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Current Affairs: May 2011

2011-07-22T02:46:00.000-07:00

Current Affairs: May 2011

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Monday 6 June 2011

Let me begin with two questions: Who is Pakistan's current Chief of Army Staff? I suspect General Ashfaq Parvez Kayani's name rings a bell even for those who did not answer correctly. Now, who is India's current Chief of Army Staff? It's General Vijay Kumar Singh, and chances are you know nothing about him. This isn't because he has a generic name, the sort Amitabh Bachchan might adopt to play COAS in a Bollywood thriller, but because, unlike his Pakistani counterpart, General Singh rarely figures in the news. Which is not a bad thing at all. The firewall between India's civilian administration and its military is the single most important factor ensuring we continue on a democratic path. Unfortunately, since it is defined in the negative, as an absence of military interference in everyday life, it is the least heralded of India's accomplishments in the journey to a truly representative political system. India's parliamentary apparatus, which has functioned for sixty-five years with only a brief interruption in the mid-1970s, is generally accepted as uniquely robust and durable among developing nations. Naturally, the issue of why India remained democratic while so many countries succumbed to dictatorship interests historians and social scientists. It is often suggested that this country's diversity has preempted authoritarian rule, but the argument could easily be turned on its head, as it often was in the 1940s, to suggest that India's lack of ethnic and linguistic cohesion dooms it to disintegration unless kept intact by autocracy. Another view places Hinduism at the root of Indian democracy. Since both independent India and Pakistan were born with a heritage of British institutions and respect for parliament, India's relatively greater success in institutionalising democracy must stem from Hinduism's pluralism and tolerance, the argument goes. However, the only other Hindu majority state in the world, Nepal, has a very patchy democratic record, evidence that the Hindu religion has no essential connection with egalitarian government. The Hindutva argument fits well with assertions common in the world at large about the incompatibility of Islam and democracy. Should the Arab Spring live up to its promise, such assertions will be disproved once and for all.
For the moment, let us consider what binds together the dictators who have abdicated this year, or might be removed from power in the near future. Tunisia's Ben Ali, Libya's Gaddafi, Egypt's Mubarak, Syria's Assad, Yemen's Ali Abdullah Saleh are all Arabs, and they are all Muslims. They have also all been military officers. Bashar al-Assad was only drafted into the army after becoming heir to the Syrian throne, but his father Hafez al-Assad was a fighter pilot.
Moving east of the current crisis, and back in time, we encounter dictators who were not Arabs, but were Muslim: Ayub, Yahya, Zia, Musharraf, Ziaur Rahman, Ershad. They, too, all had a military background. Further east yet, we come across the Burmese Generals; Suharto of Indonesia; Bainimarama of Fiji; and, crossing the Pacific, the banana republics of Central America; Chile's Pinochet; Argentina's anti-Peronist junta; and so on. Wikipedia lists 80 nations that have found themselves under military dictatorship for substantial spells, and the name of virtually every major developing nation is included. The conclusion's clear: there's only one common factor tying together modern dictatorships, and it isn't the rulers' ethnicity or religious affiliation, but their association with the military.
The question of why India's government didn't turn dictatorial, then, is better phrased as: How is it that India, almost alone among developing nations, never came under the army's spell?
It certainly wasn't mere happenstance: such things do not occur by accident. It was a carefully thought out strategy implemented by Jawaharlal Nehru, India's much maligned first Prime Minister, the anniversary of whose death came and went with little fanfare between my last column and this one. Nehru's achievement is best illustrated by alluding to a series of instances where military and civilian authority were at odds in the subcontinent. The most famous of these is over a century old, a dispute between a Viceroy and a war hero. Lord Kitchener, who came to India as Commander-in-Chief of the Indian Army in 1902, wanted all power in military matters to vest in him, rather than be divided between himself and the military member of the Executive Council. When the Viceroy Lord Curzon rejected his proposal, Kitchener threatened to resign, and broke the chain of command by lobbying London directly. The British government pandered to him, taking account of his popularity following exploits in Sudan and southern Africa. Curzon resigned as a consequence of the dispute, and Kitchener got his centralised command, but it proved unwieldy both in India and in Europe during the First World War. After a paucity of ammunition scuttled a major British WWI offensive, Kitchener, then Secretary of State for War, was relieved of control over munitions. The episode demonstrates that the Generals' solution need not be the right one even in military matters.
Jawaharlal Nehru faced an analogous crisis in 1948, when General Roy Bucher, the Commander-in-Chief of the Indian army, threatened to resign just before the annexation of Hyderabad State. Bucher believed India's forces, already stretched in Kashmir, were ill-equipped for a second campaign. Nehru backed Sardar Patel against the advice of his military chief, and Hyderabad became part of India after an invasion which the Prime Minister euphemistically termed a "police action".
Bucher was succeeded by General K.M. Cariappa who, while still a Brigadier, had proposed to Lord Mountbatten's Chief of Staff that power be handed over to the army under a civilian head at independence. Although Cariappa never attempted a coup while Commander-in-Chief, he did make political noises, and Nehru packed him off to Australia as High Commissioner immediately after his term ended. It may appear a paranoid gesture, but popular heroes are always a potential threat to democracies, and it's better to be safe than sorry.
In 1961, the then COAS, General Thimayya, submitted his resignation over differences with Defence Minister Krishna Menon. Nehru persuaded Thimayya to see out his term, but made it clear in parliament that civilian authority had to be paramount. The next year, India suffered a defeat to China in a border war, and Krishna Menon became the fall guy. He is now one of the most reviled figures in India's post-independence history.
It is questionable if India could ever have held the Aksai Chin region against a Chinese invasion, considering the Chinese could supply their forces through a land route while India's only connection with the area was by air. However, having inadequate space to delve into that conflict's background, I will, for argument's sake, accept that General Thimayya was a visionary who might have put a winning strategy in place against the Chinese threat, and Krishna Menon's intransigence was responsible for the 1962 debacle. Even granting the civilian leadership failed the military and the nation in the Chinese instance, is India's overall record so bad?
Nationalists appear to measure success and failure primarily in terms of territories gained through force and ceded in defeat. By that account, India has done exceptionally well since 1947. Under Nehru, we gobbled up most of Jammu and Kashmir; all of Hyderabad State; and the Portuguese colonies of Goa, Daman and Diu. On the debit side, we lost the barren Aksai Chin, which was of little importance to us, but vital to China as a link between Tibet and Xinjiang.
'Most of Jammu and Kashmir' isn't good enough for nationalists, though the erstwhile princely state should have gone entirely to Pakistan, at least judging by the logic India used in taking over Junagadh and Hyderabad. Kashmir was Pakistan's to lose, and it was arguably lost when the acting Commander-in-Chief General Douglas Gracey disobeyed Muhammad Ali Jinnah's orders. Jinnah wanted the Pakistani army to march into Kashmir, but General Gracey flatly refused to comply. Instead, Pakistan sent in tribal insurgents who, instead of heading as quickly as possible for Srinagar, performed a loot and pillage routine on the way. This alienated local Kashmiris, and gave India time to accept the accession of the state and fly troops into Srinagar. As Indian troops pushed the insurgents back, General Gracey belatedly agreed that professional armed soldiers needed to play a part from Pakistan's side. While India continued to hold the initiative, a drawish position was achieved on the Kashmir chessboard, and became today's Line of Control. For his act of rebellion, Gracey was rewarded with promotion to full-fledged C-in-C. Jinnah had established a precedent of kowtowing to the military, and the results are evident in that nation's later history.
In regard to the curtailing of the military's power, every Indian leader since Nehru has taken his legacy forward. Service chiefs have seen their protocol status downgraded repeatedly. India's security is now handled by a welter of military, paramilitary, and intelligence organisations answerable to different civilian departments. This creates inefficiency and a lack of coordination, but it's a price well worth paying. Pakistan has a single command to co-ordinate different intelligence inputs; it is called the Directorate for Inter-Services Intelligence, popularly known as the ISI. Not only does the ISI appear to work independently of civilian control, but, as demonstrated by the recent attack on the Mehran naval base as well as the constant targetting of civilians in bombings, it isn't particularly good at staving off militants.
The greatest danger ahead lies in believing that India is somehow unique, that we are immune to the threat of a military takeover. A close look at the situation in Kashmir and the North-East suggests a different possibility, one in which emergency rule, once established, is extended indefinitely instead of being employed for a short period as happened between 1975 and 1977. The Armed Forces (Special Powers) Act of 1958 gives the security forces huge latitude in 'disturbed areas'. Armies love impunity, and are loath to give it up once they have it. But impunity spurs wanton arrests and killings, which create a backlash that can then be used to justify the continuation of emergency powers. Which is why, despite the recommendations of a review committee, pressure by human rights groups, and the wishes of democratically elected state governments, AFSPA has persisted, in some areas for over half a century.
Egypt's emergency law has been in place since 1967; Syria's, just lifted, was promulgated back in 1963. Not only could this happen to us, it is happening to us in substantial portions of the country.

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Andhra Pradesh’s Microfinance Muddle

2011-05-02T23:23:00.001-07:00

Andhra Pradesh’s Microfinance Muddle

Last week, the Andhra Pradesh government took a fresh step towards encouraging its citizens to violate their contracts en masse. Claiming to be speaking on behalf of self-help groups in his state, the principal secretary, AP Department of Rural Development, told microfinance institutions (MFIs) that borrowers would resume paying loans if interest amounts paid were now treated as principal, if interest rates were halved -- from 24% to 12% -- and if repayment was now on a monthly rather than a weekly basis.

With over Rs 10,000 crores of loans outstanding, and no fresh funds available, at least some MFIs operating in AP will accede to the new conditions, just as some parents will pay ransom charges to kidnappers. The question, though, is whether the role of the state is to hold a gun to business, or to reinforce the sanctity of contracts.

Andhra Pradesh has been at the forefront of the Indian microfinance initiative to take credit to rural areas, while the formal banking sector has made scant progress in expanding into India's villages. In 1969, Indira Gandhi nationalised India's 14 largest commercial banks, firing off the shoulder of a report commissioned by the then Young Turk, Chandra Shekhar. One of the key objectives of the move was to "vigorously pursue expansion programmes to cover rural areas, smaller towns and lower income groups." More than 40 years and several reports and committees later, barely 5% of India's villages have banks.

By any measure, SKS Microfinance was doing a good job of extending rural credit. At its peak, it had outstanding loans of over Rs 4000 crore, extended to 7 million borrowers. Since Indian MFIs do not take deposits, their traditional source of funding has been a mix of grants and low-cost funds from donor agencies, and loans from conventional banks for whom they act, in effect, as an outreach mechanism. In a move designed to scale up operation significantly, SKS's promoter, Vikram Akula, decided to tap India's capital markets to generate more loanable funds.

The public offering (IPO) was a commercial success, and SKS's share surged to a peak of Rs 1490. Politically, though, it was a disaster, and India's press was buzzing with concern about whether lending to the poor should be profitable, and whether the interest rates charged by MFIs amounted to usury. Few bothered to examine the really relevant issues - why bank nationalisation had failed to reach rural areas; the costs involved in servicing large numbers of small loans; and whether pushing out MFIs was not consigning rural borrowers to good old money-lending, at 10% per month.

But the mud that really stuck was the charge that MFIs efforts to obtain repayment were setting off a wave of suicides in Andhra Pradesh. Political and ideological warriors have used the fact of suicides to flog everything from genetically modified seeds to India's so-called liberalisation, regardless of the fact that our suicide rate stands roughly in the middle of the spectrum of suicide rates in the world — at 10.6 per 100,000 per year. Suicide seems to have little correlation with economic deprivation — Japan and South Korea have among the highest suicide rates in the world; nor with free markets — Sweden and Finland are a lot more morose than the UK and the US.

Nevertheless, by shouting 'Suicide!', the Andhra Pradesh government found political sanction to murder MFI activity in its state. Borrowers were encouraged not to repay loans, and banks were arm-twisted into choking off funds needed by MFIs to keep their operations running. The SKS share dropped to 1/3rd of its peak.

Back in Delhi, our nation is still waiting for a microfinance bill, whose draft was supposed to be the outcome of several high-powered bodies, most recently the sub-committee headed by YH Malegam. In the absence of sound policy, politics will rule banking, as it has long done, from nationalisation, to loan melas, to bank waivers.

Bank waiver, edition 2008, is too recent to assess, but the Devi Lal edition, circa 1990, was followed by a pronounced slump in rural bank credit. Andhra-based MFIs, too, will extricate themselves from the mess created by politicians promising a cheap lunch. The highly concerned members of civil society have long moved on to their next cause celebre. Soon, the only diners left at the Andhra party will be the local moneylenders, who are doubtless licking their chops in anticipation of a renewed surge in business.

Mohit Satyanand is an entrepreneur and portfolio investor

29 april

2011-04-28T22:28:00.001-07:00

PURULIA ARM CASE

Kim Davy, one of the accused in the Purulia arms dropping case, has told Times Now that it was the then Narasimha Rao govt that planned the whole operation to destabilise the communist government in West Bengal.

Masking its disappointment over India rejecting the bids by Boeing and Lockheed Martin to supply next generation F16s for the Indian Air Force, Pentagon spokesperson Col Dave Lapan is quoted in the New York Times as saying 'We are deeply disappointed by this news but we look forward to continuing to grow and develop our defence partnership with India. We remain convinced that the United States offers our defence partners around the globe the world's most advanced and reliable technology.' Describing India's rejection of the two US majors as a blow for President Barack Obama, the NYT points out that Obama had pushed hard for various defense deals when he visited India in November 2010. Speaking of how the US has struggled, despite improving relations, to land big contracts in India, the NYT points out that part at least of the reason is that the 'the Indian defence establishment are still wary of American intentions and United States military aid to Pakistan, India's main adversary.'

PAC divided on 2G report, Joshi walks out

Parliament's Public Accounts Committee (PAC) was Thursday split down the middle with panel chief Murli Manohar Joshi walking out in anger as the ruling combine rejected the draft report on the 2G spectrum case and the opposition vociferously backed it.

During the meeting at the Parliament House complex here, Congress and DMK members, supported by the Samajwadi Party and Bahujan Samaj Party, moved a resolution that the draft report should be put to vote.

The ruling alliance members gave 11 votes in writing, exactly half of the 22-member panel.

At this, Joshi, who is a leader of the opposition Bharatiya Janata Party (BJP), got angry, abruptly adjourned the meeting and walked out. Joshi had support from members of the Shiv Sena, Janata Dal-United and the Biju Janata Dal.

Congress member Naveen Jindal said the chairman had not adjourned the meeting. The remaining 11 members then appointed Saifuddin Soz as the acting chairman to preside over the meeting.

Soz, in his capacity as the acting chairman, got a resolution passed rejecting the report, Jindal said.

Soz and the rest of the members then submitted the resolution rejecting the report and the written votes of 11 members to Lok Sabha Speaker Meira Kumar.

The BJP said that Joshi in his capacity as the chairman of the panel could still finalise the report and submit the report.

The draft 270-page report, which was circulated among members Wednesday, has criticised Prime Minister Manmohan Singh for giving an 'indirect green signal' to former IT and communications minister A. Raja to execute his 'unfair and dubious designs' in selling scarce radio waves at throwaway prices.

RBI releases paper on savings bank deposit rate deregulation

The Reserve Bank of India on Thursday released a discussion paper on deregulation of savings bank deposit rate, and has asked for feedback by May 20.

In the discussion paper, the central bank pointed out that the deregulation of the savings bank deposit rate, which is currently at 3.5%, would improve monetary policy transmission.

EPFO to pay 9.5% on claims till new rate is decided

Subscribers of retirement fund manager EPFO, settling their final claims before the new rate is announced for the current fiscal, will get the existing 9.5% interest on their deposits.

"Since the rate of interest (on deposits) for FY11 has been declared as 9.5% per annum, settlement of claims of the EPF subscribers during FY12 shall be made at 9.5% per annum till rate of interest is declared for FY12," said an order issued by the Employees' Provident Fund Organisation (EPFO). The decision will benefit those subscribers who are either retiring or going in for full and final settlement of their accounts before the new rate is announced for FY12.

In September, EPFO had announced 9.5% rate of return on deposits for over 4.71 crore subscribers for FY11, which has been ratified by the Finance Ministry.

The order is contrary to the view of the Chairman of EPFO's apex decision making body, Central Board of Trustees (CBT), who wanted to give 8.5% rate for FY12 to all outgoing subscribers settling claims this fiscal.

CBT, which is headed by the Labour Minister, had expressed the view of providing 8.5%.

EPFO had been providing 8.5% rate of return to its subscribers for five years since FY06. It was raised to 9.5% for FY11 after EPFO discovered a surplus of over Rs 1,700 crore.

According to the Employees' Provident Fund Scheme, EPFO has to settle claims at the rate provided for the previous fiscal, in case the rate for the subsequent financial year has not been declared.

This rule will benefit all those subscribers who would settle their claims before the announcement of the rate of return for FY12.

They will retain the gains even if EPFO announces interest rate lower than 9.5% for this fiscal, but will be able to claim the difference if the rate happens to be higher.

PAC setback for RBI governor Subbarao

Questions over Duvurri Subbarao's role in the 2G spectrum scam could be a setback to the former IAS officer's chances of getting a second term in the Reserve Bank of India in September.

