Sustained high food inflation warrants monetary steps - RBI

The Reserve Bank of India (RBI) chief Duvvuri Subbarao on Tuesday said monetary steps may be warranted to curb inflation expectations in face of sustained high food inflation, flagging the need to revisit politically sensitive subsidy schemes in agriculture.

RBI Governor also said that the government's food for work programme and proposed food subsidy bill will further raise fiscal deficit and inflationary pressures.

Food inflation has been stubbornly high over the last few years in India, inspite of record foodgrain production and robust buffer stocks.

The RBI has already raised rates 13 times since early March 2010 to clamp down on stubborn inflation, largely driven by high food prices.

"The direct role of monetary policy in combating food price pressures is limited, but in the face of sustained high food inflation, monetary action may still be warranted to anchor inflation expectations," Subbarao said in a speech at a conference in the south-eastern city of Hyderabad.

The comments, hawkish as they seem, may not warrant a change in RBI's stance which has signalled a likely pause in rate hikes in the December policy and may be extend it, if inflation falls in line with the RBI's projected trajectory.

The central bank, in a bid to ease tight banking system liquidity, will buyback bands upto 100 billion rupees ($1.9 billion) on Thursday.

Subbarao said large increases in the minimum support prices on food grains by the government to farmers was one of the reasons driving food inflation.

"There is a case for revisiting subsidy regime for a number of reasons, including the pressure it exerts on food inflation."

His criticism comes on the first day of a parliamentary session in which the government will propose doubling food subsidies to about $24 billion in an effort to bolster its support among millions of poor Indians ahead of state elections.

Agricultural subsidies are a politically volatile issue as farmers constitute a large votebank for political parties.

The central bank chief also said the supply chain of farm products is a major source of price pressures and the cross-country experience on the benefits of multi-brand foreign direct investment on inflation is "ambiguous".

India's cabinet may decide to allow chains such as the world's largest retailer Wal-Mart Stores Inc (WMT) to operate in the country with a majority stake under strict local sourcing rules, a senior government source told Reuters.

A draft cabinet note suggesting so-called multi-brand retail foreign firms could hold up to 51 percent ownership has already been reviewed, a senior government source said on Friday.

Subbarao also said that the government's proposed food subsidy bill is another major potential source of inflationary pressure.

"The higher food subsidy burden on the budget will raise the fiscal deficit, exacerbating macro level inflationary pressures."

Estimates suggest that 68 per cent of the country's 1.2 billion population will get a legal entitlement for food grains after the bill is enacted, which will significantly raise annual grain procurement demand even as the available marketed surplus would not increase in the same proportion.

The governor made it clear "a lasting solution to food price pressures lies in a supply response" from the government.

Data released last week showed India's food price index rose 10.63 percent and the fuel price index climbed 15.49 percent in the year to Nov. 5.

'Saif al-Islam wanted to be with lovers, orgies'

Saif al-Islam was a womaniser who often indulged in domestic violence, according to a Ukrainian woman who claims to be a former wife of the captured son of slain Libyan dictator Muammar Gaddafi.

Nadia, a blue-eyed brunette claims to have met Saif, now 39, when she was working as a stripper at a Moscow nightclub, and says that as she prepared for marriage to him, she had to fly to Paris to have an operation to "restore" her virginity.

"The doctor proved my innocence in the presence of Saif's aunt. Then I embraced Islam. I tried to have a normal family, but Saif wanted to live as single man with lovers and orgies," the 'Daily Mail' quoted her as telling a Ukrainian newspaper.

The 29-year-old woman added: "Our house looked like more as bordello: a lot of his friends and a lot of women. We got married under religious traditions. I embraced Islam for that, but nobody treated me as the mistress of the house.”

"My husband tried to make me a submissive Eastern woman and I couldn't stand that attitude. Saif took drugs and he couldn't control himself when he was under narcotics. He had certain sexual perversions in sex, for example, he liked to do it in public. I understood that we couldn't live together."

Nadia has claimed that their relationship ended after a furious row in a restaurant which culminated with him beating her and throwing her out of a window, but she miraculously survived though she was in a coma for 47 days.

Of Col Gaddafi himself, she said: "About me being in hospital, he was in a fury. He kicked Saif away to the desert. It could spoil the reputation of the family that was already not so clean."

