Federal Reserve's March meeting. Foreign investors have been active buyers of debt and equities since March, and net purchases in April alone have already totalled $933.67 million, according to the market regulator's data. The rupee had touched an eight-month high of 59.5950 on April 2, before giving up some gains, with the Reserve Bank of India also suspected of having bought dollars to replenish its foreign exchange reserves. "The market expectation broadly is that the FOMC minutes will be less hawkish than the press conference in March," said Nizam Idris, a strategist with Macquarie Capital in Singapore. The partially convertible rupee closed at 60.14/15 per dollar compared with 60.11/12 on Monday. Financial markets were closed on Tuesday for a local holiday. The rupee rose to the session high of 59.80 as the BSE Sensex rose as much as 1.77 per cent to an all-time high of 22,740.04, while the Nifty rose as much as 1.7 percent to a record high of 6,808.70. However, gains were capped ahead of the Fed's minutes given continued concerns about when the central bank will start to raise interest rates as it unwinds its asset-purchase programme. Some dealers also cited dollar buying by state banks for defence purposes. In the offshore non-deliverable forwards, the one-month contract was at 60.62, while the three-month was at 61.37. (Reuters)
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HRD Minister Smriti Irani today asked Delhi University to "reinstate" five non-teaching staff members, who were suspended for allegedly leaking purported documents relating to her undergraduate admission and admit card following a row over her educational qualifications.Irani said that in public life one should be open to scrutiny and criticism. "So am I," the Minister said on microblogging site Twitter.She said that "since Delhi University is an autonomous institution, I have put forth my personal appeal to the Vice Chancellor to reinstate the officials".University sources had yesterday said that its School of Open Learning has suspended five persons on the suspicion that they entered a confidential domain and accessed documents which were leaked.Those suspended are a Section Officer and four officials below him in hierarchy. An inquiry has been initiated against them, they said.Meanwhile, Congress attacked the Narendra Modi government over the suspension of the officials."5 officials of Delhi University suspended for leaking HRD Minster's educational qualification details!Does this Govt believe in transparency," party general secretary Digvijay Singh tweeted.Taking another potshot at the government, he said, "ACHHE DIN AA GAYE HEIN. Would anyone stand up for the suspended officials of DU ?"After Irani sought revocation of the suspension, Singh quipped, "Thanks Smriti for appealing to VC DU for reinstating DU officials. Now let people of this Country know your actual Educational Qualification".Sources said the officials have admitted to SOL's Director Chandra Shekhar Dubey to leaking the documents.Irani is at the centre of a raging controversy over her educational qualification after it emerged that she had made contradictory declarations when she contested Lok Sabha elections in 2004 and 2014.Congress had launched a broadside against her questioning her ability to deliver as HRD minister as she was "not even a graduate".Irani had said "extraneous circumstances" were created to deviate her attention from work and asked the people to judge her by her work.(PTI)
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For far too long, the government has been persisting in its policy of granting a plethora of rights to citizens that it can ill afford, which some celestial being is expected to magically help the government in fulfilling. If the state focuses on the ideal and utopian outcome of trying to accomplish all, it will overspend and cause inflation and only harm those who it is supposedly trying to help.Selling capital assets to fund revenue expenses, ad hoc delays in subsidies/payments due, absurd claims on tax payers, rampant government borrowings, and not setting aside resources to meet pension liabilities of government employees is also impairing the long-term fiscal health. Investing in a transition team to move the government to accrual system of accounting to stop the systematic gaming of government finances would restore the credibility of the fiscal regime. To sustainably reduce fiscal deficit, ruthless prioritisation is unavoidable. Provision of basic standard of living, that includes clean water and sanitation, healthcare, and schooling, constitutes a basic human right and is undoubtedly an essential ingredient of economic development and the state should create enabling infrastructure and incentivise the same. Given below are some suggestions on resource allocation. Creating a resource pool to meet all historical unmet commitments. It is essential to first deliver on all the promises made and that too in a timely manner. The historic outrage of non compensation for homes drowned by the Hirakud dam or later the Bhakara Nangal dam and the non settlement of war widows promised compensation is a reputational blot which the government must remove. Protecting personal security (especially for women) and security of personal property. The