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Do you remember one name? Agha Hassan Abedi. Yes I m talking about early 1980s. There you go. He founded the Bank of Credit and Commerce International (BCCI). All of us know that in those days it was the fastest growing financial institution. It dint take to figure out that this success was based on deceit and fraud. Abedi fell into ignominy as quickly as he rose to the fortune he was commanding. The next name I would like to remind you is that of Ken Lay. Now we are in 1990s. He made Enron rise from $4.6 billion Company in 1990 to a company of $ 101 billion in 2000. In the next year the company was bankrupt. Lay was the most sought after man in the corporate community when the company was rising. He was awarded with huge rewards and recognitions and if anyone asked any question about the performance of company he was dismissed. We can see the same in Ramalinga Raju. He is the man behind Satyam being fourth largest IT Company. He was also conferred with the Golden Peacock Award for corporate governance last year.  Out of many these are just three names who were once colossus and then collapsed leaving behind nothing but shame. Question: why do men of such stature are compelled to defraud?

There is only one answer on Psychological bases. Hype. The impact of public accolades and media hype. They were once the centre of attention of shareholders, peers, financial journalists and industry federations. Every initiative of theirs was covered extensively. This made overconfidence step in. they started believing in the hype. They got so carried away with the exaggeration of third party analysts and media that they started focusing on expended disproportionate effort on sustaining the stories of their success where as they were required to look into managing cash flows.

Next question: how can the directors especially the independent directors allow such a situation to come to pass and what were the auditors doing? Answer: the auditors were sleeping. The independent directors are equally responsible for this situation as they are expected to have the knowhow to help the company meet its objective of profitability growth and social responsibility. They should also ensure adherence to legal and financial propriety.

Acquisition There is news in the India corporate world according to which engineering field giant Larson&Turbo is searching for the possibilities of acquisition of fraud hit Satyam. According to some company sources L&T Chief A.M Naik met central corporate minister Premchand Gupta on Tuesday and discussed the matter. On the other hand the new Director Trun Das has said that some national and international IT companies have contacted the board to acquire the company.  Company’s new board of directors’ meeting is scheduled to be held on 22-23 January in which the names of new CEO and SFO will be discussed and finalized. Tarun Das told that many Indian and foreigners have showed their interest to acquire Satyam. Director Depak Parekh has already said that ‘all options of acquisition are open’. It is being also said that an investment Banker can be appointed to study various options of acquisition.

Meeting Agenda Board will discuss the various names for the posts of CEO and SFO. Board has already sent the ball into government’s court. It must be learnt that government has kept the rights of appointment of the CEO and SFO with it. PMorgan and Goldman Sachs are among the banks short listed to advise the new board of fraud hit Satyam Computer. There is some positive news for Satyam also. According to some sources some big clients will kept on working with Satyam. According to GE spokesperson his company will keep on taking the services of Satyam it has not canceled any project. Malaysian Airlines has also said that it will carry on taking the Satyam services.

Investigation Meanwhile, CID raided the residents of relatives of Ramalinga Raju and recovered more than one hundred land documents and sale deeds that cover the purchase of hundreds of acres in the name of Ramalinga Raju’s family and some benami names. CID team raided on SRSR Holdings at Jubilee Hills and SRSR Advisory Services Private Limited at Begumpet. It must be learnt that SRSR Holdings at Jubilee Hills and SRSR Advisory Services Private Limited are a part of the Maytas Infra Limited promoters. Serious Fraud Investigation Office (SFIO) has extended scope of its ongoing probe according to the Centre Government directions and has brought Maytas Properties and Maytas Infrastructure also under the investigations. Former  Satyam directors, including Raju, his brother B Rama Raju and ousted interim-CEO Ram Mynampati, have been directed not to ‘alienate, charge, mortgage or sell any of their shares, securities and fixed assets, without leave of the CLB’. This move points out that they had siphoned off the company funds for their personal gains. It is also being said that Raju had confessed to diverting the Satyam funds to the two real estate companies owned by his family members. During the interrogation he admitted that land was purchased across Andhra Pradesh with the hope of making huge profits out of the real estate price rise.