In fact, the names of economic affairs secretary R Gopalan and chief economic advisor Kaushik Basu have already started doing the rounds as a possible successor. Both joined the finance ministry after Pranab Mukherjee moved into North Block in late 2008.

Apart from having been in charge of the financial sector department in the ministry, Gopalan was a public sector bank employee before joining the IAS. Basu is an economist who is on leave from Cornell University.

When Subbarao moved to Mumbai in September 2008, he was given a three-year term and he was widely expected to get a two-year extension. Yaga Venugopal Reddy, Subbarao's predecessor on Mint Road, had served a five-year term while Bimal Jalan's three-year term had been extended though he decided to resign midway to become a Rajya Sabha member.

The draft PAC report, which was not accepted by all the committee members, had said Subbarao should be asked to explain why he did not raise questions over telecom ministry's move to ignore finance ministry's recommendations.

Officials said there was no formal proposal to either extend the present governor's tenure or find a replacement. A final call would be taken by Prime Minister Manmohan Singh and finance minister Pranab Mukherjee closer to the expiry of Subbarao's term.

In 2008, in a first, a committee headed by P Chidambaram, then finance minister, with C Rangarajan, chairman of the Prime Minister's economic advisory council, as a member shortlisted possible candidates and zeroed in on Subbarao.

Though Subbarao is seen to have handled the impact of the global financial crisis well, he has publicly opposed the government on at least two issues. The first area of difference was the establishment of a joint committee of regulators for dispute resolution that is headed by the finance minister. Similarly, he was severely critical of the government's decision to set up the Financial Stability & Development Council, which is again headed by the finance minister.

On both occasions, however, he was placated by the government after signals from the North Block that RBI governor is the first among equals when it comes to financial sector regulation.

After Chidambaram's departure from the finance ministry, the government has stayed away from reappointments in regulatory agencies with former Sebi chairman C B Bhave and former RBI deputy governor Usha Thorat being examples. At least two senior finance ministry officials - revenue secretary P V Bhide and finance secretary Ashok Chawla - were not given extensions and were allowed to retire just a month before the budget was presented.

In case of banks and financial institutions, too, the government has decided that any reappointment will take place only after the incumbent's performance is reviewed by a specially-appointed panel.

28 APRIL

2011-04-27T22:52:00.001-07:00

INDIA IS IN GRIP OF INFLATION REALLY ? !!!!!!!

INDIA IS IN GRIP OF INFLATION REALLY ? !!!!!!!

First, India’s stockpile of foodgrains is now around 45 million tonnes, double the buffer stock that is mandated for food security. A bumper harvest is forecast, after which the government will add another 25 million tonnes to this pile. Second, the government and its main procuring and stocking arm, the Food Corporation of India (FCI), have proved that they cannot handle such large food stocks. In many places, grains are piled high under plastic sheets, exposed to the weather and rodents. Even after distributing rice for as low as Rs. 1 or Rs. 2 per kilogramme in states like Tamil Nadu and Andhra Pradesh, stocks stubbornly refuse to run down. It is likely that by the time the government decides to do something about this food mountain, worth around Rs. 40,000 crore, much of it would have become dinner for rats. Three, food inflation is not being driven by Foodgrains, but by the spiralling prices of vegetables, edible oil, pulses and milk. Exports of foodgrains will not add to food price inflation at home; indeed, it might help to increase farmers’ incomes.

Finally, the most compelling argument is about prices. The glut has pushed market prices of wheat to below the minimum support price (MSP) of Rs. 1,170 per quintal. Indeed, in states like Uttar Pradesh, wheat is being sold for Rs. 1,050 per quintal, a substantial discount to the MSP. In global markets, wheat is being traded at around Rs. 1,530 per quintal. So, if India lifts its export curbs on foodgrains, imposed after the food price scare last year, exporters can make a nifty profit, storage costs would come down and farmers’ incomes would go up, yielding some incentive to invest in technologies to boost productivity.

Economic Indicators



YoY (In %)	Current	Qtr Ago	Yr Ago

Inflation (31/03)	8.98	9.41	10.23

IIP (28/02)	3.60	12.10	15.10

GDP (31/12)	8.20	8.90	7.30

CPI (28/02)	8.82	9.70	14.86

CRR (23/04)	6.00	5.00	5.00

Bank rate (29/04)	6.00	6.25	6.50

India’s Inflation Kool-Aid

India's economic growth is measured in terms of Gross Domestic Product (GDP) as reduced by Inflation. So we grew — according to the recent CSO release — a whopping 20% on GDP last year (2010-11), and because inflation was, well, pretty high, we grew a only a "real" 8.6% in 2011. How can you grow 20% but only really grow 8.6%? Inflation eats up the rest — and in a way "deflates" the GDP.

This year, the GDP deflator is at 11%+. We have had only six higher figures in the past since 1961, and this year is the highest since 1991 (13.73%). But can you really rely on it?

The GDP deflator is calculated in a complex way, but according to Deepak Mohanty, Executive Director at RBI, much of that is based on inflation of the WPI — or the Wholesale Price Index. This is the measure of Wholesale prices of commodities and manufactured goods across the country, released monthly.

There are multiple price indexes in India: The WPI and four different indexes of Consumer Price Inflation (CPI). This is confusing, but we're sure it all has a purpose — just one of them, the CPI (Industrial Workers) is used to calculate "dearness" allowance, a cost-of-living increase in wages.

But let me explore the WPI. Remember, the WPI is what is mostly used to determine our GDP growth in real terms; our politicians and economists refer only to 8% or 9%, so real growth is important. Therefore, it should be just as important to understand how the deflator, and therefore the WPI, works. And more interestingly, how it doesn't work.

How it works: First, they have a bunch of items they categorize into a hierarchical list and give a weight to each item depending on how important it is to the overall basket. You have the outer broad categories of "primary articles" (mostly food, but also raw materials like iron and copper), Fuel and Manufacturing goods. These are weighted around 20%, 15% and 65% respectively. Within each of them you have subcategories, all the way till your actual item. For instance, Rice is found like so:

Primary Articles > Food Articles > Food Grains > Cereals > Rice (Wt. 1.79%)

Presumably, prices are collected every month and updated and instead of mentioning a price, they relate it to a base year. Current WPI statistics are linked to prices of 2004-05, which is given a price of 100, and a today's index price of 200 means the item has doubled in price since 04-05.

About 700 item prices are published monthly by the Office of the Economic Adviser. With this granularity some defects become apparent; much of the data seems to not be collected. Take the example of Crude Petroleum. It's 0.9% of the index, which is huge, for a single item — if you add the weights of Onions, Potatoes and Chicken, you get only 0.8%.

Crude petroleum prices haven't changed, according to the WPI release, since the last four months. One doesn't need to be an expert to know something's off here — international prices went up nearly 20% in the same time.

Prices of Coke — not the cold drink, the fuel — haven't been updated since April 2008. 36 months of no-change. Even coking coal, which was updated in March 2011, saw 16 months of being at the same level. Raw wool prices show the same since October 2009, and coffee powder since May 2010 (Coffee's been making new highs worldwide, just for the record). This doesn't make sense - either data wasn't being updated or prices really didn't change. I wouldn't bet on the latter.

More than 80 items haven't been updated for over four months, and these add up to 10% of the index. Some of these items don't change regularly — like prices of electricity for instance. But, like we saw above, many items have just been overlooked. If the idea is that they don't update prices for a very long time, and then do a single "bunched" update that will perhaps add up all the intermediate unrecorded price increases, we'll see the inflation index take sudden large jumps. The index is supposed to be for transparency, and we lose all such benefits from "bunched" updates. But the problem goes deeper.

Some items don't even belong in an index. Litchi prices for instance, although a very small weight (0.03% of the index) are available just one month of the year. I'm not sure a product with such a skewed supply should even figure in an index that determines, in the end, economic policy. (For the record, I love litchis and ice-cream.)

Yet others aren't even represented. For a country that's going ga-ga on mobile telephony, the total weight of mobile telephones in the index is… zero. (There is a category called TV Sets and VCD players — but not one for mobiles.) One could say mobile prices have come down and that's a good thing, but all we know is that they're not even in the index.

And then there are revisions. Every few months, the past indexes are revised based on data that is supposedly better. Such revisions are supposed to be minor, small variations from the first number. But not anymore. The January 2011 inflation number was revised from the first reported 8.23% up to 9.35% - a whole percentage point higher. This could just mean our March 2011 number — 8.98% - might actually be revised to double digits.

Finally, the Wholesale Price Index is not really a consumer basket — it contains no references to rent or housing, use of services like internet access or cable TV, or wages, all of which are substantial parts of the consumer's spending. Yet, the WPI doesn't even recognize any of that. In effect, we "guess" the inflation on the service sector by estimating the price increases through WPI — that is like guessing the price of a house through the increase in steel and concrete prices. To anyone who has not been living under a rock, it is obvious real estate prices have no correlation with anything; the equation is like this:

Steel prices go UP + Concrete prices go UP = House prices Go UP.

Steel goes DOWN + Concrete goes UP = House prices Go UP.

Steel goes DOWN + Concrete goes DOWN = House prices Go UP.

Someone dumps tons of steel and concrete for FREE = House prices Go UP.

The inflation in housing prices, captured by the simple formula above, does not reflect in our WPI.

(For the record, house prices can only go up so far. The fact that many of us haven't seen a sustained price fall doesn't negate its possibility)

For services, there is a new index called the CPI (Urban) which will, next year, replace the other CPIs and perhaps the WPI as the indicator of choice. But in its preliminary releases, it has demonstrated that it has similar degrees of blindness by declaring that the last nine months of 2010 saw no increase in housing prices in India. I admire how they can say this with a straight face.

WPI and perhaps even the CPI (Urban) when it comes, will therefore misrepresent inflation, and probably do so quite substantially — how much, we'll never know unless they actually update real data. But one thing is certain — you can pretend only so long by not revealing the real data, but a price rise will eventually flood the entire economy. Even if we don't update crude prices in the WPI, it is only a matter of time before plastics and textiles become expensive, and that spread to everything else. This is not something that I predict will happen — it is already happening today.

Underreporting inflation is a useful thing when you have only that much GDP growth to work with — a lower inflation number creates a higher "real" number to be proud of. The US does it all the time. But to drink our own kool-aid and therefore turn a blind eye to growing inflation is altogether more dangerous — we create a monster that we can't control.

This is the time for the central banker to act — to recognize that inflation, as reported, is probably below actual numbers. It's also time for the good people collecting WPI data to be more aggressive in keeping prices up-to-date so we get a more accurate picture. It would be a shame if we tried to "pretend-and-extend" our overheating economy.

Deepak Shenoy is co-founder at MarketVision, a financial education site and writes at Capital Mind. You can reach him at deepakshenoy@gmail.com or @deepakshenoy.

TOTAL SCAM IN INDIA REACHED UP TO 73 LAKH CRORE!!!!!!!!

What India Could Do With Rs 73 Lakh Crore?

Build: 2.4 crore primary healthcare centres. That’s at least 3 for every village, at a cost of Rs 30 lakh each.

Build: 24.1 lakh Kendriya Vidyalayas at a cost of Rs 3.02 crore each, with two sections from Class VI to XII.

Construct: 14.6 crore low-cost houses assuming a cost of Rs 5 lakh a unit.
Set up: 2,703 coal-based power plants of 600 MW each. Each costs Rs 2,700 crore.

Supply: 12 lakh CFL bulbs. That’s enough light for each of India’s 6 lakh villages

Construct: 14.6 lakh km of two-lane highways. That’s a road around India’s perimeter 97 times over.

Clean up: 50 major rivers for the next 121 years, at Rs 1,200 crore a river every year.

Launch: 90 NREGA-style schemes, each worth roughly Rs 81,111 crore.
Announce: 121 more loan waiver schemes. All of them worth Rs 60,000 crore.

Give: Rs 56,000 to every Indian. Even better, give Rs 1.82 lakh to 40 crore Indians living BPL.

Hand out: 60.8 crore Tata Nanos to 60.8 crore people. Or four times as many laptops.

Grow the GDP: The scam money is 27% more than our GDP of Rs 53 lakh crore."

Greed, graft, politics, bribery, dirty money. Just another day in the life of a nation still rated among the most corrupt in the world. Scan the scams that have grabbed headlines, destroyed reputations and left many people poorer.

Action Points :-

1) Don't Delete this email, Circulate as much as you can!!

2) Take a resolution for New Year 2011 that you don’t vote for any Leader!!

Total Scam Money (approx) Since 1992:

Rs. 73000000000000 Cr.
(73 Lakh Crore)

Hard to digest ?
Just check the below given details

1992 -Harshad Mehta securities scam Rs 5,000 cr

1994 -Sugar import scam Rs 650 cr

1995 -Preferential allotment scam Rs 5,000 cr
Yugoslav Dinar scam Rs 400 cr
Meghalaya Forest scam Rs 300 cr

1996: -Fertiliser import scam Rs 1,300 cr
Urea scam Rs 133 cr
Bihar fodder scam Rs 950 cr

1997 -Sukh Ram telecom scam Rs 1,500 cr
SNC Lavalin power project scam Rs 374 cr
Bihar land scandal Rs 400 cr
C.R. Bhansali stock scam Rs 1,200 cr

1998 -Teak plantation swindle Rs 8,000 cr

2001 -UTI scam Rs 4,800 cr
Dinesh Dalmia stock scam Rs 595 cr
Ketan Parekh securities scam Rs 1,250 cr

2002 -Sanjay Agarwal Home Trade scam Rs 600 cr

2003 -Telgi stamp paper scam Rs 172 cr

2005 -IPO-Demat scam Rs 146 cr
Bihar flood relief scam Rs 17 cr
Scorpene submarine scam Rs 18,978 cr

2006 -Punjab's City Centre project scam Rs 1,500 cr,
Taj Corridor scam Rs 175 cr

2008 -Pune billionaire Hassan Ali Khan tax default Rs 50,000 cr
The Satyam scam Rs 10,000 cr
Army ration pilferage scam Rs 5,000 cr
The 2-G spectrum swindle Rs 60,000 cr
State Bank of Saurashtra scam Rs 95 cr
Illegal monies in Swiss banks, as estimated in 2008 Rs 71,00,000 cr

2009: -The Jharkhand medical equipment scam Rs 130 cr
Rice export scam Rs 2,500 cr
Orissa mine scam Rs 7,000 cr
Madhu Koda mining scam Rs 4,000 cr"

SC refuses to quash PIL against Mayawati in Taj corridor scam
Orissa mine scam could be worth more than Rs 14k cr

CORRUPTION, MONEY LAUNDERING SCAM, Koda discharged from hospital, arrest imminent

'A Cover-Up Operation':
"It's a scam involving close to Rs 60,000 crores"
Spectrum scam: How govt lost Rs 60,000 crore

India's biggest scams 1, Ramalinga Raju, Rs. 50.4 billion
India's biggest scams 2, Harshad Mehta, Rs. 40 billion
India's biggest scams 3, Ketan Parekh, Rs. 10 billion
India's biggest scams 4, C R Bhansali, Rs. 12 billion
India's biggest scams 5, Cobbler scam
India's biggest scams 6, IPO Scam
India's biggest scams 7, Dinesh Dalmia, Rs. 5.95 billion
India's biggest scams 8, Abdul Karim Telgi, Rs. 1.71 billion
India's biggest scams 9, Virendra Rastogi, Rs. 430 million
India's biggest scams 10, The UTI Scam, Rs. 320 million
India's biggest scams 11, Uday Goyal, Rs. 2.1 billion
India's biggest scams 12, Sanjay Agarwal, Rs. 6 billion
India's biggest scams 13, Dinesh Singhania, Rs. 1.2 billion

Posted by neelam at 22:37 0 comments

28 april

Normal 0 false false false false EN-US X-NONE X-NONE

PAC on 2G: Manmohan gets clean chit, PMO A parliamentary panel in its draft report on the 2G spectrum case has given a clean chit to Manmohan Singh but criticised the Prime Minister's Office (PMO) for delaying a letter to A. Raja asking him to consult senior ministers before selling the scarce and expensive telecom radiowaves.

Approving the findings of the Comptroller and Auditor General (CAG), the Public Accounts Committee (PAC) report blames 'systematic failure' in the government and severely indicted Raja, the then IT and communications minister, for allegedly selling second generation telephony spectrum licences to private firms at throwaway prices despite a letter from Manmohan Singh asking him to consult others, according to a panel member.

'Prime Minister's Office's role is under scanner but prime minister (Manmohan Singh) is not,' the member told IANS on condition that he not be named.

The member said the panel in its six-month investigation has found that the prime minister was kept out of the loop on 2G spectrum allocation even as he had advised Raja to consult a group of senior ministers over how to allocate the spectrum and how much to charge for it.

'The committee has brought it to the notice that there was a delay in sending the prime minister's letter to Raja. Raja took advantage of the delay and sold the spectrum at cheap rates,' the member said, adding the delay was from the PMO.

Asked if the report gives clean chit to Manmohan Singh, the members said: 'Yes, to some extent.'

Raja and eight others, including top corporate honchos and bureaucrats, are in jail for conspiring to sell the 2G airwaves to select companies at throwaway prices. Five others, including DMK Rajya Sabha member Kanimozhi, have been named as co-accused in the case.

The report has also criticised the role of P. Chidambaram who was the finance minister in 2008 when the spectrum was sold.

