Sensex dips to over 2-year low; down 365 pts on fund outflow

The Bombay Stock Exchange benchmark Sensex today dropped to more than two-year low, down 365 points, as investors squared positions ahead of the monthly settlement in derivative contracts amid heavy fund outflows and weak global markets.

Sensex, which gained 119 points yesterday, fell 365.45 points to 15,699.97 - level seen on November 3, 2009.

It had touched a low of 15,478.69 before the partial recovery.

Before yesterday's gain, the market had lost nearly 10 per cent in eight straight sessions.

The broad-based National Stock Exchange index Nifty tumbled 105.90 to 4,706.45, after touching 4,640.95.

Brokers said investors sold heavily while clearing pending positions ahead tomorrow's settlement in this month's derivative contracts and weak cues from Asian and European equities markets.

IT, industrial and financial stocks led the slide on weak global trend as the US economy expanded at a rate below market expectations during the third quarter, they added.

The overall market fall was cushioned somewhat as shares of telecom operator RCom and real estate firms DB Realty and Unitech recovered after the Supreme Court granted bail to their executives in the 2G spectrum case.

2G case: SC grants bail to 5 corporate honchos

In the first bail in 2G case, the Supreme Court ordered the release of five top corporate executives from Tihar Jail, raising hopes of other accused in the case including former Telecom Minister A Raja and DMK MP Kanimozhi who have been in prison for over six months.

A bench comprising justices G S Singhvi and H L Dattu directed the release of the five corporate honchos -- Unitech Limited MD Sanjay Chandra, Swan Telecom Director Vinod Goenka and Reliance Anil Dhirubhai Ambani group executives Hari Nair, Gautam Doshi and Surrendra Pipara.

 

They were asked to furnish two sureties of Rs 5 lakh each to the satisfactiion of the special judge holding the trial of the case as bail condition.

The operative part of the judgement was read out by Justice Dattu. The accused had moved the apex court challenging Delhi High Court and trial court orders turning down their bail pleas.

CBI had opposed their release on bail saying they could approach the trial court for relief.

The accused, who have been charged with various offences under the Indian Penal Code and the Prevention of Corruption Act, had contended they should be granted bail as charges have already been framed in the case and there is no chance of them tampering with evidence.

The bail plea of Kanimozhi and four others is due to come up for hearing before the Delhi High Court on December one.

This is the first time that any of the accused in the 2G scam has been granted bail. Other accused in the case include Raja's Private Secretary R K Chandolia, who is a suspended IRS officer, and former Telecom Secretary Siddhartha Behura.

Others arrested in the case include Swan Telecom promoter Shahid Usman Balwa, his cousin Asif Balwa and their colleague Rajeev Agarwal, besides DMK-run Kalaignar TV MD Sharad Kumar and Mumbai filmmaker Karim Morani.

Three telecom firms Reliance Telecom Ltd, Swan Telecom and Unitech (Tamil Nadu) Wireless Ltd too have been listed as accused in the CBI chargesheet in the case.

The CBI had chargesheeted 14 persons in the scam, with Raja being the first to be arrested on February 2, along with his former Private Secretary Chandolia and former Telecom Secretary Behura.

The five executives, who were granted bail, were arrested on April 20.

Besides Kanimozhi, the four others who have moved the High Court against the special court's order on bail are Kalaignar TV MD Kumar, Kusegaon Fruits and Vegetables Pvt. Ltd. Directors Balwa and Rajeev Agarwal and film producer Morani.

Govt hopes March end inflation at 6.7 pc

Finance Minister Pranab Mukherjee on Tuesday assured that government is committed to bring down inflation to acceptable levels and expressed hope that it will come down to 6-7 per cent by March end.

Tabling a statement on inflation in the lower house of the Parliament, Pranab Mukherjee said that a durable solution lies in improving agri productivity and strengthening of food supplies.

He also stressed on augmenting capacities in the manufacturing sector to keep pace with the growth in demand.

"...while there has been a steady improvement in the inflation situation in India, there are important tasks ahead to be undertaken to get the desired outcomes," Mukherjee said.

He attributed the rising prices to demand-supply mismatch, depreciating rupee, global commodity prices and easy monetary policy followed by some countries.

