IHT Rendezvous: Muslims Seek Dialogue With Next Pope

LONDON — As the Catholic Church’s cardinal electors gather at the Vatican to choose a new pope, Muslim leaders are urging a revival of the often troubled dialogue between the two faiths.

During the papacy of Benedict XVI, relations between the world’s two largest religions were overshadowed by remarks he made in 2006 that were widely condemned as an attack on Islam.

In a speech at Regensburg University in his native Germany, Benedict quoted a 14th-century Byzantine emperor as saying, “Show me just what Muhammad brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached.”

In the face of protests from the Muslim world, the Vatican said the pope’s remarks had been misinterpreted and that he “deeply regretted” that the speech “sounded offensive to the sensibility of Muslim believers.”

For many in the Muslim world, however, the damage was done and the perception persisted that Benedict was hostile to Islam.

Juan Cole, a U.S. commentator on the Middle East, has suggested that although the pope backed down on some of his positions, “Pope Benedict roiled those relationships with needlessly provocative and sometimes offensive statements about Islam and Muslims.”

Despite the Vatican’s efforts to renew the interfaith dialogue by hosting a meeting with Muslim scholars, hostilities resumed in 2011 when the pope condemned alleged discrimination against Egypt’s Coptic Christians in the wake of a church bombing in Alexandria.

Al Azhar University in Cairo, the center of Islamic learning, froze relations with the Vatican in protest.

Following the pope’s decision to step down, Mahmud Azab, an adviser on interfaith dialogue to the head of Al Azhar, said, “The resumption of ties with the Vatican hinges on the new atmosphere created by the new pope. The initiative is now in the Vatican’s hands.”

Mahmoud Ashour, a senior Al Azhar cleric, insisted that “the new pope must not attack Islam,” according to remarks quoted by Agence France-Presse, the French news agency, and said the two religions should “complete one another, rather than compete.”

A French Muslim leader, meanwhile, has called for a fresh start in the dialogue with a new pope.

In an interview with Der Spiegel of Germany this week, Dalil Boubakeur, rector of the Grand Mosque in Paris, said of Benedict, “He was not able to understand Muslims. He had no direct experience with Islam, and he found nothing positive to say about our beliefs.”

Reem Nasr, writing at the policy debate Web site, Policymic, this week offered Benedict’s successor a five-point program to bridge the Catholic and Muslim worlds.

These included mutual respect, more papal contacts with Muslim leaders and a greater focus on what the religions had in common.

“There has been a long history of mistrust that can be overcome,” she wrote. “No one should give up just yet.”

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David Bowie Makes Triumphant Comeback with New Album: PEOPLE's Critic

By Chuck Arnold

03/01/2013 at 08:40 PM EST

Ten years after his last album, David Bowie is back – and so is his swagger.

Forget the moody musings of "Where Are We Now?" – the reflective comeback single that he dropped, seemingly out of nowhere, on his birthday last month (Jan. 8). The Next Day – which, though not released until March 12, began streaming in its entirety on iTunes on Friday – represents much more of an emphatic, energetic return from the 66-year-old Rock and Roll Hall of Famer.

"We'll never be rid of these stars/ But I hope they live forever," sings Bowie, sounding like the immortal rock god he is over the glittering guitar-pop bounce of "The Stars (Are Out Tonight)."

It's one of many driving, guitar-charged tracks on The Next Day: You can just imagine Ziggy Stardust getting his groove on to the bouncy beat of "Dancing Out in Space," while "(You Will) Set the World on Fire" is a rocking, fist-pumping anthem for today's young Americans.

Elsewhere, "Dirty Boys" is a sleazy grinder that, with its saxed-up funkiness, harks back to his soulful periods like 1975's Young Americans. In another nod to Bowie's past, The Next Day was produced by Tony Visconti, who also worked on the star's Berlin Trilogy albums from 1977 to 1979.

On one of the standouts, the melodic, midtempo "I'd Rather Be High," the album takes a political turn with Bowie's anti-war message: "I'd rather be dead or out of my head/ Then training these guns on those men in the sand."

It's moments like these that make The Next Day a triumphant comeback from a much-missed icon.

