5 Stories for Today

(1) PM Manmohan Singh reshuffles pack with eye on assembly polls, Telangana
(2) Brazilians take to the streets over public spending
(3) Cheap foreign loans spur outbound M&A march
(4) Mysterious Steve Jobs emails hang over Apple trial regarding e-books and iPad
(5) CREDAI slams RBI, says rate cut status quo will hit India GDP growth, employment generation

(1) PM Manmohan Singh reshuffles pack with eye on assembly polls, Telangana

In a ministerial reshuffle reflecting Congress's immediate political priorities, Prime Minister Manmohan Singh inducted senior leaders from Rajasthan, Karnataka and Andhra Pradesh as Cabinet ministers to fill vacant portfolios like railways and highways.

Rajasthan leader Girija Vyas replaced C P Joshi after the latter got a party assignment. Vyas filled the Brahmin slot, while 85-year-old Jat leader Sisram Ola was recalled to the Cabinet almost four years after he was last minister.

The inductions have a bearing on the Rajasthan elections due later this year. Ola's recall is intended to be a reassuring signal to the Jat community which has been at odds with chief minister Ashok Gehlot and has tilted towards BJP leader Vasundhara Raje.

The appointment of Gandhi loyalist Oscar Fernandes as highways minister and Mallikarjun Kharge's shift to railways from labour is viewed as a reward to the Karnataka contingent in the wake of Congress's return to power in the state.

TOI had reported the impending Cabinet and minister of state level inductions on June 17.

Unlike the changes in the Congress organization announced on Sunday, the Cabinet inductions do not reflect a younger profile. Besides Ola, Vyas is 66, K S Rao is 69 and Fernandes is 72.

The exercise was, however, not without surprises. Haryana leader Birender Singh, tipped for a Cabinet berth after being sacked as party general secretary, was replaced by five-time Andhra Pradesh MP K S Rao. There is speculation of Singh being tripped by belated concerns about what sources described as "personal flaws".

In a rethink to soften the blow, Singh was accommodated in the Congress Working Committee on Monday evening.

If Singh's near miss smacks of Haryana-centric intrigue, aligned as he is against chief minister B S Hooda, the minister of state appointments are not seen as very inspiring. J D Seelam is another Andhra Pradesh inductee who made the cut ostensibly as a counter to Congress rebel Jaganmohan Reddy's pull among 'dalit' Christians.

Some in the party saw the induction of a non-Telangana leader as an indication of some movement on the statehood demand after the assembly session in Andhra Pradesh concludes on June 21. Rao is seen to have the strong backing of chief minister Kiran Reddy. He had thrown a tantrum when he was overlooked in the previous ministerial reshuffle.

Party sources remain unconvinced of Seelam's utility on this score but Congress has reposed faith in another dalit from Punjab, Santosh Chowdhary, who has been made an MoS in the health and family welfare ministry.

The two dalit leaders serve to score a political point for Congress. Chowdhary, who won her Hoshiarpur seat narrowly, has pipped other claimants from more influential communities. Her Lok Sabha win is seen to have been powered by Congress leader Rahul Gandhi campaigning for her.

Maharashtra's Manikrao Gavit is a tribal leader and EMS Natchiappan is a Rajya Sabha MP from Tamil Nadu.

The appointments to railways and the highways portfolios indicate a certain dearth of options - or prioritization of political concerns — as neither Kharge or Fernandes have a reputation for being effective administrators needed for the infrastructure-related ministries.

After the exit of Chandigarh MP Pawan Bansal as railway minister in the wake of an alleged bribery scandal involving his nephew accepting money for a senior appointment on the railway board, the Congress leadership has turned to Kharge who has moved from the labour ministry.

Fernandes also had to be accommodated after being shipped out of the Congress organization. While not a minister with any degree of flair, he can be a safe pair of hands who will not cause the party further embarrassment.

The railway ministry for Kharge seems a compensation for being overlooked for the chief minister's post in Karnataka and is seen to be a part of the party's effort to shore up its defences for the 2014 Lok Sabha elections when it will hope to repeat the strong showing in the assembly polls.

On the whole, the exercise is seen as a modest one rather than a comprehensive sweep. The top four ministries of home, defence, external affairs and finance remain untouched. There are reports of home minister Sushil Shinde being keen on a change in portfolio, but this does not seem to have impressed the Congress brass.

The main objective seems to have been to fill the railways and highways ministries while accounting for the exits of Ajay Maken and C P Joshi for assignments in the party organization.

Source: The Times of India

(2) Brazilians take to the streets over public spending

Around 2,00,000 people took to the streets of a dozen Brazilian cities on Monday night in largely peaceful protests against the government’s economic policies.

Around 1,00,000 people marched in Rio de Janeiro, where some masked demonstrators set fire to a car and threw stones at the regional parliament building.

The protests were originally against a hike in public transport prices, but demonstrators have widened their complaints to include corruption and the public spending on hosting football tournaments.

Thousands gathered in the political capital Brasilia in front of the National Congress building, where several protestors breached security and climbed onto the roof waving the Brazilian flag.

In the country’s largest city, Sao Paolo, where the first demonstrations over bus fares broke out last week, the crowd reached around 50,000 on Monday, according to police.

