Economy
Majority don't expect policy rate cut by RBI on 30th October: survey

It is widely expected that the RBI Governor will leave all the key rates unchanged due to the persistently high inflation in its second quarter monetary policy review


Mumbai: A majority of India Inc have little expectations from the Reserve Bank of India (RBI)'s second quarter monetary policy review on 30th October given the macro-fundamentals of the economy, with 53% not foreseeing any reduction in the policy rate, reports PTI quoting a survey.

 

However, the Royal Bank of Scotland (RBS) in a pre-policy client survey released today, observed the market is gearing towards a softening in the interest rates in the long-term, say beginning March.

 

The Reserve Bank will unveil its busy season credit policy next Tuesday, where it is widely expected that Governor D Subbarao will leave all the key rates unchanged due to the persistently high inflation, which in August stood at 7.81%.

 

Many analysts and economists are also saying that it is too early for the government to expect anything dramatic on the interest rate regime despite the recent reform measures.

 

But there is also a section in the industry and academia who call for some reciprocal measures from the Mint Road, at least symbolically which can go a long way in boosting the sentiment.

 

Currently, cash reserve ratio (CRR) is pegged at 4.50%, while repo is tied at 8%, after the tweaking in the March-April period.

 

While half (50.9%) the respondents don't expect any change in the CRR, around 49% are looking at a 25-50 bps cut in the same on next Tuesday.

 

Significantly, around 53% of the respondents expect no cut in the repo or the short-term lending rates, while the rest expect a 25 bps cut, RBS said in the survey.

 

The 14th RBS clients survey covered over 120 local market participants, including its corporate clients, banks, insurance companies and mutual funds among others.

 

As much as 56% of the responses came from its corporate clientele and rest from financial institutions.

 

The market is split down the middle on whether the easing cycle begins with this policy or not with only half of it feel the easing cycle will begin in the long-term say by June next.

 

Around 51% believe there will be a rate pause in CRR this policy review meeting, RBS said in the release.

 

On the rupee, the survey says median expectation is the local unit trending up to 52 to the dollar by March.

 

The market is expecting the rupee to remain range bound in the near-term, while continuing to be moderately bullish in the longer-term.

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Zee News-Navin Jindal episode: Real face of media exposed?

While paid news is being discussed since the last election, for the first time we saw there is no wall between news reporting and sales, as Zee News’ editors Samir Ahluwalia and Sudhir Chaudhary are also business heads of the channel


The episode between Navin Jindal and Zee News is becoming murkier every day. Jindal, the Member of Parliament (MP) belonging to the Congress party and chairman and managing director of Jindal Steel and Power-part of the $15 billion diversified OP Jindal Group-had filed criminal extortion case against Zee News and Zee Business channel.

 

Following a formal complaint by Navin Jindal, the Broadcast Editors' Association (BEA) suspended its treasurer Sudhir Chaudhary, who is also editor and business head of Zee News. Even the News Broadcasting Standards Authority (NBSA) headed by former chief justice of India JS Verma has said that it would inquire in to the complaint by Jindal. While both Zee and Jindal are sticking to their own stands, the entire episode raises more questions on the ethics of news reporting and business.

Jindal, in a dramatic press conference on Thursday, also released tapes showing the conversation between his team members and Zee News reporter, who allegedly asked for cash to stop the TV channels sting operation. "Media in our country has to be above suspicion. Media has played a crucial role in our country. Jindal Steel and Power has faced an incident on which I want to give a pure version. The way Zee TV has carried the news, it has become important for me to share," the Congress MP said.



Earlier, Jindal had filed a first information report (FIR) against Subhash Chandra, chairman of Zee group, Punit Goenka, managing director of Zee, Sameer Ahluwalia and Sudhir Chaudhary, both editors and business heads of Zee Business channel. In the FIR, Jindal said that Ahluwalia and Chaudhary demanded "certain advertisement commitments" worth several crores of rupees (Rs100 crore, according to media reports) for not broadcasting a story about the Jindal group's alleged involvement in the coal block allocations.

 

Jindal in the FIR said, “...the said three officials (Ravi Muthreja, head for corporate communications, Sushil Kumar Maroo, director and Vivek Mittal from Jindal) met with the aforesaid Sameer (Ahluwalia) and Sudhir (Chowdhary) at Polo Lounge of Hotel Hyatt Regency, New Delhi on 17 September 2012. In this meeting Sameer and Sudhir claimed that the deal amount will be Rs100 crore and not Rs20 crore as same was a communication error. They further said that if our company agreed to pay their company a total sum of Rs100 crore, they will not telecast any program concerning us and further they will improve/repair damage already caused to our company and its management due to the said programs.”