'It was Chidambaram who pleaded with the prime minister to close the matter despite some ministers wanting stringent action against those responsible for the losses,' the member said quoting the report.

The report is likely to be adopted by the 22-member panel Thursday in its last meeting before its term ends April 30.

The report is to be tabled in parliament's next session before being made public officially.

Ironically, the 22-member panel headed by Bharatiya Janata Party's Murli Manohar Joshi has a sharp division within.

'The Congress and the DMK (Raja's party) are opposing the report. Let's see what happens,' said another member.

It is likely that the DMK and the Congress members in the panel will write a note of dissent. However, their views are unlikely to be incorporated in it.

PM should have been named as witness in 2G case:Balwa

Swan Telecom Promoter Shahid Usman Balwa, chargesheeted in the 2G spectrum scam, today told a Delhi court that the CBI should have named

Prime Minister Manmohan Singh as one of the witnesses in the case.

He cited the correspondence between former Telecom Minister A Raja and the Prime Minister relating to the 2G spectrum, which has been annexed with chargesheet, for demanding that

Singh be made a witness.

"CBI is producing letters of Raja and the Prime Minister as evidence. They (CBI) should have made the Prime Minister a witness in the case," Advocate Majid Memon, appearing for Balwa, told Special CBI Judge O P Saini while arguing his bail plea.

Memon along with advocate Vijay Agrawal said that CBI has produced letters written by Raja to Prime Minister Manmohan Singh and his response as a evidence in the case.

Memon said that Raja was in touch with the Prime Minister and he regularly apprised him (PM) about the development in the department (DoT).

They said the agency, in its first chargesheet, has said that Raja misled the Prime Minister but instead of CBI, the PM should tell this.

"CBI is saying Raja misled the PM. If it is so, then it should be the PM who should say this, not the CBI," Agrawal said.

During the arguments, Memon also pointed out to the letters written by Raja to the Prime Minister

on November 2, 2007 and the subsequent letters to Raja from the Prime Minister.

He said when Swan Telecom applied for the licenses, neither Raja was the telecom minister nor his personal secretary R K Chandolia, who has named as accused in the chargesheet, was there.

Pressing for Balwa''s bail, Memon said that the offence under which his client has been charged does not fall under the category of grave offences punishable upto life imprisonment or death penalty.

He alleged that CBI is enjoying that Balwa is behind the bars.

"CBI says that Balwa cannot come out of jail as if they are enjoying my (Balwa''s) sufferings behind the bars," he said.

"CBI may be feeling a sense of shame

if they will not oppose the bail plea in such a high magnitude case and so they are opposing it." .

Syria's Assad under pressure as hundreds of Baathists quit

DAMASCUS: Foreign pressure mounted on Syrian President Bashar al-Assad on Wednesday and hundreds of members resigned from his party, as troops kept their grip on the flashpoint town of Daraa.

Syria's opposition warned Assad that he would be toppled unless he ushered in democratic reforms, although the UN Security Council failed to agree on a condemnation of the violence.

And in a fresh blow to the regime, 233 members of Syria's ruling Baath party announced their resignation in protest at the deadly crackdown on protesters, according to lists seen by AFP.

"The security services have demolished the values with which grew up. We denounce and condemn everything that has taken place and announce with regret our resignation from the party," they said in a signed statement.

Baath party signatories from the Banias region, which covers Daraa, condemned "the house raids and the indiscriminate use of live fire against people, homes, mosques and churches."

On the international scene, influential US Senator John McCain said Assad has "lost his legitimacy" and called for UN sanctions to force him to halt attacks on his people.

"I obviously think he has lost his legitimacy. He has ordered his army to fire on his own people, and yes I think he should leave," the senator told AFP in Paris.

The Security Council, however, failed to agree on a statement condemning the killing of Syrian protesters, diplomats in New York said. After talks ended in deadlock, Western nations called for an immediate open meeting.

Russia and China blocked the statement proposed by Britain, France, Germany and Portugal that would have condemned the violence and backed calls for an independent investigation.

Germany's defence minister earlier demanded that the Council send a "strong signal" to show international alarm over the unrest in Syria.

The European Union, meanwhile, is mulling sanctions and the UN human rights body has called for a special session in the wake of the Syrian regime's bloody crackdown on pro-democracy protesters.

Five EU countries are also summoning Syria's ambassadors over the violent crushing of dissent, France said, adding it was joined by Britain, Germany, Italy and Spain.

According to human rights activists, the military assault on Daraa, 100 kilometres (62 miles) south of Damascus, has left more than 30 people dead since Monday, with at least 453 civilians killed across Syria since protests first erupted in mid-March.

A military source, meanwhile, said soldiers on Wednesday confronted "terrorist armed groups" who had cut off roads and opened fire on passers-by in a Daraa drive-by shooting.

"One member of the armed forces was martyred and five others were wounded," said the source, quoted by the official media, adding that several of the gunmen were also killed.

He denied satellite television reports of a rift in army ranks.

As the assault on Daraa, an agricultural town near the Jordanian border, entered its third day, the newly formed National Initiative for Change (NIC) warned Assad to institute real democratic reforms or risk "violence, chaos and civil war."

"Either the ruling regime leads itself in a peaceful transition towards democracy ... or it will go through a process of popular protests that will evolve into a massive and grassroots revolution," an NIC statement said.

"If the Syrian president does not wish to be recorded in history as a leader of this transition period, there is no alternative left for Syrians except to move forward along the same path as did the Tunisians, Egyptians and Libyans before them," added the NIC, an umbrella group of more than 150 opposition activists in Syria and abroad.

Syrian protesters took to the streets in even greater numbers after Assad scrapped nearly five decades of draconian emergency rule and abolished the repressive state security court a week ago.

Testing his promised reforms, they staged protests across Syria on Friday, demanding the end to the Baath's grip on political power, the release of political prisoners and the right to protest freely.

However, the security forces cleared demonstrations with tear gas and live rounds, with scores reported killed and hundreds arrested.

On Monday, between 3,000 and 5,000 troops backed by tanks and snipers swept into Daraa, the epicentre of the protests killing at least 25 people, according to rights activists. At least another six people died on Tuesday.

The army said troops entered Daraa "in response to calls for help" from citizens to rid them of "extremist terrorist groups" behind a spate of killings and sabotage.

Security forces also deployed in the northern Damascus suburb of Douma on Monday.

Austria said steps were being taken to evacuate its nationals from Syria, while Syrian ally Turkey said it is sending envoys Thursday to Syria to press for reform.

US ambassador to India Timothy Roemer to resign

IDBI to push RBI on 'White-label' ATMs

Plans joint venture with private ATM service providers.
IDBI Bank is planning to create a separate entity in partnership with private ATM service providers for running ‘White-label ATMs’ — not tied to any bank — in the country.

“We will soon approach RBI (Reserve Bank of India) with our plan,” R M Malla, chairman and managing director, told Business Standard.

Customers from any bank can deposit or withdraw money from ‘white-label ATMs’. Their banks then pay for the service. Also, such ATMs are invariably owned by a third-party, not a bank.
At present, under RBI guidelines, ATMs can only belong to a particular bank. Transactions of customers from other banks are settled by paying Rs 14 as the charge per transaction by the bank in which the customer has his account. RBI has been reluctant to allow white-label (or no name) ATMs by non-banking entities. Malla said RBI felt only banks should own ATMs so that the flow of funds can be accounted for, regulated and monitored.
“However, with a new entity created jointly and handled by a bank, the situation would be different and RBI’s concerns can be taken care of. If globally this has happened with proper precautions, why should it not work in India with strict due diligence?” asked Malla.
Many services in the banking domain were common, he noted. Obviously, it was difficult for banks to create a common platform for these services. “There could be some entity, however, whose proper due diligence has been done and which specialises in this area. We want to be a major player in this,” he said.
IDBI has started working towards this goal. It has 1,400 self-managed ATMs across the country. “In the next 12 months, we have planned to raise the number to 2,500, with a strong focus on low-cost ATMs,” said Malla. The bank has decided to tie up with ATM service providers for this. Of the 1,100 ATMs to be added during this period, 500-750 ATMs will be outsourced.
“This will save us the cost of setting-up and running ATMs, as we will have to pay the service provider a specified amount per transaction. It will be the service providers’ responsibility to create the infrastructure and run the ATMs,” said Malla.
Adding: “We are evaluating proposals of various ATM service providers. We will set up ATMs with them. Then, at some point of time, we will partner with them for starting the white-label ATMs venture if RBI permits.”

MFIs need fixed regulations: Fitch

A common and consistent set of regulations from a single regulator is necessary to revive Indian microfinance institutions (MFIs). According to a report by rating agency Fitch, different sets of regulations imposed by different regulators may result in an uneven playing field.
The Reserve Bank of India (RBI) and the Andhra Pradesh government seeking to regulate the sector in the state can be seen as an example of multiple regulators vying for control. Such instances would only lead to harmful consequences, the report said

“The experience of cooperative banks in India suggests multiple regulators may not be as effective as a single, strong regulator. MFIs may also find it difficult to comply with different sets of guidelines. A common and consistent set of regulations would add stability to MFIs’ operations and enhance creditor comfort”, said Ananda Bhoumik, senior director (financial institutions), Fitch.

MFI loans in Andhra Pradesh were the worst hit in the country, owing to uncertainty over regulation of the industry in the state. Collection efficiencies dropped from 99 per cent in September 2010 to below 50 per cent in December 2010. Andhra Pradesh accounts for about 29 per cent of the total MFI loans in the country, and the deterioration in portfolio delinquency in the state resulted in many large MFIs seeking to restructure their own borrowings from banks, the report said. Rising delinquencies in Andhra Pradesh could also spill over to the adjacent states of Karnataka and Tamil Nadu, it added.
RBI recommendations on interest rates and margin caps on lending, together with tighter loan-loss provisions and general provisioning norms, may lead to consolidation, since smaller players would be forced to re-examine their business models. Under the new guidelines, debt and equity funding may be constrained, since investors would reassess their risks. “From a creditor’s perspective, the lower pace of growth is good news. While lower margins would somewhat erode the defence against shocks to asset quality, the minimum core Tier 1 ratio of 15 per cent provides comfort,” Bhoumik said

RBI creates two more ED posts

The Reserve Bank of India (RBI) has decided to increase the number of its executive directors from seven to nine. The two additional executive directors would be appointed in May. Since one of the executive directors would replace deputy governor Shyamala Gopinath, who would retire in May, RBI would conduct interviews to select a total of three executive directors. The move follows a review of the various important posts in RBI.
Among the eligible candidates P Vijay Bhaskar, regional director of Bangalore, is the most senior chief general manager, followed by B Mahapatra and G Padmanavan. A candidate requires three years of residual service to be eligible for the post of executive director. The retirement age for RBI employees is 60 years.

Of the seven RBI executive directors, V K Sharma is the most senior, followed by V S Das. G Gopalakrishna, HR Khan, D Mohanty, S Karuppasamy and R Gandhi are the other executive directors.

Posted by neelam at 22:25 0 comments

27 APRIL

Government to go
ahead with Jaitapur nuclear park

The Centre will go
ahead with the 9,900 MW Jaitapur nuclear power park in

Maharashtra. A high-level meeting convened by Prime Minister Manmohan

Singh on Tuesday decided to set up an autonomous Nuclear Authority of

India to address people’s safety concerns.
The proposed Nuclear
Regulatory Authority will be an autonomous body

answerable to Parliament. It will subsume the Atomic Energy Regulatory

Board. The government will introduce a Bill to this effect in the

monsoon session of Parliament.
The meeting also
decided to provide a higher compensation for displaced people.
Following the
Fukushima disaster, there have been apprehensions about the safety

of nuclear plants and this added fuel to protests in Jaitapur. The

meeting acknowledged the need for better safety standards and decided to

put each of the six reactors at Jaitapur under their own operations

system. Government leaders said the operational safety review team of

the International Atomic Energy Agency will be invited to conduct safety

reviews and audit of all nuclear plants.
At present, India
operates 20 small nuclear reactors at six sites with a

capacity of 4,780 MW, or 3% of total power capacity. It hopes to

increase nuclear capacity to 7,280 MW by next year, more than 20,000 MW

by 2020 and 63,000 MW by 2032, adding nearly 30 reactors.

Justice PD Dinakaran
moves SC to stay probe against him

Sikkim High Court
Chief Justice PD Dinakaran has asked the Supreme Court to

stay an inquiry against him by a Parliament-appointed panel.
The panel, appointed
by the Rajya Sabha chairperson Hamid Ansari after the

House initiated impeachment motion against him, had asked Dinakaran to

respond to the 16 charges framed against him. The panel is examining

charges of corruption, land grabbing, abuse of judicial office and

amassing wealth disproportionate to known sources of income against

Dinakaran. The three-member panel headed by Justice Aftab Alam of the

SC, Karnataka High Court Chief Justice JS Khehar and senior advocate PP

Rao had rejected Dinakaran’s plea seeking stay on proceedings till he is

supplied with all documents being looked into.
Dinakaran sought
quashing of the panel’s order, which rejected his appeal,

seeking recusal of PP Rao alleging that he was biased. Dinakaran had

said he apprehended that there was likelihood of bias in the proceedings

as Rao had earlier campaigned against him when his elevation to the SC

was under consideration.
Charges against
Justice Dinakaran, who is due to retire on May 9, 2012, were

levelled when he was Chief Justice of the Karnataka HC. He was

subsequently transferred to the Sikkim High Court.

The only Indian
Prince who has been invited to the Prince William and Kate wedding

Raghav Raj Singh,
the current maharajsahib of Shivrati, a jagir in the former

princely state of Udaipur, is the only Indian aristocrat to be invited

to the wedding of Prince William and Kate Middleton in London on Friday.
He is a good friend
of Prince William. Singh, a Sisodia Rajput, has

played with William at the famed Cirencester Park Polo Club and Windsor

Polo Club, both favourites of the Wales brothers.
Wearing a
resplendent traditional Mewari sherwani and colourful headgear, he

will stand out among the grey morning suit clad men in the congregation.

His wife, Shelja Kumari, from the thikana of Umaidnagar in Jodhpur,

draped in a classic sari favoured by Indian nobility and heirloom family

jewellery is equally likely to stand out.
An alumnus of Mayo
College, Ajmer and St Stephen’s, Delhi, Singh did a

stint at Cheltenham College in Gloucestershire as an exchange , which

should come in handy for his future foray into healthcare and wellness

segment in Rajasthan and Delhi.

Finance & Economy

Is it the right time
to allow export of food grains?

Yes, argues today's
ET editorial. Look at its reasoning:
First, India’s
stockpile of foodgrains is now around 45 million tonnes, double

the buffer stock that is mandated for food security. A bumper harvest

is forecast, after which the government will add another 25 million

tonnes to this pile.
Second, the
government and its main procuring and stocking arm, the Food

Corporation of India (FCI), have proved that they cannot handle such

large food stocks. In many places, grains are piled high under plastic

sheets, exposed to the weather and rodents. Even after distributing rice

for as low as Rs. 1 or Rs. 2 per kilogramme in states like Tamil Nadu

and Andhra Pradesh, stocks stubbornly refuse to run down. It is likely

that by the time the government decides to do something about this food

mountain, worth around Rs. 40,000 crore, much of it would have become

dinner for rats.
Three, food
inflation is not being driven by foodgrains, but by the spiralling

prices of vegetables, edible oil, pulses and milk. Exports of

foodgrains will not add to food price inflation at home; indeed, it

might help to increase farmers’ incomes.
Finally, the most
compelling argument is about prices. The glut has pushed

market prices of wheat to below the minimum support price (MSP) of Rs.

1,170 per quintal. Indeed, in states like Uttar Pradesh, wheat is being

sold for Rs. 1,050 per quintal, a substantial discount to the MSP. In

global markets, wheat is being traded at around Rs. 1,530 per quintal.

So, if India lifts its export curbs on foodgrains, imposed after the

food price scare last year, exporters can make a nifty profit, storage

costs would come down and farmers’ incomes would go up, yielding some

incentive to invest in technologies to boost productivity.

RBI fines 19 banks
for selling complex derivatives to corporates

State Bank of India,
ICICI Bank, Citibank and Axis Bank are among 19 lenders

penalised by the Reserve Bank of India for violating currency

derivatives norms and selling products to companies which did not

understand them. This ends a three-year dispute between banks and small

companies burnt by derivatives.
The penalty may be small,
ranging from 5 lakh to 15 lakh. But the ruling

was a blow to banks since it vindicated the claims of tiny companies

that claimed banks sold meaningless contracts to earn fees to boost

earnings.
The RBI has been
scanning the derivative books of banks for more than a

year and had sought information from 22 lenders about these

transactions.
The RBI order
vindicates the stand of corporates, some of whom had sued

banks on grounds of misselling. Others had claimed that some of the

contracts were contrary to law, particularly the FEMA. Already,
most

matters had been settled out of court with banks picking up 25-50% of

the losses. This order will hasten the settlement of remaining disputes.
Banks had sold
currency derivatives to allow corporates to either improve the

earnings on their exports, lower the outgo on imports, or cut the

interest and repayment cost on loans. The better exchange rates
that

such swaps and options offered always came with risks that most

corporates either ignored or thought were academic — eventualities that

are unlikely to materialise.
Several bets
backfired when currencies like euro, swiss franc and yen surged in

2007. By late 2007 and early 2008, when corporates were asked to pay up

after the markets moved against them, there was a hue and cry. Private

lenders, including ICICI Bank, HDFC Bank, ABN Amro (now RBS), Axis and

Kotak were sued by companies. Most cases were settled out of court.
Amid court feuds
between banks and corporates, the RBI appointed an

inter-departmental group to inspect the trades. The group spotted

transactions where the underlier was inadequate while in some cases

multiple transactions were done against photocopies of the same document

that served as an underlier. In such situations derivative deals are no

longer hedges, but pure currency bets.
In some cases,
documents on a company’s past export performance that is

used to arrive at a hedging limit was not certified by the auditor. The

RBI decision will be followed by parties in the case pending before the

SC.