Frauds Indian Foreign Affairs minister has termed Satyam episode as an isolated issue which has undoubtedly pictured the Indian economy in a ‘wrong frame’. He appealed to the international community not to take this episode as the representative of the Indian corporate sector. But Prime Minister Manmohan Singh has described it as a ‘blot on out corporate image’. In recent years Indian economy has been hit by man frauds. This has happened almost at regular intervals. It is happening because some people took the advantage of loop holes in the Indian judicial system and get away easily. This will kept on happening until those loopholes are not closed.

Fraud Indian IT giant Satyam’s chief B. Ramalinga Raju’s admital of fraud of 7,100 crore has sent shockwaves across the financial sectors in India. He had admitted to the Board of Directors that accounts were fudged over several years. It must be learnt that Satyam is India’s fourth largest Information technology company. He confessed that company’s liabilities were understated while the debtor position was overstated. He also confessed that company’s bank balance of 5,040 crore and the accrued interest of Rs. 376 crore never existed. apologizing to all ‘Satyamites and stakeholders’ he said, ‘The gap in the balance sheet has arisen purely on account of inflated profits over a period of last several years. Every attempt made to eliminate the gap failed’. With this development, company shares rates have fallen almost 80 percent. Company shares that were selling at 179.10 closed at 39.95 after Raju’s disclosure. Satyam has 53,000 employees and operates in 65 countries. It is said that it has 5000 client companies across the world.

Cover-up Attempt But he also stated that neither he ‘nor the Managing Director took even one rupee/dollar from the company and have not benefited in financial terms on account of the inflated results’. This indicates that even the top company officials were not aware of company’s financial condition till the ‘last moment’. The whole of the drama had started three weeks ago when Satyam had to abandon its attempt to acquire Maytas Infra and Maytas Properties, promoted by Mr. Raju’s sons, on December 16. It looks that this move had been taken to ‘cover-up’ the financial irregularities. But the company had to back tract because of shareholders’ objections.

Investigation The Securities and Exchange Board of India (SEBI) and the Registrar of Companies (RoC) had begun investigations at the company’s offices after the7, 100 crore fraud surfaced in Satyam Computers. SEBI team had visited many Satyam offices and had seized books and records. There were rumors that Satyam chief has fled the country but his advocate S. Bharat Kumar denied such reports and said, ‘Mr. Raju is very much available in Hyderabad.’ Centre government has decided to cover eight more firms in which Ramalinga Raju and his family members have their assets. This includes Maytas Properties, Maytas Infra and Satyam BPO. The government has dissolved the existing boards and has decided to form a new board to run the ‘falling tower’. Meanwhile, Ramalinga Raju along with his four close relatives had surrendered before the Andhra Pradesh government on January 8. But on the other hand Andhra police claimed that they had not surrendered but were arrested by the police team. It is being said that Satyam chief will have to face almost 10 cases. It is being said that Raju had diverted the Satyam profits to finance and maintain the Maytas Infra. It involves the buying land in and out of the state and many other company assets. Meanwhile many banks who deal with Satyam have submitted their business deals with Satyam to the Reserve Bank of India. There are some reports that some banks had extended loans to Satyam.

This fraud has sent wrong signals across the world about Indian IT sector. Indian IT sector is already suffering badly because of International financial crisis and this development will deteriorate the condition. On the other hand it has also exposed the failure of Indian financial system that failed to notice the ‘years old financial fraud’.

Announcement The Indian government on Friday cut the prices of petrol by Rs. 5 and diesel by Rs. 2 per litre respectably as an interim measure to give some relief to the ‘aam janta’ of India in the wake of falling international crude oil prices. Petroleum Minister Murali Deora told that this price reduction is an ‘interim measure’ and government would take further decisions by keeping an eye on the global prices of oil. The reduction will take effect from Friday midnight. With this reduction petrol will cost Rs. 45.62 a litre and diesel Rs. 32.86 in the national capital Delhi. But government has not changed the prices of LPG (cooking gas) and kerosene.

Earlier Prices Crude oil prices had touched the USD 150 a barrel mark in July putting the Indian oil companies in a very tight position. They were facing huge losses because of subsidies. To stabilize their position and end their cash crunch government of India had increased the prices of oil in June. Government had raised the prices of petrol and diesel by Rs. 5 and Rs. 3 a litre, respectively. The price of LPG was raised by Rs. 50 per cylinder. When the UPA government had took over from the NDA government the crude oil price in the International market was around USD 70 a barrel. But now it has fallen to the record low of USD 43.5 a barrel. If compared with the earlier crude oil prices, the present price reduction is very less.

