Business and Economy

• The Income Tax Department reported an increase of 20% in tax collection the last quarter. Direct taxes, automatically deducted from payroll, jumped 27% and indirect taxes by 16.2%. The increase in payroll taxes despite sharp rise in exemptions shows that the taxation net has widened. Corporate taxes increased by about 21%. Two controversial taxes, the Fringe Benefit Tax (FBT) and the Bank Cash Transaction Tax brought in both that Rs. 3 billion. With such data and given a shortage in Government income affecting social projects, it is unlikely that the Government will drop these controversial and unpopular taxes. India signed a Double Tax Avoidance Convention with Serbia and Montenegro covering income taxes, surcharge on income, and wealth tax for India and profit tax, income tax, capital tax, and revenue tax for Serbia and Montenegro. 

Democracy, Politics and Judiciary

• A Constitutional row is evolving regarding the Gujarat riots and communication between then President K.R. Narayanan and Prime Minister Atal Bihari Vajpayee. The former President had alluded to these letters in an interview that cast aspirations on the former Prime Minister and his Government did not do enough to curb the riots. Representing the Government before the Nanavati Commission, the Additional Solicitor General claimed “privileges” of the Constitution and Evidence Act so that the papers no be released. He also cautioned the commission on this line of investigation saying that the contents have to be read in full and the context understood; a failure of this and selective interpretation would seriously affect public interest, leading to communal violence and disharmony. The Government also says that President Narayanan quoted selectively what is considered “state information” implying a breach of privilege. The judges of the commission took umbrage to this position demanding to know whether the Government considered Narayanan “irresponsible.” A confrontational line of questioning resulted in the judges asking the Government to “apply its mind” before claiming privileges. While the contents of these letters is not known, a debate between the former President and Prime Minister over Federalism, rule of law, preserving security of population, and the quality of security offered by the Narendra Modi's Gujarat Government to Muslims were apparently discussed.

Environment, Health and Education

• The Supreme Court Monitoring Committee on Hazardous Waste submitted its recommendation to the Supreme Court and said that this would be a "turning point in environmental awareness." Refusing to reveal their recommendations for "protocol" reasons, Chairman G. Thyagarajan said that the Committee might open up for more discussions and suggest a set of options for the court to consider.

• A virulent strain of bird flu virus has killed 40,000 birds in a large poultry farm in Nigeria. This is the very first known instance of bird flu in Africa. The farm where the H5N1 virus was found first on Jan 15, 2006 treated the chickens, geese, and ostriches with a broad dosage of antibiotics. Nigeria reported bird flu to the World Health Organization only after the birds did not respond to this treatment. An India sailor was reported to have contracted bird flu and his condition is unknown.

• Editorial: Regulate Ship Breaking Business

Terrorism, Defense and Security

• A lone suicide Taliban terrorist exploded a bomb outside the police headquarters in Kandahar, killing 13 people and injuring 14 others. Taliban has been increasing its suicide operations in a systematic manner causing much hardship to civilians. The public has been vocal protesting these attacks. The Afghan Government blames Pakistan for not doing enough to catch the Taliban terrorists hiding in Baloachistan.

Neighbors

• The Maoist threat for a weeklong strike almost paralyzed Nepal even as terrorist killed 8 security men. Terrorists attacked candidates who continued to stay in the mayoral race. King Gnanendra says that the mayoral election is the first step to full Parliamentary democracy, which the oppositions access to be a sham. The Nepal Government is threatening its employees if they do not vote in these elections.

• Editorial: The Nepal Stalemate

• Editorial: Iran's Nuclear Program

World

• Acting Israel Prime Minister Ehud Olmert said that Israel plans to unilaterally annex the Jordan Valley under Palestinian control and also Jewish settlements to Israel. This move will ensure that the Palestinian state remains an island within Israel and without direct links to the outside world. Israel also promised to keep targeting terrorist groups. Meanwhile, Israel and the terrorist group Hamas, which won the Palestinian elections, recently, have reiterated their recalcitrant positions signifying that they are in no mood for compromise. However, Hamas said that it is interested in a “long-term peace” and negotiations through third parties. Israel has already said it will not negotiate with terrorist groups and demanded along with the rest of the world that Hamas give up violence and accept Israel’s right to existence. Hamas has rejected this call, despite intense diplomatic and financial pressure.