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WHO: Slight cancer risk after Japan nuke accident

LONDON (AP) — Two years after Japan's nuclear plant disaster, an international team of experts said Thursday that residents of areas hit by the highest doses of radiation face an increased cancer risk so small it probably won't be detectable.

In fact, experts calculated that increase at about 1 extra percentage point added to a Japanese infant's lifetime cancer risk.

"The additional risk is quite small and will probably be hidden by the noise of other (cancer) risks like people's lifestyle choices and statistical fluctuations," said Richard Wakeford of the University of Manchester, one of the authors of the report. "It's more important not to start smoking than having been in Fukushima."

The report was issued by the World Health Organization, which asked scientists to study the health effects of the disaster in Fukushima, a rural farming region.

On March 11, 2011, an earthquake and tsunami knocked out the Fukushima plant's power and cooling systems, causing meltdowns in three reactors and spewing radiation into the surrounding air, soil and water. The most exposed populations were directly under the plumes of radiation in the most affected communities in Fukushima, which is about 150 miles (240 kilometers) north of Tokyo.

In the report, the highest increases in risk are for people exposed as babies to radiation in the most heavily affected areas. Normally in Japan, the lifetime risk of developing cancer of an organ is about 41 percent for men and 29 percent for women. The new report said that for infants in the most heavily exposed areas, the radiation from Fukushima would add about 1 percentage point to those numbers.

Experts had been particularly worried about a spike in thyroid cancer, since radioactive iodine released in nuclear accidents is absorbed by the thyroid, especially in children. After the Chernobyl disaster, about 6,000 children exposed to radiation later developed thyroid cancer because many drank contaminated milk after the accident.

In Japan, dairy radiation levels were closely monitored, but children are not big milk drinkers there.

The WHO report estimated that women exposed as infants to the most radiation after the Fukushima accident would have a 70 percent higher chance of getting thyroid cancer in their lifetimes. But thyroid cancer is extremely rare and one of the most treatable cancers when caught early. A woman's normal lifetime risk of developing it is about 0.75 percent. That number would rise by 0.5 under the calculated increase for women who got the highest radiation doses as infants.

Wakeford said the increase may be so small it will probably not be observable.

For people beyond the most directly affected areas of Fukushima, Wakeford said the projected cancer risk from the radiation dropped dramatically. "The risks to everyone else were just infinitesimal."

David Brenner of Columbia University in New York, an expert on radiation-induced cancers, said that although the risk to individuals is tiny outside the most contaminated areas, some cancers might still result, at least in theory. But they'd be too rare to be detectable in overall cancer rates, he said.

Brenner said the numerical risk estimates in the WHO report were not surprising. He also said they should be considered imprecise because of the difficulty in determining risk from low doses of radiation. He was not connected with the WHO report.

Some experts said it was surprising that any increase in cancer was even predicted.

"On the basis of the radiation doses people have received, there is no reason to think there would be an increase in cancer in the next 50 years," said Wade Allison, an emeritus professor of physics at Oxford University, who also had no role in developing the new report. "The very small increase in cancers means that it's even less than the risk of crossing the road," he said.

WHO acknowledged in its report that it relied on some assumptions that may have resulted in an overestimate of the radiation dose in the general population.

Gerry Thomas, a professor of molecular pathology at Imperial College London, accused the United Nations health agency of hyping the cancer risk.

"It's understandable that WHO wants to err on the side of caution, but telling the Japanese about a barely significant personal risk may not be helpful," she said.

Thomas said the WHO report used inflated estimates of radiation doses and didn't properly take into account Japan's quick evacuation of people from Fukushima.

"This will fuel fears in Japan that could be more dangerous than the physical effects of radiation," she said, noting that people living under stress have higher rates of heart problems, suicide and mental illness.

In Japan, Norio Kanno, the chief of Iitate village, in one of the regions hardest hit by the disaster, harshly criticized the WHO report on Japanese public television channel NHK, describing it as "totally hypothetical."

Many people who remain in Fukushima still fear long-term health risks from the radiation, and some refuse to let their children play outside or eat locally grown food.

Some restrictions have been lifted on a 12-mile (20-kilometer) zone around the nuclear plant. But large sections of land in the area remain off-limits. Many residents aren't expected to be able to return to their homes for years.

