M A I N   N E W S

Govt determined to get to the truth
Says Volcker report evidence insufficient
T R Ramachandran
Tribune News Service

New Delhi, November 3
The Manmohan Singh government is conducting its own inquiry into the Paul Volcker Committee report and has expressed its determination to "get to the root of the matter and establish the truth or otherwise" of the references to the Congress party and External Affairs Minister K Natwar Singh.

"The matter is under serious consideration of the government and a decision will be announced shortly," observed a statement issued here today by the Prime Minister's office.

The statement did not specify the kind of inquiry that the UPA government has ordered or fix the time frame for "shortly" when its decision will be made public.

The government said it is "deeply concerned" about the unverified references made in the Volcker Committee report and "as it stands today is insufficient to arrive at any adverse or definitive conclusion" in respect of the Congress party or Mr Natwar Singh.

The statement assumes significance coming as it does after Mr Natwar Singh called on Prime Minister Manmohan Singh and is believed to have apprised him of the situation in the wake of the Volcker Committee report which has propelled the Opposition parties with the BJP in the vanguard to bay for Mr Natwar Singh's head from the Union Government.

BJP General Secretary Arun Jaitley has reeled off a letter to the Prime Minister today demanding that Mr Natwar Singh be dropped from the Union Cabinet forthwith and his passport impounded. He claimed that the continuance of Mr Natwar Singh as the EAM has become a "national embarrassment."

Even though Mr Natwar Singh has stressed that he will make a suo moto statement in Parliament when the winter session gets under way on November 23 on Iraq's Oil-for-Food programme and the UN ordered Volcker Committee report, the government believes it cannot brush aside the Volcker Committee report peremptory before ascertaining the facts. This issue is bound to rock Parliament as both the Congress party, the biggest entity in the UPA coalition arrangement at the Centre and Mr Natwar Singh are in the public glare because of the Volcker Committee report.

Clearly, the Manmohan Singh government's wants to be sure that their probe into the Volcker Committee report following Iraq's Oil-for-Food programme does not throw up anything incriminating or illegal vis-a-vis the Congress party and Mr Natwar Singh. The overbearing view in the government and the Congress is that there is nothing conclusive against the ruling party or Mr Natwar Singh. The final report of the UN-appointed Committee headed by Volcker, a former Chief of the US Federal Reserve, named Mr Natwar Singh and the Congress party as "non-contractual" beneficiaries of Iraqi oil sales under the UN programme.

Panther's Party chief Bhim Singh whose name also figures in the Volcker Committee report acknowledged that the report on kickbacks in the Oil-for-Food transactions in Iraq were correct and maintained "there is no illegality in receiving commissions." He, however, refused to accept commission because his conscience did not allow him to do so.

The Prime Minister's much awaited Cabinet expansion-cum-reshuffle before the winter session of Parliament will inevitably have to wait for the government's decision on the inquiry into the Volcker Committee report.

Dr Singh has also held discussions about filling the gaps in his Council of Ministers with UPA Chairperson and Congress President Sonia Gandhi. It is in this context that the government's determination to announce its decision on the Volcker Committee report assumes significance.

The Prime Minister has admitted that the gaps in his Cabinet have to be filled expeditiously before the commencement of the winter session of Parliament. Dr Singh's 18-month-old government is due for a makeover to provide representation to all the states despite the speculation about Mr Natwar Singh continuance as the EAM.

The vacancies in Dr Singh's Council of Ministers have arisen by shifting the just resigned Urban Development and Parliamentary Affairs Minister Ghulam Nabi Azad as the Chief Minister of Jammu and Kashmir, the quitting of Jagdish Tytler as NRI Affairs Minister in the wake of the G T Nanavati Commission report on the 1884 anti-Sikh riots, Shibu Soren, who also had to quit in fulfilling his dream of being the Chief Minister of Jharkhand which was shortlived and highly controversial and the sudden death of Sunil Dutt who was overseeing Sports and Youth Affairs.

Sources indicated that Dr Singh might induct some new and youthful faces having a good track in the Council of Ministers in the next two weeks and at any rate before November 23 when the winter session of Parliament commences.

Govt adopts two-pronged strategy
Anita Katyal
Tribune News Service

New Delhi, November 3
The UPA government and the Congress have adopted a two-pronged strategy to deal with the political fall-out of the Volcker Committee report that has named External Affairs Minister K. Natwar Singh and the Congress as beneficiaries of the UN’s oil-for-food-programme during the Saddam Hussein regime in Iraq.

Faced with the growing Opposition demand for the removal of the minister and a Parliament session coming up this month-end, the government appears to be buying time on this issue, hinting at the possibility of a probe into the allegations against Mr Natwar Singh.

This was evident from the statement issued by the PMO today saying the government is determined to go to the root cause of the matter and that a decision will be announced shortly. For the present, it has decided to back the minister.