International

Compulsory sectoral
talks not acceptable, says India

India is examining
the latest draft proposals circulated by the World Trade

Organisation to bring to life the deadlocked Doha round of global trade

talks, but will continue to oppose the US move to make participation in

sectoral talks compulsory.
Disagreement between
the US and large developing countries, including India, China

and Brazil, over sectoral negotiations to eliminate duties on select

industrial goods has been identified by WTO director general Pascal Lamy

as the biggest issue blocking the progress of the round.
The US has been
insisting that large developing countries should agree to

eliminate tariffs on some industrial goods through compulsory

participation in sectoral negotiations while the opposing countries

maintain that it is outside the mandate of the Doha round.

25 april

2011-04-25T02:57:00.000-07:00

RBI relaxes norms for provisioning of bad loans

MUMBAI: The Reserve Bank of India has relaxed norms regarding setting aside money for bad loans - a move which has come as a major relief for all commercial banks. The banking regulator has said banks should maintain 70% of the provision coverage ratio (PCR) of their gross bad loans as on September 2010, but they do not have to maintain 70% of PCR on an ongoing basis.

PCR is the amount that a bank expects to forgo from a loan if they have to writeoff that loan account. Thus if a Rs 100 loan has turned bad, setting aside 70% as PCR means that the bank has set aside Rs 70 as provision and it expects to recover Rs 30 of the loan.

RBI has said September 2010 onwards, on incremental NPAs banks would have to set aside money based on the income recognition norms. This ranges from 10% in the initial months when the asset is classified as substandard to 100% when it is classified as a loss asset after a few years.

Even now, banks follow income recognition norms for making provision on bad loans, however, the provision coverage ratio was over and above it. The central bank has said the surplus of provision under PCR should be segregated into a separate account called 'Countercyclical Provisioning Buffer'.

The Reserve Bank has said this buffer will be allowed to be used by banks for making specific provisions for NPAs during any downturn in the economy. However, to dip into this, banks will require approval from the regulator. "Balance sheet planning will become easier. If a bank earns windfall profit, say from treasury operations, it can be set aside as a buffer and subsequently used during bad times," said MD Mallya, chairman of the Indian Banks' Association and CMD of Bank of Baroda .

"Incrementally, it will bring down banks' requirement for making provisions," said Somnath Sengupta, executive director and chief financial officer of Axis Bank. The Reserve Bank of India has said the majority of the banks have achieved 70% of PCR and had represented RBI whether the prescribed PCR is required to be maintained on an on-going basis.

While most banks already achieved 70% PCR, banks such as the State Bank of India has asked for time till September 2011. Its PCR stood at 64% as on December 2010.

Loan-to-grant scheme planned to revive

Urban development minister Kamal Nath has a new plan for fixing the infrastructure mess in Indian cities that are struggling to keep pace with pressures of rapid growth.
Now, instead of funding urban projects in installments, the government will pay the entire cost upfront as a loan to municipal administrations. The loan will be converted into a grant if promised outcomes are achieved with the projects.
UPA's flagship Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has been 'a complete failure that has wasted money and left an ugly spectre of unfinished projects across cities,' Nath told ET.
Under the JNNURM, the Centre gives funds to states but stops payments when municipal administrations do not carry out reforms mandated.
"How will nagar palikas implement these reforms (without any support)? It's an absurdity," the urban development minister said.
"It is up to us to pay them the rest so that the project at least is finished. With installments, you get sucked into a trap - our money is wasted and reforms don't take place either."
State urban officials agree. "Implementing reforms is not an issue, it is more about delay of release in money and inconsistent fund flow," a JNNURM project director of a southern state told ET.
"There is a lot of inconsistency in release of money to states under the scheme and projects have to be dropped half way," he said.

USDA revises India's sugar output forecast lower than government

NEW DELHI: The US Department of Agriculture (USDA) has revised its estimate of India's sugar production in the ongoing 2010-11 sugar year slightly upward to 24 million tonnes (MT), but this is still lower than the government's forecast of 24.5 MT.

Earlier, the USDA had pegged the country's sugar production at 23.6 million tonnes during the ongoing 2010-11 sugar year (October-September).

The USDA said in its latest report that it has revised India's sugar production forecast to 24 MT from its previous estimate after taking into account higher cane output of 340.5 million tonnes in the 2010-11 sugar year.

Production in top two sugar producing states -- Maharashtra and Uttar Pradesh -- is expected to be 9.3 MT tonnes and 6.2 MT, respectively, this year, it said.

Higher sugar production is expected particularly in central and southern India, as output in these regions is likely to be better following well distributed monsoon rains and favourable weather conditions, it said.

Also, the recent weakening of gur prices vis-a-vis sugar and relatively modest cane prices paid by sugar mills limited the diversion of sugarcane for the production of gur during peak the crushing season, it added.

According to the USDA, Indian mills are estimated to have produced 16.3 MT of sugar till February this sugar year, as compared to 13.7 MT in the year-ago period.

With expected surplus sugar production in 2010-11, the report observed that India may export around 8,00,000 tonnes of sugar in the current sugar year.

Already, the government has approved the export of 5,00,000 tonnes of sugar under Open General Licences (OGL). It had also allowed mills to meet their export obligation of around one million tonnes under the Advance Licence Scheme (ALS).

India is the world's second biggest sugar producer, but the largest consumer of the sweetener.

Estimating higher sugar production for India in the 2011-12 sugar year at 25.5 million tonnes, the USDA said that sugar output is likely to gain strongly in the coming sugar year as production is on an upswing this year after consecutive years of decline.

RBI likely to pull up 7 banks for flouting currency regulations

Sri Satya Sai Baba is no more

· Buoyant tax collections

The Centre’s tax collection for 2010-11 has reportedly exceeded the revised estimates by about Rs. 12,000 crore to hit Rs. 7.92 lakh crore.

· Some coarse grain related statistics

From the 1970s, as government policy, pricing and procurement heavily favoured wheat, rice and sugarcane, farmers took the rational decision to grow more and more of these, so land under coarse grains shrank rapidly: falling by as much as 1.3% every year through the 1980s, and by 0.76% every year through the 2000s.

· About dedicated freight corridor

The Rs 77,000 crore dedicated freight corridor project, scheduled to be built by 2016/17, is expected to ease infrastructure bottlenecks and boost industrial development and international trade as existing railway lines in these regions are running up to 50% more than the designed capacity. The choked railway lines have encouraged a rapid shift to road transport from railways. The National Highway Authority of India's plan to expand the Delhi-Mumbai highway to six lanes would accelerate the shift of cargo from goods trains to trucks, but the new freight corridors are expected to reverse the trend as the railways would be able to offer faster and cheaper transportation.
Look at this graphic for some more details of the project.

· Chairman PFRDA

Is Yogesh Agarwal.

· Banks betting big on consumer loans

Bank credit to consumers for personal consumption has increased 12.6% to ` 1,17,919 crore as on February 25, 2011, from 1,04,715 crore a year earlier, RBI data show. Loans outstanding on credit cards increased to 6,212.92 crore at the end of February 2011, from 4,923.11 crore a year ago. Credit card spend increased 26.9% in the same period. Industry estimates show average monthly spending on cards averaged 3,000-3,900 this year, up from 2,200-2,400 last year.
Banks are returning to consumer lending after getting hurt during the credit crisis when many customers defaulted. But this time things appear to be different, with better credit information and banks avoiding third-party salesmen who did not do their due diligence

Companies use LLPs as tax smokescreen

Corporates are masking their true identities to jump regulatory hurdles and form holding entities that help them lower their tax burden.
Promoters of at least 30 companies have formed limited liability partnerships (LLPs) by suppressing the information that the newly-floated LLPs would serve as group investment companies — a disclosure that would have called for a no-objection certificate from the Reserve Bank of India (RBI). Instead, they have tweaked the object clause to claim that the LLPs are into businesses like consultancy and broking — a simple manipulation that quickens clearance from the registrar of companies (RoC), the final authority that approves the formation of an LLP.
In 2008, Indian businessmen were allowed to form LLPs, an internationally followed tax-efficient structure that is spared of dividend distribution tax and minimum alternative tax (MAT) on gains from sale of shares. Though the new law was aimed at making life easier for smaller businesses and such ventures as law and audit firms, there was nothing to prevent business houses from converting their investment companies into LLPs.
But when businesses houses applied for such conversion, the RoC insisted on a noobjection certificate from the central bank. Most companies hit a wall as RBI was unwilling to comply with their requests. The banking regulator is keen to monitor corporate investment firms just as it keeps an eye on non-banking finance companies. And allowing them to transform into LLPs would mean losing control over these firms.
Now, corporates have found a way out. An entity that claims to be carrying out consultancy is not required to approach RBI. Since its business is unrelated to activities like share investment, banking, insurance and finance, it can directly approach RoC. An entity that attains LLP status by falsely declaring consultancy as its main business activity is subsequently capitalised by the partners to buy out the shares that is held by the original group investment companies.
However, the possibility of RBI coming out with new rules to stop LLPs from bypassing it is not being ruled out, more so, given its intentions to monitor investment companies. A year ago, RBI announced new rules which meant that group holding companies and investment firms would have to get themselves registered with RBI, fulfil certain criteria and share information on a regular basis. Amid corporate lobbying, the rules were later diluted to an extent to exclude investment companies which do not raise funds. But finance professionals said that even the diluted rules would cover a significant number of companies.

International

India to export petro products to Pakistan

18 april

2011-04-18T05:38:00.001-07:00

BRICS moves ahead

The Sanya Declaration by the heads of state and government of Brazil-Russia-India-China-South Africa (BRICS) marks a strengthening of this emerging country partnership on the world stage in at least two significant respects. First, BRIC has become BRICS with South Africa — a rainbow nation of 50 million people, abundant natural resources, a middle income economy, and tremendous potential — joining the forum as a full member. Secondly, the grouping has gained coherence as well as confidence in articulating forward-looking positions on global economic and, to an extent, political issues. The formulation of an Action Plan at Sanya to enhance existing cooperation programmes, engage in new areas, and explore new proposals for working together indicates increased commitment. The global financial crisis brought BRIC to the fore and gave its emerging common positions salience; and on the trade and economic front and also on climate change, BRICS solidarity has been real and quite robust. Further, the Sanya declaration sends out a message on what is badly needed in international relations: a greater role and voice for developing countries — and specifically these five rising powers, which have a combined population of three billion, that is, more than 40 per cent of the global population — on issues of “world peace, security and stability, boosting global economic growth, enhancing multilateralism, and promoting greater democracy in international relations.”

However, the reality is that each of the five countries regards its ties with the United States as its most important bilateral relationship and is excessively wary of displeasing Washington. How else to explain their attitude to the indefensible military attacks, from the air, on Libya by the United Kingdom, France, and the U.S.? The BRICS stance, formulated in the Sanya declaration, is disapproval of external military intervention in the MENA (Middle East and North Africa) and West African regions; thus, “we share the principle that the use of force should be avoided...[and] we maintain that the independence, sovereignty, unity and territorial integrity of each nation should be respected.” How to square this stance with the vote of each of the five BRICS members — despite their concurrent presence in the United Nations Security Council in 2011 — on Resolution 1973, which provided cover for the western military attacks? The two permanent members, Russia and China, failed to veto the resolution but abstained; South Africa voted for the resolution; and India and Brazil equivocated by abstaining. There is a moral here. BRICS has made real progress since Brazil, Russia, India, and China held the grouping's first summit in June 2009 at Yekaterinburg in Russia and issued a declaration calling for the establishment of an equitable, democratic, and multi-polar world order. Now they need to put more sincerity and substance into this very worthwhile coming together.

Largest waste-to-power plant in China to start soon

The largest waste-to-power plant in China, the Hangu waste-to-power plant, located in the country's northern coastal city of Tianjin, will begin operations before June, according to a spokesman for the Tianjin Electric Power Corporation.

Located in the Binhai new district of Tianjin, the plant, spread over an area of 13.2 hectares, is expected to consume 2,000 tonnes of trash and waste daily.

On completion, it will be able to treat 6,67,000 tonnes of trash and generate 146 million kwh of electricity each year. The waste-to-energy plant has the largest complete sealed trash tank in China, which can keep 20,000 tonnes of waste in storage.

With an advanced incineration system, the emission targets of the power plant meet European Union standards, the spokesman said. Along with fast economic development and a quick rise in urban population, Tianjin, like many other Chinese cities, has been plagued by the issue of growing waste.

Pantaloons Femina Miss India World 2011

Pantaloons Femina Miss India World 2011, including (Body Beautiful, Miss No Marks, Miss Ramp Model, Miss Water Baby, Veet Femina Miss Beautiful Legs) Kanishtha Dhankhar

Miss India Earth 2011	Hasleen Kaur
Miss India International 2011	Ankita Shorey
People's Choice Miss Indiatimes including Miss Fresh Face, Miss Talented, Miss Beautiful Smile, Miss Beautiful Eyes	Rakul Preet Singh
RMKV Femina Miss Photgenic	Dayana Erappa
Kaya Femina Miss Radiant Skin	Purva Rana
Femina Miss Divine Thoughts	Surabhi Rao
HP Femina Miss Digital Diva	Deepika Bajwa
Femina Miss Iron Maiden and Tissot Femina Miss Perfect Time	Asmita Sood
Femina Miss Beautiful Lips	Ankita Shorey
Novotel Femina Miss Congeniality	Aditi Mishra
Sunsilk Femina Miss Perfect Hair and Lavasa Femina Miss Vivacious	Aparajita Sharma
Femina Miss Bollywood Diva and Forever Femina Miss Traditional	Ankita Mohapatra
Pantaloons Beauty for a Cause	Kriti Kapoor

Miss India South 2011	Shweta Dolli
Miss India South 2011 1st Runner Up	Apoorva Mittra
Miss India South 2011 2nd Runner Up	Nidhi Sunil
Miss India East 2011	Ankita Mohapatra
Miss India East 2011 1st Runner Up	Ruhi Singh
Miss India East 2011 2nd Runner Up	Smrity Singh

2011 YFLO ZOYA Young Women Achievers Award

Bollywood actor Rani Mukherjee receives the 2011 YFLO ZOYA Young Women Achievers Award from Union Minister for Culture, Kumari Selja, organised by Young FICCI Ladies Organisation in

India, Kazakhstan ink nuke, oil pacts

Embarking on an ambitious roadmap to consolidate their strategic partnership, India and Kazakhstan on Saturday signed seven pacts, including a framework agreement in civil nuclear field and a stake-sharing accord in oil sector, with Prime Minister Manmohan Singh saying there was “vast potential” for cooperation in all areas.

At wide-ranging talks between Dr. Singh and Kazakh President Nursultan Nazarbaev, the two sides also decided to work for pushing the bilateral trade, which was currently as low as $300 million, through engagement of governments and business communities and diversifying to non-oil sectors like pharma, agriculture and IT.

The two leaders discussed a host of issues during their talks. The delegation level meeting covered bilateral matters and international issues like developments in Libya and other North African countries and Afghanistan.

Summing up the talks, Dr. Singh said in a statement to the press that there was “solid and substantive outcome” that will help build on the strategic partnership forged during the visit of Nazarbaev to India in January 2009.

The two sides signed an inter-governmental agreement for Cooperation in Peaceful Uses of Atomic Energy, that envisages a legal framework for supply of fuel, construction and operation of atomic power plants, exploration and joint mining of uranium, exchange of scientific and research information, reactor safety mechanisms and use of radiation technologies for healthcare.

After the talks, the Kazakh President announced that his country would supply India with 2100 tonnes of uranium and was ready to do more.

FEB 2011 - july 2010 CURRENT AFFIR AND GK

2011-04-15T04:58:00.001-07:00

Current Affairs: January 2011

NATIONAL AFFAIRS

Rural job Plan turns five but a lot needs to be done
The Mahatma Gandhi National Rural Employment Guarantee Act, UPA’s flagship aam admi scheme, turned five on February 2, 2011. However, more than 30% of the rural India working under the right-to-work act continue to receive wages below the guaranteed minimum as per the minimum wages act.
On January 14, the Ministry of Rural Development issued a notification revising the wage rates under the MNREGA from Rs 100 per day to between Rs 117 and Rs 181 (17-30 % hike) in different States. The revision under Section 6(1) of the 2005 Act, coming in wake of inflationary pressures on the poor, adjusts the wages by indexing it to the Consumer Price Index of Agricultural Laborers (CPIAL).
Though the Ministry claims the revision takes NREGA wages above the minimum wages in 26 States and Union Territories, analysis shows the other eight States that continue getting less than minimum wages constitute 1.3 crore households or 31% of the total 4.1 crore households provided work till January 31, 2011.
The eight include smaller States such as Goa and Mizoram, which have less number of workers under the scheme.
But, the States also include the two showpieces under MNREGA—Andhra Pradesh and Rajasthan—that brought in reforms like social audit, post office-bank payments into the mother of all schemes with a budget allocation of Rs 40,100 in 2010-11.
Though numerous villages, like Saru in Udaipur district of Rajasthan, have benefited from MNREGA, the average they receive is under Rs 100 a day, forcing many to go in search of work as far as Ahmedabad, Surat where they Rs 200 to Rs 250 per day.

