PAC meeting on 2G deferred amid sharp differences

The BJP and other opposition parties insisted that former DG (Audit) RP Singh should be summoned as he has differed with the figures of loss incurred by the government in the 2G scam. Mr Singh, who has now retired, has stated that the loss is merely of Rs6,000 crore while the CAG had maintained that it was to the tune of Rs1.76 lakh crore

New Delhi: The second generation (2G) spectrum controversy rocked the Parliament’s Public Accounts Committee (PAC) meeting here Monday with opposition parties demanding that former DG (Audit) RP Singh be summoned and asked why he differs with CAG on the quantum of loss while Congress members opposed the move, reports PTI.

With differences persisting, the meeting was adjourned.

The meeting scheduled for tomorrow has also been postponed reportedly on as Chhath festival falls Tuesday.

Sources said the BJP and other opposition parties insisted that Mr Singh should be summoned as he has differed with the figures of loss incurred by the government in the 2G scam. Mr Singh, who has now retired, has stated that the loss is merely of Rs6,000 crore while the CAG had maintained that it was to the tune of Rs1.76 lakh crore.

Prakash Javadekar (BJP) demanded that not only Mr Singh but others like telecom minister Kapil Sibal—who said there was zero loss- among others, should be summoned by the PAC and asked how they had arrived at figures different from that of the CAG. AIADMK member M Thambidurai insisted that the Central Bureau of Investigation (CBI) director should also be called as the agency had arrived at a different loss figure.

BJP, BJD, SAD and AIDMK referred to the letter written by Congress member Sanjay Nirupam asking that the 2G issue be discussed and said the questions which have not been addressed should be gone into.

Caught in a bind over Mr Nirupam’s letter, Congress members on Monday argued that Mr Singh cannot be asked to present his views in front of the CAG and his team—which is present in every PAC meeting—as he does not concur with them.

Some Congress members in the PAC were later heard saying that Mr Nirupam had caused an unnecessary hassle by writing this letter. The matter is now with the JPC and PAC could have avoided getting into the issue afresh.

Opposition members demanded that since Mr Singh has retired he has nothing to fear and so can freely depose before the PAC. One member even maintained that there have been several instances where those summoned by the committee have differed with the CAG.

With no consensus in sight, PAC chairperson Murli Manohar Joshi adjourned the meeting on the ground that the legal and constitutional aspects related to the issues raised by the members Monday will be looked into and then brought up for discussion at a later meeting.

RP Singh, who had come prepared to attend the meeting and make his presentation, was not called in on Monday.

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MF Global faces a run, could file for bankruptcy. Its Indian arm is silent—and so are regulators

Beleaguered giant MF Global has been trying to restructure its assets, and clearing houses are trying their best to get out when they can. But if MF Global does go bankrupt, market volatility will go up even further. Indian investors are now just watching the saga unfold

On 28th October (See: MF Global Holdings crushed by $6.30 billion exposure to European sovereign debt ), Moneylife had reported on how MF Global had overexposed its trading beyond futures (commodities, interest rates and indices) and has been crushed due to its $6.30 exposure to the euro-zone sovereign debt. At this juncture with the EU looking down at a bottomless abyss of debt, which financial entity would place bets on countries like Portugal, Italy, Ireland and Spain and throw good money after bad?  

Despite the position that the fund (a leading global broker of exchange-listed futures & options, with $7.30 billion of customer assets as of 31st August) finds itself in, and the possibility of MF Global filing for bankruptcy, there is absolutely no indication (so far) on the future of its India arm, MF Global Sify Securities.

One would have at least thought that MF Global Sify securities would issue a communiqué for its investors (as MF Global has done)—or, indeed, the market regulator would take some action to safeguard the interest of investors. But both remain tight-lipped on this issue.

The MF Global saga is similar to the subprime mortgage crisis that rocked the US and subsequently global markets in the sense that both the US Fed and the SEC (Securities and Exchange Commission) failed to see the tsunami that was coming their way.

So what happens to individual customers if MF Global goes belly-up? Huge entities like the CME Group would be able to capitalise on the outstanding trading positions. Individual investors have already started pulling out their money. Rival trading houses are trying their best to rope in former MF Global customers.

MF Global may face more ratings cuts. Though the market buzz has it that Goldman Sachs is interested in snapping up the firm, this just remains a rumour. MF Global had important bourses in India and Singapore among its clients. By today evening when US markets open for trade, the picture will be much clearer. Will Indian customers—and the regulator—finally try a rescue job?