She left Libya and returned to Moscow. 'The last time he came was in 2008, and he suggested that we lived together again -- but I was cold to him by that time," she said.

Rahul: We Will make UP No. 1 state in five years

Congress General Secretary Rahul Gandhi on Tuesday promised to transform Uttar Pradesh completely from the alleged misrule of the BSP government and make it the number one state in five years.

Addressing a huge gathering of his delighted supporters in Barabanki, Rahul said, “I want to assure you that in five years we (Congress) will make UP the number one state in terms of industry, business and economic development.”

The young Congress leader, ridiculing the anti-people government of Chief Minister Mayawati, said, “You will see for yourself that Congress party will make a people’s government in Uttar Pradesh after the Assembly Elections in 2012.”

He made a scathing attack on the Mayawati government by alleging that it was embezzling funds meant for people’s welfare and development.

“Funds meant for development and people’s welfare does not reach the actual beneficiaries. The MNREGA fund released by the central government from time to time does not reach the aam admi. It is being guzzled by the middlemen. I want to ask the BSP government where this money goes, “he said asking, “Who are the real beneficiaries of this money?

“All previous non-Congress governments in Uttar Pradesh have failed to live up to the people’s expectation. The governments of Samajawadi Party, BJP and BSP have all failed this state. The successive governments in the past two decades have done nothing to alleviate people’s standard of living.”

Striking an emotional chord with his supporters, Rahul said, “Congress party’s derives its strength from the aam admi, who remains in the center of all our policies.”

Rahul informed his supporters that Congress government has taken several initiative aimed at improving the condition of people at the grass root level. “We have allocated Rs 6000 directly for weavers and waived loan up to Rs 3000, and we have done this not through the UP government because then you would not get it.”

Rahul made these remarks after kicking off his five-day road show from Barabanki.

He will cover Barabanki, Bahraich, Balrampur, Shrawasti and Kushinagar in the first phase of his five-day tour. Rahul is expected to address rallies along the way before ending his roadshow at Kushinagar on November 26.

Rahul had sounded the Congress poll bugle at Phulpur in Allahabad on November 14 by slamming Mayawati-led state government. He termed the situation in the state as ‘mafia raj’ and stirred a controversy by saying that people from Uttar Pradesh are being forced to go and beg in Maharashtra.

Besides addressing public meetings, Rahul may also continue with his visits to Dalit homes.

His tour will surely further increase the political temperature which is already on an upswing after Chief Minister passed a bill the state assembly for division of Uttar Pradesh into four new states.

2G trial to be shifted to Tihar: HC

In a sudden move, the ongoing trial of the 2G spectrum allocation case was ordered to be shifted to Tihar jail from its present venue of the Patiala House court premises.

Special CBI Judge O P Saini, trying the case announced that the trial venue of the case is to be shifted as per a Delhi High Court notification, received by him Tuesday.

"In exercise of the powers conferred by section 9 (6) of the CrPC 1973, the acting Chief Justice and judges of this court (Delhi High Court) have been pleased to order that the trial of the 2G spectrum cases shall be held in Tihar court complex, New Delhi, according to law," read the notification issued by the high court.

Tomorrow's hearing, however, will continue in Patiala House court complex itself.

The judge announced the shifting of the trial venue of the case amid the ongoing cross-examination of key prosecution witness and HDFC Bank's Mumbai-based Vice President Uday Shahasrabuddhe.

The announcement by the judge triggered protests by former Telecom Minister A Raja, DMK MP Kanimozhi and other accused, who contended that the move was bereft of valid reasons.

Raja said, "I do not know what is happening in this country.

The defence counsel opposed the notification, saying if the trial is shifted to the Tihar jail, it would create a lot of inconvenience as everybody will have to get an entry pass to Tihar Jail made before attending the proceedings.

They will challenge the notification in the High Court.

Egypt unrest: Activists call for mass demonstrations

Egyptian activists have called for mass demonstrations after an overnight standoff between security forces and protesters in Cairo's Tahrir Square.

Thousands flocked to the square overnight after the cabinet offered its resignation to the military council.

At least 26 people have been killed and hundreds injured in three days of protests against the military rulers.

Amnesty International has criticised the military for failing to keep its promise to improve human rights.

Late on Monday some 20,000 people were estimated to have thronged Tahrir Square after the cabinet of Prime Minister Essam Sharaf announced its offer to resign.