Srikrishna panel report
The Justice B.N. Srikrishna Committee report was made public on January 6, 2011. It has strongly advocated maintaining united Andhra Pradesh along with creation of statutory Telangana Regional Council to address the core socio-economic concerns of the backward region.
“This is the most workable option in the given circumstances and in the best interest of the social and economic welfare of people of all the three regions in the state,” the committee said in its 500-page report.
The five-member panel was set up in February 2010 to examine the competing demands for carving out a separate Telangana State and maintaining the status quo.
After an elaborate exercise involving interactions with various groups, field visits and examining over 2.50 lakh petitions, the committee presented a set of six options and discussed their pros and cons in great detail.
The stress on maintaining unity formed a common thread that ran through the report.
On bifurcation, which has been the single point agenda of Telangana protagonists, the Committee said it was the “second best option” but could be recommended “only in case it is unavoidable and if this decision can be reached amicably among all three regions.”
However, the committee warned that division of the State would have repercussions in other regions. “If earlier agitations are anything to go by, this decision will give rise to serious and violent agitations in coastal Andhra and Rayalaseema regions where backlash will be immediate, the key issues being Hyderabad and sharing of water and irrigation resources,” the report said.
Elaborating further on consequences of splitting the State, the Committee said: “The division will also have serious implications outside AP. It will give fillip to other similar demands. The matter should also be seen in the larger context of whether a region can be allowed to decide for itself what its political status should be, as that would only create a demand for a great number of smaller States resulting in problems of coordination and management.”
The panel said: “We are convinced that the development aspect is of utmost importance for the welfare of all the three regions and could best be addressed through a model that includes deeper and more extensive economic and political de-centralisation.”

The OPTIONS
—Maintaining status quo but allow economic and political de-centralisation.
—Bifurcation of the State into Seemandhra and Telangana; with Hyderabad as a Union Territory. The two States will develop their own capitals in due course of time.
—Bifurcation into Rayala-Telangana and coastal Andhra regions with Hyderabad being an integral part of Rayala-Telangana.
—Bifurcation into Seemandhra and Telangana with enlarged Hyderabad Metropolis as a separate Union Territory. This Union Territory will have geographical linkage and contiguity via Nalgonda district in the south-east to district Guntur in coastal Andhra and via Mahboobnagar district in the south to Kurnool district in Rayalaseema.
—Bifurcation into Telangana and Seemandhra as per existing boundaries with Hyderabad as the capital of Telangana and Seemandhra to have a new capital.

Historical Timeline
—Andhra, Rayalaseema were part of Madras province.
—Telangana was part of the Hyderabad State for 400 years.
—In 1953, Andhra and Rayalaseema separated from Madras.
—In 1956, Andhra merged with Telangana.
—1969: Telangana Praja Samiti was formed.
—1972: Jai Andhra movement in Rayalaseema and coastal Andhra.
—2000: TDP opposes creation of Telangana.
—2001: K. Chandrashekhara Rao forms Telangana Rashtra Samiti (TRS).

Visit of President of Indonesia
History met geography when Indonesian President Susilo Bambang Yudhoyono took the salute as the Chief Guest at India’s 62nd Republic Day parade on January 26, 2011. President Soekarno, whose close friends Jawaharlal Nehru and Biju Patnaik helped defy the Dutch colonial embargoes of the late 1940s that enabled Indonesia gain independence, was the Chief Guest at the founding of the Indian republic, in 1950.
President Yudhoyono came to Delhi with a large business delegation and witnessed the signature of a clutch of agreements, including between private enterprises. New investment commitments worth $12 billion were signed, with the Indians looking to put their money in infrastructure projects such as airports, railways and ports.
Indian business interest in Indonesia is kindled not only by the fact of its large, 238 million population, and therefore, a large market, but also because it is the gateway to the ASEAN, a region of over 300 million people that spans 10 States from Myanmar to the Philippines.
India and Indonesia signed nearly 30 agreements, including an extradition treaty and a mutual legal assistance treaty, and pledged to achieve a bilateral trade target of $ 25 billion by 2015, from about $ 11 billion in 2009-10.

The main accords signed by the two sides were: MOU for cooperation in the field of education; MOU on the establishment of biennial trade ministers’ forum; protocol for extension of the MOU on cooperation in marine and fisheries; MOU for the development of urea manufacturing plant in Indonesia; air services agreement; MOU on cooperation in oil and gas; MOU on cooperation in the field of micro, small and medium enterprises; MOU on cooperation in science and technology; and MOU between the Press Council of India and the Press Council of Indonesia.
In a joint statement issued after the talks between the Prime Minister and the Indonesian President, the two countries unequivocally condemned terrorism in all its forms and manifestations and stressed that there could be no justification whatsoever for any act of terrorism.
In the field of tourism, the two leaders recognized that a quantum leap in tourism between India and Indonesia was desirable to strengthen vibrant and long-standing people-to-people ties. As a step towards this objective, the Prime Minister announced a scheme of granting visa on arrival to the citizens of Indonesia.

India, Italy to set-up joint trade panel
On January 31, 2011, India and Italy decided to set up a Joint Business Council (JBC), a bilateral trade cooperation body, to work together in areas like ICT, infrastructure and manufacturing.
The decision was taken during the meeting of India’s Commerce and Industry Minister Anand Sharma and Italian Minister for Economic Development Paolo Romani, in Rome.
The JBC will be managed by FICCI from the Indian side and by CONFINDUSTRIA from the Italian side. It will meet once a year, coinciding with the bilateral ministerial meeting.
The two ministers also discussed the importance of SMEs and it was agreed that soon industry chambers of both the countries would organise workshops and seminars. Seeking closer cooperation in infrastructure sector, Sharma informed Romani that India would soon come out with a manufacturing policy aimed at increasing the contribution of manufacturing to 24 per cent of the GDP, from 16 per cent now.
Romani assured India that Italian entrepreneurs would take huge advantage of the investment opportunities in India.

USA lifts export curbs on DRDO, ISRO
The US has removed nine Indian space and defence related companies, including those from ISRO and DRDO, from its export control ‘Entity List’ in an attempt to expand high technology trade and strategic cooperation with India.

The US decision meets a long pending Indian demand and is the first step to implement the export control policy initiative announced by US President Barack Obama and Prime Minister Manmohan Singh on November 8, 2010, after their summit talks in New Delhi.
The nine entities are Bharat Dynamics Ltd (BDL), four remaining subsidiaries of the Defence Research and Development Organisation (DRDO) in the US sanction list and another four of the Indian Space Research Organisation (ISRO).
The DRDO subsidiaries are Armament Research and Development Establishment (ARDE), Defence Research and Development Lab (DRDL), Missile Research and Development Complex and Solid State Physics Laboratory Liquid Propulsion Systems Center, Solid Propellant Space Booster Plant (SPROB), Sriharikota Space Center (SHAR), and Vikram Sarabhai Space Center (VSSC) are the four ISRO subsidiaries.
Removal from the ‘Entity List’ eliminates a licence requirement specific to the companies, and results in the companies off the list being treated the same way as any other destination in India for export licensing purposes.
“These changes reaffirm the US commitment to work with India on our mutual goal of strengthening the global non-proliferation framework,” said US Under-Secretary of Commerce Eric L. Hirschhorn.

Justice Patil report on 2G Scam
The one-man committee headed by retired Supreme Court judge Justice Shivraj V. Patil, who was appointed by the Telecom Ministry to look into the lapses in the allocation of the 2G Spectrum, has identified the guilty in the report which was submitted on January 31, 2011.
After former Telecom Minister A. Raja resigned, the panel was set up on December 13 2010 to look into the Spectrum allocation procedures and policies from 2001 to 2009. The period also included the issuing of telecom licences during the NDA regime.
During 2001-04, the BJP-led NDA Government was at the Centre and Raja had been saying that he only followed the policies of his predecessors.
The panel has nailed A. Raja for procedural lapses. The report also named seven other officials in the Department of Telecom (DoT), including former DoT Secretary Siddharth Behura and R.K. Chandolia, a former lieutenant of Raja.
Justice Patil clarified that procedural lapses of different types were found in different periods and that referred to not just the particular year in question but also before that. He said that procedural shortcomings were found in applications of telecom operators and that there were many shortcomings on the part of DoT officials in implementing procedures.
The panel was also asked to examine if procedures were followed consistently and if these were followed in fair and transparent manner and report any deviation, shortcomings and lapses.
Country’s top audit body Comptroller and Auditor General (CAG) had earlier alleged that several operators had suppressed information while applying in 2007 to bag licences and the 2G Spectrum from A Raja.
Justice Patil said that in the report he had suggested remedial measure with regard to the licensing policies and procedures. Concerning the guilty identified in the report, Patil said he could not produce supporting documents as they were with the CBI.

Prime Minister draws up 20-point agenda on Corruption
Prime Minister Manmohan Singh has outlined a comprehensive agenda to make transparency and ethics the core focus of governance at all levels.
A 20-point agenda to bring about procedural improvements to achieve this goal is on the anvil. Adoption of Finland’s procedural model is also under consideration.
Critical steps under active consideration by the government include instructions to clearly mention on files involving clearances by them whether the decision was a government one (taken by the Cabinet) or one by the official himself.
Other steps being planned are: Proper scrutiny of officials before appointments, especially to critical posts, posting on websites the names of officials involved in corruption cases and permission to prosecute identified cases.

INTERNATIONAL AFFAIRS

Dilma Rousseff is Brazil’s first woman President
On January 1, 2010, Dilma Rousseff became the Brazil's first female President. She has promised to build on an unprecedented run of economic success achieved by her popular predecessor and mentor, Luiz Inacio Lula da Silva. Thousands of admirers braved a driving rain and cheered as Rousseff rode to her inauguration in a 1953 Rolls Royce flanked by an all-female security detail.
The former Marxist guerrilla, who evolved over the years into a pragmatic civil servant with a professed obsession for reducing poverty, smiled broadly and clapped along with spectators as she was sworn in before the Congress.
More than 20 million Brazilians were lifted out of poverty during Lula's eight years in office, thanks largely to his social welfare policies and stable economic management that made Brazil a darling among Wall Street investors. The coming decade also looks bright, with massive, newly discovered offshore oil reserves due to be exploited and the World Cup and Olympics to be hosted here.
Yet, Rousseff also faces a long list of daunting challenges that Lula failed to tackle, including an overvalued currency that is hurting industry, rampant public spending that is fueling inflation, and notorious bureaucracy that stifles investment and discourages innovation. Perhaps the biggest task will be living up to the example set by Lula, a former metalworkers' union leader who leaves office with an approval rating of 87 per cent and near folk-hero status, especially among the poor.

New PM appointed in Jordan following protests
On January 31, 2011, Marouf Bakhit was appointed as the Prime Minister of Jordan by King Abdullah. The move came following protests inspired by mass demonstrations in Tunisia and Egypt, but the opposition dismissed the move as insufficient. The earlier Prime Minister Samir Rifal was criticized for following a pro-Western reforms agenda. His opponents sought to reverse free market reforms they say have cut State support for East Bank Jordinians, the original inhabitants of the country who depend on government support more than Jordinains of Palestinian origins.

UN ends Peace Mission in Nepal
On January 15, 2011, the UN ended its peace mission as the government and the main Opposition Maoists inked a crucial eleventh-hour deal to monitor fragile peace process. The UN mission was tasked to supervise the arms and the army of the former rebels and the military.
The UNMIN closure, however, makes the fate of the 19,000 Maoist combatants confined in the cantonments uncertain, as there is no clear road-map regarding the future monitoring, integration and rehabilitation of the former combatants.
The government said a special committee comprising representatives from the main political parties would monitor the ex-guerrillas, which the Maoists do not agree to.

Governor of Punjab province of Pakistan assassinated for supporting a woman convicted under blasphemy law
The assassination of former Governor of Punjab province of Pakistan, Salmaan Taseer, on January 4, 2011, once again drew attention to Pakistan's controversial blasphemy laws, which have been at the center of debate of late. Religious parties have been able to force Prime Minister Yousuf Raza Gilani to step back from the government's earlier stance of changing these laws
Taseer's killing due to his support for a woman convicted under the blasphemy law is yet another addition to the list of those killed as a direct or indirect consequence of this legislation.
Threats were made, and protests held against Taseer after he visited Aasia Bibi, a Christian woman awarded the death sentence for committing blasphemy, and expressed his support for her.
According to data compiled by the National Commission for Justice and Peace, a local NGO, extra-judicial killings of those accused under the country's blasphemy laws started in 1990, but the laws were in place since 1980, instituted by military strongman General Zia Ul Haq.

South Sudan says “Yes” to secession
South Sudan has overwhelmingly voted to split from the north in a referendum intended to end decades of civil war, as per the result declared on January 30, 2011.

Thousands cheered, danced and ululated after officials said 99.57 per cent of voters from the south’s 10 States chose to secede.
The vote was promised in a 2005 peace-deal which ended decades of north-south conflict, Africa’s longest civil war which cost an estimated 2 million lives.
Kiir, the head of the former southern rebel Sudan People’s Liberation Movement (SPLM), praised his former civil war foe, Sudan’s overall president Omar Hassan al-Bashir, for agreeing to the 2005 accord.
According to the terms of the accord, south Sudan will be able to declare independence on July 9, 2011, pending any legal challenges to the results.
Leaders from the SPLM and Bashir’s northern National Congress Party (NCP) still have to agree on a list of politically sensitive issues, including the position of their shared border, how they would split oil revenues after secession and the ownership of the disputed Abyei region.
UN Secretary General Ban Ki-moon praised north and south Sudan for the peaceful vote but said he was concerned about the unresolved issues.

Visit of Chinese President to USA
President Hu Jintao of China visited USA in second week of January 2011 to narrow rifts between the world’s top two economies. This was the first visit of a Chinese President to USA in 13 years.
The State-run Chinese media recorded the visit as a successful summit of equals. However, the pomp and rhetoric did little to resolve acrimony between the two countries over ‘US interference’ in South China Sea, US policies on Taiwan, the Dalai Lama, currency and trade differences.
During the joint press conference President Jintao admitted that his country needed to do a lot more on human rights. The human rights were clearly the top concern of USA despite the economic ties between the two countries.
President Jintao warned USA to keep away from Tibet or else bilateral ties will be greatly effected, a day after President Obama asked him to talk to representatives of the Dalai Lama to resolve the issue.

Global Innovation Report, 2010
Innovation levels, as measured by patent volume, shifted across 12 major technology areas from 2009 to 2010, according to the second annual analysis of world patent activity published by the IP Solutions business of Thomson Reuters.
The 2010 Innovation Report: Twelve Key Technology Areas and Their States of Innovation tracks patent activity in key technology areas using the Thomson Reuters Derwent World Patents Index® (DWPISM) database, the world's most trusted source of patent information.

Key findings between 2009 and 2010 innovation data include:
Aerospace technology area blasts into a new orbit: In addition to increasing overall activity by 25% year over year, the largest aerospace sub-sector increase from 2009 to 2010 occurred in the field of Space Vehicles and Satellite Technology, which jumped up 108%. The three companies in this area were Japanese manufacturer Sharp, followed by Korean manufacturers LG and Samsung.
Semiconductor innovation short circuits: The Semiconductor technology area saw the largest drop in innovation activity across the 12 areas tracked, falling 9% last year. The drop was driven by sub-sector declines in Integrated Circuits; Discrete Devices; and Memories, Film & Hybrid Circuits. The one Semiconductor sub-sector showing growth in 2010 was Materials and Processes. The innovators with the most patent activity in this sub-sector were Korean manufacturers Samsung and Hynix Semiconductor, followed by Japan's Toshiba.
Computers & Peripherals tops the list of the most innovative technology areas with the highest volume of patent activity for second consecutive year, despite an overall decline from 2009: The Computers & Peripherals technology area published 212,622 unique inventions in 2010, earning it the top slot among the 12 areas in the analysis. However, this is a 6% decline from the level seen in 2009.

Muslim demographic peak over next 20 years
The world's Muslim population will grow at double the rate of non-Muslims over the next 20 years, according to a broad new demographic analysis that is likely to spark controversy in the West.
The Future of the Global Muslim Population may be the first to attempt to map the Muslim population of most of the world's countries. The analysis was conducted by two giant non-profit groups interested in religion: the Pew Research Center and the John Templeton Foundation. This is part of a larger project to map the population of all the world's religions.
Among its other projections are:
—Muslim populations in some parts of Europe will reach the double digits, with France and Belgium at 10.3 percent by 2030.
—Pakistan will overtake Indonesia as the world's most populous Muslim nation.
—Muslim population growth and fertility rates will continue to decline.
—India will remain home to the world's third largest Muslim population.
—The number of US Muslims will more than double, from 2.6 million in 2010 to 6.2 million in 2030.
The analysis could fuel critics of Islam in Europe and the United States, who argue that the religion is at odds with Western values and worry that the number of Muslim extremists is on the rise. Or it could calm those fears by providing evidence that Muslim populations in the West will remain relatively tiny. The study—which uses a dizzying mix of public and private data sources—makes it clear that even rapid growth among Muslims will not produce dramatic demographic shifts in most parts of the world.
Eighty-two percent of the world's Muslims live in Asia, West Asia and North Africa, and that number is projected to be around 79 percent in 2030.
According to the study's projections, Muslims make up 23.4 percent of the world's population of 6.9 billion; in 2030, that percentage will be 26.4. Europe is home to 2.7 percent of the world's Muslims, a percentage that is predicted to remain stable.