Kanno accused the report's authors of exaggerating the cancer risk and stoking fear among residents.

"I'm enraged," he said.

___

Mari Yamaguchi in Tokyo and AP Science Writer Malcolm Ritter in New York contributed to this report.

__

Online:

WHO report: http://bit.ly/YDCXcb

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With record highs in sight, stocks face roadblocks

NEW YORK (Reuters) - If Wall Street needs to climb a wall of worry, it will have plenty of opportunity next week.

Major U.S. stock indexes will make another attempt at reaching all-time records, but the fitful pace that has dominated trading is likely to continue. Next Friday's unemployment report and the hefty spending cuts that look like they about to take effect will be at the forefront.

The importance of whether equities can reach and sustain those highs is more than Wall Street's usual fixation on numbers with psychological significance. Breaking through to uncharted territory is seen as a test of investors' faith in the rally.

"It's very significant," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"The thinking is, there's just not enough there for an extended bull run," he said. "If we do break through (record highs), then maybe the charts and price action are telling us there's something better ahead."

Flare-ups in the euro zone's sovereign debt crisis and next Friday's report on the U.S. labor market could jostle the market, though U.S. job indicators have generally been trending in a positive direction.

Small- and mid-cap stocks hit lifetime highs in February. Now the Dow Jones industrial average <.dji> and the S&P 500 <.spx> are racing each other to the top. The Dow, made up of 30 stocks, is about 75 points - less than 1 percent - away from its record close of 14,164.53, which it hit on October 9, 2007. The broader S&P is still 3 percent away from its closing high of 1,565.15, also reached on October 9, 2007.

The advantage may be in the Dow's court. So far in 2013, it has gained 7.5 percent, beating the S&P 500 by about 1 percent.

THE RALLY AND THE REALITY CHECK

The Dow's relative strength owes much to its unique make-up and calculation, as well as to investors' recent preference for buying value stocks likely to generate steady reliable gains, rather than growth stocks.

But the more defensive stance illustrates how stock buyers are getting concerned about this year's rally. While investors don't want to miss out on gains, they're picking up companies that are less likely to decline as much as high-flying names - if a market correction comes.

The Russell Value Index <.rav> is up 7.6 percent for the year so far, outpacing the Russell Growth Index's <.rag> 5.7 percent rise. Within the realm of the S&P 500, the consumer staples sector led the market in February, gaining 3.1 percent.

There is some concern that growth-oriented names are being eclipsed by defensive bets, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

"This isn't a be-all and end-all sell signal by any means, but we would feel much more comfortable if some of the more aggressive areas, like technology and small caps, would start to gain some leadership here," Detrick said.

Signs that investors are becoming concerned about the rally's pace is evident in the options market, where the ratio of put activity to call activity has recently shifted in favor of puts, which represent expectations for a stock to fall.

"We are seeing some put hedging in the financials, building up for the past month," said Henry Schwartz, president of options analytics firm Trade Alert in New York.

The put-to-call ratio representing an aggregate of about 562 financial stocks is 1:1, when normally, calls should be outnumbering puts.

Investors have no shortage of reasons to crave the relative safety of blue chips and defensive stocks. Although markets have mostly looked past uncertainty over Washington's plans to cut the deficit, fiscal policy negotiations still pose a risk to equities.

The $85 billion in spending cuts set to begin on Friday is expected to slow economic growth this year if policymakers do not reach a new deal. Markets so far have held firm despite the wrangling in Washington, but tangible economic effects could pinch stock prices going forward.

The International Monetary Fund warned that full implementation of the cuts would probably take at least 0.5 percentage point off U.S. growth this year.

EASY MONEY AND TEPID HIRING

Investors will also take in a round of economic data at a time when concerns are percolating that the market is being pushed up less by fundamentals and more by loose monetary policy around the world.

The main economic event will be Friday's non-farm payrolls report for February. The U.S. economy is expected to have added 160,000 jobs last month, only a tad higher than in January, in a sign the labor market is healing at a slow pace. The U.S. unemployment rate is forecast to hold steady at 7.9 percent.

While lackluster data has been a catalyst in the past for stock market gains as investors bet it would ensure continued stimulus from the Federal Reserve, that sentiment may be wearing thin.