Police Act was enacted by the British to protect its regime’s interests and not the masses - hence the overarching focus on VIP security. Implement the 2006 SC directives on implementation of National Police Commission and adopt the Soli Sorabjee Committee draft of the model Police Bill. Encourage local citizen patrolling, increase women constables and gender sensitisation training. Allow no discretion in filing FIR’s by allowing complainants to file at any government office and/or by themselves on a police website (punish perjury). All police stations must disclose status of ongoing investigations and conviction rates on a website. Providing and enforcing property titles: The countries which have shown the highest growth rates post the 1820 historic inflection of growth rate dispersion are those which have facilitated clear property titles for individuals and created and resourced a framework to efficiently help individuals protect private property. On average, GDP per capita, measured in terms of purchasing power parity, is 10X as high in nations with the strongest protection of property rights than in those with an ineffective judicial system. Through enforcement of these rights, the value of untitled land assets of the world’s poor is estimated to be 40X all the foreign aid received throughout the world since 1945. Evidently, with their already accumulated property secured, the world’s poor would be much less so. Unburden and expand Judiciary to expedite justice: Investing in increasing capacity and skills of public prosecutors and partially privatise this to the legal profession who should be entitled to a percentage of fines for achieving success. Unimplemented laws in statuette books benefit only those who violate them and those who facilitate it, creating perverse incentives in society. Drains trump free healthcare: 90 per cent of increased life expectancy in the last century is explained by improvement in sanitation. According to a study done by Harvard and National Bureau of Economic Research, in the US, clean water alone was responsible for nearly half of the total mortality reduction in major cities, three-quarters of the infant mortality reduction, and nearly two-thirds of the child mortality reduction. In India today, 1 in every 5 urban households and 2.1 in every 3 in semi-urban or rural areas (i.e. ~131 million Indian households) do not have basic sanitation access! So there is urgent need for creation of public toilet infrastructure with some element of pay for use and incentive for good maintenance cannot be ignored. Additionally, reimburse doctors/hospitals for vaccinations and trauma care. Healthcare is important, but given our limited resources, primitive requirements like sanitation/clean water, vaccinations and trauma care need the greatest allocations from the government. In a similar vein, the government needs to do away with wasteful/inefficient subsidies in the agriculture sector. Government's conflicting policy goals: one, of keeping retail food grain prices low to protect consumers and the other, of keeping procurement prices high to incentivize farmers is self-defeating as it weighs down government budget with a perennial subsidy burden and stokes inflation. According to a study in 2011 by the central bank, 40 per cent of India's vegetables and fruit rot before they can be sold. Moreover, in a little over $70 billion, the government could complete the irrigation potential of the country (60 per cent of farmland is rain fed). However, the government is choosing to fritter over $15 billion each year on fertiliser and power subsidies instead of facilitating investment in warehouses/drip irrigation and fixing land titling. Stop expanding the scope of already bogus schemes: Repeal the Food Security Bill and replace with targeted (families with girl children) food vouchers. Simultaneously, allow unimpeded (remove all marketing/distribution restrictions) market forces to deliver supply response. No society can subsidise two thirds of its population for anything. Gathering resources from all using higher indirect taxes and then using FCI (whose costs are 4 times markets) to deliver food (with self admitted 40-50 per cent plus leakage) to two thirds of the country’s indirect tax payers has to be the most dishonest piece of legislation ever enacted!! Facilitating access to education ubiquitously: Government delivery of education has proved to be thoroughly inadequate. The state should not be setting up buildings and recruiting staff. Focus on enabling educational and outcome/accreditation testing at multiple levels to allow the state to get out of running schools, colleges etc. Offer strict outcome based reimbursements as well as vouchers to low income households prioritised by merit and priced by means and social objectives. Current infrastructure should be rented out on shift basis to the private sector and resources should be reused to provide access to defined prioritised need based beneficiary using vouchers. The vouchers should entitle recipient to all variable costs of service delivery along with a fraction of the regular fixed cost recovery. This will ensure all facilities are fully utilised, the poorer have access but also that the service providers have resources and incentive to enhance capacity and