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Occupy Wall Street could prop up Obama

Chances of Obama getting a second term seem impossible, say the pundits. The state of the US economy is going from bad to worse. The Occupy Wall Street campaign is made up of those who had chanted “Yes, We Can!”... This movement could give the current American president a big boost 

Commentators in the United States are predicting President Obama can’t win a second term. His poll numbers are at an all-time low. Only 43% approve of his performance as president while 47% disapprove. Unemployment in the US has remained stubbornly high at 9.1%, the worst since 1983. Despite these dreadful numbers it must be pointed out that in September 1983, the unemployment rate was also at 9.2%. Then Ronald Regan was president and only 46% approved of his performance. Regan did not have any problem getting re-elected 13 months later. But that may not what will save Obama. What will save him is a coalition presently named Occupy Wall Street.
 
Occupy Wall Street is a spontaneous grass-roots movements. It seems like it is filled with outcasts, malcontents and the generally weird things that New York throws up from time to time. Some pundits have dismissed it, but that is unwise. In 2009 after the triumphal election of Obama in 2008, a small group of what appeared to be crazy old people often dressed in 18th century costumes complete with tri-corn hat started to demonstrate in front of state capitals and disrupted government hearings. They called themselves the Tea Party movement after a legendary and destructive riot that occurred in Boston in 1773. Their message seemed unclear, occasionally racist and often simply silly. Yet in just over a year it coalesced into a major force that was able to set the agenda for the Republican Party and eventually take over the US Congress.
 
What united the Tea Party though was not a love of history. It was fear. Obama by just his appearance represented a monumental change to America. Older white people came from a world where both their position in American society and America’s position in the world seemed secure. Now all that seemed to have changed. The world economy had collapsed. The US was broke and owed piles of money to China. Government programmes meant to benefit them seemed in jeopardy and their long-term jobs were disappearing.
 
It is that same potential for fear that could unify the people Occupying Wall Street. There is a difference. The Tea Party is more of a movement of the ‘want to keep’. Occupy Wall Street could be more of a movement of the don’t haves.
 
The largest segment of the want to haves is the young and often well educated. The reason they are well educated is that they were able to go to university. The way they were able to pay for it was with government-subsidised student loans. The amount of these loans is huge, potentially over a trillion dollars. The probability of students getting good jobs to pay off these loans has been decimated. The crushing burden of these loans makes it almost impossible for younger workers to afford anything like a car or a house that their parents enjoyed. They cannot even get rid of the loans in bankruptcy and there is no statute of limitations.
 
Other have-nots include minorities. Minorities have been especially hard hit by the recession. The average national unemployment rate for whites is 8%, but for Hispanics it is up to 11% and for Blacks it is 16% (double the white number). These minorities are not just a small fraction of the electorate. Instead they presently make up a third of the population.
 
Another segment are the ‘used-to-haves’. Most of these are the people who have lost homes in foreclosure, over three million since the recession began, added to that are the 4 million whose homes are delinquent in their payments over 90 days. Finally almost 30% of homes have mortgages that are larger than what the home is worth.
 
Then there are the ‘might-not-haves’. These include millions of workers whose promised pensions may not exist. States all over the country are having financial problems. Only one state, Delaware, has over 90% of its liabilities funded. Over 60% of the states have liabilities that exceed 20%. In 16% it is over 40%. The total pension shortfall could be over $2 trillion and that is does not include private companies.
 
Against this back ground the Republicans and Tea Party are unsympathetic. According to former pizza executive Herman Cain, “If you don’t have a job and you’re not rich, blame yourself!” Candidate Mitt Romney blasted the anti-Wall Street rallies as “dangerous” and “class warfare.” While candidate Newt Gingrich called the protests a “natural outcome of a bad education system teaching them really dumb ideas.” Meanwhile Republicans in Congress stoutly refuse to raise taxes on people making over a million dollars a year.
 
What Obama needs to win is a way to unite the disparate islands of anger against this insensitivity. The Occupy Wall Street demonstrations may do just that.  
(The writer is president of Emerging Market Strategies and can be contacted at [email protected] or [email protected]).

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COMMENTS

baby

5 years ago

Congress must seriously think of "occupy jantar mantar" by their cronies to prop up Amulbaba !

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