Business News

The NASDAQ-listed iGate has sealed the deal to buy Patni Computers, India’s seventh largest IT services firm, to create a $1-billion entity
Starbucks, the world’s largest coffee retailer, has entered into an agreement with Tata Coffee for a strategic alliance in India. Under the non-binding MoU between the two, Starbucks will set up stores in the Tata group’s retail outlets and hotels and source roast coffee beans from Tata Coffee’s Kodagu facility.

Infrastructure, Leasing & Finance Services (IL&FS) will be the new promoter of Maytas Properties, the cash-strapped company owned by family members of disgraced Satyam founder Ramalinga Raju.
Wipro Chairman Azim Premji has done away with the dual helmsman-ship model and appointed T.K. Kurien as Wipro’s new CEO.
Google Inc co-founder Larry Page has taken over as CEO from Eric Schmidt. Page’s assumption of day-to-day operations marks a return to Google’s technological roots, 13 years after he and fellow Stanford University student Sergy Brin founded what has become the world’s number one internet search engine.
Mahindra & Mahindra, the market leader in utility vehicles, has launched a pick-up vehicle based on the Xylo model. The vehicle has been named Genio.
The Aditya Birla group has bought the $1-billion revenue earning US firm Colombian Chemicals for $875 million, catapulting the group to become the world leader in carbon black, from its number four position that it held before the acquisition.
Opening another chapter in aviation history, G.R. Gopinath, known as the pioneer of low-cost carriers in India, has had his Deccan Charters Ltd join hands with Taj Air, the executive charter service of Indian Hotels Company Ltd and with Business Jets India Pvt Ltd, to launch Powerfly, an alliance in the air charter industry.
Maruti Suzuki India Ltd has entered into luxury sedan segment with launch of its car Kizashi.
ICICI Bank has entered into an agreement with Indian Army for extending modern banking products to the personnel in uniform

DO YOU KNOW

Per capita income of Indians grew by 14.5 per cent to Rs 46,492 in 2009-10, from Rs 40,605 in 2008-09. The new per capita income figure estimates on current market prices is over Rs 2,000 more than the previous estimate of Rs 44,345 calculated by the Central Statistical Organisation. Per capita income means earnings of each Indian if the national income is evenly divided among the country's population at 117 crore (1.17 billion). Per capita income (at 2004-05 prices) stood at Rs 33,731 in FY10 against Rs 31,801 in the previous year.
The size of the economy at current prices rose to Rs 61,33,230 crore (Rs 61,332.30 billion) in 2009-10, up 16.1 per cent over Rs 52,82,086 crore (Rs 52,820.86 billion) in FY'09. Based on 2004-05 prices, the Indian economy expanded by 8 per cent during the fiscal ended March 2010. This is higher than 6.8 per cent growth in fiscal 2008-09.
The gross domestic product (GDP), or gross domestic income (GDI), is the market value of all final goods and services produced within a country in a given period of time. The idea of gross domestic product came into existence after the Great Depression and World War II. GDP was first developed by Simon Kuznets for a United States Congress report in 1934. His idea was to calculate all economic production by individuals, companies and the government in a single measure. According to him, GDP would rise in good times and fall during any crisis. In 1944, the World Bank and the International Monetary Fund accepted GDP as a method to assess a nation's economy.
The 98th Indian Science Congress was held at SRM University near Chennai.
While 2010 was observed as the International Year of Biodiversity, from 2011 starts the Decade of Biodiversity. During the decade, a UN body, much like the IPCC for Climate Change, is expected to push for action on biodiversity front.
The Qingdao Haiwan Bridge in China is the world’s longest sea bridge. It is 42.48 km long, 8.04 km further than the distance between Dover and Calais, as also longer than a marathon. The bridge links the main urban area of Qingdao city in east China’s Shandong province with Huangdao district.
January 14, 2011 marked the 250th anniversary of the third battle of Panipat. The defeat of the Marathas by the army of Ahmad Shah Abdali prepared the ground for the gradual take-over of India by the East India company.
Army Day is observed in India on January 15.
The World Bank has offered to India a loan of $1.5 billion (about Rs 6,800 crore) for building 24,000km of all-weather roads in the rural seven economically poor and hilly areas States—Himachal Pradesh, Uttarkhand, Uttar Pradesh, Jharkhand, Meghalaya, Punjab and any other State which may join at alter date over the next five-year period.
On January 17, 2011, Indian Navy commissioned a squadron of Unmanned Aerial Vehicles (UAVs), named INAS 343, at Porbander, Gujarat, to enhance coastal surveillance capabilities. The UAVs have been nick-named “Frontier Formidables”.
The world’s highest restaurant is located on the 122nd floor of the world’s tallest building Burj Khalifa. It is called At.mosphere. The restaurant is 92 meter taller than the world’s second highest eatery, the revolving 360 Restaurant in Toronto’s CN Tower.
Rural roads account for about 61% of India’s road length. National Highways comprise less than 2 per cent of the road network, but carry 40 per cent of road-based traffic.
RBI has decided to circulate Rs 5 coins to commemorate the 125th birth anniversary of Dr Rajendra Prasad, India’s first President. Objective
Anti-Leprosy Day is observed in India on January 30.

Current Affairs: February 2011

Current Affairs: February 2011 NATIONAL AFFAIRS
Union Budget 2011 HighlightsStandard rate of excise duty held at 10 percent; no change in CENVAT rates. Personal income tax exemption limit raised to Rs 180,000 from Rs 160,000 for individual tax payers. For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.

Citizens over 80 years to have exemption limit of Rs 5lakh. To reduce surcharge on domestic companies to 5 percent from 7.5 percent. A new revised income tax return form 'Sugam' to be introduced for small tax papers. raise minimum alternate tax to 18.5 percent from 18 percent.Iron ore export duty raised to 20 percent

Nominal one per cent central excise duty on 130 items entering the tax net. Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.

Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat. Works of art exempt from customs when imported for exhibition in state-run institutions; this now extended to private institutions. Subsidy bill in 2011-12 seen at 1.44 trillion rupees.Food subsidy bill in 2011-12 seen at 605.7 billion rupees. Revised food subsidy bill for 2010-11 at 606 billion rupees.

Revised fertilizer subsidy bill for 2010-11 at 550 billion rupees.

Revised petroleum subsidy bill in 2010-11 at 384 billion rupees.

State-run oil retailers to be provided with 200 billion rupee cash subsidy in 2011-12.

Fiscal deficit seen at 5.1 percent of GDP in 2010-11.

Fiscal deficit seen at 4.6 percent of GDP in 2011-12.

Total expenditure in 2011-12 seen at 12.58 trillion rupees.

Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent.

Gross tax receipts seen at 9.32 trillion rupees in 2011-12.

Non-tax revenue seen at 1.25 trillion rupees in 2011-12.

Corporate tax receipts seen at 3.6 trillion rupees in 2011-12.

Tax-to-GDP ratio seen at 10.4 percent in 2011-12; seen at 10.8 percent in 2012-13.

Customs revenue seen at 1.52 trillion rupees in 2011-12.

Service tax receipts seen at 820 billion rupees in 2011-12.

Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent.

Inflation seen lower in the financial year 2011-12.

Disinvestment in 2011-12 seen at 400 billion rupees.

Government committed to retaining 51 percent stake in public sector enterprises.

Net market borrowing for 2011-12 seen at 3.43 trillion rupees, down from 3.45 trillion rupees in 2010-11.

Gross market borrowing for 2011-12 seen at 4.17 trillion rupees.

Revised gross market borrowing for 2010-11 at 4.47 trillion rupees.

To create infrastructure debt funds.

FDI policy being liberalized.

To boost infrastructure development with tax-free bonds of 300 billion rupees.

Food security bill to be introduced.

To permit SEBI registered mutual funds to access subscriptions from foreign investments.

Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion.

Setting up independent debt management office; Public debt bill to be introduced in parliament soon.

Bills on insurance, pension funds, banking to be introduced.

To allocate more than 1.64 trillion rupees to defence sector in 2011-12.

Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12.

To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12.

To allocate 520.5 billion rupees for the education sector. Rs.21,000 crore for Sarva Shiksha Abhiyan.

To raise health sector allocation to 267.6 billion rupees.

Rs.500 crore more for national skill development fund.

Rs.54 crore each for AMU (Aligarh Muslim University) centres at Murshidabad and Mallapuram.

Rs.58,000 crore for Bharat Nirman; increase of Rs.10,000 crore.

Mahatma Gandhi National Rural Employment Guarantee Scheme wage rates linked to consumer price index; will rise from existing Rs.100 per day.

Infrastructure critical for development; 23 percent higher allocation in 2011-12.

Removal of supply bottlenecks in the food sector will be in focus in 2011-12.

To raise target of credit flow to agriculture sector to 4.75 trillion rupees.

3 percent interest subsidy to farmers in 2011-12.

Cold storage chains to be given infrastructure status.

Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner.

To provide 3 billion rupees for 60,000 hectares under palm oil plantation.

Food storage capacity to be augmented; 15 more mega food parks to be set up in 2011-12; of 30 sanctioned in previous fiscal, 15 set up.

Comprehensive policy on further developing PPP (public-private-partnership) model. To move towards direct transfer of cash subsidy for kerosene, LPG and fertilizers.

Financial Sector Legislative Reforms Commission, headed by former Supreme Court judge B. Srikrishna, to complete its work in 24 months; to overhaul financial regulations.

Five-fold strategy against black money; 13 new double taxation avoidance agreements; foreign tax division of CTBT strengthened; strength of Enforcement Directorate increased three-fold.

Bill to be introduced to review Indian Stamp Act.

New coins carrying new rupee symbol to be issued.

Anganwadi workers salary raised from Rs.1,500 to Rs.3,000.

Housing loan limit for priority sector lending raised to Rs.25 lakh.

Railway Budget, 2011
For the third year in a row, Railway Minister Mamata Banerjee made an attempt to come out with the “aam aadmi” budget sparing the passengers and industry from fare and freight hikes and announcing the highest ever investment of Rs 57,630 crore, with 68 new trains.
On February 25, 2011, presenting her third Railway Budget in UPA-II in the Lok Sabha, Mamata vowed to build a stronger railroad infrastructure based on the Vision 2020 document while announcing a slew of concessions, including reducing the eligibility age of senior women citizens from 60 to 58 years and raising the fare concession for senior citizens (above 60) from 30 to 40 per cent.
The budget estimates for 2011-12 project a freight loading of 993 million tonne and a passenger growth of 6.4 per cent. Ordinary working expenses have been estimated at Rs 73,650 crore and appropriation to depreciation reserve fund pegged at Rs 7,000 crore.
A provision of Rs 6,735 crore has been made for dividend payment and the excess for railways for the new fiscal has been projected at Rs 5,258 crore, with an operating ratio of 98.1 per cent.
Gross traffic receipts have been fixed at Rs 94,840 crore, which is higher by Rs 75 crore over budget estimates. The ordinary working expenses have been fixed at Rs 67,000 crore. A target of 1,300 km of new lines, 867 km of doubling of lines and 1,017 km of gauge conversion has been set.
Indian Railways, the world’s second largest under a single management, has a network of 64,099 km to ferry as many as 18.9 million passengers on 7,000 trains daily, from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonne of cargo.

Highlights

No hike in passenger fare and freight rates.

Highest ever plan outlay of Rs 57,630 crore proposed.Rs 9,583 crore provided for new lines.

1,300 km new lines, 867 km doubling of lines and 1,017 km gauge conversion targeted in 2011-12.

56 new Express Trains, 3 new Shatabdis and 9 Durontos to be introduced.

16,000 ex-servicemen to be given jobs in railways.

Ten-year backlog of 1.75 lakh jobs to be addressed.

Durontos on the Allahabad-Mumbai, Pune-Ahmedabad, Sealdah-Puri, Secunderabad-Visakhapatnam, Madurai-Chennai routes.

Integrated suburban network to be set up in Mumbai, Chennai, Ahmedabad.

A bridge factory in Jammu & Kashmir and a state-of-art institute for tunnel and bridge engineering proposed at Jammu.

New Shatabadi to link Ludhiana with New Delhi.

New weekly train, "Vivek Express", on Bandra (T)-Jammu Tawi Express route via Marwar-Degana- Ratangarh -Jakhal-Ludhiana.

Industrial park in Nandigram, Metro coach factory for Singur.

Centre for excellence in software at Darjeeling.

Concession for senior citizens increased from 30% to 40%.

Age for senior women citizens’ concession reduced to 58 from 60.

Pradhan Mantri Rail Vikas Yojana to be launched.

Student special .trains to be started; start of Rajrani Express.

Multi-purpose smart card to be introduced for all-India travel.

Review of economic growth story of India
As per the Economic Survey 2011, non-Congress States are scripting India’s economic growth story. The Survey places Bihar on top in terms of performance on growth, with the State posting a whopping 16.59 per cent growth in 2008-2009, the latest year for which the data
is available.
But Gujarat pips Bihar (which is followed by Orissa, Haryana and Uttrakhand) to the lead spot when the growth performance is measured from 2002-2003 onwards to 2009. Interesting to see is the fact that out of top five growing States in the country, four are ruled by non-Congress governments, with the exception of Haryana which stands fourth in this list.
The Economic Survey reveals that though Rajasthan, followed by Andhra Pradesh, UP, Madhya Pradesh, Tamil Nadu and Bihar, provided maximum employment under MNREGA in 2009-2010, it was Punjab (ruled by the Shorimani Akali Dal-BJP combine) which employed the maximum Scheduled Castes under the programme (Punjab also reports the lowest number of people below poverty line in India) while the BJP-ruled Madhya Pradesh employed the maximum STs, followed by Jharkhand, Gujarat and Chhattisgarh.

After Punjab, the maximum SC employment under MNREGA was reported from Tamil Nadu, UP, Haryana and Bihar.
On gross enrollment ratios in elementary education also, the Opposition-ruled States of Jharkhand (where the JMM and BJP are in coalition), Madhya Pradesh, Chhattisgarh and Gujarat rank the highest. So far as the progress under the National Rural Health Mission goes, the maximum health centers have come up in Tamil Nadu, followed by Karnataka, Andhra Pradesh, Maharashtra, Uttar Pradesh and Bihar.
Ironically, though they are doing well in terms of economic growth, non-Congress ruled states like Orissa and Bihar continue to perform poorly on poverty indicators. “The percentage of people below the poverty line is very high in Orissa, Bihar, Chhattisgarh, Jharkhand, Uttrakhand and Madhya Pradesh.
Rural income inequality is the highest in Haryana and urban income inequality is the highest in Madhya Pradesh.
Plan to deal with black money menace
Union Finance Minister Pranab Mukherjee has said that the government had adopted a five-fold strategy to deal with the problem of generation and circulation of black money. Presenting the Budget, he said: “The five-fold strategy consists of joining the global crusade against black money, creating an appropriate legislative framework, setting up institutions for dealing with illicit funds, developing systems for implementation and imparting skills to the manpower for effective action.”
He added that while the membership of the Financial Action Task Force was secured in June 2010, the government has also joined the Task Force on Financial Integrity and Economic Development, Eurasian Group and Global Forum on Transparency and Exchange of Information for Tax Purposes.
“Discussions have also been concluded for 11 Tax Information Exchange Agreements and 13 new Double Taxation Avoidance Agreements (DTAAs), along with revision of provisions of 10 existing DTAAs,” he said.

India, Malaysia ink free trade pact
On February 18, 2011, India and Malaysia signed a comprehensive market opening pact that throws up myriad trade opportunities for both sides and give a boost to India's Look-East Policy and the prospects for its economic integration with South-East Asia.

India’s Commerce Minister Anand Sharma and his Malaysian counterpart Mustapa Mohamed, in the presence of Prime Minister Najib Razak and several leading captains of industry from both sides, signed the Comprehensive Economic Cooperation Agreement (CECA).
The agreement, which was reached after seven rounds of negotiation, will see Indian mangoes, cotton, motorcycles, trucks and basmati rice attract less duty in Malaysia, among other things.
As a quid pro quo, the South-East nation will face less barriers on the sale of its fruit, engineering goods and chemicals in India.
Shivraj V. Patil panel report on 2G scam
Unveiling the report of the Shivraj V Patil panel that went into the lapses made during the allocation of the 2G Spectrum, Telecom Minister Kapil Sibal said on February 4, 2011, the committee had concluded that all decisions on Spectrum allocation since 2003 by successive governments, including the UPA regime, were procedurally wrong.
In what could be a damning admission of Raja not following procedures despite advice from other ministries, the report says that the DoT did not follow the advice of the Law Ministry or the views of the Finance Ministry over Spectrum pricing.
The findings on procedural lapses are being sent to the CBI, which is looking into the criminal culpability in the scam.