increase supply. Also, if the state cannot fund sports teams or cultural programmes it should facilitate private citizen initiatives and enable and encourage it. Solid waste disposal infrastructure and water management: Ensuring availability of water ideally through rain water harvesting friendly building codes in a country rich in annual precipitation but poor in ground water resources. Create modular infrastructure for waste disposal and drainage after recycling. All efforts towards improving the standard of living will be fruitless if the country remains vulnerable to attacks. Defence is and should remain a top priority along with building disaster management capacity. Build a fund to assuage victims of any deficiency in service delivery by the government i.e. trauma, crime and natural calamities etc and enter into tie ups with countries like Japan etc to learn the best practices in disaster management and train the personnel. The Indian government has been operating on the unfounded belief that it is omniscient and omnipotent and omni-competent. Broader charity is a wonderful thing but the state must fulfil its basic responsibilities first, else it will keep loads more in need of charity. The state should facilitate charity by selling vouchers to those willing to donate for a particular Aadhar number for their education or medical expenses etc. The main impediment to those wanting to donate more is a presumption of defalcation and specificity; state facilitation with no leakage will help overcome this issue. Reimburse NGOs that run the best (defined scorecard) orphanages, schools etc. While the state should give social recognition to all those contributing, it should be wary of those who see someone’s need, protest and reach into someone else’s pocket to do charity just incidentally benefiting themselves. Government overstretch across economic and social activity has resulted in it falling short of fulfilling even the basic, traditional duties of safeguarding life and private property. More and more of government’s resources are being spent on “private goods” while ever less is being spent on the things that only the government is equipped to do. The administration in the recent past has been marred by kickbacks on nearly anything that can be put out to tender and unnecessarily wasteful construction projects to maximize the rents that they can generate. Unsurprisingly, there is an increasing recognition of the fact that government intervention should not be equated with direct provision by the government. But firstly, there is a need to change outlay orientation to outcome driven government spending removing cleverly packaged wasteful expenditure. Bloated organisations need to sharpen their focus to increase effectiveness. Media monitoring of government performance and exposing corruption is now stirring the large middle class out of its slumber and bringing it to the streets and hopefully the polling booths. Hopefully this scrutiny will force the government to recognise that it is not a deity handing out largesse but rather a service organisation subject to scrutiny on its efficacy in delivering public goods and creating an equitable enabling environment. The author is Managing Partner, Baring Private Equity Partners India Limited. If you have any comments/questions please feel free to write to the author- policy.suggestions@gmail.com
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US Secretary of State John Kerry called his Indian counterpart Sushma Swaraj after she took over the External Affairs Ministry and discussed re-energising of the Indo-US ties. Kerry called late last night and was the first among the international leaders to call Swaraj, an MEA spokesperson said today. During the call, focus was on enhancing trade and economic ties to USD 500 billion, the spokesperson said. Swaraj, on her part, emphasised on the importance India gives to strengthening the international partnership. She also briefed Kerry on India's engagement with the SAARC countries including Pakistan. Both are looking forward to meeting each other, the spokesperson said. Earlier in his message to the new Indian Prime Minister, Kerry had said that the Obama Administration is looking forward to welcoming Prime Minister Narendra Modi to the United States. (Agencies)
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The world's financial leaders are likely to discuss possible risks to Europe's economy from the crisis in Ukraine, but there are no plans to mention it in the final document from their Washington meeting, two G20 officials said. Finance ministers and central bankers from the Group of 20 developed and emerging economies will treat Ukraine at their two-day meeting later this week the same way as they have talked about past crises, a Russian G20 official said. "There is no mention of the situation in Ukraine (planned for the G20 communiqué)," the official said. "One way or another, the issue will be brought up during discussions but it will be approached from the point of view of risks the crisis in Ukraine can create for the region as a whole. This is a traditional approach." The G20 is also likely to talk about the planned International Monetary Fund programme for Ukraine and about the crisis as a general geopolitical risk that would have