At the political centre, Obama at crossroads?

After a restful Christmas break, US President Obama returns to face a new reality in Washington.

As a new session begins, Obama faces a Congress that is likely to be unusually combative, given the deep political gulf between Republicans and Democrats, and the restoration of some balance in the power equation, with the House of Representatives having shifted from Democratic to Republican control after the disastrous November midterm elections.

In the Senate, Democrats lost six seats and hold a reduced majority of 53 to 47. Emboldened Republicans have pledged to derail President Obama's agenda, starting by repealing health-care reform and cutting government programs.

According to the new House Speaker John Boehner, "Our spending has caught up with us and our debt soon will eclipse the entire size of our national economy. Hard work and tough decisions will be required of the 112th Congress. No longer can we fall short. No longer can we kick the can down the road. The people voted to end business as usual and today we begin to carry out their instructions."

Over the past two years, Democrats needed to win over just a couple of Republicans to overcome a filibuster, a process where a Senator can go on speaking, in theory indefinitely, to block a bill. To end a filibuster, 60 out of the Senate's 100 members must sign on.

In the new Senate, the Democrats will need at least seven Republicans to prevent even a single Republican member who is deeply opposed to a measure from blocking it in the Senate.

Bipartisanship is clearly the need of the hour. The question is whether the new Congressional leadership will be able to rise to the occasion, and seek the intelligent compromises that make for sound government policy.

President Obama certainly hopes so. "My expectation, my hope, is that (House Majority Leader) John Boehner and (Senate Republican leader) Mitch McConnell will realise that there will be plenty of time to campaign for 2012 in 2012, and that our job this year is to make sure that we build on the recovery," he said.

In December's lame-duck session, Obama scored significant victories when both parties looked beyond rhetoric to pass a tax-cut bill, extend unemployment benefits and ratify a nuclear arms treaty with Russia, leading President Obama's job approval rating to crawl back to 50 percent for the first time in seven months.

Obama now hopes to build on this momentum. It is worth noting that two of President Obama's predecessors - Ronald Reagan and Bill Clinton - actually saw substantial improvements in their ratings after their parties had lost Congressional elections.

Two years ago, the United States elected a man with no executive experience, and only two years in national  politics, as its President, giving Barack Obama the biggest break of his career. Today, the country has presented him with its greatest challenge. Obama will need to use this mid-point to bring together a country that has been too divided, politically, for too long, and to forge agreement on how to tackle challenges where the only agreement thus far has been on their enormity, if history is to judge him worthy of trust that was reposed in him in the last election.

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Indian Govt may not raise taxes

Govt may not raise taxes, try to streamline international tax.

The government is likely to plug loopholes in international taxation to swell its kitty, since it does not have too many options to raise taxes in the upcoming Budget due to proposed rates in new direct and indirect tax regimes and high inflation.

Rising inflation is not only hitting the common man, but will also make the task of the government to increase its tax-GDP ratio difficult, sources said.

Facing this difficult task, the government may try to strengthen its international taxation rules like mutual agreement procedures (MAP), transfer pricing, revision in double taxation avoidance agreements to make its exchequer richer in 2011-12.

This will also be done because the government is also not expected to get windfall from non-tax revenue next fiscal, as it received this fiscal from the sale of spectrum for high speed mobile and broadband services.

The Centre received Rs 75,000 crore more than the budget estimates on this count.

With a target to bring down fiscal deficit to 4.8 per cent of GDP during 2011-12 from the estimated 5.5 per cent this fiscal, the government has to see for more revenues or cut its expenditure.

On revenue front, the hands of the government are tied since it has already proposed new tax slabs in the Direct Taxes Code (DTC) bill, currently with the standing committee of Parliament.

In the DTC bill, introduced by Union finance minister Pranab Mukherjee last year, the government seeks to widen tax slabs to levy 10 per cent rate on income between Rs 2 lakh and 5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent above Rs 10 lakh.

Currently, income between Rs 1.6-5 lakh attracts 10 per cent tax; Rs 5-8 lakh 20 per cent and beyond Rs 8 lakh 30 per cent.