Inflation Some leading news papers of India had published the news on Friday that government is thinking to reduce the prices of petrol and diesel by Rs. 10 and Rs. 5 a litre respectively and of LPG by Rs. 50 a cylinder. Falling oil prices will bring the inflation down and will give a big boost to the economic growth rate. With the reduced prices, the prices of some essential commodities will come down thus giving a big relief to the poor and lower sections of the society. It must be learnt that a few weeks ago, inflation had crossed the 12 per cent mark and Manmohan Singh led UPA government was being criticized by all the sections of the society for its failure to check the prices. But in November prices started to fall that decreased the inflation rate.

Public Global economic crisis caused the downfall in crude oil prices in the international market thus giving a big relief to the oil importing countries. Indian government was ready to reduce the oil price during the month of November but it had to wait because of election code of conduct in wake of assembly elections in some states. Because of Mumbai terror attack, UPA government it in a very tight position and the oil price reduction will save it from the public wrath to some extent.

Inflation After remaining near 12 percent the Indian inflation rate has ‘suddenly’ fell sharply below 10 percent. According to some reports published in leading Indian newspapers inflation rate had fell sharply from 10.72 percent to 8.98 percent after the period of 21 weeks on November 1. It has been said that decline in the price of fuel items like naphtha, jet fuel, furnace oil and light diesel oil is the reason behind the decline in inflation rate in India. Decline in the prices of iron, undefined oil, fruit and vegetables, tea and spices have also played an important role. The inflation rate was recorded 12.42 percent for the week ended on September 9.

Reasons The sudden decline in inflation rate has given rise to many doubts. Earlier it was being expected that the inflation rate will slip down to single digit after the harvesting season. The sharp decline in the inflation rate smells some ‘foul play’. Elections have been scheduled to be held in six states in the months of November and December and Lok Sabha elections will be held early next year. It can not be denied that decline in inflation rate has brought to “bring cheer to the UPA government”. It was being expected that the price rise will be major issues during these elections. Though the prices of ‘house hold’ commodities have not declined but the inflation has suddenly come down. From the present circumstances it looks that the reasons of sudden decline in inflation rate are political instead of economic.

Face-Saving Two months ago, Congress led UPA government was under attack from the opposition because of various reasons. Its failure to adequately tackle communal violence in Orissa and Assam, serial bomb blasts in some major Indian cities, natural calamities and rising prices had brought centre government’s popularity to its lowest point. Decline in the popularity of UPA government was the major reason that all its partners had tried ‘all means’ to save it form the earlier downfall during the trust vote motion on the issue of Indo-US civilian nuclear deal. Now all the ‘burning issues’ have cooled down and only inflation was the issue that needed to be ‘dealt with’ in time. Thus by bringing down the inflation rate, without any ‘genuine decline’ in the prices of daily-use commodities, the UPA government has cleared its way to go into the elections with some ‘face’.

Alliance After alliance between Jet Airways and Kingfisher Airlines, the former had decided to sack its 1900 staff members to cut the costs. Both the companies were loosing crores of rupees per month because of higher fuel prices. They had decided to rationalize the flights and end some international operations. After it Jet Airways management had issued sacking orders of 1900 staff members to keep the company afloat. It had led to protests in major cities and some politicians including Aviation Minister had demanded the probe into the matter.

Protests And Criticism MNS chief Raj Thackeray had threatened that his party workers will disrupt the Jet’s operations if the employees were not reinstated. On the other hand Labour Ministry had also showed its concerns and had decided to go ahead after the meeting with the Jet management and sacked workers on Friday. Jet Airways management had decided to sack employees across all the sections who were either probationers or had served for less than six months. The announcement had led to protests by the sacked employees in the major cities. More that 50 employees had demonstrated at Indira Gandhi International Airport in the Capital. Even the Oil Minister Murli Deora had launched a direct attack on Jet Airways Chief Naresh Goyal.