negative effects on the European economy only if it escalates, another official involved in the preparations for the meeting said. "It will appear in the discussion as geopolitical risk, but also because the Russians are there I don't expect that will be high in the discussions of the G20," the second official, a non-Russian, said. Last month Ukraine won a $14 billion-$18 billion standby credit from the IMF. The country's economy was thrown in chaos after popular protests in Kiev ousted pro-Russian president Viktor Yanukovich in February and Russia seized Ukraine's Crimea and annexed it, causing the worst standoff between Moscow and the West since the Cold War. "Of course there is concern, the tension escalated, but markets have more or less made the assumption that there will be a diplomatic solution so they can shrug it off," the second official said. "If that is not the case and at a certain moment you have an escalation, then you could have a re-appreciation of the risk and then could be spillovers on us." Emerging MarketsThe G20 communiqué will address problems in emerging markets and, possibly, measures to offset the impact from the tapering by the U.S. Federal Reserves of its monetary stimulus policy and "controversial" policies of individual countries. "Much of the discussion will be devoted to the situation in emerging markets as it has become clear that many are faced with problems that are not caused exclusively by the Fed's policy," the Russian G20 official said. "Many controversial decisions have been made by national authorities. Considerable attention may be paid to the situation in these countries and possible measures to overcome the negative consequences." China's economic slowdown, money flight following the U.S. announcement last year that it would curtail its bond-purchasing and the standoff between Russia and the West over Crimea this year have pushed economic growth down across emerging markets. European economy and strategies to ensure global sustainable and balanced growth will also be discussed. "Despite recovery in the U.S growth, positive growth trends in Europe, it is obvious that developed economies will not be able to haul the situation alone without support," the Russian official said. BRICS United?The failure of the US Congress to approve IMF funding has held up reforms agreed in 2010 that would double the Fund's resources and give more say to emerging markets, such as the BRICS countries - Brazil, Russia, India, China and South Africa. Russia has been pushing for the IMF to move ahead with the reforms without the United States but nothing has been formally floated for this meeting. "At this moment there have been no options or proposals submitted," the Russian G20 official said. "The process has not moved off the ground." But, he said, BRICS may be become united in their approach towards the IMF reforms after they meet in Washington. "I think that some common approaches, positions will be developed which will allow ... some proposals," the official said. The G20 overall is not eager to reach agreement and compromise, the official said. "There are a number of countries that are fine with the status quo." (Reuters)
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Sonia Gandhi has declined to provide a copy of her passport to a US court in New York as documentary evidence in the 1984 anti-Sikh riots case, citing refusal by the Indian government on grounds of personal security and confidentiality. US District Judge Brian Cogan had last month asked Gandhi to provide some form of documentary evidence by April 7 to enable the court to make a determination about her presence in the United States. The court order had come on a lawsuit filed by the rights groups Sikhs for Justice (SFJ) which claimed it had served summons on Gandhi when she had allegedly visited Memorial Sloan-Kettering Cancer Centre in the city for a medical check-up in September last year. The lawsuit against Gandhi hinges on the issue of whether she was served summons on September 9 as the group claims or whether she was not present in the US during that time as per her assertion. The SFJ has sought compensatory and punitive damages from Gandhi for her alleged role in "shielding and protecting" Congress party leaders including Kamal Nath, Sajjan Kumar and Jagdish Tytler from prosecution for their alleged role in the 1984 riots. Gandhi's attorney Ravi Batra on Monday (8 April) submitted before the court that his client has "nothing to hide". Batra handed over to court as exhibit a letter dated April 5 signed by Gandhi to him in which she states that "in matters of disclosure of my travels, which are contained in the passport document, the Government of India has informed me that they would not permit such a disclosure. "However, as I have nothing to hide, I voluntarily relinquish the plea of lack of personal jurisdiction. I may add that the present submission is without prejudice to the plea of want of jurisdiction in relation to the subject matter." Batra, in his submission to court, said he was informed over the weekend that the Indian government has refused to permit the release of 67-year-old Gandhi's passport because of "concerns with respect to her personal security and keeping confidential the methods used to protect her. "It