"...the government is committed to bring down inflation to more acceptable levels. I hope to see the March end inflation between 6 to 7 per cent", he said and sought suggestions from the members on how to tackle the issue.

Inflation has remained over 9 per cent since December 2010. The headline inflation measured on WPI was 9.7 per cent in October, while the rate of price in food segment for the week ended on 5^th November was 10.6 per cent.

No case for NDA's call to boycott Chidambaram: PM

PM Manmohan Singh has said that there was no case for NDA's call to boycott Home Min P Chidambaram in Parliament and hoped that the opposition political parties would desist from any such temptation.

"As far as the boycott is concerned, I sincerely hope that the political parties will desist any such temptation. There is virtually no case for a boycott of the type that has been talked about in the newspapers," Singh told reporters outside Parliament on the opening day of the Winter Session on Tuesday.

In escalation of confrontation, NDA had on Monday decided to target Chidambaram by boycotting him and not allowing him to speak in Parliament, holding him also responsible for the 2G Scam.

Sounding a note of caution, Singh said Indian economy can also go down if it did not manage its affairs well and urged political parties to work together to push forward the development agenda.

The Prime Minister said that important Bills were expected to be tabled in Parliament during the month-long session and that many needed to be converted into acts.

"I once again appeal to all political parties to work together to give the development agenda a push forward. As we all know, the global economy is facing serious difficulties and if we do not manage our affairs well, we can also go down," Singh said.

Hoping that the session would move smoothly, he said, "The government is prepared to discuss all issues which the opposition may want to discuss."

"I sincerely hope that all political parties would recognise that we have some very important pieces of legislation which are going to be presented in this session and our country's sustained development prospects demand that many of these bills should be converted into Acts of Parliament," Singh said.

The Prime Minister said he hoped that at a time when the country is poised for sustained economic growth; all political parties will make their effective contribution to make that happen.

Oppn all set to take on govt in Winter Session

A determined opposition is raring to turn the heat on the govt on a range of issues including price rise and corruption in the Winter Session of Parliament beginning Tuesday.

The Left parties have already decided to move an adjournment motion on the issue of price rise on which the BJP-led NDA is yet to finalise its strategy.

The Left and the Right have been equally critical of the government's failure to provide relief to common man despite Parliament passing a unanimous resolution earlier asking for steps to contain price rise.

Some key UPA allies like Trinamool Congress have also expressed displeasure over rising prices.

NDA is meeting on Monday evening amid indications that the opposition could evolve a common strategy and a better floor coordination on issues like price rise.

It could also see opposition unity on the issue of corruption in the wake of new CAG reports on the issue as well as on the 2G scam.

With assembly elections in five states, including Uttar Pradesh, scheduled early next year, developments in these states may also have their echo in Parliament.

UP Chief Minister Mayawati has sprung a surprise on her detractors by coming out with the move to divide the largest and politically most crucial state into four smaller states.

Opposition is accusing the government of doing nothing to bring down the double-digit inflation, saying the economic situation in the country was very serious.

The Left parties have also been demanding that government reverse deregulation and decontrol of fuel prices.

A heavy agenda awaits the session as the government has listed as many as 31 bills for consideration and passing including the Lokpal bill and the Judicial Standards and Accountability Bill.

The Parliamentary Standing Committee scrutinising the anti-corruption legislation is expected to give its report by the first week of December.

The Monsoon Session of Parliament had failed to transact much official business despite a heavy agenda in view of disruptions by the opposition on a range of issues including the Lokpal Bill.

Likewise, the Winter Session last year was washed away over opposition demand for a JPC on the 2G scam issue.

HC orders fresh FIR after SIT concludes Ishrat encounter fake

In a setback to the Narender Modi govt, the special investigation team probing the 2004 Ishrat Jehan case has concluded that the college girl was killed in a fake encounter, prompting the Gujarat High Court to order a fresh FIR against accused policemen in the case.

The SIT in its report said Ishrat and three others were killed prior to the encounter date of June 15, 2004.

A division bench of Justice Jayant Patel and Justice Abhilasha Kumari ordered that a separate FIR under section 302 (punishment for murder) should be filed in the concerned police station against those police officers who were involved in the shootout.

The SIT had submitted its final report in the high court regarding their findings on the encounter on November 18.