 

The complaint also blames Zee group’s head Subhash Chandra. It says, “Aforesaid Sameer and Sudhir further informed us that a vilification campaign against our company is under instruction, consent and full knowledge of aforesaid Subhash Chandra and other officials of their top management. They further informed that Subhash Chandra Goyal was fully aware of this. In fact this whole thing was his plan and each step had his concurrence”.

 

The Zee group, however, denied the allegations made by Jindal. According to a PTI report, Punit Goenka, managing director and chief executive, Zee Entertainment Enterprises has said, “This kind of allegation has happened in the past and may happen in the future. It doesn’t make any difference to us and we will stick to the truth. These are all pressure tactics.”

 

Zee News also alleged that Jindal misbehaved with a team of its reporters after they sought clarifications from him on the allegations levelled against his company for alleged irregularities in allocation of coal bocks.

 

This case highlights the effects of the diminishing wall between news reporting and sales and marketing. Renowned media critic Ken Auletta, while writing about Sameer Jain and Vineet Jain, the Times of India brothers, in The New Yorker has highlighted the question about news and paid news. (http://www.newyorker.com/reporting/2012/10/08/121008fa_fact_auletta ). Auletta says, “India is one of the few places on earth where newspapers still thrive; in fact, circulation and advertising are rising. In part, this is because many Indian newspapers, following an approach pioneered by the Jain brothers, have been dismantling the wall between the newsroom and the sales department. At the Times of India, for example, celebrities and advertisers pay the paper to have its reporters write advertorials about their brands in its supplementary sections; the newspaper enters into private-treaty agreements with some advertisers, accepting equity in the advertisers' firms as partial payment.”

 

Read: Times Group’s private treaties housed under a new name

 

Unfortunately, more and more media houses in India are using the same method to churn out news and earn profits. While it is no secret that owners of several media expect the editorial team to provide some ‘benefits’ to them either through some deals or advertisements, Zee has gone one step ahead by merging the two posts, editor and business head.

 

While responsibilities for both these posts are different, merging them would be only disastrous as can be seen by the Chaudhary episode. Being an editor, Chaudhary may plant stories for and against, let’s say, Jindal, and at the same time as business head may, directly or indirectly, approach the business group for advertisements.

 

Last year, after the screening of the movie “Brokering News” by Moneylife Foundation and vCitizens Action Network and MxM India, a member of the audience asked the panellists, “When I see a movie getting good ratings, I go watch it. If it turns out to be bad, I lose Rs150 for the ticket. How does ‘paid’ news affect me then?”

 

The movie, directed by Umesh Agarwal, showed how, mass media, which is responsible for reporting correct information and mould public opinion; has started to act as mouthpiece of corporate houses, power lobbies and politicians—misleading the people and redirecting public opinion for their benefit.

 

Read: One Cheer for Transparency?

 

While there is no doubt that the electronic and print media need an introspection, on the other hand enquiries also must be launched against publishers who come up with suspicious-looking content or articles that engage in adulation for an organisation or persons. The Zee News and Jindal episode, probably is pointing towards this direction.

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COMMENTS

PADMA SAHU

4 years ago

Zee news has target Jindal group for only getting money... nothing else

PADMA SAHU

4 years ago

Exposing the REAL face of news channel is good. No regulations, under ambit of freedom of expression they do all nonsense.

PADMA SAHU

4 years ago

Zee news demanding 150cr for stop to showing Coalgate scame to his channl from Jindal. It is very2 shameful and blackmailing

PADMA SAHU

4 years ago

Zee News' license should be dismissed

PADMA SAHU

4 years ago

Video is right.....there is no tampered with video tape

PADMA SAHU

4 years ago

Your attempt will also provide a strong platform to other business houses nd clean politicians to fight unnecessary pressure

PADMA SAHU

4 years ago

first time sting operation against the media was prove that the how they are blackmailing.

PADMA SAHU

4 years ago

all News channel must be broadcast soon and repeat the same.we hope

PADMA SAHU

4 years ago

Video tape is clearly showing black face of Zee.........

anjank

4 years ago

for gaining popularity in public which is lost by Zee media send defamation notice....very2 shameful

anjank

4 years ago

Now people think that no body use journalism in proper & honest way

sanjiv

4 years ago

Zee news activity with refernece to Mr.Navin Jindal should be condemned.

anjank

4 years ago

jindal fights agnst the media crooks & zee media which is spreading biased information against his group.

anjank

4 years ago

the intention of Zee News was strikingly evident from beginning as they were focusing JSPL more than the main issue and earn money through blackmailing.

rajkumar

4 years ago

This is proof enough that media is only interested in sensational reporting for TRps with absolutely no concern for preventing corruption

Rajat Gupta’s crime and conviction: Power gone wrong or breach of trust?

