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Impact of court ruling on diesel cars moderate, but wide: Analysts

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New Delhi, Dec 16 : The Supreme Court order banning the sale of diesel vehicles above 2,000 cc in the national capital will impact only some auto-makers strongly, but will also potentially trigger a cascading effect on the dependent ancillary industry, analysts maintain.

Spelling out the figures on domestic sale of passenger vehicles, analysts said out of some 3 million sold in India annually, only around 7 percent is accounted for by the national capital — which makes it a market of 210,000 units.

Out of that, diesel vehicles account for 25 percent, or a market of 52,500 units. That is 1.75 percent of passenger vehicles sold in India are accounted for by the diesel versions in Delhi region.

“In the short term, there will be disruption. From showroom inventory to pipeline stocks — changes, cancellation of bookings, workshop and parts planning are the areas of impact at the vendor end,” said Kumar Kandaswami, senior director with Deloitte Touche Tohmatsu.

“It remains to be seen as to the long-term view. If this restriction of not registering diesel cars with engines of 2000 cc or more continues longer, or on a permanent basis, companies will have to deal with investment decisions that are significant,” Kandaswami told.

“Inventories will have to be shifted,” he said, referring to the impact down the line. “The problems may not be as acute in some interior parts and accessories. Most component suppliers will be faced with schedule changes in the near term.”

But some companies, analysts maintain, can take a larger hit.

“We believe the news (of the Supreme Court order) is likely to have negative impact on Mahindra and Mahindra, as about 95 percent its passenger vehicle portfolio is above the 2,000 cc range,” said Bharat Gianani, automobile analysts with Angel Broking.

In fact on a day when the sensitive index of the Bombay Stock Exchange rose 0.69 percent, Mahindra and Mahindra shares declined by 5.44 percent, even as the bourse’s automobile index, as a whole, was down just 0.51 percent.

Mahindra and Mahindra hoped for a holistic view. “The vehicles affected represent about 2 percent of the company’s monthly sales. The company is in the process of evaluating various options to work within the framework provided by the honourable Supreme Court,” the company statement said.

“The news will not have much impact on Maruti Suzuki — it hardly has any product above the 2,000 cc segment — nor on Tata Motors as its earnings are driven largely by JLR, which is a global player,” Gianani added.

At then same time, they said the ruling could change customer perception nation-wide.

“This decision will surely impact some makers in the luxury segment and as well as SUV segment. In addition, from customer prospective they will think twice now buying diesel vehicles because of the uncertainty with regard to diesel regulation,” said Abdul Majeed of PriceWaterhouse.

Similarly, they said, much was being made out on the pile-up of inventories. They said the norm was to maintain an inventory of around one week. But they felt government revenues may get effected slightly, as as utility vehicles were taxed at higher rate at 24-30 percent.

“There is an interim period of 15 days till December 31 for OEMs to clear the inventory in the NCR region, if they are not able to clear the inventory by 31st Dec they need to look at other location within the country including if possible exports to nearby countries,” Majeed said.

Analysts believe the auto industry will hold negotiations with the government to sort out the issue, suggesting measures such as banning older vehicles, further improving the emission levels so that the ban does not exceed March 31 next year.

“While the temporary ban on diesel vehicles for three months may impact sales in the short term, the long term changes to policy, including emission norms, will be the key in determining the future road map of the industry,” said R. Muralidharan of Fitch Ratings.

Politics

BJP sinking ship, says NCP’s Tariq Anwar

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New Delhi, July 20 (IANS) Senior Nationalist Congress Party (NCP) leader and MP Tariq Anwar on Friday termed the BJP a sinking ship, saying no one was ready to sail in it.

The MP, who supported the no-confidence motion in the Lok Sabha, said if the current situation, as the BJP claims, is like ‘Ram Raj’, then he wondered what the ‘Ravan Raj’ would be.

“The government had come to power with a slogan of ‘sabka saath, sabka vikas’, but today the government is supporting no one, and vikas (development) is absent,” he said.

“In the last four years of the BJP government, unemployment has risen, farmers are unhappy, women are unsafe and minorities and weaker sections are being threatened. The prices of petrol-diesel are going up. The government has also failed to frame sound foreign policies,” he added.

The MP from Katihar in Bihar also said that Prime Minister Narendra Modi and Amit Shah spent most of the last four years attacking the Gandhi-Nehru family. The government is using investigating agencies for political gains, he added.