The court is at present considering which central agency -the CBI or the NIA can probe the case after the second FIR will be filed and it has sought suggestions from the petitioners and the state government.

The court said, "The probe agency would need to find out who played the key role in the encounter, what was the motive and what was the actual time of the death of the four people".

The SIT team, which investigated the case, is headed by R R Verma, while the other two members of the team are IPS officer Mohan Jha and Satish Verma.

Ishrat, a 19-year-old college girl, along with Javed Sheikh alias Pranesh Pillai, Amjad Ali Rana and Zeeshan Johar was killed in a shootout by Ahmedabad Crime Branch on June 15, 2004.

Crime Branch had then claimed the four were LeT members and were on a mission to kill Chief Minister Modi.

A judicial inquiry report by metropolitan magistrate S P Tamang submitted on September 7, 2009 in the encounter case had also said that the shootout was fake and executed in cold blood by the police officials for their benefit.

The probe in the sensational case was supervised directly by the Gujarat High Court which had constituted the SIT last year to investigate genuineness of the encounter after petitions filed by Ishrat's mother Shamima Kausar and Gopinath Pillai, father of another victim of the encounter Javed Sheikh alias Pranesh Pillai.

Those accused in the case include then JCP (crime branch) P P Pande, suspended DIG D G Vanzara, then ACP G L Singhal and ACP N K Amin-all IPS officers.

There were total of 21 policemen, including the IPS officers, involved in the encounter.

Vanzara and Amin are also accused in the Soharabuddin Sheikh fake encounter case and murder of Sheikh's wife Kausar Bi and are presently behind bars.

Six dead, 50 injured in Delhi fire

At least six persons died and 50 suffered injuries when a major fire engulfed a community centre in an east Delhi locality on Sunday night, police said.

The incident took place at around 7 PM on Sunday evening at the community hall in Nand Nagri area where a function was in progress, police said.

Government officials said six bodies have been recovered so far and at least fifty have been injured in the incident.

They feared the causalities could go up.

Battle against corruption to continue: Advani

BJP leader L K Advani has said that all NDA MPs will give a declaration during the Parliament session commencing next week stating that they do not possess any illegal wealth or bank accounts outside India.

Addressing a huge rally at Ramlila grounds at the culmination of his 38-day anti-corruption yatra on Sunday, Advani said even though his journey has ended, the battle against corruption would continue.

Accusing the government of lack of political will to fight graft, Advani said the only route to end corruption is through public awakening or a change of government.

Flanked by top BJP and NDA leaders, as well as AIADMK supremo Jayalalitha's emissary M Thambidurai, Advani said, "The fog around India's politics will not go automatically. It will go only by public awakening or by the change of government."

He added, "My Yatra against corruption has ended, but this war will carry on till we conquer corruption."

"Within one week of the start of the Parliament session on November 22, all NDA MPs will give a declaration that they do not possess any bank account or illegal wealth abroad," Advani promised.

The 84-year-old BJP leader said the declaration to be handed over by Lok Sabha MPs to the Speaker and Rajya Sabha MPs to the Chairman will read as "I solemnly state and declare that I do not have directly or indirectly any bank account or assets illegally held outside India."

He also favoured a strong Lokpal bill and said he would ascertain the progress made by the Parliamentary Standing Committee on the much-awaited measure.

Addressing the rally, Advani said he missed the presence of his party colleague Atal Bihari Vajpayee, who was ailing.

He said he had not seen much support during any of his yatras earlier. "I received an overwhelming welcome in various states. But this was the first yatra when Vajpayeeji was not with me," he said.

Earlier, Advani welcomed the court verdict in a graft case against former Telecom Minister Sukhram.

"It is the judiciary which is doing better (than the government) in the task of eradicating corruption," he told a gathering in Ghaziabad, on the outskirts of Delhi.

Govt to stick to Rs 40,000 cr disinvestment target: Pranab

The government on Friday said it will stick to its disinvestment target of Rs 40,000 crore for the 2011-12 financial year, but achieving this goal will hinge on many other factors.

"I am not revising it (the target) right now. We have fixed the target and we will try to achieve it, but it depends on many other situations, particularly the economic health conditions," Finance Minister Pranab Mukherjee told reporters in New Delhi.

