Monday, February 28, 2011

Libya update: Opp forces close to Tripoli


Cairo/Washington: Opposition forces on Monday stormed close to the Libyan capital Tripoli for a final showdown with militia still loyal to beleaguered strong-man Muammar Gaddafi, as US and its European allies readied plans for a possible imposition of a 'no-fly zone' over the embattled country.
Three areas close to the east of the capital fell to the opposition forces advancing from Az-Zawiyah, just 50 kms west of the capital, Al-Jazeera channel reported.
Quoting its correspondent moving with the opposition forces, the channel
said heavily armed Gaddafi's forces were manning check-posts between Az-Zawiyah
libya crisis
and Tripoli.
It said there were also reports of Gaddafi loyalists demonstrating in small towns on the periphery of the capital. "Gaddafi was reported to be holed up in the heavily fortified Bab al-Aziziya area of the capital with his mercenaries militia men ringing
him," the channel said.
It claimed that Gaddafi loyalists were also venturing to launch probing attacks
outside the capital and said that at the moment "the capital was still in his control".
As Gaddafi and opposition forces seemed to be locking into a final battle, US and its European allies appeared to be stiffening their attitude to fast paced developments in Libya.
Obama administration officials were in talks with European and other allied
governments for a possible imposition of 'no-fly zone' over Libya to prevent further killings of civilians by troops loyal to Gaddafi, New York Times reported.
US officials are also discussing whether the American military could move to
disrupt communications to prevent Col Gaddafi from broadcasting in Libya.
The paper also said Washington was also pondering to set up 'safe corridors' leading from Libya into neighbouring Tunisia and Egypt to assist the refugees, whose numbers are multiplying. UN Secretary General Ban Ki Moon was scheduled to meet US President Barrack Obama in White House to discuss the deteriorating situation in Libya.
France on Monday declared it would send "massive" aid to opposition held
territories in Libya and did not rule out supporting the NATO enforcement of a no-fly zone.
The French Prime Minister Francois Fillon said the country's air force plane would start leaving for Benghazi to start a massive humanitarian and relief operations.
The French announcement followed as British and German military planes flew clandestinely into the Libyan desert rescuing hundreds of civilians stranded in the country.
The dramatic rescue by planes came after a secret commando raid by Britain's famed SAS which plucked 150 oil workers from multiple locations from the remote Libyan desert, 'The Sunday Telegraph' reported.
The paper quoting unnamed Whitehall officials said the secret military mission into the strife torn country signalled the readiness of western nations to disregard Libya's territorial integrity when it comes to the safety of its citizens.
Three British Royal Air force C130 Hercules Aircraft swooped into the eastern Libyan desert to pluck out 150 stranded civilians and flew them to safety to Malta on Sunday the British Defence Secretary Liam Fox said in a statement.
Telegraph said, one of the RAF Hercules transport aircraft suffered minor damages from small arms fire.
In a similar defiant action, Germany said its air force transport planes had evacuated 132 people from the Libyan desert during a secret military mission on Saturday.

Union Budget 2011 spares the axe


By R Jagannathan, Editor-in-chief, Web 18 business portals
The Union Budget for 2011-12 presented by Finance Minister Pranab Mukherjee to Parliament on Monday is widely seen as taxpayer- and market-friendly. While it provides tax relief to individual taxpayers and corporate assessees, it has also sought to avoid any across-the-board increases in excise and service taxes – as was widely expected following suggestions from the Prime Minister's Economic Advisory Council. The Council had said recently that the time was ripe to withdraw the fiscal stimulus of 2008-10.
But the Finance Minister apparently disagrees. He said: "In my last Budget, I had started rolling back the fiscal stimulus implemented over 2008-09 and 2009-10 to mitigate the impact of the global financial crisis on the economic slowdown in India. In the course of the year, I have moved further on that path. I believe that a part of the current recovery must be stored away to build future resilience. Indeed, a counter-cyclical fiscal policy is our best insurance against external shocks and localised domestic factors."
So, Mukherjee is obviously not sure that growth will remain robust if he tightens the screws just now. The main highlights of his budget proposals are the scattering of relieves here and there, with the big sting being left for later.
The following are the main budget proposals, and their possible impact.
* The surcharge on corporate tax on domestic companies will be cut from 7.5 per cent to 5 per cent. However, the Minimum Alternate Tax goes up to 18.5 per cent from 18 per cent to keep the effective level of taxation for MAT companies the same. Companies will welcome the relief.
* Individual taxpayers get a higher basic deduction of Rs 1.8 lakh; every taxpayers get minor relief of Rs 2,000. It's a minor drop in the bucket given the ravages of inflation.
* Senior citizens get a bonanza. Apart from an increase in the exemption limit to Rs 2.5 lakh, the entitlement age for senior citizens is now 60, not 65. A new class of super senior citizens aged above 80 gets an even higher IT exemption limit of Rs 5 lakh. For a young country, Pranab, 76, is obviously rooting for senior citizens.
* Service tax stays at the same level as before at 10 per cent, but several new services have been brought within its ambit. Among them: hotels with tariffs above Rs 1,000 (5 per cent service tax), restaurants with bar and A/C (3 per cent), hospitals with more than 25 beds and with A/C (5 per cent), and air travel (Rs 50 more for domestic, Rs 250 for international). Business class air travel will attract a full 10 per cent service tax. Hotels, five-star restaurants and airlines will scream.
* The base excise rate stays at 10 per cent, but exemptions on some 130 items are being withdrawn. A basic rate of 1 per cent is being levied. Another 240 items that are still exempt will be attracting tax when the goods and services tax is introduced next year. One can expect inflation to get a nudge up.
* Inflation, reforms and black money generation got some mention, but nothing substantive. The amnesty scheme for bringing back black money was missing in the budget. The government is obviously not keen to be seen as reactive to public criticism of corruption.
* Subsidies on fertiliser, kerosene and cooking gas (LPG) will be cash-based by March, 2012. No measures on fuel deregulation were, however, announced. The urea subsidy will soon become nutrient-based. Good in intent, a lot will depend on political will. One can expect the Left to be critical of the proposal.
* The public sector disinvestment target has been upped to Rs 40,000 crore in 2011-12; the current fiscal's target was reduced to 22,144 crore due to higher realisations from other sources. But it could be because of the government's inability to reform oil prices. While Indian Oil was forced to review its further public offer due to losses, ONGC's plans appear to have been delayed. A lot will depend on how the market fares after the budget.
* Foreign institutional and non-institutional investors get more options for investment. While the total ceiling on debt is raised to US$40 billion, individual investors who are KYC (know-your-customer) complaint can invest in Indian mutual funds. This could indirectly give a fillip to market sentiment. Positive for market sentiment, but don't expect a flood of foreign funds to come into equity.
* Many sops for infrastructure have been announced. While Rs 30,000 crore worth of tax-free bonds will be on offer next year, the Rs 20,000 additional tax deduction available for investing in infra bonds will be retained for another year. Nothing earth-shattering in all this.
* Small sops have been offered to housing, especially low-cost housing. The 1 per cent interest rebate will be applicable for loans upto Rs 15 lakh on houses costing upto Rs 25 lakh. Loans upto Rs 25 lakh will qualify as priority sector loans (against Rs 20 lakh now). One cannot expect any major fillip to housing with this. Realty is already beyond reach in most metros even for the middle class.
Overall, the Centre's direct tax relieves will cost Pranab Mukherjee Rs 11,500 crore, while his indirect tax levies will bring in Rs 11,300 crore. The fiscal deficit will be contained at 4.6 per cent next year against 5.1 per cent this year, with the 2013-14 target being 3.5 per cent.