Reversal Of Order But everyone was astonished to see the development when Jet Airways Chairman Naresh Goyal apologized for the sacking move on Friday and requested them to resume work. He said that though the management had decided to sack the employees but it is his personal decision to reinstate them and work together to make Jet Airways a big company. Civilian Aviation Minister Praful Patel has welcomed Goyal’s decision of taking back the staff. He said that he had talked to him to rethink about the move. But on the other hand Goyal asked the sacked employees to return to work from today (Friday) because he did not wanted ‘to see tears in the eyes’ of his employees who are like his ‘children’ to him.

Politics A race has started between politicians to take credit for the reinstatement of the sacked employees. At one hand Praful Patel is saying that his words have forced the Jet Chairman to roll back his decision. One the other hand some people have said that it is the result of the tough stand taken by Raj Thackeray. But Goyal has said that he has not reversed the move because of any kind of political pressure.

Nano’s New Home After its exodus form Singur, Tata’s Nano has found its new home in Sanand near Ahmadabad in Gujarat state. West Bengal’s loss has become Gujarat’s gain. An agreement was signed between Gujarat Government and Tata Motors on Tuesday, October 7 in Gandhinagar. The announcement was made on the same day and Gujarat CM Narendra Modi and Tata Motors Chairman Ratan Tata were present at the press meeting where the announcement was made. It is the coincident that Narendra Modi government has completed its seven years in power on October 7 and a 2000 crore project has been signed on the same day. Thus Gujarat government has celebrated the day in a different manner. It is being considered Narendra Modi Government’s biggest achievement. Tata officials have said that project will be completed almost in 12 months. It will create thousands of direct and indirect job opportunities in the state and will also will be influential in attracting more investment.

Land Tata Motors had taken 1000 acres of land from the West Bengal government on lease but Tata had to face agitations form unwilling farmers and project had been marred by controversies ever since the starting of it. Nano project had fallen prey to the narrow minded politics in West Bengal. But Gujarat has given 1100 out of 2200 acres of land owned by the Gujarat Agricultural University for running experimental cattle farm and crop cultivation. GUA has transferred the land to the state government which has allocated it to Tata Motors.

Deal Many states were trying to attract Nano project ever since the Singur pull out announcement. In fact Tata officials had visited Andhra Pradesh to relocate the Nano plant. But Gujarat has won the competition by removing the bureaucratic hurdles in a speedy way. Gujarat government had competed all the process only in ten days. There are many factors that worked in attracting Tata Motors to Gujarat. First there is no chance of any kind of agitation as the land was owned by the state government. Secondly Even the warmers have given their land with great enthusiasm that was required for widening the road to the project site. Gujarat is known for its investment and industry friendly atmosphere. Ratan Tata, in an interview has said that Gujarat deal is better ever than Singur land deal as it is unencumbered and has been sold to Tata Motors at prevailing market prices.

Announced October 3 turned out to be the black Friday for the people of the state of West Bengal as Tata Chairman Ratan Tata announced the pull out from Singur. He announced his decision after the meeting with WB Chief Minister Buddhadeb Bhattacharjee and Industries Minister Nirupam Sen on Friday. When he made the pull announcement he was looking visibly upset. It is evident from his statement that he has ‘taken a great pain’ too make the announcement which has ’shattered many dreams’. But he legitimated his decision by saying that we are ‘doing the right thing’. It must be borne in mind that West Bengal has never been considered an industry free state because of decades of communist rule. When Tata had decided to set up the Nano plant in Singur, it had astonished the corporate world.

Investment Nano plant was not merely an investment but a dream. A dream of Ratan Tata, dream of the West Bengal government and people and also a dream of the lower middle class of India. Nano is considered to be the world’s cheapest car. With the pull out decision a wrong message has been sent globally about the anti-industry image of the state. Total investment of the Nano plant is 1500-2000 crore but state will loose more than 80,000 crore investment as some multinational companies were in talks with the state government but there are very few chances that they will take interest in talks now. Tata has announced that the cost of the car will remain around one Lakh despite huge loss because of Singur row.

Agitation Despite the state Government many other sections of the Bengal society had repeatedly requested Tata Motors not to take such a decision. But Tata has taken the decision by taking into account he safety of its employees and to meet some set deadlines and pledges. It must be learnt that During the agitation led by Trinamool congress chief Mamta Benerjee, Tata employees had been assaulted by the violent agitators. Many times boundary wall of the plant had been broken and the machinery vandalize by the protesters. Tata chairman has blamed Mamta Benerjee for the sad development.