Their numbers were far short of the hundreds of thousands whose demonstrations in the square earlier in the year led to the overthrow of Hosni Mubarak as president after 30 years in power.

But the square was again the scene of clashes between security forces and protesters determined to see the military transfer power to a civilian government.

A coalition of political groups has accused the military council of leading a "counter-revolution" and called for a mass demonstration on Tuesday.

Hundreds of people camped out in the square overnight.

The Supreme Council of the Armed Forces has not said whether it has accepted the cabinet's resignation.

A military source told there was no consensus among the council on whether to accept. The source said the council was also consulting with other political groups.

In a statement carried by the official Mena news agency, the council expressed its "deep regret for the victims in these painful incidents" and called for "the greatest degree of self-restraint".

On Monday evening, ambulances with sirens wailing were seen driving into the heart of the large city-centre square to ferry the injured to hospital.

The clashes began on Saturday following demonstrations against proposed constitutional changes unveiled by the interim government.

The military council produced a draft document setting out principles for a new constitution, under which the military and its budget could be exempted from civilian oversight.

A proposal by the military to delay the presidential election until late 2012 or early 2013 has further angered the opposition.

Protesters want the presidential vote to take place after parliamentary elections, which begin on 28 November and will be staggered over the next three months.

The unrest has cast uncertainty over the future of the elections but the military council has said they will go ahead.

Many people fear the military plans to hold on to the reins of power, whatever the outcome.

On Monday, protesters in Tahrir Square chanted "the people want the removal of the marshal" - a reference to Field Marshal Mohamed Tantawi, who heads the Supreme Council of the Armed Forces.

He has the task of overseeing the country's transition to democracy after three decades of autocratic rule under Mr Mubarak.

The ruling generals are the real focus of demonstrators' anger, says another BBC correspondent in Cairo, Yolande Knell. The interim cabinet is seen as having little power.

Monday saw further clashes between protesters and security forces, who fought running battles on the edges of the square and the nearby sidestreets leading to the interior ministry.

Shahrukh Khan honoured by UNESCO

Bollywood superstar Shahrukh Khan bagged a special award for his kindness at the 20th UNESCO Awards in Germany on November 10.

The King Khan became the first Indian to be honoured with this award. And along with the award, he came back with many fond memories of his interaction with Jet Li for his 14-year-old son Aryan, who is a huge fan of the Hollywood action hero.

According to the sources, "SRK was asked to be a part of the event in March this year by the Director General of UNESCO. Special UNESCO ambassador Mrs. Ohoven sent him the invite as well. However, since the actor was busy with RA.ONE, the actor couldn't confirm his availability till October."

Shahrukh Khan was also seen bonding with Hollywood action star Jet Li. Some of the other dignitaries who attended the gala event were Mikhail Gorbacheva, Noami Cambell and Ute Ohoven among others.

'Samsung in last-stage talks to launch Google TV'

Samsung Electronics, the world's top TV maker, is in last-stage talks with Google to roll out its Google TVs, the head of Samsung's TV division told reporters on Tuesday.

Google TV -- which currently comes built-in on certain Sony Corp television models and on Logitech International set-top boxes -- allows consumers to access online videos and websites on their TVs, as well as specialised apps such as video games.

Samsung in January displayed a new Google TV-enabled Blu-ray player and companion box at the Consumer Electronics Show (CES), but did not commercialise the offerings.

Yoon Boo-keun, president of Samsung's TV division, said the company planned to unveil its Google TV at an event next year without elaborating on the schedule, saying only the firm was working with Google on the rollout.

Samsung's Google TV service would differ from those of competitors, he said on the sidelines of a local forum.

Google in October unveiled a revamped version of Google TV service, hoping to making inroads into the living room despite consumers' lukewarm reaction to its initial offering.

Yoon also said Samsung plans to unveil TVs featuring next-generation OLED displays at the upcoming CES to be held in January in Las Vegas.

OLED displays produce crisp images and do not need backlighting, making them slimmer and more energy-efficient than LCDs, the most popular type of flat TVs.

Yoon expected the global flat-panel TV market to grow by about 10 percent next year despite economic uncertainty, helped by sales growth in internet-connected TVs and replacement demand. He also said Samsung was looking to outperform the market next year. TV makers are grappling with slowing demand and cutthroat competition that has squeezed margins.