There were fewer clashes between demonstrators and police than on previous days, local media reported.

Protestors held up banners criticizing the government for spending billions on the ongoing Confederations Cup and on hosting next year’s World Cup.

The cities of Porto Alegre and Salvador also saw thousands of demonstrators, while police in Belo Horizonte used tear gas against the crowds. There was no indication of any injuries.

President Dilma Rousseff said the peaceful demonstrations were a legitimate part of the democratic process, but said this did not apply to the clashes outside Rio’s state assembly.

The president of that assembly, Paulo Mello, called the attacks on its building “an act of terrorism.”

Source: The Hindu

(3) Cheap foreign loans spur outbound M&A march

Foreign banks are fuelling India’s recent burst of overseas takeover bids, offering cheap US dollar loans to Indian corporates expanding beyond their home states.

The stream of financing offers from banks such as Standard Chartered, Citigroup and Deutsche Bank comes after some US and European lenders pulled back from the Indian market last year as the country suffered through an economic slump.

Apollo Tyres (advised by Deutsche Bank and Morgan Stanley), for instance, was granted $2.5 billion to buy out New York-listed Cooper Tire & Rubber Co (advised by Bank of America), a company nearly three times the size of its Indian suitor.

Bankers said lenders were taking advantage of a window of opportunity that exists while monetary policy remains loose, before any sort of scaling back by central banks happens.

Indian companies are bidding for at least $10 billion worth of deals and, if successful, even push up to $13 billion -- the highest since a record year in 2010, analysis shows.

But the revival of M&A activity is good news for foreign investment banks operating in the country, which for years have struggled with wafer-thin margins.

"The debt market is back today," said Venkat Anantharaman, South Asia Co-Head for wholesale banking at Standard Chartered. He was referring to the US high yield market and opportunity to provide companies with the money needed to grow.

Source: Hindustan Times

(4) Mysterious Steve Jobs emails hang over Apple trial regarding ebooks and iPad

The late Steve Jobs has taken centre stage in the latest twist in the Apple antitrust trial on ebooks.

A federal court attempted to plumb the meaning of a series of unsent emails Jobs addressed to Eddy Cue, an Apple senior vice president assigned with negotiating ebook contracts with major publishers in late 2009 and early 2010 before the launch of the iPad.

Even though the emails were never sent, government prosecutors argue that they help establish a pattern of Apple serving as a "ringleader" in a conspiracy with the publishers to force the retail book industry to adopt higher prices of ebooks.

The government contends that Apple forced publishers to change their pricing system with Amazon, resulting in higher ebook prices across the industry and costing consumers hundreds of millions of dollars.

Apple maintains that it was indifferent to Amazon's contracts with the publishers and that higher ebook prices were set by publishers, not Apple.

All of the draft emails responded to a message from Cue outlining the emerging price of Apple ebooks, which would be USD 12.99 or USD 14.99, up from the USD 9.99 Amazon had sold for bestsellers.

In most of the drafts, dated January 14, 2010, Jobs is seen picking over the impact of the emerging deal between Apple and the publishers, according to testimony.

This included the effects of an Apple "most favoured nation" (MFN) provision requiring publishers to make available to Apple any ebook offered on another retailer for the same price.

The bombshell was a draft note to Cue in which Jobs said, "I can live with this as long as they move Amazon to the agent model too for new releases for the first year."

"If they don't, I'm not sure we can be competitive." The Amazon note appears to be the last draft email in the series, said Cue. It is also the only one in the series signed by Jobs.

US Justice Department lawyer Lawrence Buterman depicted Jobs's draft Amazon email as part of a pattern of Apple demanding publishers to change their terms from a "wholesale" model in which retailers set price to an "agency" model in which publishers set price but guaranteed booksellers a 30 per cent commission.

The government contends this shift led to higher ebook prices.

Buterman also pointed to a January 4 letter from Cue to the publishers demanding that all publishers shift their other retailers to the agency model.

Source: The Economic Times

(5) CREDAI slams RBI, says rate cut status quo will hit India GDP growth, employment generation

The association demanded that the interest rates for developers as well as home buyers should be brought down to boost realty sector, which is facing a slowdown in demand.

In the mid-quarter policy review, Reserve Bank of India kept the key interest rates unchanged citing elevated food inflation, rupee depreciation and uncertainty over foreign fund inflows.

Criticising the Reserve Bank of India's status quo in credit policy, CREDAI Chairman Lalit Kumar Jain said the no-change approach will lead to an irreversible economic slowdown. "This will harm the GDP growth and employment generation," he observed.

Read full script: RBI Mid-Quarter Monetary Policy Review

Stating that the realty sector is capital and labour intensive, Jain demanded that RBI should make a policy to encourage construction of mass housing instead of stifling its growth with credit squeeze and unaffordable rates of interest for both the developer and the buyer.

RBI's status quo influenced by external factors: Rangarajan

The developers should be encouraged to flood the market with housing stock which will lead to a price check, he added.

Confederation of Real Estate Developers Association of India (CREDAI) has over 10,000 developer members pan-India.

"The negative weightage given by RBI to the sector is forcing the developers across the country to go for high-cost non-bank funding that adds up to the high cost of inputs," Jain said.

Source: The Indian Express