Responsibility More than 10,000 farmers had willingly given their land to the government and only 2000 farmers had not excepted the compensation. They were holding the agitation with the help of Mamta with the motive of squeezing some more compensation. And on the other hand Mamta had been leading the agitation only for short time political gains. But with the Tata pull out thousands of Bengali youths’ future has been shattered. It is not the loss only of the Singur farmers but a loss for whole of the state and Mamta Benerjee is solely responsible for it.

India has stepped up efforts to build an interceptor missile that will track the enemy missile and destroy it inside(endo) and outside(exo) of the atmosphere of earth. India has already tested the missile twice and has reached  near completion of the project. It is being said in next few days third test of the missile will be conducted from the Wheeler Island off Orissa’s coast that will track the and destroy the incoming long range enemy missile in the outer atmosphere of the earth at the attitude of around 80-km.

India had conducted the first test of an “exo-atmospheric’ hypersonic interceptor missile in 2006 to destroy the incoming missile at the attitude of 40-50 km. It was a successful test that of the system that can be compared to Israel’s Arrow-2 BMD system. Second test of the system was conducted in December that demonstrated the capability akin to the American PAC-3 system. It was an “endo atmospheric” interceptor missile that tracked and destroyed an incoming missile enemy missile at the attitude of 15 km.

It has been told that DRDO has divided the project in phases. The third test that will be conducted in September-October will be the integrated mode of ‘exo’ and ‘endo’ interceptor missile with of capacity of intercepting the “2,000-km class targets” . It is being considered the Phase-1. DRDO will develop the system that will intercept “5000-km targets”.

DRDO chief controller for missiles, V K Saraswat, had  told TOI that the BMD system of Phase-I should be ready for deployment by 2011 or so, after several tests against a variety of missiles to ensure “a kill probability of 99.8%”. This is a very complex project as far as the variety, speed and range of the missiles is concerned.”It’s like stopping a bullet by hitting it with another bullet. Even the US is still to master it completely,” said a scientist. 

US, Russia and Israel are the only other three countries that have BMD Systems.It will give India an edge over Pakistan and China that have a wide variety of missiles.

Talks called off Talks between Anil Ambani owned Reliance Communications (RCOM) and South African Telecoms giant-MTN were called off on Friday night without reaching any agreement. Talks were aimed at merger of both of the telecom companies that could have created one of the 10 top mobile phone service provider’s powerhouses. Both of the sides in their statements have said that talks were called off because of some legal and regulatory issues.

Agreement Negotiations between both of the telecom companies had started on May 26 and were being held secretly but somehow the news spread out that Mr. Anil Ambani is going to sell his stake in Rcom to MTN following which MTN would have become the majority shareholder in the Rcom. It was also being said that Ambani would also become the chairman of the merged group. After the merger Rcom would have become a telecom company operating in about two dozen countries with its reach to around 120 million subscribers.

Battle It is being said that the result is the outcome of the wrangle between the Ambani siblings. As the talks over the deal were in process Mr. Mukesh Ambani threatened to use his right of first refusal over the shares of Rcom.When Reliance was demerged on January 2007 an agreement was signed between both of the Ambani siblings. According to which Mukesh Ambani was given the right of first refusal over the shares of Rcom. Mukesh had warned that MTN will have to face the court case that he had decided to file against Rcom for its breaching the January 12 agreement. Battle between both of the brothers worsened because of the claims and counter claims.

Issues MTN had extended the date of the talks to give more time to the Ambani brothers to resolve the dispute but nothing enthusiastic happened. According to PTI, Rcom in a statement said,” The two sides were unable to conclude the transaction due to certain regulatory issues”. Mukesh had on Thursday had started arbitrary proceedings. To avoid the court MTN decided not to go ahead with the tie-up talks. It was once again the eruption of the battle between the Ambanies that abruptly ended the negotiations between RCOM and MTN.