 

Finance Minister told reporters that seven months of the ongoing fiscal are over, but the government has been only able to raise Rs 1,145 crore through a stake sale in Power Finance Corporation (PFC) and there are apprehensions that it may miss the mammoth Rs 40,000 crore targets for 2011-12.

Volatile stock market conditions have forced the government to delay proposed stake sales in PSUs. Global equity markets have been on a downslide on fears over the spiralling debt crisis in the euro zone, as well as the credit crunch in the US.

"All these aspects have to be taken into account and the government will take a decision at the appropriate time," Mukherjee said.

In view of uncertain market conditions, companies like SAIL and Hindustan Copper (HCL) have deferred planned issues of fresh equity issue, though the government may still go ahead with its proposal to offload stake.

It also plans to divest its stake in ONGC, BHEL, RINL, Hindustan Aeronautics and NBCC, among other companies.

Last fiscal, the government raised Rs 22,763 crore through the sale of equity in public sector enterprises.

Pak Envoy offers to resign over Memo

Pakistan's Ambassador to the United States, Husain Haqqani has offered to resign in the wake of a controversy over a military take over reportedly expected by Pak President asif Ali Zardari.

Media reports said Zardari sought America's help to avert a coup by army chief Ashfaq Parvez Kayani following the killing of dreaded terrorist Osama Bin Laden by the US marine forces in May this year.

Pak envoy to US, Haqqani has been linked with the letter sent to former US Military Chief Mike Mullen on behalf of Zardari.

According to reports, Pak born American businessman Mansoor Ijaj sent the letter seeking US help.

Ijaj said a top Pak diplomat was associated with the controversial letter.

Mike Mullen confirmed having received a letter from Ijaj and said he did not take it seriously.

Haqqani denied any links with any memorandum sent to the US.

He wrote to Zardari offering to quit.

Pak Prime Minister Yousuf Raza Gilani on Wednesday summoned Haqqani to Islamabad for an explanation over the controversy.

Manmohan Singh, Obama to chart road ahead in Indo-US ties

Prime Minister Manmohan Singh and US President Barack Obama are expected to chart a road ahead in the bilateral ties, including in civil nuclear cooperation, when they meet in Bali tomorrow during which the situation in Af-Pak region is also likely to figure. 

The meeting between the two leaders, first since the US President visited New Delhi in November last year, is taking place against the backdrop of India notifying the rules of conducting nuclear business with an aim to address apprehensions of American and other foreign companies.

The two leaders would mainly discuss the bilateral relations and how to take these forward, sources said today.

The meeting will provide them an opportunity to review the decisions and outcomes of Obama's visit besides discussing regional issues like the situation in India's neighbourhood.

The sources said the Indo-US relations were in "very good shape" and the two countries were working together on a range of issues, including Afghanistan and Pakistan besides economic crisis in the Eurozone and in the UN Security Council.

To press the point, the sources said considerable progress had been made on implementation of the decisions taken during the visit of Obama to India a year ago.

"It (the relationship) will have to keep evolving" in tune with the new developments taking place in the world, they said.

The implementation of the Indo-US civil nuclear deal is also likely to come up for discussion in the backdrop of India notifying the rules for nuclear business, which among other things makes it clear that there cannot be unlimited or unending liability on part of foreign suppliers.

This is aimed at addressing the apprehensions of foreign companies, including the American ones.

The US has been pressing India to put in place, at the earliest, all rules related to the nuclear commerce in tune with international regulations.
Singh and Obama will be meeting on the sidelines of ASEAN and East Asia Summits in Bali.

Soni advocates self regulation by media to check misleading adv

Advocating self regulation in the broadcast sector, Information and Broadcasting Minister Ambika Soni on Thursday said that it is better to maintain self regulation rather than formulating laws over misleading advertisements.

The Minister also asked the self-regulatory bodies in the broadcast sector to increase their memberships for effective participation of all sections and be sensitive to the needs of the public.

This, she said, would help reflect the true status of the broadcasting sector and help in effective participation of smaller players in the sector.

"Self regulatory mechanism has been in place and they should keep hearing the public voices in this regard and work accordingly," Soni said while addressing a public discussion on "Strengthening self-regulation of advertising content" organised by the Advertising Standards Council of India.

