The PAC grilling was based on a recent CAG report on civil aviation which had said that the decision to acquire 111 planes by Air India through debt was “a recipe for disaster” and should have raised an alarm in the government
New Delhi: Questioning the timing of merger and fleet acquisition when Air India was under heavy debt, the Parliament’s Public Accounts Committee (PAC) has asked the airline to submit all documents related to the issue within a week, reports PTI.
Top officials of Air India and erstwhile Indian Airlines faced some tough questioning by the Parliamentary panel which also slammed them over complaints of poor passenger services.
The grilling was based on a recent CAG report on civil aviation which had said that the decision to acquire 111 planes by Air India through debt was “a recipe for disaster” and should have raised an alarm in the government.
Air India officials told the PAC that it was their idea to merge the two carriers as the ‘open sky’ policy had increased competition in the aviation sector.
They also said that since their fleet at that time was ageing, they had thought of acquiring new planes and believed that merger will provide them greater strength to compete in the new environment.
“They have been asked to submit all documents on merger and fleet acquisition from the conceptual stage onwards to the committee,” a member said.
The officials were grilled on their plan to acquire 50 aircraft which quickly got the government's nod recently while their earlier plan to buy 18 additional planes could not materialise even after six years.
The officials are learnt to have told the committee that the proposal to purchase 18 aircraft was a short-term move whereas the proposal to induct 50 planes was a long-term plan which had the approval of the board.
“They said the file went from bottom to top and got cleared,” a committee member said quoting the officials.
Air India officials refuted suggestions that they had shut down profitable routes and assured the Committee to provide it with details to support their claim.
Officials of the erstwhile Indian Airlines were grilled by the PAC members for their ‘poor’ passenger service.
The AI officials included KM Unni, S Venkat and FJ Vaz dealing with airframe, finance and commercial operations respectively besides representatives of erstwhile IA—Vipin Sharma, Deepak Brara and V Bhandari.
In its latest report tabled in Parliament in September, the public audit body also called the merger of two erstwhile state-run carriers—Air India and Indian Airlines—‘ill-timed’ and said that “the financial case for the merger was not adequately validated prior to the merger”.
The report also dealt with several aspects of the ailing national carrier’s losses, fleet acquisition, merger, huge debt burden, delay in joining the global airline grouping Star Alliance and its financial and operational performance.
According to Indian Overseas Bank chairman and managing director M Narendra, the central bank is likely to keep policy rates unchanged for a while
New Delhi: Overlooking the demand of India Inc to lower interest rates, the Reserve Bank of India (RBI) in its policy review may refrain from cutting policy rate as the inflation of manufactured goods is still high, reports PTI.
“I don't see moderation in the interest rate (in the coming policy). CRR (Cash Reserve Ratio) cut I am not hopeful,” State Bank of India (SBI) chairman Pratip Chaudhuri said.
“I think there would be strong measures to indicate that RBI wants inflation to be stamped out totally,” he said.
Headline inflation fell to a two-year low of 7.47% in December, 2011. Food inflation entered the negative zone in mid-December and stood at (-)0.42% as of 7th January, as per the latest numbers released by the government.
The RBI will unveil its third quarterly review of monetary policy on 24th January.
Industry has been demanding cut in interest rate to prop up the economy. In the second quarter (July-September) of the current fiscal, the economy recorded a growth of 6.9%, the lowest level in over two years.
In its last review in December, the RBI pressed the pause button on its monetary tightening measures and said it might go for rate cuts in the future depending on moderation in inflation.
“From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth,” RBI governor Subbarao had said in the last policy review.
According to Indian Overseas Bank chairman and managing director M Narendra, the central bank is likely to keep policy rates unchanged for a while.
There is a little possibility of changing the CRR in the coming policy review, Mr Narendra added.
Presently, CRR is 6%. CRR is that portion of deposits which commercial banks keep with the central bank.
The central bank had hiked interest rates by 375 basis points between March 2010 and October 2011 to deal with the persistently high inflation, including rising prices of food items.
Canara Bank chairman and managing director S Raman said there is some possibility of the RBI slashing CRR by 25 basis points to infuse liquidity in the light of moderation in industrial activity.
The government has already revised downwards the gross domestic product (GDP) growth forecast for the current fiscal. GDP is expected to clock a growth rate of about 7% against 9% projected earlier.
Kotak Mahindra Bank managing director Uday Kotak said: “Domestic liquidity is tight as you can see at numbers ... at the most the market can hope something on CRR to correct the domestic liquidity situation”.
Banks are drawing over Rs1,00,000 crore from the repo window everyday even though RBI is carrying on Open Market Operation (OMO) on weekly basis to ease liquidity pressure.
The Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice is examining the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Act-2011 aimed at criminalising foreign bribery and offences thereof
New Delhi: In view of complaints of corruption in the private sector, the government is considering bringing corporates under a proposed anti-graft law, reports PTI.
Official sources said the chiefs of the Central Vigilance Commission (CVC), the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) have been called in by a parliamentary standing committee next week to give their views in this regard.
The Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, headed by Congress leader Abhishek Manu Singhvi, is examining the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Act-2011 aimed at criminalising foreign bribery and offences thereof.
The Bill has been passed by the Lok Sabha and is awaiting nod from the upper house of Parliament.
“A letter has been sent to the CVC, CBI and ED seeking their response through an in-person presentation/submission on the matter. They have been asked to appear before the Committee on 24th January,” a source said.
“The Committee is also considering bringing corporates or private industrial houses in the ambit of the proposed bill,” he added.
The Bill prohibits accepting gratification by foreign public officials as also giving gratification to foreign public officials, while also proposing provisions for rendering assistance and co-operation among nations and making the offence punishable to a minimum of six months jail term to a maximum of seven years.
It also envisages provisions for attachment, seizure and confiscation etc., of property in a contracting state or India and extradition of accused persons.
Foreign bribery is not covered under any domestic anti-corruption laws at present.
The sources said the committee is likely to finalise its recommendations within a month, and then the Bill will be sent to the Rajya Sabha for its nod.
They said that the committee has already met with the representatives of industries bodies like the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Federation of Indian Chambers of Commerce and Industry (FICCI) and PHD Chamber of Commerce and Industry, among others, to discuss various provisions under it.
“Stakeholders are understood to have favoured legal net for corporates to ensure transparency and check corruption.
The proposed amendments will be in conformity with the United Nations Convention against Corruption and the Anti Bribery Convention of Organisation of Economic Cooperation and Development (OECD),” a source said.
The head of country’s anti-corruption watchdog CVC, Pradeep Kumar has also favoured a legislation to bring corporates under the purview of another anti-graft law, Lokpal.
Currently, no government body including the CVC has powers to check corruption in private firms. Capital market regulator Securities and Exchange Board of India (SEBI) recently rejected a proposal for donning the role of an anti-corruption watchdog for private companies—similar to the role of the CVC for government entities.