appears that much as our government's Secret Service and Diplomatic Security agents need to keep their means and methods confidential, so too do the Indian authorities with respect to those they are charged with protecting," he said. He said that Gandhi "wishes to be as cooperative as she can" in resolving the lawsuit brought against her by the rights group to arrive at a final determination" of the case, "notwithstanding that she was not in the United States, nor served with process." Batra said Gandhi does not possess records of the US government agencies, such as Customs and Border Protection entry and exit stamps into and out of the US or records of the Memorial Sloan-Kettering Cancer Center "given she was not there during the subject period." Gandhi is keen to bring the case to an "expeditious resolution" without the delays that may be caused by requesting federal government agencies to produce travel records or by asking Sloan-Kettering to furnish "non-existent records," Batra added. She had previously filed a motion in court seeking dismissal of the lawsuit filed by SFJ, citing lack of personal jurisdiction and that she was never personally served with the summons in the case. SFJ legal adviser G S Pannun alleged that successive Indian governments have "thwarted attempts of 1984 victims to seek justice." (PTI)
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Coal India's operating profit may beat consensus estimates when the miner reports January-March results later in the day, Thomson Reuters StarMine's SmartEstimates shows.StarMine's SmartEstimates, which places a greater emphasis on forecasts by top-rated analysts, expects Coal India to report an operating profit of Rs 6373 crore ($1.08 billion) in the quarter, compared with a consensus mean estimate of Rs 5908 crore.Coal Indian shares are down 0.55 per cent as of 10:32 a.m on 29 May.(Reuters)
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Over 80 per cent voters exercised their franchise on Monday (7 April) for one of the two Lok Sabha seats -- Tripura West constituency in the Left Front ruled state as polling ended peacefully. Election department sources said that the percentage might increase after final computation. Chief Electoral Officer, Ashutosh Jindal told reporters that the polls were incident free and barring a few complaints, EVMs functioned well and in case of minor problems they were either changed or repaired. The electoral fates of 13 candidates, including CPI(M)'s Shankar Prasad Dutta, secretary of the state unit of CITU, Congress' Arunoday Saha, former vice-Chancellor of Tripura Central University, Sudhindra Dasgupta, BJP's state unit Chief and Chairman of the state unit of TMC and former minister Ratan Chakraborty, were sealed in EVMs. The CPI(M) had won the seat ten out of 15 times between 1952 and 2009. Since 1996 the CPI(M) consistently won this seat. Chief Minister and CPI-M politburo member Manik Sarkar told reporters after casting his vote, "In reality there is no wave like Modi wave in the country. It is actually the creation of the corporate media." Polling for the East Tripura (ST Reserve) seat would be held on April 12. There are two LS seats in the state.(PTI)
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The rupee ended weaker on Monday (7 April) in cautious trading as the country kicked off a five-week election process and on importers demand for the greenback. The rupee's fall was further accelerated as shares fell for a third straight day retreating from record highs hit last week, with the BSE Sensex ending down 0.07 per cent. Financial markets will remain closed on Tuesday for a local holiday. In recent sessions, shares have rallied on hopes Hindu nationalist opposition leader Narendra Modi, a more business-friendly candidate, is seen coming to power on promises of economic revival and jobs. However, the election manifesto unveiled on Monday by the main opposition Bharatiya Janata Party disappointed some investors by opposing foreign direct investment in multi-brand retail. "After a strong Modi-wave seen recently, the market is pricing in a slight disappointment as the BJP election manifesto seems less business friendly to foreigners," said Vikas Babu Chittiprolu, a senior foreign exchange dealer with state-run Andhra Bank, referring to the barring of foreign direct investment in multi-brand retail. The partially convertible rupee closed at 60.11/12 per dollar compared with 60.08/09 on Friday. Overseas investors have so far bought Indian shares worth $4.46 billion in 2014, driving shares higher. Capping the losses in the rupee, the Asian currencies were stronger with the latest U.S. jobs report not seen as strong enough to raise expectations of an early rate hike by the Federal Reserve. The unit rose as high as 59.5950 last Wednesday, its strongest since July 30, before starting to decline gradually. Some forward dollar booking by importers to take benefit of the weak spot pushed INR forward premiums higher, a senior trader at a foreign bank said. The dollar/rupee one-year forward premium trading at 507.25 compared with its previous close of 502.75. In the offshore non-deliverable forwards, the one-month contract was at 60.57, while the three-month was at 61.29.(Reuters)
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