Inflation Rate Inflation has registered a 13-year high of 11.05 per cent growth rate on Friday. It is the direct result of rise in the prices of petrol, diesel and cooking gas. The government is in its last year of power and the elections are nearing and Inflation has added more to the problems of the government. Government had to increase the prices of petrol, diesel and cooking gas because the prices of fuel in the international market had increased a lot. The Indian oil companies were left with very low cash flows and the normal fuel supply could have been affected because of their financial problems.

WPI Government had announced the hike in the prices of petrol, diesel and cooking gas on June 4 that put the pressure on the price line pushing the inflation to the height within the week though the Wholesale Price Index for food articles had actually declined 1.1 during the week. The Commerce and Industry minister released the latest provisional inflation data in New Delhi. He said that in the first week of June WPI for light diesel oil had gone up 21 per cent, LPG had gone up 20 percent, furnace oil 15 percent petrol 11 percent and high speed diesel 10 percent.

Possibilities Rise in oil prices in the International market fueled the spiraling inflation and there is a possibility that the global commodity and crude oil prices will ease by the October month of the year. It is said that Government’s and Reserve Bank’s monetary and fiscal measures will begin to impact inflation with a lagged effect. Good monsoon predictions are also a positive sign.

Effected

Rising prices have put a disastrous effect on the living standards of middle class and the poor. It is the poor for whom the life has become more difficult. Prices not of crude oil but all the essential commodities have risen. Rise in steel and cement prices has badly affected the construction industry. Though government policies are also responsible for it, inflation is a global phenomenon and the government is trying its best to insulate the poor.

Meeting The much awaited meeting between (UPA and Left committee) was postponed and will be held on June 25.But the sources say that it is not the postponement but the cancellation as the left had never accepted the deal in the present terms and wanted the government not to pursue the deal. The meeting was called of when the left leaders learned that the Manmohan Singh government has decided to go ahead with the nuclear even without the permission of Left parties.

Left’s Opposition Prolonged discussions between the government’s main negotiator and Mr. Karat could not bear any fruit as the left leaders did not changed their stand of opposing the nuclear deal. In the past few days several rounds of talks have been held between the top left and UPA. Government had been trying to persuade its outside supporters to allow it to seal the safeguards agreement during the upcoming meeting of IAEA Board of Governors. But the Left leaders kept on consistently rejecting the plea. But the Prime minister has taken a stand to go ahead with the deal at any cost.

Relations Sources say that the government had realized that the marriage of convenience between the Congress and the Left had lost its utility and there was very little point left to prolong the alliance as it became obvious that Left is weakening in its bastion, West Bengal where it had faired badly in the Panchayat elections. Left’s continuous criticism of the government on the issues of price rise and fuel price hike had further soured the relations. As the Prime Minister has decided to go ahead with the nuclear deal in spite of the opposition of its Left allies the fate of the UPA government is also looking fraught.

Future India is a fast emerging economy that needs more energy for its consistent growth. India imports most of the fuel from outside. It is very necessary for an economy like India to be self dependent in the field of energy and India-US nuclear deal is the opportunity that cannot be missed out and it would be “unfortunate” if the agreement falls through.” Government comes and goes. Nuclear power is a requirement and assets must be created for our next generation”.

Differences Uncertainties are looming over the fate of Indo-US nuclear agreement. There are huge differences Inside India among various political parties regarding the terms of the deal. This deal is mainly opposed by the left parties who are supporting the UPA Government from outside. These parties consider that the nuclear deal is not in the interests of the country. They are strongly opposing the deal with the US arguing that it would compromise the security interests and the independent foreign policy of the country. Though the Congress led government is currently engaged in talks with their left allies to iron out the differences.

Needs There are huge demands of energy in India and it is unable to meet them. It is a rapidly growing economy and its demands of energy are increasing day by day. It fulfills its energy needs by importing from the other countries. To sustain the current economic growth rate it needs to be self dependent in the field of energy. The deal will open up new possibilities of cooperation not only with the US but with other nuclear powers also not only in the fields of nuclear technology but many others. By entering into the deal India had sought new dimensions to its relationship with US.

Views According to the left parties the Indo-US nuclear would make India a US outpost against China. This view of the left parties has been opposed by most of the Indians. It seems that they are more concerned about protecting China’s interests than India’s own national and strategic interests. It seems as if they are not worried about the rising energy needs India but are acting as if they are a political party of China. America is having strong economic ties with China as well as with India. There is not any reason that will harm China’s interests. It is necessity of the time that India’s rising energy needs should be met at early as possible.