On Justice Katju's comments that self-regulation had not worked in the broadcast sector, she said, "please do not misunderstand Justice Katju. He is a very eminent jurist. Even during his tenure as a Supreme Court judge, he gave some very path-breaking judgments."

She said he has initiated a very important debate.

The issue he has again brought to the public arena is one which have been raised by Justice P B Sawant and Justice G N Ray.

A GoM was constituted in January this year in this regard.

"In a democracy, unless you have a debate and dialogue on issues, especially which are of concern to the common person, you cannot arrive at a final solution. I think Justice Katju and a man of his eminence has rearticulated issues which are being raised from time to time. But no one has taken any firm step on them. Let there be a debate. Yesterday also, he had initiated a debate and something will come out of it," she said.

On more powers for the Press Council of India, Soni said, "they needed powers but there has to be a consensus".

She said every political party, which had been in power, tried to bring a National Broadcasting Bill but there is no consensus.

She, however, said "if the nation wants stricter rules, Parliament is there. But there has to be majority view.... there are areas where we need to work on."

Citing the growth in the broadcasting sector with over 800 channels at the national and regional level, she said this would also enhance the effectiveness of self regulation and make the environment responsive to the needs of consumers.

The Minister said it was critical for every stakeholder in the industry to work with sensitivity towards the hopes and aspirations of the people.

Self Regulation as a process needed to be in a state of constant evolution so as to address critical concerns that arose from time to time, she said.

She added it was necessary to believe in this process in view of the changes taking place within the industry which offered tremendous opportunities for the advertising sector to become one of the principal engines of growth.

"The advertisements should be meant to interest people to sell products and should be made keeping in view public taste...The self regulatory system should also change accordingly as per public demand," she said.

Monti takes on mission to save Italy

Mario Monti took over as Italy's new prime minister and appointed himself finance minister on on Wednesday as he unveiled a technocratic cabinet to rescue the eurozone heavyweight from bankruptcy.

The former European commissioner said his new team would focus "on coordinated initiatives for economic growth and development," as he announced he had formally accepted the nomination to replace Silvio Berlusconi.

"It will be a race," the 68-year-old economist told reporters.

Monti, who is due to be formally sworn in at 1600 GMT, also said he would outline his economic programme on Thursday with intense pressure from financial markets and international leaders to act speedily to implement reforms.

The new government will go to a confidence vote in parliament on Thursday.

"We have had many signals of encouragement from our European partners and the international community. I believe all this will translate into... a calming of the market difficulties concerning our country," he said.

Corrado Passera, chief executive of Italy's biggest retail bank Intesa Sanpaolo, will also head up a reinforced economic development and transport and infastructures ministry charged with boosting the anaemic growth rate.

Like Monti, the 56-year-old Passera is an alumnus of Milan's prestigious Bocconi University the training ground for Italy's financial elite.

As he scrambled to put together his cabinet this week, Monti sought to build consensus around the idea that Italians will have to make "sacrifices" to exit the debt crisis and has called for "economic, social and civil growth."

He has won endorsements from all of Italy's main political forces but he faces a major challenge in steering a course through a fractious political world, with particularly intense sniping from Berlusconi's allies.

There had been speculation until the last minute over whether or not political representatives would be included in the new cabinet.

"During my consultations I reached the conclusion that the non-inclusion of politicians in my government will actually help it," he said.

The Berlusconi-owned Il Giornale daily was scathing however, with a headline saying, "He Can't Last Long."

Some loyalists from Berlusconi's People of Freedom party have called for the return of the colourful billionaire.

The softly-spoken Monti has meanwhile garnered support of more than half of Italians according to a poll by IPR Marketing, which said 53 percent favour him though many right-wing voters are still upset over Berlusconi's exit.

Tense markets fluctuated before and after today's nomination, with the rate on Italian 10-year government bonds hovering around the 7.0-per cent warning threshold that has set off alarm bells around Europe and beyond.

Stock market investors also appeared cautious, with Milan at around zero.

Despite his 10-year stint in Brussels, the technocrat has never held office in Italy but has already shown mettle by insisting that his government has to stay in power until 2013- the scheduled date for the next general election.

As European commissioner, Monti famously fined US technology giant Microsoft nearly 500 million euros (USD 672 million at current exchange rates) and blocked a massive USD 42-billion merger between General Electric and Honeywell.

