5 Stories for Today

(1) Centre pulls the plug on three NGOs
(2) Gilani asks Taliban to join Afghan negotiations
(3) House panel for hiking IT relief limit to Rs.3 lakh
(4) Europe suffers 'oil shock'
(5) Indian BPOs are going rural to stay competitive

(1) Centre pulls the plug on three NGOs

Action follows PM's statement that some U.S.-based NGOs are behind Kudankulam stir

Close on the heels of the publication of Prime Minister Manmohan Singh's assertion in an interview in the latest issue of journal Science that some United States-based NGOs are behind the agitation against the Kudankulam nuclear power plant, the Centre announced the revocation of the licences of three NGOs.

Message to Moscow

Simultaneously, India told Russia, which is collaborating with India in the 2,000-MW plant, that the government was engaged in consultations with all stakeholders and appreciated Moscow's patience.

At ‘Comprehensive Foreign Office Consultations,' Foreign Secretary Ranjan Mathai told Russia's First Deputy Foreign Minister Andrei Denisov that India was consulting various domestic constituencies and working on the opening of the first 1,000 MW unit, a process that would pave the way for operationalising the second unit six months later.

The Centre has offered half of the electricity to be produced to Tamil Nadu, where four more units have been planned.

Home Ministry probe

Minister of State in the Prime Minister's Office V. Narayanasamy insisted that Dr. Singh's statement was based on a probe by the Home Ministry.

Mr. Narayanasamy said that the licences of the three NGOs were cancelled after an inquiry by the Ministry found that they were diverting foreign funds for anti-nuclear plant campaign in Kudankulam.

The identity of the NGOs is not known.

“These NGOs were receiving funds from foreign countries for social service… such as helping the physically handicapped and eradication of leprosy, but these [the money] were used for the anti-nuclear [plant] protests,” he said.

Mr. Narayanasamy said, “In fact, the people who are agitating near the plant have been continuing their agitation for the past three months. People are being brought there in trucks from various villages. They are being given food.”

Amid the developments, senior BJP leader Arun Jaitley urged Dr. Singh to elaborate on his statement. The government should come out with facts so that people could judge whether or not the charge against the NGOs was right. “Since he [the Prime Minister] has made this statement, the government should make the facts… public, so that the veracity of all this is known to the people of India, who are in a position to define what is correct.”

In the interview, Dr. Singh said: “[The] atomic energy programme has got into difficulties because these NGOs, mostly I think based in the United States, don't appreciate the need for our country to increase the energy supply.”

In another reference to protests against the use of genetic engineering for crops and in other sectors, he said: “There are NGOs, often funded from the United States and the Scandinavian countries, which are not fully appreciative of the development challenges our country faces.”

Kakodkar backs Manmohan

The former Atomic Energy Commission chief, Anil Kakodkar, shared Dr. Singh's sentiments, saying “a nuclear power plant cannot be put under siege the way it has happened now.”

It was strange that a large project ready for implementation which has met all safety requirements, even environmental and when there is tremendous shortage of electricity, the country's development should become “hostage” to foreign forces, he noted.

“By just exploiting the Fukushima sentiment ,this entire thing has been built up,” he said adding ” a nuclear power plant cannot be put under a siege the way it has happened now.”

CPI leader D. Raja alleged that the Prime Minister was trying to isolate some of the worker NGOs, who are working among the people of Kudankulam.

(2) Gilani asks Taliban to join Afghan negotiations

Pakistan on Friday appealed to the Taliban leadership and other Afghan groups including the Hizb-e-Islami of Gulbuddin Hekmatyar to enter into direct negotiations with the Hamid Karzai-led government of Afghanistan, within the framework of an “intra-Afghan process, for reconciliation and peace” in the war-ravaged country.

This appeal was issued by Prime Minister Syed Yusuf Raza Gilani in response to a plea made by Afghan President Hamid Karzai to Pakistan “to support and facilitate our direct negotiation efforts as part of the peace process”. Emphasising the importance of Pakistan's support for the success of the peace process, he opened the endeavour to all Afghans who have remained outside the framework of the political process, including the Taliban.

The Afghan President issued this appeal after returning to Kabul from a bilateral meeting with Islamabad last week.

At the meeting, he did not mince words and sought Pakistan's help in accessing the Taliban leadership, particularly Mullah Omar who is believed to be living here and leading the Quetta Shura — the highest decision-making body of the Afghan Taliban.

Mr. Karzai had also met and sought the help of Maulana Sami-ul-Haq — regarded as the ‘father of the Taliban' as he heads the Darul Uloom Haqqani, the alma mater of the Taliban leadership, including Mullah Omar — in getting them to the negotiating table.

Though the Afghan President's demand to deliver Mullah Omar to the negotiating table had been described as “preposterous and ridiculous” by Foreign Minister Hina Rabbani Khar, the Prime Minister's statement on Afghanistan struck a more conciliatory tone and said that Pakistan was duty-bound to respond positively to the appeal issued by Mr. Karzai after his Islamabad visit.

Reiterating Pakistan's stated position that there is no military solution to the problems of Afghanistan, Mr. Gilani noted that it was “now time to turn a new leaf and open a new chapter in the history of Afghanistan”. Extending Pakistan's support for an authentic Afghan process of reconciliation, he stressed the importance of creating conditions conducive for a “grand intra-Afghan settlement, based on national reconciliation that involves the Afghan people without any distinction”.

