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The Mint Report for 03 March 2011

The Mint Report for 03 March 2011
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First Published: Thu, Mar 03 2011. 09 39 PM IST
Updated: Thu, Mar 03 2011. 09 39 PM IST
P.J. Thomas is out of a job and the UPA’s problems just got worse. [GRFX IN] On Thursday the Supreme Court quashed the appointment of P.J. Thomas as India’s Central Vigilance Commissioner. It said the committee that appointed Thomas did not consider charges against him and therefore, “does not exist in law”. Thomas resigned soon after the Supreme Court’s decision. But opposition parties intensified their criticism of the UPA, with both the BJP and CPI-M calling on Prime Minister Manmohan Singh to explain himself in Parliament. Meanwhile law minister Veerappa Moily said the government accepted the Supreme Court’s decision, but said Manmohan Singh was not to blame.
The controversy over P.J. Thomas dates back to September of last year. That’s when a so-called high powered committee consisting of Manmohan Singh, home minister P. Chidambaram and, opposition leader Sushma Swaraj considered appointing Thomas. While Swaraj opposed Thomas because of charges against him, the UPA successfully pushed for his appointment. The Central Vigilance Commission is India’s top anti-corruption organization. P.J. Thomas previously served as a government officer in Kerala and was charged in a 1991 import scandal.
India is a step closer to a law meant to liberalize parts of the banking sector. On Thursday the Union cabinet approved the Banking Laws Amendment Bill. The proposed legislation will give shareholders of a bank voting rights in proportion to the stake they hold. It would also allow banks to issue preference shares to raise money. At present shareholders in PSU banks get just 1% voting rights, while their counterparts in private banks get a maximum of 10%. The government plans to introduce the bill in parliament during the ongoing budget session. The approval is in line with finance minister Pranab Mukherjee’s budget speech on Monday. Mukherjee had listed the banking bill as part of the government’s efforts to pursue financial sector reforms.
There’s some relief for consumers, with food inflation easing in mid-February. India’s food price index went up just 10.39% in the period to 19 February. The previous week it had gone up 11.49%. Thursday’s figure is the lowest in three months. Food inflation in India has remained at over 10% since December.
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First Published: Thu, Mar 03 2011. 09 39 PM IST