The departing Berlusconi reportedly spent his last day in office packing up gifts -a scimitar from Kazakhstan and a Ming dynasty vase from China, which the jocular premier had famously pretended to drop to the horror of diplomats.

After dominating Italian politics for nearly two decades, Berlusconi has made it clear he had no intention of retiring and pledged on Saturday to never give up on the land he loves.

PM to leave for Bali on Thu to participate in Indian-ASEAN Summit

Prime Minister Dr. Manmohan Singh will leave for Bali, Indonesia on Thursday to participate in the ninth India-ASEAN Summit and sixth East Asia Summit.

The leaders from ten ASEAN member countries will begin their deliberations from Thursday.

ASEAN Summit and related summits will be held in Bali from 17^th to 19^th November. India is a dialogue partner with the Association of 10 South East Asian Nations, ASEAN.

Thereafter the forum will be opened for Dialogue partners India, Australia, China, Japan, South Korea, and New Zealand. The United States and Russia have also been invited to participate in the Summit this year.

The India-ASEAN Summit will consider 40 proposals worth US$ 50 million submitted by India to enhance multilateral ties with South East Asian countries.

Indian Ambassador in Indonesia Birendra Nanda, said after Free Trade Agreement with ASEAN countries trade has increased manifold and will reach 70 billion dollars by next year.

Speaking about the Commemorative India-ASEAN Summit to be held in India next year the Ambassador said that various events are planned to mark the occasion.

The Prime Minister will also hold bilateral talks with member countries of ASEAN, during his visit to Indonesia.

US President Barrack Obama who is visiting the summit for the first time is scheduled to meet Dr. Manmohan Singh on the sidelines of the ASEAN Summit.

CAG Vinod Rai appears before JPC

Comptroller and Auditor General (CAG) Vinod Rai on Tuesday appeared before the JPC, a day after his former colleague sought to dismiss the presumptive loss of Rs 1.76 lakh crore due to 2G spectrum allocation as a mathematical guess.

Rai, who appeared before the Joint Parliamentary Committee (JPC) along with Deputy CAG Rekha Gupta, had written to Committee Chairman P C Chacko requesting the presence of R P Singh, former Director General, Audit (Post and Telecommunications) during his deposition.

Singh had told the JPC on Monday that his calculation in a draft audit report was based on inflation rate of seven years as the entry fee decided in 2001 was not revised in 2008.

He had told the JPC that the actual loss due to spectrum allocation was Rs 2,645 crore as against the Rs 1.76 lakh crore in the final report.

Singh had also said that he was compelled to sign the final report to which he did not agree in its entirety.

Rai and Gupta were present at the meeting venue at 11:00 AM and had to wait for over an hour as members held internal discussions on Singh's deposition and Chacko's briefing to the media.

A section of the members felt that Chacko's media briefing on Monday appeared to be biased against the CAG institution merely on the basis of remarks of a senior official.

The Chairman is learnt to have taken a plea that he was quoted out of context by a section of the media.

Time to lift ban on uranium supply to India: Aus PM

Australian PM Julia Gillard has made a strong pitch for uranium sale to India, saying the time has come to lift the long-standing ban on its exports to the dynamic and democratic country.

Gillard said she will urge the party faithful at next month's Labor national conference to reverse a ban on uranium exports to India, bringing Australia into line with America's thinking, a newspaper reported.

"India is our fourth biggest export markets, a market worth nearly USD 16 billion to Australia, with enormous potential to grow as India becomes wealthier," Gillard said on Tuesday.

"As India rises and brings hundreds of millions of people out of poverty it will need more energy," she said.

"We are a very big supplier of uranium so having access to this new and growing market is good for Australian jobs," she said.

Australia is the world's third largest supplier of uranium, which contributed more than USD 750 million to the economy and created more than 4200 jobs.

India was expected to increase its use of nuclear power from the current 3 percent of electricity generation to 40 percent by 2050.

Gillard said lifting the ban was another step forward in Australia's relationship with India.

It came at a time when Australia faced a unique set of opportunities in what she called the "Asian century".

"India as a rising giant will be part of that strong economic growth," she said.

"Put simply, our best possible partnership with India is also good for Australian jobs."

The Australian prime minister declared that it is "time for Labour to modernise our platform and enable us to strengthen our connection with dynamic, democratic India."