Though Pakistan has appealed to all Afghan groups to enter into direct negotiations with the Karzai dispensation, the Prime Minister's statement flags only two by name: the Taliban and Hizb-e-Islami — both Mujahideen groups jointly promoted by Washington and Islamabad against the Soviet occupation of Afghanistan.

(3) House panel for hiking IT relief limit to Rs.3 lakh

‘Tax saving deductions should be raised to Rs.2.50 lakh'

A Parliamentary Committee, scrutinising the Direct Taxes Code (DTC) Bill, will recommend raising the annual income-tax exemption limit to Rs.3 lakh and hiking the limit on tax breaks for investments to Rs.2.50 lakh, following a broad consensus among its members.

“There is a consensus among the members that the annual tax-exemption limit be raised to Rs.3 lakh,” sources said after a meeting of the Parliamentary Standing Committee on Finance, chaired by senior BJP leader Yashwant Sinha.

Some members had earlier suggested that the annual income-tax exemption limit be raised to Rs.5 lakh from Rs.1.80 lakh at present, in view of high inflation and erosion in purchasing power of the rupee.

The DTC Bill proposes the tax exemption limit at Rs.2 lakh and also provides for revising the tax slabs for all the three categories.

At present, income in the bracket of Rs.1.80-5 lakh attracts 10 per cent tax, 20 per cent for Rs.5-8 lakh. It is 30 per cent for above Rs.8 lakh.

Members also felt that the limit for the total tax saving deductions, which include investment in provident fund, life insurance, children education and infrastructure bonds, should be raised to Rs.2.50 lakh from Rs.1.2 lakh, sources said.

At present, investments up to Rs.1 lakh in specified instruments are deducted while calculating the tax liability.

In addition, investments up to Rs.20,000 in infrastructure bonds are also exempted from tax.

The Standing Committee on Finance has decided to finalise its report on DTC by March 2, enabling Parliament to consider the ambitious reforms in the direct tax regime in the budget session beginning March 12.

“The committee will present its report to Parliament in the third week of March”, sources said.

(4) Europe suffers 'oil shock'

No sooner are Europe's debt anxieties easing a touch than a sharp rise in oil prices threatens to impede the economy's tentative recovery from the euro's near-death experience with Greece.

Brent oil has shot up about 20% since mid-December on concern over cuts in Iranian supply, and set an all-time high this week in euros. Oil has not reached a level that poses a grave danger to growth, economists say. In dollars, today's price around $123 is still below last April's $127 high, let alone the record peak of $147 scaled in 2008. But the risk is that consumers and companies, their confidence still fragile, will crawl back under the covers.

"This comes at a difficult time for the euro area economy, which I would still characterize as being in a state of mild recession despite one or two more promising signs," said Julian Callow, an economist at Barclays Capital in London. "If we were to see a rapid, sudden escalation in the oil price, then for sure it would be a factor that would lead us to be revising down our projections for euro area growth and, if sustained, could make a mild recession turn into something more serious," he said.

(5) Indian BPOs are going rural to stay competitive

Business Process Outsourcing (BPO) companies are now going away from the main metro cities to the hinterlands in search of talent as well as to economise the cost of their operations.

“Lower cost of operations and better retention of employees are driving growth,” said a recent National Association of Software and Services Companies (Nasscom) survey titled “Strategic Review 2011”. If one were to go by the survey, IT-BPO firms are set to increase the total rural BPO employee base by more than 10 times over the next three years. Rural BPOs are now compelling business ventures for outsourcing companies due to factors such as availability of talent, low attrition rates, affordable real estate, cheap labour and minimal operational costs.

According to K. Purushothaman, Regional Director of Nasscom, business process outsourcing jobs are moving away to low-cost countries such as the Philippines and Egypt. If India needs to retain its brand image of world's outsourcing destination, it will have to explore newer avenues and areas. “Tier-III and rural areas are the next best options for these outsourcing companies. Talent is available in these rural areas, but it will have to be re-oriented to meet the requirements of the industry standards,” he adds.

“Rural India holds a lot of potential and talent waiting to be tapped,” feels Shalabh Jain, Executive Vice-President, Asia Business Unit, Firstsource Solutions.The company has partnered RuralShores to set up a 135-seat delivery centre at Chand, a village in Chhindwara district of Madhya Pradesh. Firstsource and RuralShores have joined hands to set up this rural office to empower the Indian youth and create employment opportunities.

Similarly, Thinksoft, too, has decided to set up a rural BPO. “Cost arbitrage is driving us towards setting up rural centres,” argues Vanaja Arvind, Executive Director of Thinksoft.

The challenge, however, is not just finding skilled workforce. It lies in getting the right infrastructure, adequate quality power and bandwidth connectivity. These are certainly worrying factors for BPOs who seek to set up shops in rural areas.

Major BPO companies such as Firstsource Solutions, Wipro, HDFC, Tata Group, and Priamal Foundation are making a beeline for rural areas. These companies are either partnering local NGOs (non-government organisations) or existing small outfits to set up rural BPOs.

In order to increase the BPO presence in rural areas, Nasscom, in collaboration with the ICT (information, communication and technology) Academy and the State governments, has been inviting BPOs to set up their centres in rural areas. It has asked these companies to use the infrastructure and talent available at the government college campus. This will pare the real estate cost for companies and also reduce the attrition levels.

Nasscom has been urging the State governments to provide subsidies to help these companies make a foray into rural India. Nasscom, according to Mr. Purushothaman, is working with many smaller BPO firms in Maharashtra, Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh, asking them to set up rural BPOs.