5 Stories for Today

(1) Priyanka, Rahul intensify poll campaign in Uttar Pradesh

Rahul Gandhi and Priyanka Vadra, the Congress' star campaigners, have intensified their public contact programmes in different parts of Uttar Pradesh as the election dates draw near in the politically crucial state.

Prime Minister Manmohan Singh and Congress President Sonia Gandhi's tour programmes are yet to be finalised but a senior leader in the party said both leaders will be addressing at least one election rally in each of the seven phases starting from March 3. While Priyanka reached Fursatganj on a three-day tour of Chattrapati Shahuji Maharaj Nagar and Rae Bareli, Rahul will begin his tour of Bundelkhand region. The AICC general secretary will also address a tribal rally in Sonebhdadra this week.

Priyanka's three-day tour will be confined only to the Assembly segments falling in the Parliamentary constituencies of Sonia and Rahul Gandhi - Raebareli and Amethi - for the time being. There are 10 assembly constituencies in Raebareli and Amethi of which seven are represented by Congress. Priyanka Gandhi will again coming on Amethi tour from February 2.

Party sources say while Rahul is on a whirl wind tour of the state spelling out party's policy and programmes to electorates, Priyanka's current tour is more related to rejuvenating the party workers and taking stock. Her public campaigns will start a few days later. Rahul's campaign this week focuses on Bundelkhand which has a sizable tribal population, for which the central government had announced a development package at his initiative last year.

He would start his campaign from Lalitpur and then travel to and other districts before addressing a public meeting in Duddhi, Sonbhadra district, on January 21.

(2) Al-Qaida in Yemen captures town south of capital

Al-Qaida militants seized full control of a town south of the Yemeni capital, overrunning army positions, storming the local prison and freeing its inmates, security officials said. The capture of Radda in Bayda province, some 100 miles (160 kilometers) south of Sanaa, underscores the growing strength of al-Qaida in Yemen as it continues to take advantage of the weakness of a central government struggling to contain nearly a year of massive political unrest.

The officials said the militants in Radda threw a security ring around the town, preventing residents from leaving or entering, and killed two soldiers and wounded a third in clashes with army troops.

The fighters pushed into the town from several points they had captured over the weekend, including an ancient castle that overlooks the town, a school and a mosque. They freed 150-200 inmates, including an unspecified number of militants belonging to al-Qaida. The officials said some of the freed inmates joined the militants after they were given arms.

The officials spoke on condition of anonymity. The attack prompted stores and schools to close. Bayda province is a key transit route between the capital and Yemen's southern provinces where the al-Qaida militants are most active. Islamist militants have already seized control of a swath of territory and towns in Abyan province in southern Yemen.

The militants were armed with rocket-propelled grenades, automatic rifles and other weapons. He quoted residents as saying the black al-Qaida banner has been raised atop the mosque they captured over the weekend. The security officials estimated the number of militants who attacked the town at around 200.

Yemen's opposition has accused embattled President Ali Abdullah Saleh of trying to torpedo a power transfer deal he signed last month by allowing security to deteriorate in the south of the country as a way of arguing that he must stay in power, which he has held since 1978.

The United States long considered Saleh a necessary ally in the fight against Yemen's active al-Qaida branch, which has been linked to terror attacks on U.S. soil and is believed to be one of the international terror organization's most dangerous franchises. The U.S. withdrew its support last summer and said he should step down.

Islamist militants began seizing territory in Abyan province last spring, solidifying their control over the town of Jaar in April before taking the provincial capital, Zinjibar, in May.

Yemeni security forces have been trying unsuccessfully to push them out since then in fierce fighting that has caused many casualties on both sides. The conflict has forced tens of thousands of civilians from Zinjibar and the surrounding area to flee, many to the port city of Aden.

(3) Rural retail sees fall in demand

Hariyali Kisaan Bazaar, India’s biggest rural retail chain by sales, which operates 230 stores across eight states and had seen good growth in the past two years, said it had seen a fall in rural demand in the past two to three months.

A drop in prices of potatoes, onions and some other vegetables, leading to low realisation for farmers, and an increase in cost of fertiliser, are reasons for these changed sentiment. Except on necessary agricultural inputs, rural consumers are just not spending as much as they used to, it said.

“The rural marketplace is not as buoyant as it was two-three months ago. Income at the farm level has come down for crops like potato, onion, tomato, etc. At the same time, cost of farm inputs such as fuel, fertiliser and labour has moved up,” said Ajay Shriram, chairman and senior managing director, DCM Shriram Consolidated. Its rural retail arm is Hariyali Kisaan Bazaar, with annual turnover of nearly Rs 800 crore. Hariyali stores are operational in Haryana, Punjab, Uttar Pradesh, Rajasthan, Uttarakhand, Madhya Pradesh, Maharashtra and Andhra Pradesh.

