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Update No: 022 - (29/11/05)


Iraqi oil scam alleged
This month marked an interesting turn for Indian politics with a change of government in the two states of Bihar and Madhya Paradesh along with an emerging controversy over the Volcker report. The Volcker report is a an Interim Report on the United Nations Oil-for-Food program. The report has raked up controversy in India because it supposedly contains names of a few Indian officials who allegedly entered into oil contracts with Saddam Hussein's regime; allegations that have been denied by the Indian side. The controversy sparked a heated debate in Parliament leading to a disruption in parliamentary proceedings by the NDA government. Prime Minister Manmohan Singh expressed his disappointment with the consequent disruption in parliamentary protocol. The opposition took a harsh stance forcing the adjournment of both Houses over this issue; one that is now being referred to as the Iraqi oil pay-offs scam. The opposition also demanded the resignation of Union Minister K Natwar Singh and Congress President Sonia Gandhi as Singh's name seems to have appeared in the document. Natwar Singh in his defence argued that the current report was based on the records of the current Iraqi government, which has "no credibility in the world" and that Volcker should "produce evidence in support of the allegations." Singh's clarification came after Volcker on Thursday said in New York that he was not aware of the fact that Singh was the External Affairs Minister of India. Volcker had also said that those mentioned in the report were notified and given a chance to clarify their role. The Congress party has reacted sharply to these findings that allegedly claim that Natwar Singh acted on behalf of Congress President Sonia Gandhi. The party denied that Gandhi had any links with the oil-for-food scam. The specific allegations were made by an Indian businessman, H S Mejee who said he was told of Gandhi's links to the scam by Iraq's Oil Minister. Mejee claims that Singh carried a letter written by Gandhi related to oil contracts. However, as of now, there is no clear evidence to prove Natwar Singh's involvement in this scam. 

All change in Bihar & Madhya Pradesh
As regards the change of rule in Bihar and Madhya Pradesh, Nitish Kumar will be the new Chief minister of Bihar while Shivraj Singh Chauhan takes over in Madhya Pradesh. The Janata Dal (United) leader led the National Democratic Alliance to a secure victory in the Bihar assembly elections. The JD(U)-led alliance did phenomenally well, winning 147 seats to gain an absolute majority in the 243-seat house. Laloo Prasad Yadav's Rashtriya Janata Dal alliance claimed only 65 seats. Nitish Kumar will be sworn in as Bihar Chief Minister on the 1st of December in the Patna, the capital city of Bihar. Kumar described the NDA's victory in Bihar as a "victory of the people". Kumar also said the coalition would work hard to give the state good governance. Moreover, in his words, "every caste, every community in the state voted for change and stability. People in Bihar wanted good governance and we are grateful they have reposed faith in us. We will try to fulfill their ambitions." In the state of Madhya Pradesh, Shivraj Singh Chauhan will be appointed the next Chief Minister Babulal Gaur who has resigned. Chauhan is considered a prominent Other Backward Clsses (OBC) leader in the state and a section of the party and the Rashtriya Swayamsevak Sangh (RSS) extended their support for the Chief Minister's post. 

In early November, as part of a military exercise, Indian and American fighter aircrafts fought a mock battle in the air over Kalaikunda in West Bengal while thousands of Leftist supporters protested the presence of US aircraft in Indian air space. The Left is opposed to the growing military relationship between India and the US. Protestors gathered at the site in large numbers waving red and black flags in protest against the joint airforce exercise. Effigies of President George W Bush were burned indicating that the Left wanted to prevent the growth of India's strategic alliance with the US. Although the Leftist parties in India have always been wary of building a partnership with the US, their arguments do not reflect the majority of sentiments shared by other political parties such as the Congress and the BJP. It is often the case that as part of a vibrant political system, different political parties tend use such issues as a way of pushing their own agendas. 
On a more significant issue concerning Indo-American nuclear cooperation, American lawmakers pointed out that there were many "serious and difficult" conditions imposed on India in the nuclear cooperation deal. They also warned the Congress that maintaining a "defiant" stand could prove counter-productive and damage bilateral ties. Democrat Gary Ackerman spoke about these conditions to the House International Relations Committee hearing on: 'US-INDIA GLOBAL PARTNERSHIP: The significance for American interests,' in Washington recently. Ackerman stated that as per the July 18 joint agreement between the two countries, there are quite a few serious and difficult conditions that both India and the US have to meet. Ackerman also argued that "if we add additional conditions that the Government of India had previously rejected during the negotiations, the result will be not just be scuttling the agreement itself, but significant and lasting damage to the US-India relationship." As per the provisions of the agreement, the US is to lift restrictions on the supply of reactors and fuel for India's civilian nuclear program only if New Delhi fulfils a series of obligations which include separation of its military and civilian facilities. 

At the South Asian Assoication of Regional Cooperation (SAARC) summit in Dhaka this month, Pakistan Prime Minister Shaukat Aziz described India-Pakistan ties as a "deficit of trust." As the Summit closed, Indian Prime Minister Manmohan Singh also agreed with his Pakistani counterpart but added that is was incumbent upon the two countries to turn the deficit of trust into a surplus of trust by resolving cross-border terrorism. The SAARC summit which is an important avenue for regional cooperation in South Asia also faced a couple of difficulties with regard to Afghanistan's entry into SAARC and in developing a partnership with both China and Japan. However, the distinguishing feature of the 13th SAARC Summit was the absence of bilateral issues and a greater focus on strengthening multilateral ties between member states. 
Separately, India and Pakistan have agreed on a series of measures to stop trans-border crimes including narcotics trafficking by conducting joint patrolling and sharing intelligence. "Both sides assured to extend full co-operation and help in amicably and promptly sorting out all issues at the field-commanders level so that civil populations feel secure and their problems are settled" The Indian delegation was headed by Additional Director-General of the Border Security Force N P S Aulakh, while Director-General of Pak Rangers (Sindh) Javed Zia represented the Pakistani side. Aulakh said "fine tuning of existing procedures" was finalised to allow for a working relationship. This included enhanced contact at commander and other levels. He said both sides decided to "exercise mutual restraint" and take steps to check trans-border smuggling and crime through "exchange of intelligence." 

President APJ Abdul Kalam recently said at-least 100 PURA (Providing Urban Amenities in Rural Areas) complexes needed to be launched by the end of 2006. He said this would trigger growth in far-flung areas, and help India emerge as a developed nation by 2020. 
In his words, "we have been talking about PURA as a growth driver of our economy for the last few years ... we need to consolidate all these experiences and launch at least 100 PURAs." The President was speaking at the inauguration of a national workshop 'Vision 2020 - India: PURA and Growth Centres for Making India a Developed Nation.'
The PURA concept entails connecting a cluster of villages by a ring road, providing communication, health, housing facilities along the route and linking them to cities. (PTI) 

Sensex hits 9000
In other business related news, the Sensex created history and hit the 9000 mark for the first time on November 28, 2005. It ended the trading session at the level of 8,994. The Sensex's breathtaking journey to 9000 has come much faster than what even the most bullish of market players expected. But according to experts and critics, the key question now is whether India is looking too expensive or whether its growth story remains intact. The Sensex PE currently is about 17.4, which is slightly less than when the Sensex was at 8,500 and only slightly higher than its PE when it was at 8,000 and 7,500 (PTI Report)


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