Developments The time is running out as Bush’s presidential tenure will end very soon. It looks as if the nuclear deal is almost dead. Sovereignty of the nation can not be compromised. But India has very limited options that can meet its energy needs. Government is in a very tough condition and the whole of the world is watching the developments. Whatever decision is taken by the government it will have to remain with it and it will also become a history. How the future generations will consider it depends on them.

Naxalites Maoist Insurgency in India is increasing day by day. No day happens without violence activities conducted by Maoists. They always have made their presence felt whether it is Andhra Pradesh, Bihar, or other eastern states. The communist insurgent movement is known as Naxalites.

Reasons As India is developing at a very high pace Government is developing Special Economic Zones, along the lines of China’s economic Growth model. People of rural areas are directly affected with this move. As developers have tried to acquire the land aggressively, it has grown the dissatisfaction among the affected people. Whenever government tried to acquire the land people have always clashed with police. .Maoists with their agenda of fighting against exploitation and promotion of creating a classless society, have always seized upon the grievances of the directly affected people.

Base Maoists have their presence in 182 districts in 17 out of India’s 28 states. Chhattisgarh is the worst affected state as some of its parts are referred as ‘war zone’. Their support base is largely the land less laborers and marginalized tribal and lower cast people. There has been a dramatic increase in support of the Maoists in the last decade. Maoist support have got a boost after the successes of the nearly 10 years old rebellion in Nepal .They have their secret organizational structure and every activity is performed in a well planned and structured method by them.

Increased Power Their power have increased to such an extent that they never hesitate to attack the security forces. Frequency of such attacks has grown over the past two years. They attack in large numbers in a unified way. Their Attack on Jahanabad jail in Bihar, hijacking of a train in Jharkhand and assassination of MP Mahato, are some of the examples of violence activities. They are the biggest internal threat to country. They raise funds through extortion and taxation of the farmers’ output the areas where central government is absent.

Solutions This menace can be curbed if government takes some serious steps for the betterment of the poor, landless sections of the society. Widespread poverty and caste discrimination are is the main reasons that people get drawn towards the Maoist movement. Geography is the other major reason that provides them suitable situations to prosper. In order to defeat government should work for the fast development and also should win the hearts of population by providing them massive aid and relief.

Inevitable Decision United Progressive Alliance (UPA) Government on Wednesday midnight took the ‘inevitable’ decision of increasing the fuel prices. Soaring oil prices is the international oil market had put the Indian Government into a tight spot. Subsidies were increasing and the financial situation of the oil companies deteriorating day by day. Oil companies had left with a very low cash flow and an immediate decision was required to bail them out of the ‘gruesome situation’. These companies had been incurring huge losses for past several months and it was necessary to save them from being financially crunch.

No Options Though the crude oil prices had doubled since the last year, rates of diesel and petrol had remained unchanged. Because of steep increase in International oil prices government had left with no options. This was an inevitable decision that was being expected by everyone. Though the decision is unpopular but it was required to ensure the uninterrupted supply of the petroleum products.

Increasing Losses Defending the decision of his government, PM has said that to a certain limit government can keep the keep the consumer prices unaffected by the rising oil prices in the international market. If the oil companies go on incurring losses then they will be left with no money to import oil from abroad. Government had to take the tough decision as it had allocated large financial amounts for social sector programs and farming. All these programs require huge financial amounts that mostly depend on higher revenues of the Government.

Increase in Prices Government has increased the petrol prices by Rs 5, Diesel by Rs 3 and cooking gas by Rs 50 per cylinder but kerosene has been left untouched. This decision has been hailed by the Indian Industry chambers. On government’s part the custom duty has been reduced on crude oil from 5 per cent to nil, and on petrol and diesel from 7.5 per cent to 2.5 per cent.

Alternative Energy Sources Almost all political parties whether they are in opposition, Left or UPA’s allies have criticized the decision as many of them have threatened to launch national wide protests. This criticism of government is only politically motivated. Oil shocks have always slowed down the growth rate. To avoid this kind of setbacks and criticism government will have to look for the alternatives of the petroleum energy in future.