Markets stumbled last week following worries that the Fed might wind down its quantitative easing program sooner than expected.

"It shows the underpinning of the market is being driven at this point by monetary policy," Hellwig said.

With investors questioning what is behind the rally, it will make a run to record highs even more significant, Hellwig added.

"There's smart people that are in the bull camp and the bear camp and the muddle-through camp," Hellwig said. "The fact that you can statistically, using historical evidence, make a case for going higher, lower, or staying the same makes this number very important this time around."

(Wall St Week Ahead runs every Friday. Comments or questions on this column can be emailed to: leah.schnurr(at)thomsonreuters.com)

(Reporting by Leah Schnurr; Additional reporting by Doris Frankel in Chicago; Editing by Jan Paschal)

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Malaysia Said to Open Fire on Armed Filipinos

MANILA — Shots have been fired in a tense standoff between a group of armed Filipinos and Malaysian police officer who have them surrounded in a remote northeast area of Malaysia, a Philippine presidential spokesman said Friday.

The group, which is occupying an isolated village in attempt to revive a historical claim to the area, tried early Friday morning to breach the perimeter established by Malaysian police, said Ricky Carandang, a Philippine presidential spokesman.

The group claims the territory in Malaysia’s Sabah State as its own, and has rejected a plea from President Benigno S. Aquino III of the Philippines to leave. The group’s seizure of the coastal village has complicated relations between the Philippines and Malaysia.

After the group tried to breach the perimeter, the Malaysian police fired warning shots to force them to return to the cordoned off area and no one was injured, Mr. Carandang said.

“They apparently tried to leave the area and were stopped,” Mr. Carandang said by telephone. “We have conflicting reports but this is what we have verified so far.”

The group’s leader, who is based in Manila, claimed on Friday that the Malaysian police opened fire on them. The leader, Prince Rajah Mudah Agbimuddin Kiram, told the Philippine radio station DZBB that the group was fighting back and that there had been Filipino casualties.

The episode began Feb. 12, when the group, which is seeking to revive a historical claim to part of Borneo, arrived by boat from the Philippines and seized the land. The Philippines on Monday sent a navy vessel to the area with medical and diplomatic personnel to pick up the group or escort them back to the Philippines, hoping to resolve the situation.

Mr. Aquino said Tuesday that his government had sent emissaries to meet with Mr. Kiram to resolve the issue.

“These are your people, and it behooves you to recall them,” Mr. Aquino said to the leader in his Tuesday statement. “It must be clear to you that this small group of people will not succeed in addressing your grievances, and that there is no way that force can achieve your aims.”

The Philippines has been coordinating with the Malaysian government to resolve the issue peacefully, but Malaysian police officials in the area where the standoff is taking place had earlier suggested that they were prepared to use force if necessary.

Floyd Whaley reported from Manila, and Gerry Mullany from Hong Kong.

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American Idol Reveals Its Top 20

By Steve Helling

02/28/2013 at 11:20 PM EST

From left: Randy Jackson, Mariah Carey, Ryan Seacrest, Nicki Minaj, Keith Urban

Michael Becker/FOX

American Idol has been on the air for 12 seasons. From the early days of Kelly Clarkson, the judges continually hounded the contestants on song choice. Simon Cowell (remember him?) would criticize contestants for being "cabaret," "old-fashioned" and, worst of all, "boring." Some of this season's contestants have been watching Idol since they were in elementary school, which makes it all the more inexplicable that they still choose to sing songs like Peggy Lee's "Fever," which is 57 years old.

The show began with the 10 contestants rising from the floor, Hunger Games-style. Five of them will continue, while five of them met their end. Find out who made it through to the next round …
Spoiler Alert! The final picks for the Top 20 follow:

Cortez Shaw: His ballad arrangement of David Guetta's "Titanium" was excellent – and it was a nice change to hear a song that was current and relevant. "Your range surprised me today," judge Randy Jackson said. "When you hit those big notes, I was shocked."

Burnell Taylor: He's lost 40 lbs. since auditioning, and singing John Legend's "This Time," he brought down the house – despite oddly exaggerated hand movements. "I would pay to hear you sing," said Nicki Minaj, sharing the best compliment of the night. Mariah Carey was also pleased, simply saying, "This was fantastic."