ULFA agrees to unconditional talks
After three decades of armed conflict that cost thousands of lives in Assam, the outlawed United Liberation Front of Assam( ULFA) has finally decided to sit for “unconditional” talks with the Government of India.
On February 5, 2011, leaders of the outfit informed that ULFA had been invited by Union Home Minister P. Chidambaram for a preliminary round of talks in New Delhi, as a prelude to formal negotiations that would materialize once ULFA submitted its charter of demands.
With this ULFA has finally given up its earlier preconditions of, one, holding talks in a third country; two, including “sovereignty” as the core issue; three, of having a UN observer for the talks.
The ULFA foreign secretary, Sasadhar Choudhury, pointed out that preconditions set by both ULFA and the government had stood in the way of holding peace talks since 1992, the year ULFA leaders had met then Prime Minister P.V. Narasimha Rao only to renege on their promise to come forward for a dialogue on a later date.
On ULFA commander-in-chief Paresh Barua airing his opposition to dialogue, the outfit leaders said he had done it before the general council of ULFA decided on unconditional talks. “The decision of the general council is binding on everyone. Anyone defying it will face disciplinary action as per the provision of the ULFA’s constitution. Paresh Barua was invited to both the central executive committee and general council meeting, but he didn’t come. We have conveyed our decision for talks to him and are waiting for his response,” the ULFA leaders said.
ULFA claims to have been founded on April 7, 1979. It initiated major violent activities in 1990, which led the Union government banning the organisation. Military operations against it by the Army also began in 1990.
In the past two decades, some 10,000 people have died in clashes between the rebels and the government.
In December 2009, the chairman and the deputy commander-in-chief of ULFA were arrested. There has also been a large ULFA crackdown in Bangladesh in last one year, which significantly assisted India and led to ULFA softening its stand and dropping the demand for independence as a condition for talks

India, Japan sign free trade agreement
On February 16, 2011, India and Japan signed a comprehensive economic partnership agreement (CEPA) to open markets and reduce barriers on goods, services and movement of people between the two countries.The pact was signed between Commerce and Industry Minister Anand Sharma and Japanese Foreign Affairs Minister Seiji Maehara in Tokyo.
Indian government has set a target of doubling bilateral trade to

$25 billion by 2014, which is currently at $10.3 billion. CEPA will lead to a quantum increase in bilateral trade and investment flows, by relaxing barriers to trade in goods, services and movement of natural persons, besides enhanced cooperation on protection of intellectual property.
This agreement is the most ambitious agreement signed by India so far and covers trade in goods, services and investment under its ambit. This agreement follows from the commitment of the two Prime Ministers in October 2010. The agreement has ensured that the sensitive sectors for India are fully protected, including agriculture, fruits, spices, wheat, basmati rice, edible oils, wines and spirits and also certain categories of industrial products such as auto and auto parts.

INTERNATIONAL AFFAIRS

People power forces Hosni Mubarak to quit as President of Egypt
On February 11, 2011, Hosni Mubarak stepped down as Egypt's President, handing over to the army and ending three decades of autocratic rule, bowing to escalating pressure from the military and protesters demanding that he go.
A military council would run the affairs of the Arab world's most populous nation, till a free and fair presidential election is held in September.
After a speaker made the announcement in Cairo's Tahrir Square, hundreds of thousands of protesters broke down in tears, celebrated and hugged each other chanting: “The people have brought down the regime.”
The 82-year-old Mubarak's downfall after 18 days of unprecedented mass protests was a momentous victory for people power and is sure to rock autocrats throughout the Arab world and beyond.
The sharpening confrontation had raised fear of uncontrolled violence in the most populous Arab nation, a key US ally in an oil-rich region where the chance of chaos spreading to other long stable but repressive States troubles the West. Washington has called for a prompt democratic transition to restore stability in Egypt.
Hundreds of thousands of protesters rallied across Egypt, including in the industrial city of Suez, earlier the scene of some of the fiercest violence in the crisis, and the second city of Alexandria, as well as in Tanta and other Nile Delta centers.
Since the fall of Tunisia's long-time leader Zine al-Abidine Ben Ali, which triggered protests around the region, Egyptians had been demonstrating in huge numbers against rising prices, poverty, unemployment and their authoritarian regime.

Nepal finally gets a Prime minister after seven months and sixteen attempts
Ending a seven-month-long standoff over the Prime Ministerial election, Nepal's Parliament, on February 3, 2011, elected veteran communist leader and chairman of the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) Jhalanath Khanal as the new Prime Minister of the Federal Republic of Nepal.

UML chairman Khanal, 61, was elected by securing 368 votes in the 601-member Parliament.

Khanal proved lucky and became the third communist Prime Minister after the April 2006 uprising by replacing his fellow comrade Madhav Kumar Nepal after the Unified CPN-Maoists, the single largest party in the Parliament, decided to withdraw its candidate and forge a Left alliance by extending support to Khanal.

Jhalanath Khanal, who was elected chairman of the UML in February 2009, was born in Ilam in May 1950. A graduate in political science and history from Tribhuvan University, Khanal entered politics in 1965. He was one of the founding members of the National Co-ordination Committee for all Communist Revolutionaries of Nepal in 1975 and CPN (ML) in 1978. He was jailed for a total of 26 months in his early political career and went underground in 1979.

After restoration of democracy, he was a minister in the interim government formed in 1990. He was elected as a lawmaker in the 1991 and 1994 general elections.

G-20 ministers reach deal to correct economic flaws
G-20 Finance Ministers have reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security, an issue pressed by India.

After two days of hard bargain by their Finance Ministers, major economies, faced with uneven recovery and downside risks, reached a text in the face of tough resistance from China to agree on guidelines for removal of structural flaws in the global economy.

However, the document did not talk about an issue of much interest to India. New Delhi wanted that G-20 should urge all jurisdictions to conclude Tax Information Exchange Agreements so that menace of black money in tax havens can be tackled.
This issue seems to have been put on back seat as a lot of time was spent on reaching an agreement with China, which was opposed to inclusion of foreign exchange reserves and its exchange rate among the guidelines. China is sitting on a $2.8 trillion forex reserves and is accused by the US of manipulating its currency yuan.

Faced with a double-digit food inflation, India also pressed for a coordinated approach to tackle food, commodity and oil price volatility, which make emerging economies "vulnerable".

The ministers agreed on a plan to strengthen the international monetary system (IMS) with regard to disruptive capital flows and disorderly movement in exchange rates, a matter of great concern to India.
The document also expressed its worries on the impact of rising oil prices, which have exceeded $100 per barrel.

On the most contentious guidelines to remove structural imbalances, the communique appeared to have accommodated China's objections to including forex reserves and current account deficit. The communiqué, instead, said that indicative guidelines, without targets will be used to assess: i) public debt and fiscal deficit; private savings and private debt; ii) external imbalances composed of trade balance and net investment income flows and transfers, taking into due consideration of exchange rate, fiscal, monetary and other policies.

US, Russia launch nuclear arms reduction pact
On February 5, 2011, US Secretary of State Hillary Clinton launched a landmark nuclear arms reduction pact with Russia, a showpiece of Washington’s “reset” of ties with its former Cold War enemy.

The new START officially came into force when Clinton and Russian counterpart Sergei Lavrov exchanged ratification documents at a security conference in the German city of Munich.

“Today we exchange the instruments of ratification for a treaty that lessens the nuclear danger facing the Russian and American people and the world,” Clinton said.

The chief US diplomat hailed the pact as another example of “clear-eyed” cooperation between the two military powers, “part of a journey we have been taking for more than 60 years.” Lavrov told the Munich conference that the agreement would “enhance international stability.”

The pact slashes existing warhead ceilings by 30 per cent over the next 10 years and limits each side to 700 deployed long-range missiles and heavy bombers. The original 1991 pact expired at the end of 2009 amid stark differences over how the two sides planned to proceed.
Business News
Reliance Industries Ltd and UK’s oil and gas exploration company BP have announced a historic deal under which BP will pay $7.2 billion to acquire 30 per cent equity stake in 23 oil and gas production sharing contracts that RIL operates in India, including the KG D6 block. Future performance payments of up to $1.8 billion could be paid based on exploration success.
Fortis Global Healthcare Holdings will acquire a majority stake in Australia’s Dental Corporation Holdings (DCH). Fortis Global is the wholly-owned overseas investment vehicle of Fortis Healthcare Ltd.
Educomp Solutions has picked up a majority stake in test preparation company Gateforum Educational Services which provides preparatory tools for Graduate Aptitude Test in Engineering (GATE), an entrance test for admission to postgraduate courses in technical institutes in India.
Nokia Oyj, the world’s biggest maker of mobile phones, has formed a software partnership with Microsoft Corp., betting that together the two companies can challenge Google Inc and Apple Inc.

DO YOU KNOW

India’s first inland fish processing unit has been set up in the village of Bhutana in Karnal district of Haryana. The unit has been set up in technical collaboration with ZTM BPD Unit, South Zone, Central Institute of Fisheries Technology, Cochin, which comes under the Indian Council of Agricultural Research (ICAR).
As per the Economic Survey, 2011, India has the fourth largest foreign exchange reserves in the world. India’s foreign exchange reserves touched $ 297.3 billion in December 2010, from 279.1 billion in March
The National Science Day is observed on February 28 to mark the discovery of Raman Effect by Sir C.V. Raman in 1928, for which he was awarded the Nobel prize.
To reduce the burden of small tax-payers, a new, simplified income tax return form, Sugam, has been introduced.
The Union Budget 2011 has increased the Defence budget by 11 per cent. Additional Rs 17,071 crore have been allotted over 2010 Budget figure of Rs 1,47,344 crore. About Rs 69,199 crore has been earmarked for capital expenses like weapons, planes, ships, special classified projects etc.
The Budget 2011 has earmarked Rs 52,000 crore for education, out of which Rs 21,000 crore will be spent on Sarv Shiksha Abhiyan, Rs 6,213 crore on secondary education and Rs 2,200 crore on higher education.
The Hyderabad international airport has bagged the first rank in its category in the latest Airport Service Quality (ASQ) rankings of the Airports Council International (ACI).
The theme song of Cricket World Cup, 2011 was “De Ghuma Ke”. It was composed by the trio of Shankar, Ehasan and Loy
India received foreign direct investment (FDI) worth $21 billion 9Rs 96,104 crore) in the calendar year 2010, a decline of 22 per cent over 2009.
The SAARC Foreign Ministers’ meet was held in Thimpu, Bhutan on February 8, 2011.
The NASSCOM India Leadership Forum (NILF) was held in Mumbai in February 2011.
Mahatma Gandhi and the Tibetan spiritual leader the Dalai Lama have been listed by the Time magazine as the world’s top 25 political icons. Time’s top 25 political icons are: Mahatma Gandhi, Alexander the Great, Mao Zedong, Winston Churchill, Genghis Khan, Nelson Mandela, Abraham Lincoln, Adolf Hitler, Ernesto ‘Che’ Guevara, Ronald Reagan, Cleopatra, Franklin Roosevelt, the Dalai Lama, Queen Victoria, Benito Mussolini, Akbar the Great, Lenin, Margaret Thatcher, Simón Bolívar, Qin Shi Huang, Kim Il-Sung, Charles de Gaulle, Louis XIV, Haile Selassie, King Richard the Lionheart and Saladin.
India has agreed to temporarily lend fragments of Buddha’s bones, famously known as Kapilavastu relics, to Sri Lanka for an exposition to celebrate his 2600th year of enlightenment in 2011.
China has emerged as the world’s largest economy, surpassing Japan, which had held on to the position for over four decades. At the end of 2010, Japanese economy was estimated to be worth about $5.5 trillion and that of China $5.8 trillion. USA continues to be the largest economy of the world with the economy worth $14.6 trillion.

Godhra Train Burning Case
On February 22, 2011, thirty one persons were convicted and 63 others, including the main accused Maulvi Umarji, were acquitted by a special court in the 2002 Godhra train burning incident that left 59 persons dead and triggered violence in Gujarat that claimed the lives of over 1200 people.
The trial, conducted inside the Sabarmati Central Jail, Ahmedabad, began in June 2009 with the framing of charges against 94 accused. The accused were charged with criminal conspiracy and murder in burning of the S-6 coach of the train on February 27, 2002, near Godhra, about 125 km from Ahmedabad, in which 59 people were killed.
As many as 253 witnesses were examined during the trial and over 1,500 documentary evidences were presented before the court by the Gujarat police.
There were a total of 134 accused in the case, out of which 14 were released due to lack of evidence, five were juvenile, five died during proceedings of over nine years, and 16 are absconding. Of the 94, against whom the trial was conducted, 80 are in jail and 14 are out on bail.
Two different panels appointed to inquire into the 2002 case had given different views on the Godhra train burning incident. The Nanavati Commission, appointed by the Gujarat government to probe the carnage, had in the first part of the report concluded that the fire in the S-6 coach was not an accident, but was caused by throwing petrol inside it. The one-man U.C. Banerjee Commission appointed by the Railway Ministry under Lalu Prasad Yadav had said that the fire was "accidental". The Court accepted the conspiracy theory.

Current Affairs: December 2010NATIONAL AFFAIRS

Mid-quarter policy review by RBI
In its mid-quarter policy review on December 16, 2010, the RBI announced a one per cent reduction in the statutory liquidity ratio (SLR) of commercial banks from 25 per cent to 24 per cent. The new SLR rates came into effect from December 18.
The apex bank also announced that repo rates and reverse repo rates would be held at 6.25 per cent and 5.25 per cent, respectively. The cash reserve ratio (CRR) of scheduled commercial banks will also remain unchanged at 6 per cent.
The announcement came amidst signs that inflation was showing signs of slowing even as a liquidity concern in the economy was on the rise. The RBI also announced a second auction for purchase of government securities in January 2011, under its open market operation (OMO), to improve banks’ liquidity.
The RBI increased repo and reverse repo rates six times in 2010, in a bid to rein in inflation.

India’s U-turn at Cancun Summit
In an effort to break a deadlock in negotiations to save the planet from overheating, India’s Union Minister of State Jairam Ramesh discarded overnight India's policy of two years on global climate change. It's a move that will likely win India international acclaim, but Ramesh must now prepare for fierce domestic criticism of his new stand that the country is willing to accept legally binding commitments in place of its oft-repeated policy of only voluntary action to cut greenhouse-gas emissions
"All countries must agree to a legally binding commitment under an appropriate legal form," Ramesh said as he surprised his own negotiators at the 16th Global Climate Summit, held in December in Cancun, Mexico..
The statement was not part of the minister's prepared speech, which he read at the plenary of the UN Framework Convention on Climate Change, as the summit is officially called. The UPA government had assured the Parliament India's position of refusing any legally binding agreements was non-negotiable. Like most developing countries, India had consistently said that since global warming was caused by developed nations, it would only offer voluntary cuts of up to 25%—not of overall emissions but in the intensity of emissions, or reducing the carbon in every unit of industrial production.

Rs 40,000 cr raised via disinvestment in 2010
Having begun 2010 with a wide gap between its income and expenditure, the union government diluted its stake in nine State-owned companies, including Coal India, to raise Rs 40,000 crore that helped cut borrowings.
The amount is the most raised in a year since the government began the programme of diluting minority stake or privatising vast swathes of public sector companies in 1991-92.
The year started with the follow-on public offer (FPO) of NTPC, in which the government diluted its 5 per cent stake and mopped up Rs 8,480 crore. This was followed by the FPO of Rural Electrification Corporation in the month of March. The government offloaded 5 per cent of its stake in the company and raised Rs 882 crore, while REC issued fresh equity of 15 per cent.
In the same month, the government diluted 8.38 per cent of its stake in NMDC through FPO and mopped up Rs 9,930 crore.
The fiscal year 2010-11 started with the initial public offer of Satluj Jal Vidyut Nigam (SJVN) in the month of May.
While the revenue mop up figure of Rs 40,000 crore is for the 12 months ending December 31, the government had targeted raising Rs 40,000 crore through disinvestment in the financial year 2010-11.

