Court asks Citibank to compensate for harassment

New Delhi, June 2 (IANS) Ticking off Citibank for 'unfair trade practice', the Delhi State Consumer Disputes Redressal Commission has directed it to pay Rs.50,000 compensation to a Citibank credit card holder for harassment and agony.

Justice J.D. Kapoor said that despite no proof of any transaction on his credit card, the bank regularly harassed the consumer and sent huge bills and also included his name in the defaulter's list.

Holding that including the consumer's name in the defaulter's list 'is unfair trade practice', the court said: 'It is defamatory as the bank has no business to take its disputes to other banks and tell them that he is a defaulter and don't give him loan.'

The court also issued instructions to the Reserve Bank of India (RBI) and other banks not to reject loan to the consumer on these grounds.

The case pertains to a consumer Bijay Kumar Dash, who was lured by the Citibank agents to get a credit card made. Though there was no transaction on his credit card, the bank billed him for Rs.27,000 as membership fee for a club.

Thereafter, the bank kept sending hefty bills along with the accumulated interest and eventually Rs.1,30,000 was billed to him.

Dash reached a settlement amount and paid the money. However, the bank put his name in the defaulter's list and sent messages to other banks to blacklist him for sanctioning loans.

Aussie banks to move IT projects to India

MUMBAI: Even as Australia is making headlines for hostilities towards Indians, Australian banks are set to implement billions of dollars worth of IT projects and could also outsource many of their functions to India.

Some of its top banks are looking to implement core-banking projects, and the first of these projects from the National Australia Bank has already gone to Oracle Financial Solutions, earlier i-flex Solutions.

These projects could range anywhere from $2-$4 billion, with the software licences alone costing $500 million. Unlike the US, banks in Australia are still very profitable. “Many of these banks are running applications on legacy systems and hardware that may not be supported anymore. They are shifting to core banking applications and awarding contracts

for their implementation,” said Tim Sheedy, senior analyst, Forrester Research. One of Australia’s big four banks, Commonwealth Bank, is also in the midst of a core-banking modernisation programme, while two of the other big four banks are also in similar discussions with vendors. These banks are looking at outsourcing their entire IT to select functions such as monitoring and maintenance, said Mr Sheedy.

The banks are outsourcing out of necessity to cut costs and move from a variable cost model to a more predictable cost model, he said. The findings of a report yet to be released by Forrester, show that the outsourcing is staging a comeback in Australia. “Australia had moved away from outsourcing but now cost is driving them to it again.

Australian banks have never outsourced but are now starting to. The outsourcing contracts that come up could be in hundreds of millions of dollars,” he said.

So, although IT budgets in the Asia Pacific are shrinking by an average of 9%, outsourcing has increased. “The banks are doing it to save money. So we will see a considerable offshoring component because price will be a key consideration,” said Mr Sheedy.

We're different, New Zealand tells Indian students

WELLINGTON: The New Zealand education sector has moved to distance itself from attacks on Indian students in neighbouring Australia, saying they were "totally different societies", a newspaper reported here Wednesday.

"What we want to do is to remind education agents in India that New Zealand is a different country from Australia - in the nicest possible way," Robert Stevens, chief executive of Education New Zealand, told the New Zealand Herald.

Stevens said he had told the New Zealand Trade and Enterprise office in India to market New Zealand as a totally different country to Australia, which has been dubbed as racist following a series of attacks on Indian students.

Australian Prime Minister Kevin Rudd telephoned his Indian counterpart Manmohan Singh at the weekend to apologise for attacks that have left one student with severe burns and another with stab wounds.

The call coincided with a march in Melbourne that drew more than 1,000 members of the Indian community at which students vented their anger at the attacks and the perceived inadequacies of the police in dealing with them.

New Zealand has nowhere near as many Indian students as Australia - just over 6,000 compared to the 90,000 on the other side of the Tasman Sea - but numbers have doubled over the last three years.

"This could possibly increase the numbers quite drastically," Stevens said. "We are constantly competing with Australia - time will tell if there'll be a surge in numbers."

Another Indian student attacked in Australia

NEW DELHI: Even as the Australian government continues to promise strict action against those who attack Indians in their backyard, a television report suggests that another attack took place in Melbourne on 20-year-old Nardeep Singh, who was on his way to attend college. The victim of the attack, who came to Australia just a month back, hails from Ludhiana. He is a nursing student at the Chisholm Technical Institute in the city and was attacked on his way to college on Tuesday (June 2) morning. He was reportedly assaulted by at least 5 men, which included two Australians. He was attacked at a car park, where these 5 men asked him for cigarettes. When he replied that he was a non-smoker, the group asked him for money. When Nardeep refused to give them, one of the attackers stabbed him in his chest. Nardeep, however, escaped further assaults and reached the police station, where his statement was recorded. Nardeep's roommate said that he was stabbed, which was followed by excessive bleeding. Nardeep is currently under observation in a Melbourne hospital.