Lazaro Arbos: After delivering an emotional performance of Keith Urban's "Tonight I Want to Cry," the 21-year-old singer from Naples, Fla., was unanimously sent through to the next round. The Cuban-born Arbos has arguably the season's most poignant backstory, with a severe stutter that vanishes when he sings. Minaj remains a big fan, telling him: "You feel it. You stay in it. Don't change nothing."

Nick Boddington: The New York City bartender performed "Say Something Now" by James Morrison and did a passable – if unremarkable – job. "I kept waiting for the feeling of being connected to you as a person," said Urban. Carey agreed, saying, "I needed to feel you more connected to the song."

Vincent Powell: Singing Lenny Williams's "'Cause I Love You," he effortlessly broke into a falsetto that elicited cheers from the audience. After calling him a "sexy old-fashioned" singer, Minaj added, "I could envision a whole bunch of 50-year-olds throwing their panties at you." Powell, who works his day job as a church worship leader, laughed nervously.

And yes, it was guys' night, but finalist Zoanette Johnson made a cameo when she stood up and cheered Powell's performance, prompting host Ryan Seacrest to run over with a microphone. (For a brief moment, It felt like a '90s-era episode of Ricki Lake, which is actually a very good thing.) "Get it, Papa Smurf," Johnson screamed. "You go get it."

Leave it to Zoanette to steal the show on guy's night.

Tonight's finalists will join Charlie Askew, Curtis Finch Jr., Paul Jolley, Elijah Liu and Devin Velez – and 10 female finalists – to sing for America's votes next week.

Who are you rooting for?

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Asian shares capped by China PMI slip, U.S. budget worry

TOKYO (Reuters) - Asian shares were capped on Friday, with sentiment dented by lackluster manufacturing data from China and worries over the economic fallout from Italy's political confusion as well as possible U.S. spending cuts.

European markets are seen narrowly mixed, with financial spreadbetters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open between a 0.1 percent rise and a 0.2 percent fall. Italy's main FTSE MIB <.ftmib> stock market index is expected to open down 0.2 percent. <.l><.eu/>

A 0.1 percent drop in U.S. stock futures also hinted at a weak Wall Street start. <.n/>

But losses were limited by renewed confidence that major central banks will keep taking stimulative steps to support their economies.

China's factory growth cooled in February to multi-month lows after domestic demand dipped to weigh on firms already hit by slack foreign sales, two surveys showed on Friday, underlining the country's patchy economic recovery. But it does not signal China's economy is slipping into another slowdown, analysts said.

China's February official purchasing managers' index (PMI) came in at 50.1, slightly below a 50.2 Reuters poll consensus and the 50.4 posted in January. A private survey showed the final HSBC PMI fell to 50.4 after seasonal adjustments from January's two-year high of 52.3, in line with a flash reading.

"While comfort can be sought from the fact that the Chinese economy remains in expansion territory, the dip from prior PMI readings does illustrate that the recovery is far from linear and that there are still a few bumps in the road," said Tim Waterer, senior trader at Sydney-based CMC Markets.

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was down 0.1 percent, after ending February up 0.5 percent, showing muted reaction to Chinese data.

Australian shares <.axjo> slipped 0.4 percent, pulling back from 4-1/2-year highs touched in the previous session, as big miners lost ground on lower metal prices. South Korean markets were closed on Friday for a public holiday.

The Australian dollar, which is sensitive to data from China, Australia's largest trading partner, was up 0.2 percent to $1.0230.

Japan's Nikkei stock average <.n225> erased earlier losses to rise 0.5 percent, lifted by expectations for strong reflationary measures from the Bank of Japan in coming months. <.t/>

Stocks in Indonesia edged higher to a fresh record. Data showed Indonesia's trade deficit narrowed slightly in January from the previous month as exports posted their smallest fall in nearly a year, reflecting recovering global demand and providing early hope that the nation's external balances may improve in 2013.

From Japan, Friday's data showed Japanese companies cut spending on plant and equipment in October-December by 8.7 percent from the same period last year, down for the first time in five quarters amid a slump in exports, showing the world's third-largest economy was still struggling to find a solid footing.

In contrast, a drop in new U.S. claims for jobless benefits last week and a sharp rise in factory activity in the Midwest in February suggested the U.S. economy is improving.