"As in other areas, broadening our markets will increase jobs. We must, of course, expect of India the same standards we do of all countries for uranium export - strict adherence to International Atomic Energy Agency arrangements and strong bilateral undertakings and transparency measures that will provide assurances our uranium will be used only for peaceful purposes," she said.

"One of our nearest neighbours is India. Long a close partner. The world's biggest democracy. Growing at 8 percent a year. Yet despite the links of language, heritage and democratic values, in one important regard we treat India differently. We will not sell India uranium for peaceful purposes - though Canada is preparing to - while policy allows us to export it to countries such as China, Japan and the United States," the Australian prime minister said.

"Just as I have said to the nation that we must analyse and understand the opportunities and challenges of this Asian century, the Labor Party too has to focus on our long-term economic goals and be prepared to confront difficult questions about maximising prosperity and the strength of our relationships in our region of the world," she said.

However, Labor's Left faction has conceded it does not have the numbers to prevent a reversal of the party's ban on uranium sales to India.

But, Resources Minister Martin Ferguson, a strong supporter of the move, said that he expected the Labour conference to back Gillard.

India welcomes Aus PM's announcement on uranium exports

India on Tuesday welcomed Australian Government's move towards reversing its ban on uranium exports to India.

"We welcome Australian Prime Minister Julia Gillard's proposal to seek a change in Australia's Labour Party's policies and sale of uranium to India in recognition of our energy needs for the impeccable record in non-proliferation and strategic partnership between two nations," External Affairs Minister S M Krishna told reporters in Bangalore on Tuesday.

Krishna said India attaches great importance to its relations with Australia which are growing across the board.

He also said energy was one of the key areas of bilateral cooperation between India and Australia.

Krishna's comments on the sidelines of the ongoing Indian Ocean Rim Association for Regional Cooperation (IOR-ARC) in Bangalore come in the wake of Gillard making a strong pitch for uranium sale to India.

Gillard has said she will urge the party faithful at next month's Labor national conference to reverse a ban on uranium exports to India and lifting the ban was another step forward in Australia's relationship with India.

AFSPA issue very sensitive, need mature decision: Antony

Terming the issue of withdrawal of Armed Forces Special Powers Act (AFSPA) as "very very sensitive", Defence Minister A K Antony on Monday said the matter has to be handled in a "mature and cool" manner. 

Antony said he had "very frank" and "very fruitful" discussions with Jammu and Kashmir Chief Minister Omar Abdullah yesterday but it was inconclusive.

"On our side, my opinion is that this being a very very sensitive issue, let us handle it in a very mature and cool manner," he told reporters in New Delhi  in reply to questions on the issue of withdrawal of AFSPA in certain areas of the state.

During his meeting with Antony, Abdullah, who has been pressing for revocation of the controversial law from certain parts of the state, presented his case.

Antony said inter-Governmental consultations are taking place and discussions on the issue will continue.

To a question on the security situation in the state, the Defence Minister said it was much better.

"But considering that the infiltration attempts from across the border are continuing, we have to be careful 24/7."

When asked if the AFSPA issue would come up at a meeting of the Cabinet Committee on Security this week, he said, "Don't put any time limit.

Indo-Pak Commerce Secy-level talks fruitful

Amidst high expectations by India on the MFN issue, Pakistan on Monday asked New Delhi to have "trust and faith" in it, as "times have changed" and Islamabad wants complete normalisation of the bilateral trade.

India said, there is a clear political desire to "walk the talk" with its neighbouring country.

The mutual assurances were handed out by Commerce Secretaries of the two countries, who began their two-day talks for ensuring normal bilateral trade.
Armed with a "political backing and mandate, Pakistan Commerce Secretary Zafar Mahmood said in his opening remarks , "I want to assure you that please have trust and faith in the process (normalisation of trade). Times have changed. World is coming closer".
Mahmood, who is having a second round of talks with his Indian counterpart in the last six months said, he is looking forward to the official level discussions "in a spirit of mutual cooperation and confidence".
In Pakistan, besides common people and businessmen, political leadership wants normalisation of bilateral trade,he added.
The Indian Commerce Secretary, while welcoming the Pakistan's decision to grant the Most Favoured Nation (MFN)status to India, said "expectations from these talks are running high..." as the people including business communities and politicians want a breakthrough and lay a foundation for preferential trading arrangements.
"With such clear political vision, we are now obliged to walk the talk," Khullar said.
India granted the MFN status to Pakistan way back in 1996.
Islamabad, had announced to grant the crucial WTO- compliant regime for New Delhi on November 2.