Sri Lanka Tamils 'facing misery' - BBC News

Huge numbers of civilians fled from the final battles

A senior Sri Lankan Tamil political leader has urged the government to resettle civilians back to their homes as early as possible.

V Anandasangaree described conditions in camps for civilians displaced by the country's war as "horrible".

The head of the Tamil United Liberation Front (TULF) said hundreds of thousands faced misery and hardship.

He said there were food, health and sanitation problems in camps set up for Tamil civilians in northern Sri Lanka.

Many people are having skin diseases as they didn't get a chance to have a shower for days because of water shortage V Anandasangaree Tamil United Liberation Front Agony in Sri Lanka's refugee camp

The United Nations says nearly 300,000 people have been displaced by recent fighting between government forces and Tamil Tiger rebels.

The civilians have been housed in various camps, most of them in Menik Farm, near the northern town of Vavuniya.

The Menik Farm camp site, which is described by the UN as the world's largest displacement camp, houses around 220,000 people displaced by the fighting.

Health fears

Mr V Anandasangaree, the TULF leader, is one of the few remaining long-serving moderate Tamil political leaders in Sri Lanka. He has strongly supported the government's stance against the rebels.

"From the reports I get from the people [in the camps] they are good in some areas and horrible in many," Mr Anandasangaree told the BBC.

V Anandasangaree has been a critic of the Tamil Tigers

"Health, water and sanitation situation is horrible. Many people are having skin diseases as they didn't get a chance to have a shower for days because of water shortage.

"Pregnant mothers and newborn babies go through a harrowing time in the camps due to scorching heat," he said.

The Sri Lankan government accepts that conditions in some of the camps are not ideal but says facilities have been improved in many other camps. It says more land is also being allocated to build new camps to decongest those already full.

The United Nations and other aid agencies have also demanded better access to the camps to carry out humanitarian work.

Sri Lanka's government is wary of aid agencies and has complained that the agencies had helped the Tigers in the past.

Sri Lanka says it plans to resettle most of the refugees within six months.

Mr Anandasangaree, a well-known critic of the Tamil Tiger rebels, the LTTE, also faulted the government for viewing every Tamil civilian in the camps as a possible Tamil Tiger suspect.

Sri Lanka has said it needs time to weed out potential Tamil Tiger infiltrators hiding in the camps.

"The civilians risked their lives while fleeing from the LTTE-held areas as the rebels were shooting at them. If the government suspects such people as Tamil Tigers, then the entire population of the two districts - Kilinochchi and Mullaitivu - should be the suspects," he said.

"Then the government will never solve the problem."

Sri Lankan officials say they have been overwhelmed by the sudden arrival tens of thousands of civilians from rebel-controlled areas since the start of the Sri Lankan military's final battle against Tamil Tigers a few weeks ago.

The government says it also requires help from the international community for post-war resettlement and reconstruction.

The TULF leader also challenged the official view that de-mining needs to be carried out before the resettlement of civilians can begin in the north.

"The theory that the area is heavily landmined cannot be accepted because I am in touch with a number of people. So, when I ask them they tell me where the landmines are placed. They are local people. According to them, 75% per cent of the area is not at all landmined," the Tamil leader said.

Mr Anandasangaree said Sri Lankan security forces were doing a commendable job in carrying out relief work for the displaced civilians, but said that was not enough.

"The government cannot address the problem fully on its own because of the size of the displaced population."

A theory of long-term decline?

Long-term economic decline has just one root cause: Rigidity. The refusal to change long established practice has always led to long-term disaster for everyone.

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T. C. A. Srinivasa-Raghavan

The last article in this series, a month ago, had ended thus: “The next time, instead of discussing growth, we will discuss decline, the mirror image of long-term growth. What causes decline? What policies to follow to arrest it?”

Some readers have asked why economics should bother with decline. The answer seems obvious, and has three elements.

First, just as growth theories are products of such intellectual curiosity, a theory of decline should be conjured up for the sake of intellectual curiosity; second, it might turn out that it is easier to pinpoint the causes of decline than the causes of growth; three, long-term decline is more easily arrested than long-term growth is achieved.

Causes of decline

The first issue, of course, is whether long-term decline is indeed a mirror image of long-term growth insofar as the causes are concerned.

As someone who has taken a fairly close look at economic history, I think it is possible to assert with reasonable confidence that it is not.

Decline seems to be caused by factors that are quite distinct from the assumed causes of growth, namely, investment, technology, knowledge, innovation, social institutions, political institutions, judicial institutions, economic institutions, governance, human capital, endogeneity, big-push, openness and geography.