The relative outperformance of the world's leading economy over Japan's may soon turn the Japan-based yen selling into U.S.-led dollar buying, giving a fresh push higher in the dollar/yen, traders say.

The dollar inched up 0.1 percent to 92.65 against the yen.

One factor that could cloud such a positive outlook is the uncertainty over the possible extent of economic damage from the $85 billion in automatic across-the-board "sequestration" spending cuts in the United States set to begin taking effect on Friday.

"Financial markets are eerily calm about the issue. Nobody is talking about the sequestration, and I worry about the seeming lack of interest when market sentiment is far from stable after sharp swings following the Italian election," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo.

He said reaction, if any, will likely come in equities and bonds first and spill over to forex, hitting risk-sensitive currencies which may possibly underpin the dollar.

The International Monetary Fund said on Thursday it would likely cut its 2013 growth forecasts for the United States by at least a 0.5 percentage point if the cuts are fully implemented. The IMF now projects that the U.S. economy will grow 2 percent this year.

"The $85 billion in spending cuts is simply too small to make much of a difference to the economy and although it could cause some problems, it will have no bearing on influencing investor allocations among different asset classes," said Ed Meir, an analyst at INTL FCStone, in a note.

U.S. crude fell 0.1 percent to $91.93 a barrel, after earlier hitting a 2013 low of $91.43. Brent crude fell 0.3 percent to $111.05 after falling to a six-week low of $110.86 earlier. Oil prices were weighed by concerns about the global economy and the strength of demand.

Spot gold inched down 0.1 percent to $1,578.81 an ounce after dropping more than 1 percent on Thursday and ending February with its fifth straight monthly drop, the longest string of monthly declines since 1996.

The euro was up 0.1 percent to $1.3074, but near a seven-week trough of $1.3018 plumbed earlier in the week.

(Additional reporting by Luke Pachymuthu and Rujun Shen in Singapore; Editing by Eric Meijer)

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India Ink: India’s Slowing Economy Forces Budget Decisions

NEW DELHI — Not too long ago, when India’s economy was roaring amid predictions of high growth rates for years to come, the finance minister could be forgiven for strutting during budget week. He got to march into India’s Parliament with the ceremonial briefcase bearing a budget stuffed with goodies.

But on Thursday, when the current finance minister, Palaniappan Chidambaram, arrives in Parliament, his steps will be heavier, and the mood is likely to be, too. Faced with slowing growth, persistent inflation and sagging investor confidence, India’s government is pinned between conflicting pressures: economists warn that tough steps are needed to avoid long-term fiscal problems, even as political leaders are leery of introducing unpopular measures before important elections this year.

On Wednesday, the government sought to change the pessimistic narrative, as the Finance Ministry released its annual economic survey and projected that economic growth would jump somewhere above 6 percent during the next fiscal year, predicting that the downturn was “more or less over and the economy is looking up.” Some economists were skeptical, given that similar rosy predictions in recent budgets have proved wrong.

“Let me remind you that last year the economic survey spoke of about 7.6 percent projected growth — and what we had was 5 percent growth,” said Ajay Bodke, head of investment strategy and advisory at Prabhudas Lilladher, a Mumbai brokerage. “That is not just a miss but a humongous miss.”

The consequences of the budget plans are especially high because India, once a darling of global investors and an anointed power-in-waiting, is struggling to regain its lost luster.

India’s estimated 5 percent growth rate for the current fiscal year compares with 8 percent in 2010. Ratings agencies have threatened to downgrade the country’s investment rating to “junk” status. Meanwhile, India’s political class has spent more than three years enmeshed in scandals, as a bickering Parliament has accomplished almost nothing.

“It’s a supercritical moment, actually,” said Rajiv Kumar, an economist with the Center for Policy Research in New Delhi. “If you get it right, and this is a budget that can shore up the government’s credibility, they can turn it around.”

For investors and business leaders, the question is whether the government will make tough calls to address the country’s large fiscal and account deficits, curb huge subsidies for diesel fuel and petroleum products, unclog bureaucratic bottlenecks on stalled manufacturing, energy and infrastructure projects and create incentives to entice new investment.

