Citizens' Issues
VIP quota in Railways: CBI probing alleged corruption in ticket bookings

CBI suspects that certain vested interests within various unions of railways and in alleged conspiracy with private travel operators confirm these VIP tickets against a premium

The Central Bureau of Investigation (CBI) is probing alleged corruption to the tune of crores of rupees in sale of VIP or emergency quota tickets in the Railways. The agency has sought records for the last two years, claiming that even signatures of members of Parliament (MPs) have been forged to confirm the tickets in some cases.


On an average day, as many as 35,000 tickets in various classes of all trains that originate from Delhi or cross the city are reserved under the emergency quota which is also known as VIP or Headquarters quota.


The agency suspects that certain vested interests within various unions of railways and in alleged conspiracy with private travel operators confirm these tickets against a premium, official sources said.


The sources said that the agency had some requests which had forged signatures and in some cases even the letter heads were fake. Initially, the probe may be limited to the national capital but, if required, it may cover other states, they said.


CBI has already registered a preliminary enquiry (PE) last week against unknown persons to carry out a thorough probe for misuse of the railway tickets issued under quota to various railway unions.


The quota is meant for emergencies which includes medical necessity but the agency has alleged that the process was abused by certain vested interests.


It had found some related documents while looking into the functioning of railways as part of its probe into the alleged bribery case involving the nephew of former railway minister Pawan Kumar Bansal.


In May last year, the CBI had also searched the office of an RPF inspector who had allegedly helped the sacked Railway Board member, Mahesh Kumar, besides shifting some movable assets from his Mumbai residence. Many documents which pointed to a scam in railway ticketing were recovered from there.


CBI had, during a discreet probe, claimed to have found that the emergency quota tickets to unions were being handed over to some travel agents who used to charge a huge price for confirming a wait-listed ticket.


A senior CBI official claimed it was a full-fledged racket. The official said the travel agents had been identified and would be called for examination soon besides some of the office bearers of a few railway unions who had allowed confirmation of wait listed tickets.


FY12 GDP unlikely to be revised upwards from 6.2%

Gross Capital Formation (GCF) declined sharply 8.7% in FY12 after growing by 23.2% in FY11 and 38.3% in FY10

Uncertain global and domestic environment dragged investment down by 8.7% in FY12. Tight monetary policy resulted in escalating lending rates discouraging industrial activity. Interest paid by companies increased 37.1% in FY12, significantly higher than 20.1% rise in interest payment in FY11 and a mere 6.8% rise in FY10. Net Value Added of the manufacturing sector has increased by 18.7% in FY12 from 19% in FY11. Based on the ASI numbers, we believe that manufacturing sector growth for FY12 is likely to be revised downwards and other things remaining unchanged may drag overall GDP to 6.0% from the earlier revised number of 6.2%. These are the observations made in a research note on GDP growth by SBI Research.


According to SBI Research, Gross Capital Formation (GCF) declined sharply 8.7% in FY12 after growing by 23.2% in FY11 and 38.3% in FY10. It may be noted that most of such decline in investment in FY12 was attributed to a decline in working capital investment as net fixed capital formation rebounded, growing 24.7% from a 0.1% decline in FY11. The chart below shows the pattern in GCF since 2006-07:


Total persons engaged in different industries were 1.34 crore in FY12 as compared to 1.27 crore in previous year. The number of jobs in different industries increased by 5.8%, while wages rose by 16.6%, reports the SBI research note.


According to SBI Research, in an economic downturn, unregistered manufacturing units suffers the most due to weak demand accompanied with difficulty in having access to financial capital. Given this observation, we expect overall industrial sector growth may have logged in a lower growth rate in the final analysis. This may finally drag the overall GDP growth to 6.0% (sub 6% may not be ruled out) from the earlier provisional growth of 6.2%. The chart below shows the revision in GDP growth numbers:


Nifty, Sensex battling the bears: Weekly Market Report

The downward pressure on Nifty is strong. Rallies are likely to be weak

This week the Sensex closed 342 points (or 1.61%) down at 20,851 while the Nifty closed at 6,211, down 103 points (or 1.63%).


Last week, we mentioned that Sensex and Nifty would head higher subject to dips. But the market has reversed course. The dip on Thursday was too sharp and the index may head much lower. On Monday, market sentiments were adversely hit after the RBI's latest Financial Stability Report (FSR) said that the risks to the Indian banking sector have increased since the publication of the previous FSR in June this year. RBI governor, Raghuram Rajan, warned in his foreword to the 8th edition of the FSR that any political instability after May 2014, post-results, will drag the beleaguered economy further down, and that a stable new government would be desirable. The market closed in the negative on Monday.


On Tuesday, the market closed with a gain. There were rumours about prime minister, Dr Manmohan Singh that he was likely to opt himself out of the prime minister's race for the 2014 elections. However, the PMO said that Manmohan Singh has no intention of stepping down ahead of the 2014 polls. The Confederation of Indian Industry (CII) said that the CII Business Confidence Index (CII-BCI) rose sharply to 54.9% in Q3 December 2013, from 45.7% in Q2 September 2013. The survey also strikes a note of caution as the downside risks to growth have still not abated and supply side bottlenecks continue to pose a problem.


On Wednesday, the market closed in the negative after the latest data on government's finances raised concerns that India may not be able to meet its target of containing fiscal deficit at 4.8% of GDP this year.


On Thursday, Markit Economics unveiled HSBC India manufacturing purchasing managers' index (PMI) for December 2013 which was down from 51.3 in November to 50.7. This signalled a second consecutive monthly improvement in business conditions. The PMI average for the final quarter of the year at 50.5 was greater than that seen for Q3 at 49.4. After the market opened high and rallied, a severe sell-off in the afternoon shattered the complacency of the bulls and the indices closed sharply in the negative.


On Friday, Manmohan Singh met the press to announce that he would not be a candidate for the Prime Minister’s position after the current term. He listed the achievements of the UPA government in the last 10 years and but admitted its poor success rate in generating employment in the manufacturing sector and failure in controlling persistent inflation. The market fell initially on Friday but recovered towards the close.


Among the other indices on the NSE, the top two gainers were IT (1%) and Smallcap (0%) while the top two losers were Infrastructure (4%) and PSE (3%).


Among the Nifty 50 stocks, the top five gainers were Ranbaxy Laboratories (3%); Lupin (3%); TCS (3%); Maruti Suzuki (1%) and H C L Technologies (1%) while the top five losers were Mahindra & Mahindra (7%); Bharat Petroleum Corp (6%); Tata Power Co (6%); Larsen & Toubro (6%) and Oil & Natural Gas Corp (6%).


Of the 1,265 companies on the NSE, 647 closed in green, 588 closed in red while 30 closed flat.


Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:


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Worst ML sector


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