Refusal to change

As far as I have been able to see, long-term economic decline, of empires starting from the Roman to countries starting from India in the third century, has been caused by just one root cause: Rigidity. The refusal to change long established practice, whether socially, politically or in the respective economies, has always led to long-term disaster.

The amazing thing is that many historians (Gibbon, Spengler, Kosambi, to name just three) have discussed the decline of societies, empires and countries for a long time. Yet economists — who are otherwise eager to trespass into all sorts of unrelated areas — have studiously ignored this aspect.

Understanding growth

The usual excuse is that the data about the past is not there to arrive at any meaningful conclusions. But, then, it can be asked with equal earnestness: What meaningful conclusions have you arrived at when the data has been there? Are we any closer to understanding growth than we were in 1946 when Messrs Roy Harrod and Evsey Domar came up with their growth model?

The question has important implications for policy. This is because it might be easier to prevent long-term decline than to maintain high growth through a variety of artificial means.

There is a riposte to this, namely, that growth theory seeks to provide answers to countries seeking to grow, not those seeking to maintain high levels of growth.

The answer is: study history. You will find that very often the effort to artificially maintain growth in one country or in part of the world, has kept down others who are seeking to grow, thus making a complete nonsense of growth theory, which pretends to provide growth formulae to them.

Tilting trade

Thus, Britain’s monetary policy towards India from about 1880 onwards is a stark example of this. It was designed to tilt the terms of trade in its favour.

British textile policy in the 1930s was designed to keep cheap Japanese imports out of India. Closer in time, as Ronald McKinnon has shown, the Plaza Accord of 1985, by fixing the exchange rate, finished off growth in Japan from 1991 till now.

China’s exchange rate policy since 1996 has been beggaring everyone in the developing world, including the US.

Dominant country must co-operate

An examination of these policies or actions by the dominant country leads to two conclusions.

The first is that the rate at which a country will grow depends on the political and economic needs of the dominant power.

There is very little all those things like investment, technology, knowledge, innovation, social institutions, political institutions, judicial institutions, economic institutions, governance, human capital, big-push, openness and geography can do if the dominant country does not co-operate.

These might be necessary in a weak sort of way, but they are nowhere near being sufficient to cause and sustain growth.

Result of neglect

This can be seen from India’s experience with the USSR (negative experience) and China’s experience with the US (positive experience). Now that India has a good relationship with the US, it too is growing. China will soon go the other way. Its goose is cooked because it has sought to rival the dominant power.

The second is, it is this dependence — which has been described in a different context by Raul Prebisch, Andre Gunder Frank, Paul Sweezy etc — as the centre-periphery theory that modern economics ignores. It is poorer for it because the neglect causes it to come up with incomplete theories and answers.

So, what should economists do? I think it would help if they got away from the obsession with long-term growth and began to look at decline and how policies designed to prevent it affect short-term growth in other countries.

blfeedback@thehindu.co.in

GM enters bankruptcy protection

GM has lost its corporate sheen faced with falling sales and a global recession

Car giant General Motors (GM) has filed for bankruptcy protection, marking the biggest failure of an industrial company in US history.

The widely expected move comes after GM had seen its losses widen following a steep fall in sales in recent years.

The move into bankruptcy protection has been backed by the US government, which is now expected to take a 60% stake in the company.

The White House is also due to announce an extra $30bn (£18.5bn) of aid for GM.

President Barack Obama will host a press conference on GM's future later.

GM, which had already received $20bn of state aid since the end of last year, said in its bankruptcy filing that its current debts total $173bn.

Expected job cuts

US Chapter 11 bankruptcy protection gives an American company time to restructure its finances while being protected from its creditors.

The restructuring is likely to drastically change GM, with some 20,000 US workers thought likely to lose their jobs as the firm streamlines its operations.

However, GM's European arm is likely to be spared bankruptcy following a proposed deal by Canadian car parts maker Magna International to buy GM Europe's Vauxhall and Opel brands.

It is expected that GM may be able to exist bankruptcy protection within 60 to 90 days.

GM, once the largest company in the world, has been losing market share since the early 1980s.

It has been driven to bankruptcy because of high production costs and by the collapse in credit markets and consumer spending. It made losses of $30bn last year.

GM was also slow to move away from producing gas-guzzling SUVs when consumers were looking for more fuel-efficient vehicles.

Toyota sold more vehicles than GM in 2008, putting an end to the American company's 77-year reign as the world's biggest carmaker

Australia in damage control over Indian attacks

The protest started yesterday when thousands of Indian students gathered in central Melbourne. (ABC)

Prime Minister Kevin Rudd has condemned recent attacks on Indian students as deplorable and says the Government is working with authorities to bring those responsible for the violence to justice.