Only a year ago, Pranab Mukherjee, then finance minister, unveiled a budget now regarded by many analysts as a major mistake. Desperate to increase revenues, the government spooked investors by giving broad latitude for tax collectors to pursue multinationals for billions of dollars in new, unexpected taxes. Investment slowed markedly, while investors and political opponents complained that India’s coalition government, led by the Indian National Congress Party, was endangering one of the world’s fastest-growing economies.

“The economy is in a deep crisis at the moment,” said Yashwant Sinha of the opposition Bharatiya Janata Party, a former finance minister, “and I only hope the crisis doesn’t become any deeper with more pre-election sops.”

Mr. Sinha and many independent economists warn that the economy cannot afford a repeat of 2008, when the government was preparing for national elections the following year. Then, the pre-election budget was filled with big spending measures, including pay raises for government workers and the forgiveness of billions of dollars in loans to farmers. The government was easily re-elected in 2009, but the new spending contributed to a fiscal deficit that rose to roughly 6 percent, from about 2 percent the previous year.

Neha Thirani Bagri contributed reporting from Mumbai, India.

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American Idol Reveals Its Top 10 Women

TV Watch

American Idol

02/27/2013 at 10:45 PM EST

From left: Randy Jackson, Mariah Carey, Ryan Seacrest, Nicki Minaj, Keith Urban

Michael Becker/FOX

American Idol's's list of the top 10 women is complete!

After the first week of sudden-death rounds, the judges gave their stamp of approval to five more female singers Wednesday night. And they sent five others home.

Keep reading to find out who's in and who's out on Idol ...

Here are the five contestants who are moving on in the competition:

1. Zoanette Johnson: The Tulsa resident, 20, was the first to be put through by the judges, who showered her with praise for singing a spirited version of "Circle of Life" from The Lion King. Keith Urban declared her "queen of the jungle." Nicki Minaj told Zoanette, "You make me so emotional ... You're the person we're going to remember tonight."

2. Aubrey Cleland: After singing a slowed-down version of Beyoncé's "Sweet Dreams," Mariah Carey told Cleland, 19, "You're limitless." Nicki and Randy Jackson pointed out her commercial appeal. "Lookin' like a current artist, soundin' like one, feelin' like one," said Nicki of the performance.

3. Candice Glover: Taking on Aretha Franklin's "(You Make Me Feel Like) A Natural Woman" paid off for the singer, 23, who earned a standing ovation from Keith. Randy said she was "one of my favorite singers in the whole competition."

4. Breanna Steer: "You're extremely marketable and gorgeous and talented," Mariah told the singer, 18, after she sang a dramatic version of Jazmine Sullivan's "Bust Your Windows" that had Randy wanting to sign her up for a recording contract. "You got the whole package," he said. "You brought so much drama."

5. Janelle Arthur: She beat out the other country singer in the competition, Rachel Hale, for the final spot in the women's top 10 after singing Lady Antebellum's "Just a Kiss." Though Randy called Arthur, 23, his "favorite country singer in this competition," the other judges questioned her song choice. "[The song] doesn't give you a chance to really soar," Keith said. "The melody kept pulling you back."

These five will join the five female finalists announced last week – Kree Harrison, Amber Holcomb, Adriana Latonio, Angela Miller and Tenna Torres – as well as the five men – Charlie Askew, Curtis Finch Jr., Paul Jolley, Elijah Liu and Devin Velez. Ten more guys will sing Thursday (8 p.m. ET) and five will move on to round out season 12's top 20.

Did the judges make the right decisions? Sound off in the comments below.

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India Ink: A Difficult Budget Balancing Act for India

India’s fiscal budget will be announced on Thursday amid slowing economic growth, soaring inflation, a growing fiscal deficit and flagging investor confidence. But with national elections only a year away, analysts fear that instead of cutting the deficit, the government will buckle under political pressure and increase spending on social programs.

“As the country is going into an election period, there is a tendency to try to create a feel-good factor amongst the electorate by enhancing access to welfare schemes and income growth for the masses,” said Sujan Hajra, chief economist and executive director at Anand Rathi Financial Services.

The government has been under pressure to rein in spending as ratings agencies have warned that a failure to cut the deficit could result in a crippling downgrade to India’s sovereign debt.