Not putting blind faith in Gilani: PM

Asserting that he is not putting blinding faith in his Pakistani counterpart Yousuf Raza Gilani for pushing bilateral dialogue, PM Manmohan Singh on Saturday said Pakistan's armed forces were on board on the peace process.

He said India wanted to strengthen the hands of the civilian government in Pakistan and that Gilani, whom he met in Male on Thursday, has clearly understood that one more Mumbai-like attack will be a big setback in the peace process.

The Indo-Pak peace process, the resumed dialogue of which is going to take place shortly, was subject to accidents, Singh said while answering a wide range of questions from journalists on board his special flight while returning from Maldives.

He said his visit to Pakistan would take place only when Pakistan takes solid steps against the Mumbai terror attack accused in that country.

"I would not like to go into the details of this matter. But when I did discuss with Pakistan Prime Minister whether Pakistan's armed forces were on board, the feeling I got after a long time was that Pakistan's armed forces were on board," he said in reply to a question on Foreign Minister Hina Rabbani Khar's claim that army was on board the peace initiatives with India.

Asked what prompted him to call Gilani a man of peace, Singh said he had met him four-five times and every time they discussed bilateral issues, his counterpart had agreed that there was no way forward except for peaceful resolution of all problems and that terrorism was not helping the process.

"In fact, he (Gilani) has gone ahead and expressed his reservations that terrorism is a common enemy, it (terrorism) has not helped advance Pakistan's cause. I tend to believe that Pakistan has a democratic government. We would like to strengthen the hands of the democratic government.

"In the desire for normalising the relations, trade and terror-related issues, I think, in Gilani Pakistan has a Prime Minister who is ready to work with us," he said.

Asked about trusting Gilani, the Prime Minister said, "it is not that we are putting blind faith in one individual, however well-meaning he may be. PM Gilani and I believe in normalisation of relations."

Singh said he and Gilani agreed that the resumed round of dialogue should start and it will be imperative in the development of trade relations with the changing attitude of Pakistan by giving Most Favoured Nation (MFN) and the willingness of Pakistan to discuss all issues including that of terrorism.

"So I come back (from Male) with the expectation that the second round with Pakistan will begin very shortly. But what will be the outcome of the dialogue I cannot say now because Indo-Pak relations are subject to accidents," he said.

"We both recognised that if there is one (more) incident like Mumbai attack, then that would be a big setback. I think that has been clearly understood by PM Gilani," he said. (DD-13.11)

PM Manmohan Singh arrives in New Delhi from Maldives 
Prime Minister Manmohan Singh left Male for home on Saturday after concluding a four-day visit to Maldives, where he attended the eight-nation SAARC Summit, held talks with his Pakistani counterpart Yousuf Raza Gilani and announced a series of key initiatives for Maldives.
During his stay in Male, the Prime Minister addressed the SAARC Summit on Thursday during which he announced a major trade liberalisation effort in South Asia, drastically slashing the sensitive list for Least Developed Countries under SAFTA from 480 tariff lines to just 25 under which zero basic customs duty will be given for all the removed items.
On the margins of the Summit, Singh held talks with his counterparts from Pakistan, Nepal, Bhutan and Bangladesh and also met Presidents of Afghanistan, Sri Lanka and Maldives.
After meeting his Pakistani counterpart Gilani, Singh declared that time has come to write a "new chapter" in the history of two countries.
India also decided to move towards a Preferential Trade Agreement with Pakistan as both sides agreed to put in place a liberalised visa regime soon.
The decision on the Preferential Trade Agreement with Pakistan under SAFTA will lead to zero customs duty on all traded goods by 2016.
Singh and Gilani also agreed that bilateral trade will be conducted on Most Favoured Nation (MFN) basis.
Singh also met Maldivian President Mohammed Nasheed and announced a USD 100 million Standby Credit Facility and a number of other crucial initiatives, including building capacity of Maldivian security forces.