The fall in rural demand has recently been worrying retailers and marketers. Television and refrigerator makers such as LG Electronics have articulated this worry in recent months, attributing it to high inflation and a fall in government’s ability to spend on rural programmes.

Figures for the fast moving consumer goods sector (FMCG) tell the same story. In the past few years, rural demand has been the key for FMCG companies to push overall sales. In the past three years, rural FMCG sales in volumes grew at a heady 15 per cent per annum, while urban sales growth has been around 10 per cent. However, rural sales growth was only 10 per cent in April-September 2011, according to the data available.

Data from Hariyali stores point to a decline in consumption of potash and phosphate after their prices went up 15-20 per cent, in tune with global price changes. Overall demand for agricultural inputs has not gone down, as these are a must for farmers’ livelihood.

Hariyali stores sell agri-inputs, cattle feed, plastic furniture, FMCG products, and automobiles, besides services such as banking and crop insurance. A typical store caters to agricultural land of 50,000-70,000 acres and impacts the life of around 15,000 farmers and their families.

“On a national level, we are seeing a general slowdown in purchases in rural India. Staple food is moving but in lower quantities. Everything is toned down,” said Shriram. He said it was early to quantify the impact on his company’s retail turnover.

Shriram’s view, though, is contradicted by ITC, another company that operates in UP, MP and Maharashtra and says it has not seen an impact. “We are not seeing any such downward trend in our sales growth at Choupal Saagars. Maybe because our catchments do not have many growers of commodities like onion and potato,” said S Sivakumar, chief executive of ITC’s agribusiness division. Choupal Saagar is a large-format rural mall, with 24 stores.

Rural retail has been a tough ride for companies. Most have faced problems due to infrastructure, distribution and fluctuating rural incomes, along with competition from local kirana stores, which operate at much lower costs. In early 2010, Triveni Engineering shut its rural retail arm, Khushali Bazaar, after incurring a loss of Rs 19 crore in five years. ITC has not expanded its Choupal Sagaar business for the past few years. Godrej sold its Aadhaar rural retail business to the Future Group and the latter revamped it into a wholesale format. Hariyali Kisan Bazaar had to shut at least 70 outlets over the past couple of years.

It has planned to add 10 stores this year. “Even in cities, retail is a difficult business. We will expand as and when sentiment improves and it makes logical business,” said Shriram.

(4) Saudi, Spain ink $8.22 bn deal for pilgrim railway

Saudi Arabia has struck $8.22 billion deal with a Spanish consortium to build a high-speed railway on the Muslim pilgrim route between Mecca and Medina.

Saudi Finance Minister Ibrahim Alassaf and Transportation Minister Jobarah al-Suraisry represented Saudi Arabia in signing the contract while Spanish Foreign Minister Jose Manuel Garcia-Margallo and Public Works Minister Ana Pastor signed for the Consortium. Spanish companies beat out French rivals in October for the contract to build the oil-rich kingdom's Haramain High Speed Rail Project (HHR). The project aims to provide transportation for Muslim pilgrims between the two holy cities of Mecca and Medina through the Red Sea-port city of Jeddah, a distance of 450 kilometres.

The signing ceremony was attended by Saudi finance minister Ibrahim al-Assaf, transport minister Jebarah al-Suraisri, Spanish foreign minister Jose Manuel Garcia-Margallo and development minister Ana Pastor. Some 2.5 million Muslims from around the world join the annual hajj pilgrimage to Mecca. The two holy cities also attract Muslim pilgrims year round, and, along with Jeddah, are the main hubs of the kingdom's western region.

Trains on the high-speed lines will travel at 320 kilometres per hour (200 miles per hour), taking passengers from Mecca to Medina in two and a half hours and carrying an estimated 166,000 passengers a day. The project includes building the rail line, supplying 35 high-speed trains and a 12-year maintenance contract, with the possible future purchase of an additional 23 trains, the Spanish and Saudi authorities said.

The new rail link would be like blessing for lakhs of annual Haj pilgrims reducing the travel duration to less than two hours versus more than current four hours besides being more safe and comfortable. The world's top oil exporter is rapidly expanding its rail network, laying lines to its northern cities and phosphate mines, and connecting its east and west coasts in addition to the Makkah-Madinah line.

(5) India's exports rise by 6.7 pc to $25 billion YoY in December

Exports grew by 6.7 per cent year-on-year to USD 25 billion. Imports, too, increased by 19.8 per cent to USD 37.8 billion in the month, leaving a trade deficit of USD 12.8 billion.

During April-December period of this fiscal, merchandise shipment grew by 25.8 per cent to USD 217.6 billion. Data says that they may touch USD 300 billion by end of the fiscal.

During the first three quarters of the current fiscal, imports were up by 30.4 per cent to USD 350.9 billion. The trade deficit stood at USD 133.3 billion during the period.