Rajat Gupta’s case is the tale of a prosperous environment gone terribly wrong and a stark wake up call to correct it, if indeed we are to make an attempt to revive the faltering world economy at all

 
When the ball finally dropped on Rajat Gupta, it would seem it wasn’t as severe as anticipated at all. Two years imprisonment, a $5 million fine for charges of being compliant to insider trading.
 
The case was deemed the big scalp for the US Federal Reserve in its crusade against insider trading. Mr Gupta was a powerful man, with far-reaching influence. He had served as McKinsey and Company's managing director (worldwide) until his retirement in 2007, been on the board of many of today’s influential corporations and banks, including most prominently, Goldman Sachs. He founded one of India’s premier business schools, the Indian School of Business, was influential in the formation and fundraising support for the Public Health Foundation of India and one of the preeminent funds investing in the emerging markets of South/SE Asia, New Silk Route.
 
For the most part, Mr Gupta has lived the Indian American dream. Rising from India’s top engineering school, Mr Gupta headed to the Harvard Business School, where he graduated as a baker scholar. Ironically, Mr Gupta was initially turned down by McKinsey as an associate, during recruiting at Harvard. McKinsey overturned this decision upon assurances from then HBS dean, of Mr Gupta's immense promise and reputation as one of the best students Harvard had seen.
 
Mr Gupta’s tale is one of a fall from grace and lessons for Wall Street to heed. While his initial punishment (prior to appeal) is nowhere as severe as the potential 25-year prison term he could have faced, Mr Gupta is a man whose legacy lies in tatters. It will be a long time before the “egregious breach of trust”, as the judge ruling on his case put it, begins to heal. 
 
Mr Gupta’s charges were of leaking information, from his position on the board of Goldman Sachs, to hedge fund investor Raj Rajaratnam (currently serving an 11-year prison sentence) about internal transactions at Goldman, including Warren Buffet’s $5 billion bailout at the height of the crisis. This prompted Mr Rajaratnam, to hedge himself against the fluctuations in stock price. Mr Gupta wasn’t believed to have had any realistic financial gain and his attorneys say the two friends were discussing the deal in their position as investors themselves. But, of course, the timing of it and the fact that the reveal took place before the public announcement tells a more sinister story.
 
Mr Gupta has been defended by and asked to be pardoned by many public luminaries—former UN secretary general Kofi Annan, philanthropist Bill Gates among others—asking for a softer sentence in light of all of the public service he has done. And it is undeniable that Mr Gupta has been involved in a number of social-minded initiatives that have positively impacted and will continue to impact the lives of many.
 
While his good work is undeniable, his case is an example to Wall Street of the consequences of power gone horribly wrong. It is a tale of public service not being an excuse for white collar crimes, of boardroom influences not reaching far enough (to save you in the ultimate). Some will call it persecution, some will call it profiling because of race, but it is above all an example, of the sentiment worldwide about Wall Street—the protests, the disillusions, the many accusations of corruption and desire for quick fast money driven by simple greed. It is the tale of a prosperous environment gone terribly wrong and a stark wake up call to correct it, if indeed we are to make an attempt to revive the faltering world economy at all.
 
To read other articles by the same writer, click here.
 
(Ramesh S Arunachalam has over two decades of strong grass-roots and institutional experience in rural finance, MSME development, agriculture and rural livelihood systems, rural and urban development and urban poverty alleviation across Asia, Africa, North America and Europe. He has worked with national and state governments and multilateral agencies. Sushruthi Ramesh is a graduate of economics and an independent researcher working on Governance, Ethics, Investment Banking and Private Equity.)
 

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COMMENTS

NSriramamurty

4 years ago

Insider Trading is Robust in INDIA.For Allmost All Companies , Promoters /Merchant Brokers definitely BUY/SELL Shares of Companies involving Ensuing Corporate Movements like Takeovers,Mergers/Buyouts,Bonus,etc. and intimate Exchanges at Last Minute.SEBI has to Prescribe Rules for intimating Exchanges for intiatives of Companies in those Directions.
SEBI Chairman's has to iniatate Action to Take out with GOI to make required Bills in Parliment instead of shirking his Job by Simply Stating that CLASS Actions Suits are not allowed in Indian Acts .SEBI Has to take Many Actions to Curb Insider Trading and Consequential Manipulation by Brokers,Causing Losses to Common Investors.

Vinay Isloorkar

4 years ago

25.10.12

Rajai Gupta threw it all away by his " above the law arrogance." Accusations of racial profiling apart, hats off to the law enforcement in the US for bringing this swiftly to conclusion. Can we imagine anything remotely similar happening in India soon?

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