News Wrap


Foreign companies operating in India register in offshore tax havens. Many of the take-overs by Indian companies of foreign ones have been routed through tax havens such as Mauritius. The government of India has passed legislation allowing it to reopen tax cases retrospectively. Indian authorities are less zealous in pursuing tax claims with Indian National industrialists. Foreign companies are alarmed by India’s aggressive tax treatment of foreign companies. Indian government had demanded that Vodafone, a British mobile operator, hand over $2.6 billion in capital gains tax, for acquiring Hutchinson in 2007. Nokia has a $1.1 billion tax squabble in India’s Supreme Court. A recent legal decision prevents the Finnish group from transferring Indian assets, as part of its 5.4 billion Euro phone business sale to Microsoft. A string of companies, including IBM, Shell and UK’s Cairn Energy, are struggling with India’s tax revenue service. India’s tax climate is threatening its ‘‘global reputation’’, as a favoured investment destination.

Infant Mortality
Even though significant progress has occurred in ensuring child survival, nearly 40% of neo-natal deaths happen on the first day of birth in India. In 2012, three million babies died within the first 28 days of their birth, and a million babies die within the first 24 hours of their birth. India accounts for 29% of the global deaths of new borns, on their very first day of birth. Between 2010 and 2012, with 30 new born dying for every 1000 live births, New Delhi had the worst Infant Mortality Rate (IMR) among the four metropolitan cities. 64% of children are dying within the first 28 days of their birth. Chennai has the lowest IMR of 15 per 1000 live births, while in Mumbai and Kolkata it is 20 per 1000 live births. 50% of the children in Delhi live in slums, and 14.71% of its population is below the poverty line. While polio has been eradicated in India, children are still dying due to preventible reasons. The progress in reduction of neo-natal mortality rate (NMR) has been slow.

MP’s Funds
India’s Members of Parliament Local–Area Development (MPLAD) scheme fund was launched in 1993. Rs 32,133 crore was released under the scheme, and state governments have spent Rs 29,019 crore on recommendations by MPs. Rs 5 crore can be spent in a Lok Sabha MP’s constituency, or a Rajya Sabha MP’s state. Third party audits since 2007-08, have found many MPs misusing funds under the scheme. MPs, district authorities and implementation agencies have been violating the guidelines of the Ministry of Statistics and Programme Implementation, nodal to the scheme. Projects created with these funds have been treated as their own assets by some MPs. Aides of the MPs and local musclemen have encroached on some projects. On many sites there has been no work as mentioned in records. Records on assets created are poorly maintained. In Rae Bareilly district (Uttar Pradesh), a public toilet was built with Rs 6.99 lac of MPLAD funds, and was not used for years. The public bathroom remains locked. Four mobile health centre vans purchased with these funds are not traceable. In Gandhinagar district (Gujarat), two schools run by trusts, and therefore ineligible for benefits under MPLAD funds, were given computers, for which Rs 10 lac had been sanctioned. The computers were outdated and unusable. Very few of the projects have utilization certificates, for funds released from MPLAD budget.

Venezuela Today
There are continuing protests in Venezuela against the administration of President Nicolas Maduro. The Socialist President is blamed for rampant crime, a 50% rise in inflation, and shortage of basic goods. Newspapers are faced with the lack of newsprint, amid a wave of shortages over the past year. The shortages have been blamed on strict currency controls, installed more than a decade ago, to prevent the flight of capital. El Impulso, Venezuela’s oldest newspaper and regional daily, has halved its print edition from four sections to two in October 2013, and to one in February 2014, because the daily is simply running out of paper. Six local newspapers have shut down entirely, and nearly thirty have reduced their sizes, or eliminated weekend editions and magazines. Since May 2013, the largest dailies have not received any foreign currency that would allow them to import paper. There are allegations that the Venezuelan government is funding pro-government newspapers, while slowly suppressing those that had adopted a critical stance towards the government. President Maduro was threatened to impose severe sanctions on media outlets, reporting on the escalating violence.

Goma Music Festival
For nearly two decades, armed conflict has prevailed in the city of Goma in the Democratic Republic of Congo, between rebels and government forces. Mid-February 2014, crowds gathered at college Mwanga, close to the Virunga market in Goma, to celebrate a music festival. At Goma’s music festival, the optimistic slogan was ‘‘playing for change, singing for peace’’. The festival was scheduled to take place in 2013, but was cancelled because of clashes between Congo’s army and M23 rebels. The Amani festival went ahead after peace talks between the warring parties. A few thousand people attended the music gathering. Musicians and artists from the Great Lakes region performed, including the outspoken Kinhasa Rapper Lexxus Legal and the local musician Innocent Balume.

Changes in Ukraine
Anti-government protesters took over Kiev in the last week of February 2014. President Viktor Yanukovych was abandoned by his own guards and reviled across the Ukrainian capital. He fled Kiev to denounce what he called a violent coup. Centres of power fell without a fight, to throngs of joyous citizens in triumph. Former Prime Minister Yulia Tymoshenko was released from a penitentiary hospital. Parliament found the President unable to fulfil his duties, and exercised constitutional powers to set an election for May 25. A leading Governor and a Mayor from the President’s eastern base have fled for Russia. Ukraine is trapped in the East-West battle, that has echoes of the Cold War. In November 2013, Russia had agreed to a $15 billion bailout package for heavily indebted Ukraine, and promised a reduction in the price Kiev pays for Russian gas. Moscow has now decided to release the $2 billion second trench of the bailout, only when a new government is formed in Kiev. The European Union has promised ‘‘substantial aid’’, if the next Ukrainian government looks west instead of east. Ukraine has a large market and vast mineral resources. Leaders of mainly Russian speaking regions of eastern Ukraine loyal to President Yanukovych challenged the legitimacy of the national parliament, and said they were taking control of their territories. Russian armed forces have effectively seized control of Ukraine’s Crimean peninsula. At the time of going to press, Russia virtually imposed its total control over Crimea, ignoring Western and American sanctions.

Vol. 46, No. 40, Apr 13 - 19, 2014