“Instead of attacking the Gandhi-Nehru family, they should have improved the situation in the country. All of Modi’s speech is about what the Congress has done wrong or has not done in 60 years,” he said.

Speaking about Home Minister Rajnath Singh’s remarks on mob lynching, he said: “His clarification appeared like a silent support to it. If this government was serious about the issue, 200 deaths would not have taken place due to lynching,” he said.

The BJP leadership, he said, is limited to two people. “This is the reason why those who supported the BJP are nowhere to be seen,” he said, adding the Telugu Desam Party, which once supported the BJP, has driftd away from it.

“The Shiv Sena too is not seen anywhere around. Bihar Chief Minister and JD-U head Nitish Kumar has also shown his defiance.”

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SC reserves verdict on plea for larger bench to hear Babri Ayodhya title suit

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New Delhi, July 20 : The Supreme Court on Friday reserved its order on a plea by Muslim litigants seeking that the hearing on the batch of petitions challenging the 2010 Allahabad High Court verdict directing the splitting of the disputed site at Ayodhya be heard by a larger bench.

The bench of Chief Justice Dipak Misra, Justice Ashok Bhushan and Justice S. Abdul Nazeer reserved the verdict on the conclusion of arguments by senior counsel Rajeev Dhavan seeking the reconsideration of the part of 1994 top court judgment which said that a mosque was not essential to Islam for offering Namaz.

Dhavan appeared for the lead petitioner M. Siddiqui represented by his legal heir.

The Lucknow bench of the Allahabad High Court by its September 30, 2010 verdict had ordered that the land around the disputed site would be divided into three parts — one for deity (Ramlala Virajmaan), another for Nirmohi Akhara — a Hindu sect and an original litigant in the case and third for the Muslims.

At the outset of the hearing in the apex court on Friday, the court witnessed commotion as some lawyers objected to Dhavan’s use of term Hindu Taliban and comparing the razing of Babri Mosque on December 6, 1992 to that of destruction of Buddha statues in Afghanistan’s Bamiyan by the Taliban.

Refusing to budge from his description of Hindu Taliban, Dhavan said that he stood by every word and destruction of Babri Mosque on December 6, 1992 was an act of terrorism.

As senior counsel C.S. Vaidyanathan appearing for one the Hindu litigants described arguments as “mockery”, Dhavan said: “It is an argument based on the destruction of the mosque.”

Dhavan said that the former Chief Justice, the late J.S.Verma had said that Hindus must wear the cross for the destruction of the Babri Mosque.

At this, reminding Dhavan that it was incumbent upon senior lawyers to maintain “decorum” in the court, the Chief Justice described as “inappropriate” the words used by the senior lawyer.

Taking exception to the “inappropriate adjectives” used by Dhavan, he said that “adjectives” that are used in the course of the arguments should be the ones that have the acceptance of the court.

“You may think what you may, but the court thinks it was completely inappropriate,” Chief Justice Misra said as Dhavan insisted that he did not think that the description of Hindu Taliban was inappropriate.

Dhavan said that he could differ with the bench and that will not amount to contempt.

The Chief Justice meanwhile one of the lawyers to leave the court room after he said that “thousands of temple were destroyed and you still call us Hindu Taliban”.

Things came to such a pass, that a lawyer complained that court has become a sort of parliament.

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Delhi Air hostess suicide: Court rejects husband’s bail plea

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Saket Court

New Delhi, July 20: The Saket court on Friday rejected the anticipatory bail plea filed by the parents of Mayank Singhvi, the husband of the air hostess who allegedly committed suicide last week in Panchsheel Park. 

Singhvi is currently under 14-day judicial custody.

On Thursday, a friend of the hostess had said that Singhvi was responsible for the victim’s “extreme step”.

“I had received a message from her (air hostess) where she talked of killing herself saying her husband has driven her to this stage. She was a very strong girl. I can’t believe that she took this step,” the friend told ANI.

Before committing suicide, the air hostess had sent a message to her friend on WhatsApp, saying that she had been locked up in a room by Singhvi.

Singhvi was arrested on July 16 and the subsequently sent him to a 14-day judicial custody.

According to the police, the deceased air hostess had a fight with her husband around 4:30 pm on July 13, after which she went to the terrace and jumped off.

Deputy Commissioner of Police, Romil Baniya, said a full-fledged probe has been initiated in connection with the case under Hauz Khas Police Station limits.

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