Mr Rudd today told Parliament he has spoken to Indian Prime Minister Manmohan Singh about the attacks which saw hundreds of students in Melbourne take to the streets last night in protest.

"I speak on behalf of all Australians when say I say that we deplore and condemn these attacks," he said.

"I said to Prime Minister Singh that the more than 90,000 Indian students in Australia are welcolme guests in our country."

He also said the Government will work closely with the states and territories "as a matter of urgency" to work on ways to help international students feel safer.

Opposition Leader Malcolm Turnbull described the attacks as "profoundly un-Australian".

"These students are guests in our country and this recent violent behavour has the potential to do great damage to the reputation of Australia as a destination of choice," he said.

Trade Minister Simon Crean says Indian authorities raised concerns about students being targeted more than a year ago.

He says their complaints are being taken seriously.

"There's no point sending your loved ones here to study if they feel under threat," he said.

"I think that this has been an issue that we've tried to address now for a number of months. We will continue to work on it; I think we can get on top of it."

Early this morning police broke up a sit-in by several hundred Indian students; the students had blockaded a major Melbourne intersection outside Flinders Street station overnight in protest against the violence.

Police say they detained 18 students for breaching the peace. The intersection has reopened to traffic.

Police tactics defended

Police say the force used to break up the protest was justified.

Chief Commissioner Simon Overland says an officer was bitten on the hand while trying to move the students.

"There were blows, because arms had been linked, and there was a lot of resistance going on," he said.

"If someone inadvertently got hit in the mouth and got injured I regret that, but that came about on the part of the actions of the demonstrators after they'd been given every opportunity to leave the area."

The protest started yesterday when thousands of Indian students held a protest in central Melbourne to express their anger about recent violent attacks.

Student Sravan Kumar Theerthala, 25, was stabbed with a screwdriver last weekend and remains in hospital.

Yesterday's protest was organised by the Federation of Indian Students of Australia (FISA) but this morning FISA spokesman Gautam Gupta said the rally was hijacked by people with their own agenda.

FISA said in a statement on its website the rally aimed to create an awareness about an increasing number of what it called "hate crimes" in Victoria and to promote racial harmony and peace.

"I think absolutely they should have left because we are seeking peace, we are seeking non-violence, and we should be leading by example. And this is no way to lead by example," he said.

"Unfortunately the whole thing was hijacked by people with their own intention."

A 22-year-old man was arrested at the protest yesterday and is facing charges of riotous behaviour and criminal damage.

Indian students say they pump billions of dollars into Australia's education sector, but believe their concerns about what they say are racially-motivated attacks are not being taken seriously.

Concerns about violence against Indian students were raised by the Indian Prime Minister and the Indian High Commissioner to Australia last week.

Satyam to sweeten layoff terms

HYDERABAD/ MUMBAI: A majority of the 10,000 excess staff at Satyam Computer Services are set to be offered 40% of their salary for six months in what can be termed as a severance package being firmed up by the beleaguered IT firm.

The top management of Satyam, in consultation with its new owner Tech Mahindra, has prepared a list of around 10,000 employees, who have not been billed for over six months now. These employees are set to be offered 40% of their existing salary for six months, along-with medical insurance and provident fund. But they may eventually have to leave the firm. Non-billable employees have been short-listed, as they do not bring in any revenues to the IT firm.

Raju had hired more number of employees to inflate revenues and profits of the firm, and the economic downturn has only compounded Satyam’s woes, forcing Tech Mahindra to look at a separation package for the excess staff in the Hyderabad-based outsourcer. Senior industry leader Kiran Karnik, who was chosen by the government to be on the Satyam board and salvage the firm, said unless substantial steps were taken to contain costs, Satyam could go under and risk the jobs of all employees.

The board had suggested a number of options to the new management, including organisation-wide salary cuts, keeping employees on a virtual bench and sending them on a sabbatical. In the last two cases, the company would have to pay only part of the salary to these employees.

Vineet Nayyar, the CEO of Tech Mahindra and now whole time director on Satyam, declared that the company had an excess staff of around 10,000. The employee strength at Satyam is reckoned to be around 42,000. It is likely to drop to 32,000, if the proposed plan to create a “virtual pool” is implemented. Non-billable employees across all levels will be impacted, though entry and middle levels will see more exits.

“We recognise that we have to deal with the situation and are exploring the most humane ways to tackle this issue,” said T Hari, global head marketing, Satyam Computer Services.

The company is talking to a dozen out-placement firms to help people, who are laid off to find new jobs. It is also planning to tie-up with engineering colleges for PG courses and would fund employees, who wish to enrol in these programmes.

A few companies have also written to Satyam to take some employees on board. Employees, who have been identified for layoffs, will also have access to all the training programs offered by Satyam, said Mr Hari. The company plans to have financial counsellors to help out those whose exits are imminent.

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