The Congress, on the other hand, has decided to go on the offensive. It announced today that it will soon be sending a legal notice both to the United Nations and the Volcker Committee to demand the basis on which the Congress has been named a beneficiary of the Iraqi oil deals.

A press note issued by the AICC today reiterated that the Congress had been wrongly named. It had decided to issue a “comprehensive” legal notice to the parties concerned, demanding full disclosure of the material on the basis of which the Volcker Committee reached the “unverified conclusion that the Congress is a beneficiary”. Failing disclosure of the relevant material, the Congress has demanded an unconditional apology for referring to it “wrongfully and maliciously”.

The AICC statement, however, makes no mention about Mr Natwar Singh.

This coordinated action by the party and the government followed a series of meetings and hectic consultations at the highest level. Mr Natwar Singh met Prime Minister Manmohan Singh, who also consulted Congress President Sonia Gandhi and Union Ministers Pranab Mukherjee and Shivraj Patil.

AICC sources said it was decided that while the government would look into the references to Mr Natwar Singh, the Congress will make a case for clearing the party’s name. Ever since this scandal erupted, the Congress has gone out on a limb to defend the party but left the External Affairs Minister to clarify his position.

He has repeatedly denied any involvement in the Iraqi oil deals.

As of now, the government is backing the minister. It is also looking at the possibility of asking Mr Nirupum Sen, India’s Permanent Representative at the UN, to meet UN Secretary-General Kofi Anan to question the basis on which the minister’s name was included in the Volcker report. 

Government clears investment fund
Tribune News Service

New Delhi, November 3
The Union Cabinet today approved setting up a government firm to finance infrastructure projects, including private ones, approved plans to divest stakes in PSUs and use 75 per cent of the resources for social sector projects and approved a new steel policy to push 8 per cent GDP growth in the country.

The Cabinet approved setting up of India Infrastructure Finance Company Ltd (IIFCL), a special purpose vehicle (SPV) to fund mega projects. The government will provide guarantee up to Rs 10,000 crore to IIFCL in 2005-06, for borrowing long-term funds (10 years and above) from domestic and overseas markets.

It can also borrow funds from multilateral lending agencies like the World Bank and the ADB, Information and Broadcasting Minister S. Jaipal Reddy told the media after the meeting.

The government guarantee limit for the SPV would be set at the beginning of each fiscal. The SPV would fund viable projects in sectors like roads, bridges, railways, seaports, airports, inland waterways, power, urban transport, water supply, gas pipeline, special economic zones, international convention centres and tourism projects.

The SPV would fund viable projects of private and public sectors as well as those taken up on a private-public partnership basis.

The Cabinet also cleared the proposal for operationalisation of the National Investment Fund (NIF) and paved way for using 75 per cent of its income to finance

social sector projects, leaving the rest (25 per cent) for reviving central PSUs.

“The proceeds from disinvestment of CPSEs are to be channelised into the NIF, which is to be maintained outside the Consolidated Fund of India. The NIF is to be professionally managed to provide sustainable returns to the government, without depleting the corpus,” the minister said.

The public sector mutual funds would be entrusted with the management of the corpus of the NIF.

The Cabinet also approved the National Steel Policy, which aims at hiking production to over 100 MT and making Indian steel industry globally competitive in terms of cost, quality and product mix.

Mr Reddy said the Cabinet Committee on Economic Affairs (CCEA) had cleared the NSP, which envisaged that India should have a modern and efficient steel industry of world standards catering to diversified steel demand.

To render the domestic steel industry globally competitive, it was imperative to augment indigenous production to more than 100 million tonnes per annum by 2019-20 from the 2004-05 level of 38 million tonnes per annum, which implied a compounded annual growth of 7.3 per cent per annum, he said.

The minister said India today decided to join the 1998 agreement on Global Technical Regulations (GTR) for automobiles with the Union Cabinet giving a go-ahead to the proposal.

The signing of the agreement would see Indian automakers benefit as design specifications of vehicles would not have to be changed to meet country-specific regulations, which would reduce the cost of development/production and retail prices of vehicles.

It would also make approval procedures easier, expand the scope of the market and provide the consumers with a wider range of choice.

Mr Reddy said the Cabinet had approved signing of protocol to amend the Double Taxation Avoidance Convention with Itlay, with a view to boosting trade and investment. The two sides had agreed to incorporate Italian proposals as well as Indian proposals through a protocol, amending the existing convention.

The main provisions of the protocol included substitution of local income tax with a regional tax on productive activities by Italy.

The minister said the CCEA approved implementation of the revised scheme of ‘Quality Improvement in Schools’ having a Tenth-Five-Year-Plan outlay of Rs 115 crore.

The implementation of the scheme would expedite the enhancement of quality of education in government and government-aided schools. An allocation of Rs 5 crore by the Planning Commission for the new scheme of education libraries would also be utilised for science education under the above mentioned component.

The Cabinet also approved a proposal for India to be the guest of honour at the Frankfurt Book Fair 2006.