1400 HRS.

29^th October, 2013

THE HEADLINES:

• Reserve Bank of India hikes Repo Rate by 0.25 per cent to 7.75 per cent; Marginal Standing Facility rate also reduced by 0.25 per cent. Growth prospect for current fiscal cut to 5 per cent.

• Sensex surges over 300 points after RBI's monetary policy review; Rupee weakens 14 paise to 61.66 against the dollar.

• Air Marshal Arup Raha to be the next Chief of Indian Air Force.

• Pakistani troops again violate ceasefire by resorting to unprovoked firing along LoC in Poonch district. 

• Australia announces winding down of its military mission in Afghanistan with withdrawal of most of its troops by the end of this year.

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The Reserve Bank of India has hiked the short-term lending or Repo rate by 0.25 per cent to 7.75 per cent. The RBI also brought down the cost of short-term funds for banks by slashing the marginal standing facility or MSF rate by a similar quantum to 8.75 per cent. Announcing the second quarter review of the monetary policy in Mumbai today, the RBI Governor Raghuram Rajan said, the policy stance and measures are intended to curb mounting inflationary pressures and manage inflation expectations in a situation of weak growth.

It was important to break the spiral of rising price pressures in order to curb the erosion of financial savings and strengthen the foundations of growth. It is in that context that the Repo rate has been increased by 25 basis points. Curbing mounting inflationary pressures and managing inflation expectations will help strengthen the environment for growth by fostering macro economic and financial stability.

Mr Rajan reduced the growth forecast for the current fiscal to 5 per cent from 5.5 per cent projected earlier. Economic growth fell to a decade-low of 5 per cent in the previous financial year.

The RBI left other rates , such as the cash reserve ratio unchanged at 4 per cent, and  Mandatory holdings in government securities and other liquid assets as a solvency measure the (SLR) at 23 per cent. However, the Governor doubled the borrowing limit of banks against their cashpositions or Net demand and time liability (NDTL ) to 0.5 per cent for both 7-day and 14-day repos, with immediate effect to increase liquidity in the system.We Spoke to Economist DK Joshi on the latest RBI

RBI policy is on expected lines. They have taken off excessive liquidity tightening measures which they had introduced to tame currency volatility but also given the signal that interest rates are not likely to come down. RBI now expect the growth to be lower and inflation to be higher for this year. The raising of Repo rate which the rate at which the banks borrow from RBI implies that interest rates will not come down in the months ahead. So if inflation does not come down in the next few months then interest rates could actually go up further. 

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Recovering from initial losses, the Sensex at the Bombay Stock Exchange had surged 314 points, or 1.5 percent, to 20,884 in afternoon trade a short while ago, after the Reserve Bank unveiled its monetary policy review. Earlier in the morning, however, the Sensex had fallen 39 points, or 0.2 per cent, to 20,532 on investor caution ahead of the RBI's policy review. Stock markets in Japan, China, Hong Kong, South Korea, Sinagpore, and Tawan were trading mixed, today. The US Dow Jones Industrial Average had ended unchanged in yesterday's trade.

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The rupee today dropped by 14 paise to 61.66 rupees against the dollar in late morning trade on sustained month-end demand for the US currency from importers in spite of persistent foreign capital inflows. The rupee resumed lower at 61.60 per dollar as against the last closing level of 61.52 rupees. It dropped further to 61.69 before quoting at 61.66 per dollar.

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In Madhya Pradesh, the full Election Commission is reviewing preparations for the assembly elections to be held next month. the Chief Election Commissioner VS Sampat and Election Commissioners HS Brahma and Naseem Zaidi are holding discussions with Divisional Commissioners, IGs, Collectors, and SPs at a meeting in Bhopal. The Commission will also have discussions with the Chief Secretary, the DGP and the Chief Income Tax Commissioner. Our correspondent reports that the model code of conduct is being strictly enforced in the state to ensure free and fair elections.

Legal action is being taken on violation of Prevention of Deforming of Public Property Act. So far, more than 2 lakh 26 thousand wall paintings, posters and banners have been removed from public and private properties. As many as 570 cases of misuse of vehicles have come to the fore in different districts and FIRs have been registered in 25 cases. Nine cases have been registered for holding meetings without official permission. Flying squads and other teams deployed in districts have seized more than 2 crore 50 lakh rupees cash so far. Shariq Noor/Air News/Bhopal.

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The Bihar police today found a live bomb in Patna outside the IG office near Gandhi Maidan. Reports say that the bomb has been diffused. Six out of the seven blasts took place in the Gandhi Maidan on Sunday, killing six people and injuring 83 others. Home Secretary Anil Goswami will take stock of the situation in Patna this afternoon. He will review the situation at a high-level meeting. 

Meanwhile, the Centre has said it had alerted the Bihar government about the possible terror attack on the BJP Prime Ministerial candidate Narendra Modi's rally in Patna. Talking to reporters at the sidelines of a function in Gurgaon today, Home Minister Sushil Kumar Shinde said, the Home Ministry had given alerts to all states with regard to rallies, asking the state police forces to strengthen security. In another development, Mohd. Imtiaz Ansari, one of the two terror suspects arrested in connection with the Sunday blasts, has been sent to the high security Beur jail . Imtiaz was arrested from Patna railway station after a bomb exploded on platform No. 10.

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The Government today announced that Air Marshal Arup Raha, an ace fighter pilot, will take over as the next Air Force chief after Air Chief Marshal NAK Browne retires on December 31st. Commissioned on December 14th, 1974 in the fighter stream of the IAF, Raha has held various command, staff and instructional appointments in his 39-year- career. He has also served as Air Attache at the Embassy of India in Ukraine and commanded the Central Air Command and the Western Air Command. 59 year-old Raha is expected to have a tenure of three years as the Chief of Air Staff.