“The need of the hour is a growth-supportive budget that reinforces reform initiatives and minimizes populist impulses that may act as a drain on the already stretched fiscal condition and raise a red flag for the ever-watchful rating agencies,” said Ajay Bodke, the head of investment strategy and advisory at Prabhudas Lilladher, a Mumbai brokerage.

India’s economy has slowed considerably in recent quarters. On Feb. 7, advance estimates released by India’s Central Statistics Office pegged the growth rate for the current fiscal year, which ends in March, at 5 percent, a significant drop from the central bank’s earlier projections of 5.5 percent and 5.8 percent, and down from over 8 percent in 2010.

In the second quarter of this financial year, the current account deficit reached a record high of $22.4 billion, or 5.4 percent of the gross domestic product, according to data released by the Reserve Bank of India in December.

Prime Minister Manmohan Singh attributed the slowdown to outside forces. “We are meeting against the background of global slowdown of economic activity which has also affected us,” he said in Parliament on Feb. 21. “The way we conduct the financial business now before Parliament will be a crucial determinant of our country’s ability to cope with the formidable challenges that our country faces.”

The government has introduced a series of measures to narrow the deficit, including a rise in passenger rail fares, an increase in fuel prices and the opening of the aviation and retail sectors for foreign direct investment.

Reducing the fiscal deficit has been a priority for the government in recent months. In October, India’s finance minister, Palaniappan Chidambaram, presented a plan  aimed at reducing the fiscal deficit over the next five years, which included a significant reduction in subsidies and tight controls on government expenditure.

In an interview with The Financial Times in January while in England to promote India to investors, Mr. Chidambaram said that the coming budget would be “responsible,” adding, “The red lines are that the fiscal deficit for the current year will be no more than 5.3 percent and the fiscal deficit for the next year will be no more than 4.8 percent.”

Additional measures to overhaul the economy are necessary to reach that target, analysts said. The government is likely to rely on a mix of revenue and spending measures, including proceeds from the divestment of state-run companies and telecom spectrum sales, an increase in indirect taxes and improved tax administration, predicted Leif Lybecker Eskesen, the chief economist for India at HSBC Global Research.

“Debt dynamics depend importantly on broader structural reforms progress, which is needed to raise the economy’s growth potential,” he said. “It is, therefore, imperative to continue and step up the reform push.”

What worries analysts in particular is the National Food Security Bill 2011, which aims to lower the cost of food for the poor.

“If the bill is passed by Parliament, the total food subsidy expense alone would be approximately $14.6 billion per year, or 12 percent of the annual budget,” said Akshay Mathur, head of research at Gateway House, a research institution in Mumbai. Total subsidy expenses, including fuel and fertilizer would be almost 20 percent of the budget, he added.

Critics of the bill argue that the legislation is being introduced with the sole intention of garnering votes for the Congress party in the national elections in 2014.

“There is definitely a political impetus behind the Food Security Bill, but the need is not only a political one,” said Mr. Mathur. “However, the question is how we can pay for it. At this point, given that we have a fiscal deficit and a current account deficit, any added expenditure is a pure drain on the government.”

Meanwhile, fear of a sovereign ratings downgrade by international credit rating agencies is haunting the government. “Rating agencies are also closely watching out for any further fiscal slippage,” said Dipen Shah, head of private client group research at Kotak Securities.

Ratings agencies are looking to the budget for signs of the Indian government’s commitment to fiscal consolidation and structural reform.

“The Union budget will be an important gauge of the government’s commitment to fiscal consolidation and reform in general,” said a report by Fitch Ratings on Feb. 4. “India’s patchy performance on policy implementation, and the approach of elections in 2014 could impede fiscal consolidation, suggesting political and implementation risk remain significant.”

Lalit Thakkar, a managing director at Angel Broking, said that perhaps the ratings agencies’ scrutiny will compel the government to act responsibly.

“We believe that the government cannot afford any adverse economic developments at this juncture on the back of the still-looming threat of sovereign ratings downgrade by credit rating agencies,” he said.

Given that a ratings downgrade from the lowest investment grade to junk status could significantly hamper capital flow, have an adverse impact on the currency, business confidence and the availability of international finance for the corporate sector, perhaps it is this threat that will prove pivotal.

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