The government is likely to retain these rates and wait for DTC Act to come into force from April 1, 2012. However, it may tinker with threshold limit, sources said.

Since it is also in talks with states to bring Goods and Services Tax (GST) from the same date, the government might also not change indirect tax rates.

The Centre has proposed higher 10 per cent tax on goods (each from the Union and state governments side) and lower six per cent tax. Besides, it suggested that services should attract 8 per cent rate by the Centre and states each. All these rates are suggested to move to 10 per cent over three- year period.

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Burdwan killings trigger gory body politics in city

Eyes gouged out, throat slit, the nose cut open, and injuries all over the body. Political vengeance couldn't get any worse. Villagers of Brahmapur in Burdwan's Mangalkote reeled in horror on Thursday as Trinamool Congress supporter Dilip Ghosh's body was pulled out of a pond. He was allegedly murdered by CPM goons on Wednesday evening.

On Friday, the Trinamool Congress will hit the streets in Kolkata with his mutilated body and the corpses of party activists and brothers Tapas and Amrito Saha, who were killed in Burdwan's Ketugram on Wednesday. Mamata Banerjee might take part in the rally. The SFI already has a mass gathering scheduled on the same day and Kolkata Police are on the tenterhooks because the Trinamool has not yet sought permission or informed them about their plans.

"There has been a spurt in killings in Ketugram, Mangalkote and Raina soon after chief minister Buddhadeb Bhattacharjee's visit to Burdwan. The administration is not being run from Writers' Buildings. It's the political mandarins at the CPM headquarters that are calling the shots," said Trinamool chief whip in Parliament Sudip Bandyopadhyay.

This is the third time in less than three weeks that Kolkata will see street  politics over the dead. The run-up to the assembly polls has perhaps never been so gory in Bengal.

Violence broke out in Uttar Brahmapur when CPM supporters, who had fled the village, were returning home early on Wednesday, escorted by bands of armed and hooded goons, sources said. When Trinamool supporters accosted them, they opened fire.

Villages in this part of Burdwan have been caught in a civil-war-like situation for the last two years, ever since CPM leader Falguni Mukherjee was murdered in June 2009. At that time, CPM supporters had set Ghosh's house on fire. The entire Ghosh family had fled and returned home only recently.

Bhunia wants Mamata-Pranab rally in Burdwan

Slain Trinamool supporter Dilip Ghosh's widow Suchitra said CPM marauders attacked him when he was working in his field. "My husband ran for his life and managed to reach home. But the CPM goons didn't spare him. About 200 of them stormed into our home in the evening, slit his throat and dragged him away," Suchitra told senior Trinamool leaders Mukul Roy, Sudip Bandyopadhyay, Subrata Mukherjee, Madan Mitra and the party MLA from Nandanghat who visited her home. The Trinamool delegation also met the bereaved family of Ashim Dhibar who succumbed to bullet injuries at Katwa hospital on Wednesday.

Dilip Ghosh's barbaric murder is only a continuation of the politics of bombs and bullets. CPM supporters face the same ordeal in Brahmapur village. They have had to leave their home and hearth after Trinamool activist Purnima Majhi was killed on December 1, 2010.

The Opposition is out to corner the Left on the killings, especially in the light of Union home minister P Chidambaram's letter to the chief minister to "disarm and disband the harmad vahinis in parts of Bengal".

Pradesh Congress president Manas Bhuniya led a gherao of the Burdwan district magistrate's office Thursday against the spate of political murders by the CPM. "The two brothers killed at Ketugram belonged to a traditional Congress family. I propose a joint meeting in this disturbed area from where Trinamool chief Mamata Banerjee and Congress leader Pranab Mukherjee would reassure the villages reeling under CPM terror. I also feel that the Trinamool allegation against the misuse of central paramilitary units at Lalgarh needs to be looked into," Bhuniya said.

CPM denied the charge. "None of our supporters was involved in the murder of the brothers. They were victims of a family feud," said CPM zonal secretary Durjodhan Sar.

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