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The Prime Minister will inaugurate the Sardar Vallabhbhai Patel National Museum at Ahmedabad in Gujarat this evening. Dr. Mammohan Singh is likely to visit Rajiv Gandhi Bhavan, the headquarters of the Gujarat Pradesh Congress Committee. Our correspondent has filed this report:

Sardar Patel National Museum has been developed at the cost of Rs.28.54 crore in 36 thousand sq meter area. Eight feet tall statue of Sardar Patel along with Mahatma Gandhi and Jawaharlal Nehru is the main attraction of this National museum. Museum has rich and rare collection of personal belongings of Sardar Patel apart from valuable gifts received by him. Miniature of Sardar Patel’s residence, school, jail and other places associated with his life are also created in this museum. Visitors can also see the special 3D film on role of Sardar Patel in India’s freedom struggle apart from 14 multimedia interactive displays. YOGESH PANDYA/AIR NEWS/AHMEDABAD.

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In Jammu and Kashmir, Pakistan once again violated ceasefire by resorting to unprovoked firing along the Line of Control in Poonch district today. The Defence Spokesperson Col. RK Palta told AIR that Pak troops targeted Indian forward posts in the Gambhir Battalion area of Bhimber Gali. Firing started at about 5 AM today and continued for almost two hours. Pak troops used small and automatic weaponry to target Indian forward posts. Indian troops guarding the borderline returned fire effectively to silence the Pakistani guns. No loss of life or injury has been reported from Indian side.  Meanwhile, the General Officer Commanding, 16 Corps, Gen. D.S.Hooda said, nearly 300 terrorists are waiting at 40 to 45 training camps across the LoC from Akhnoor to Poonch sectors to infiltrate into India.

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The flood situation has improved in Odisha with the water level receding in major rivers. However, people in the worst-hit Ganjam district are still struggling to go back home. The Inter-Ministerial Central Team is visiting different cyclone Phailin and flood ravaged districts of Ganjam, Balasore, Puri and Mayurbhanj to assess the situation and loss due to the twin natural calamities. More from our correspondent:

The Odisha government has requested the banks to extend helping hands in rehabilitation and restoration activities in the cyclone and flood-affected areas of the state. It has urged the banks to provide loans to farmers,  self-help groups and small businessmen in order to help them restore their livelihood. The state government also advised commercial banks, regional rural banks and co-operative banks to restructure and re-phase existing loans of affected areas as per RBI guidelines. A press release from Odisha Chief Minister Naveen Patnaik's office said the Chief Minister's Relief Fund (CMRF) has so far received donation of 132.04 crore rupees for the cyclone and flood victims. Mr Patnaik has expressed gratitude to his Tripura counterpart Mr Manik Sarkar for the donation of one crore rupees made by his government. Prakash Dash/Air News/Bhubaneswar.

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In Andhra Pradesh, people from relief camps have started going back to their homes in the rain-hit areas following respite from rains after a week. Over one lakh people have left for homes from the camps as the situation improves. Over one lakh 27 thousand people are still taking shelter in 328 relief camps as hundreds of villages remain marooned especially in north coastal districts.  Chief Minister Kiran Kumar Reddy reviewed the situation at a high level meeting in Hyderabad this morning and asked officials to accord priority to restore roads and repair breached irrigation tanks.  

Meanwhile, rail traffic has been partially restored between Visakhapatnam and Vijayawada while 8 teams from the Navy and 19 teams of the NDRF are providing assistance in rain-hit areas. Heavy rains which lashed two thirds of the state for the past one week claimed 53 lives and inundated crops in over 11 lakh 37 thousand hectares besides causing damages to a tune of 3,352 crore rupees.

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The Task Force headed by former Director General of Central Reserve Police Force K. VijayaKumar began its deliberations in Hyderabad on various issues including the administrative framework for the proposed bifurcation of Andhra Pradesh. The union Home Ministry has set up a Task Force to give a report on the division of assets, security scenario and the administrative frame work with the consultative committee.

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The Railways is considering plans for introducing higher speed  trains by making the best use of the existing infrastructure with marginal inputs. The Minister for Railways Mallikarjun Kharge has asked experts to suggest low cost solutions to meet the immediate need of achieving a 160  to 200 kilometers per hour speed of trains on the existing tracks.

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Australia has announced the winding down of its military mission in Afghanistan with the withdrawal of most of its troops by the end of this year. Media reports said Australian Prime Minister Tony Abbot arrived on a surprise visit to Afghanistan late last evening. According to the Australian Broadcasting Corporation Prime Minister Abbot arrived at the International Force base in Tarin Kot, the capital of southern Afghan province Uruzgan where most of the Australian troops are posted. Addressing the gathering of the Australian and International Forces soldiers he said, "Australia's longest war is ending.

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Leander Paes and Rohan Bopanna, with their team-mates, have advanced to the pre-quarterfinals of the ATP Paris Masters Tennis event. Leander Paes and his Canadian partner Daniel Nestor, and Rohan Bopanna, with his French team-mate Edouard Roger-Vasselin, got a bye in the opening round.

In the Men's Singles, Spaniards Fernando Verdasco and Feliciano Lopez, Czech Republic's Lukas Rosol and Croatia's Marin Cilic have progressed to the second round. Swiss Roger Federer got a bye in the first round. World Number Two Serbia's Novak Djokovic, Frenchmen Jo-Wilfried Tsonga and Richard Gasquet are among the players who will play their second round matches today.