Worst Session of Parliament in 25 years
The 2010 winter session of the Parliament can be termed as the worst in the past 25 years of parliamentary history. Disrupted for its entire duration of 24 sittings each in the Lok Sabha and the Rajya Sabha, it ranks at the bottom of the heap among 82 sessions held since 1985.
Both the Houses this time saw protests on the Opposition’s demand for a Joint Parliamentary Committee probe into the 2G Scam. The Resume of Work of the two Houses reveals that the Lok Sabha worked for 7.37 hours, 5.5 per cent of the total available time, while the Rajya Sabha worked for 2.44 hours, just 2.4 per cent of the available time. These percentages are the lowest in 25 years.
The 8th Lok Sabha, despite the Bofors issue (into which a JPC was formed) worked for more than 100 per cent of the available time in 13 of the 14 sessions it saw. In the 13th Lok Sabha also, when issues such as the Ketan Parikh stock scam and the Tehelka expose rocked the Parliament, the lowest percentage of working hours in any session was 59.
If all sessions that sat for more than five working days are compared, the current session recorded the worst performance. Two other sessions that saw low performances were the 10th Lok Sabha in November, 1995, (House sat for 36 per cent of the available time) when the telecom controversy involving Sukhram as the minister came up and the 14th Lok Sabha in June, 2004, when the Opposition accused the UPA of appointing tainted MPs as ministers (namely Shibhu Soren and Lalu Yadav accused in a murder case and the fodder scam, respectively). In that session, the House sat for 33 per cent of the available time.
Visit of Chinese Prime Minister
Prime Minister of China, Wen Jiabao visited India on December 15, 2010. The much-anticipated summit between Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao was rich in symbolism but poor in substance. Belying New Delhi’s expectations, the Chinese leader remained non-committal on reversing Beijing’s policy of giving stapled visas to residents of Jammu and Kashmir or endorsing India’s candidature for a permanent UN Security Council seat.
A joint communiqué issued after the talks suggested few positive outcomes, including a commitment by the two countries to resolve outstanding differences, particularly on the vexed boundary dispute, at an early date through peaceful negotiations.
On the issue of terrorism, the two countries pledged to counter the menace through joint efforts that include disrupting the financing of the menace. They also recognised the need to implement all relevant UN resolutions on the subject, including the one that calls for the proscription of the Pakistan-based Jamat-ud-Dawa (JuD). Although there was no mention of the 26/11 terror attacks, the Chinese leader expressed sympathies with the families of the victims of the Mumbai carnage.
It was quite clear from the communiqué that the Chinese side was keen to deepen the economic content of the relationship rather than dealing with contentious issues of core concern to India. The two countries set a new bilateral trade target of $100 billion by 2015 and take measures to promote greater exports to China with a view to reduce India’s increasing trade deficit.
The positives that emerged from the India-China summit were: the two countries have decided to hold annual meetings at the foreign ministers level, established a hot line between the two Premiers, start a strategic economic dialogue, set up a CEO forum and include the Chinese language in the CBSE curriculum, apart from signing six MOUs in different areas, including one on China providing hydrological data to India on the Sutlej River in the flood season.

"The dragon and the elephant should tango," Chinese Premier Wen Jiabao suggested. He came up with this quip to emphasise the need for the two Asian giants, whose rivalry has been compared to that between the dragon (China) and elephant (India), to come closer.
India and China were partners in cooperation and not rivals, he said. Wen had words of appreciation for his Indian counterpart Manmohan Singh, describing him as a person “with an open and inclusive mind”.
The Chinese leader also mentioned that Cambridge University had brought out a publication containing speeches by him and Manmohan Singh whose common theme was the importance of open and inclusive societies.

India-EU Summit, 2010
On December 10, 2010, India and the European Union vowed to resist all forms of protectionist measures in the global trade as they reached the last stages of concluding a market opening bilateral trade and investment agreement.
After the EU-India Summit, attended by Prime Minister Manmohan Singh and top European Commission leaders, a joint declaration said that the two sides “agreed on the contours of a final package, and reaffirmed the importance of an ambitious and balanced” conclusion of Broad Based Bilateral Trade and Investment Agreement (BTIA).
Billed as the biggest trade opening agreement by the EU, and one of the biggest bilateral pacts ever, the BTIA will reduce duties on mutual trade, which aggregated about euro 56 billion (about $75 billion) in fiscal 2009-10.
While the EU is keen on gaining bigger market for its products in India, Prime Minister Manmohan Singh allayed apprehensions about its impact on the small farmers in India. He further said the two sides should take lead in avoiding protectionist trends, keeping markets open and encouraging the free flow and movement of people.
India has concerns over restrictions of movement of people in several European countries like the UK and Germany. The apprehensions were partly addressed in the joint statement.

Visit of French President
President of France Nicloas Sarkozy visited India on a four-day trip from December 5, 2010. He reached Bangalore on December 5 morning with his glamorous wife Carla Bruni and French officials and business representatives to kick off his second visit to India.
Lauding India’s role in social and economic development programmes in war-ravaged Afghanistan, he said the opening of Afghanistan’s economy, the fight against drug trafficking and the establishment of a secure regional environment demanded the cooperation of all Afghanistan’s neighbours. “India must assume its full role (in Afghanistan) in the process,” he said.
The French President also extended full support to India’s civil-nuclear programme. He said nuclear energy would now form the focus of Indo-French cooperation. Noting that 80 per cent of France’s electricity requirement was met though nuclear power plants, Sarkozy said France’s decision to rely on nuclear energy had proved visionary and ensured its energy independence.
The biggest deal that Sarkozy oversaw during the visit was the signing of the agreement between French nuclear equipment major Areva and the Nuclear Power Corporation (NCP) of India. As per the agreement, Areva is to build two European pressurised reactors (EPR) for NPC’s nuclear power complex scheduled to be built at Jaitapur in Maharashtra’s Ratnagiri district.
From two plants initially, the complex will have six nuclear reactors by 2030. The other big deal to be signed was a $1.2 billion contract to refurbish 56 Mirage 2000 aircraft of the Indian Air Force.
India and France have decided to achieve the trade target of euro 12 billion by 2012, Prime Minister Manmohan Singh said at a joint press interaction with French President Nicholas Sarkozy.
Prime Minister Singh said India would cooperate closely with France, which has assumed the chairmanship of G-20, to push forward the process of global economic recovery, better regulation and financial sector reform.
The joint statement issued by the two sides said the two countries welcomed the significant development of cross-border investments between them and large-scale investment by India-based French companies in the car industry, building materials, electrical equipment, public water utilities and rail transport. They also welcomed prospects of Indian investments in France.
Meanwhile, France said it proposed to invest over euro 10 billion in India in next two years if multi-brand retail and insurance sectors were liberalised even as New Delhi said they were ‘very much’ on government’s agenda.

Visit of Prime Minister Manmohan Singh to Germany
Prime Minister Manmohan Singh visited Germany on December 11, 2010. During the visit, in a stern message to Pakistan, Germany made it clear that terrorism is not a means to solve political problems and this is “unacceptable”.

Both the sides also discussed the possibility of entering into bilateral cooperation in civil-nuclear energy. If it crystallises, Germany will follow the US, France and some other countries for civil-nuclear cooperation with India.
Both leaders said India and Germany would work hard together to advance UN Security Council reforms for expansion of both permanent and non-permanent seats.
The two sides also agreed to enhance bilateral trade from the present level of 13 billion euro to 20 billion euros by 2012.
Germany is India's largest trading partner in the 27-nation European Union, with bilateral trade growing in the recent years to reach 13.4 billion euros in 2008.
Bilateral trade decreased marginally to 13.09 billion euro, but has revived and is growing by over 15 per cent and reached 9.8 billion euro during January-August, 2010.
Visit of Russian President
India and Russia inked more than 30 accords, including one on joint designing of the fifth generation fighter aircraft and another on expanding nuclear cooperation, during President Dmitry Medvedev’s visit to India on December 20, 2010.
From Afghanistan to co-producing a fifth-generation fighter jet at a cost of $30 billion and sharing military signals from a satellite navigation system, India and Russia returned to the familiar comfort of their extraordinary past, with the promise to add new areas of cooperation in the hydrocarbon sector, as well as take forward discussions in the area of civil nuclear energy.
Topping the chart of 30 agreements was one on enhancing cooperation in the oil & gas sector, memoranda to fight illegal immigration and simplify visa procedures, as well as a design contract for a fifth-generation fighter aircraft.
Working towards the civil nuclear cooperation, the two countries inked an accord under which Russia would set up two more 1,000 MW units at Kudankulam.
Medvedev’s visit to India brought the curtains down on a particularly busy diplomatic season in which Delhi, over a period of six weeks, played host to four of the world’s most powerful leaders.
As the US broke new ground with India in recent years, especially on the back of the nuclear deal with New Delhi, the partnership with Russia seemed to slag. But the strategic orientation of India’s foreign policy, with energy security and concerns around terrorism at the core, have had the effect of turning its head towards Moscow once again and finding that Moscow would also like to reciprocate.
For several years, for example, Russia has not wanted to discuss Afghanistan with India, but with NATO-ISAF forces now publicly announcing their decision to withdraw by 2014, Moscow realises that it must forge a new conversation around this subject, especially since both Russia and India are victims of both terrorism and drug-dealing.
It’s clear too that Russian Prime Minister Vladimir Putin is driving this return to a revivified relationship at Moscow’s end, while in New Delhi a variety of factors are combining to persuade the Indian establishment to look anew at this old friendship.
One reason is that Russia remains India’s oldest partner in the civil nuclear and defence sectors. Despite New Delhi’s intention to diversify and buy armaments from the West, especially the US, Russian offers to share information and technology in its satellite navigation system GLONASS are both “unique and unprecedented”.
The agreement on the exploitation of the hydrocarbon sector, as well as a separate one between ONGC Videsh and Russia’s Sistema, is an example of how both countries are now hoping to jointly exploit their natural resources.
As for discussions on civil nuclear energy, which have hit a road-bump with the passing of the nuclear liability law, both sides are keen that such legislation does not come in the way of Russia expanding its presence in India’s civil nuclear sector.
The Indian side reassured the Russians that the “international convention” on nuclear matters, such as the 1963 Vienna Protocol, would take precedence in any dispute following a nuclear accident on the question of supplier or operator liability.
One major drawback of the Manmohan Singh-Medvedev summit was its inability to forge a concrete roadmap to revive the economic relationship, although a couple of MOUs were signed on promoting pharma and IT-related services.
Investment in each other’s countries is an abysmal $1 billion each, while trade remains at a lowly $7.5 billion. Even the target of increasing trade to $15 billion by 2015 is modest at best.
TRAI cracks whip on telemarketers
Hardening its stand against telemarketers who violate guidelines, the Telecom Regulatory Authority of India (TRAI) has decided to impose a hefty penalty of up to Rs 2.5 lakh if they call a mobile subscriber registered for not receiving commercial calls.
The penalty is a staggering 250 times the earlier maximum stipulated penalty of Rs 1,000. The minimum penalty was only Rs 500.
Under the revised guidelines, a telemarketer will be fined Rs 25,000 for a first offence, rising progressively to Rs 2.5 lakh for a sixth offence, following which its number will be blocked by all service providers, TRAI said. The new regulations became from January 1, 2011.
Telemarketers will also be issued a series of 70 numbers to help subscribers recognise commercial calls. Similarly, a unique SMS header has also been mandated for easy identification of commercial SMSs. No commercial communication, even for unregistered customers, will be permitted between 9 pm and 9 am.
Subscribers already registered with the National Do Not Call Registry will not be required to register again. Streamlining the registration system, customer registration will now be effective within seven days, compared with the earlier 45 days.
A new option is the ability of a subscriber to choose the degree of call filtering, based on categories of interest. The categories are: banking & financial products, real estate, education, health, consumer goods, automobiles, communication & entertainment, tourism and leisure.
To register complaints, a customer can call 1909. A complaint can also be registered via SMS.
Transactional messages such as those from banks, insurance companies, telecom service providers, airlines and railways are excluded from the new restrictions. Transactional messages will, however, only be in the form of SMS and restricted to relevant information. Promotional content in transactional messages will not be permitted.

The Hero group and Honda of Japan, who had combined their names to build the world’s largest-selling two-wheeler company, have ended their 26-year-old association. The Hero group is buying out the entire 26 per cent equity stake of Honda Motor Company in the joint venture, Hero Honda Motors.
Coca-Cola India is planning to expand Vitingo, an orange-flavoured beverage, across India.
India’s largest low-cost carrier, IndiGo, has replaced Air India (domestic) to become India’s third largest carrier in terms of passengers carried. Jet Airways leads with 26.2 percent share of total passengers, followed by Kingfisher at 19.1 percent. IndiGo’s share is 17.3 percent.
Reckitt Benckiser of UK has agreed to acquire Ahmedabad-based Paras Pharmaceuticals for a consideration of Rs 3,260 crore.
IndiaPay is India’s first indigenous payment gateway and is scheduled to be launched in mid-2011. The National Payments Corporation of India (NPCI) is the owner of IndiaPay and will make its first move by cutting charges levied to merchant establishments by half, compared with what MasterCard and Visa charge. IndiaPay’s shareholders consist of 10 banks, six of which are PSU banks, and is promoted by the Reserve Bank of India.
Lanco Infratech has announced acquisition of Griffin Coal Mining Company in Australia for Rs 3,800 crore. This is the second buyout of an Australian coal mining firm by an Indian company after Adani Group bought Line Energy’s Galilee coal tenement in August 2010.

INTERNATIONAL AFFAIRS

US Senate ratifies new arms control treaty with Russia
On December 23, 2010, the US Senate ratified the arms control Strategic Arms Reduction Treaty (START) with Russia to cut down the countries’ nuclear stockpile, after several Republicans broke ranks with their party to vote in its favour. The new Strategic Arms Reduction Treaty cleared the required threshold of two-thirds of the Senators present, and the Senate ratified it by an overwhelming vote of 71 to 26.
The New START would reduce the nuclear stockpiles of the two countries to 1,500, down from the current ceiling of 2,200, besides establishing a system for monitoring and verification. It will also replace a 1991 treaty and would pave the way for resuming weapons inspections that ended in 2009 with the expiry of the earlier treaty.
The treaty allows the two countries to conduct 18 short-notice, on-site inspections each year, with as many as 10 “Type 1” inspections, which focus on strategic systems, such as intercontinental ballistic missiles, submarines and bombers, and up to eight “Type 2” inspections, which cover storage sites, test ranges and other operations.
On-site inspections, data exchanges on the technical characteristics, locations and distribution of weapons are key components of the treaty.
“We will continue to advance our relationship with Russia, which is essential to making progress on a host of challenges—from enforcing strong sanctions on Iran to preventing nuclear weapons from falling into the hands of terrorists. And this treaty will enhance our leadership to stop the spread of nuclear weapons and seek the peace of a world without them,” President Obama said.
The development was also welcomed by Russian Foreign Minister Sergei Lavrov who said the ratification was signal of “efforts to ensure the dynamic development of bilateral relations” between Russia and the US.

Lack of risk management exposes BRIC economies
Rapidly growing BRIC emerging economies are vulnerable to external shocks as they lack adequate risk management and must synchronise fiscal and monetary policies, according to a survey of finance ministry officials by consultancy Booz & Company.
It said that the role of finance ministries has expanded far beyond their traditional fiscal mandate and they must reform so that they are not overly driven by interventions, near-term fiscal targets and benchmarking against local peers.
Booz polled more than 60 policy-makers in finance ministries in the Group of 20 and other key economies, along with officials from the IMF, World Bank, European Union and OECD, academic institutions and think tanks.
Brazil, China, India and Russia—the powerful BRIC group of emerging nations— rebounded fast from the financial crisis, but the survey warned of shortcomings which could pose risks in the future.
Russia is vulnerable to swings in the price of oil, Brazil to commodity prices, and India and China to global demand. China faces the additional risk of potential changes in currency policy, which could have ramifications for its trade position, says the survey.
It said these economies will face volatile swings within the economic cycle, often requiring corrective measures with high costs, unless the economic management functions within these countries are coordinated via a larger framework.
The survey also recommends that BRIC and other growth economies should quantify on- and off- balance sheet risks, including commodity prices, currency fluctuations, private demand, or financial exposure—and build them into policy decisions.

IMF Report on World Economy
A package of U.S. tax cuts should give a lift to a global economic recovery that had already begun to gain speed late in 2010, according to the IMF.
In an updated World Economic Outlook report, the International Monetary Fund said the global economy would likely expand 4.4 percent in 2011, a touch higher than the 4.2 percent it forecast in October 2010. It said it expected growth of 4.5 percent in 2012.
Advanced economies have been a drag on global growth since the financial crisis erupted in 2007. While they are beginning to offer a bigger contribution, the IMF said those economies still pose the biggest risk to the world recovery. In particular, it warned of downside risks from the debt crisis in Europe and the high debt levels in many other advanced economies.
It said "comprehensive, rapid, and decisive policy actions" were needed to tackle troubles in the euro zone. In a separate report on Tuesday, the IMF called for an increase in the effective size of Europe's financial rescue fund and rigorous stress-testing of the region's banks.
The IMF said rich nations needed to keep in place loose monetary policies to support growth. "As long as inflation expectations remain anchored and unemployment stays higher, this is the right policy from a domestic perspective," it said.
The Fund said the U.S. economy would likely grow 3.0 percent in 2011, a sharp upward revision from its 2.3 percent October 2010 forecast. The IMF expects growth in the world's largest economy to ease slightly to 2.7 percent in 2012.
For Japan, the IMF said growth was now expected to reach 1.6 percent in 2011, an upward revision from October, and 1.8 percent in 2012.
It maintained its October forecast for the euro zone at 1.5 percent and estimated growth would accelerate to 1.7 percent in 2012. It upgraded its 2011 growth forecast for Germany to 2.2 percent from 2.0 percent due to stronger domestic demand.
The IMF said it expects emerging and developing economies, which include China, India, Brazil and Russia, to keep up their brisk pace of growth, although it noted that inflation pressures were rising in these countries.
It revised up its 2011 growth figure for emerging economies to 6.5 percent from an October 2010 projection of 6.4 percent, and said it sees similar growth in 2012.
For China, the IMF maintained its 2011 growth forecast at 9.6 percent and said growth in 2012 would slow slightly to 9.5 percent.
The Fund revised up its 2011 forecast for Brazilian growth to 4.5 percent versus a previous projection of 4.1 percent. It said Brazil would likely grow 4.1 percent in 2012.
The IMF said the surge in private investment flows into emerging market economies would likely remain strong, buoyed by low interest rates in mature markets and a strong investor appetite.
It cited inflation as the key risk for emerging economies, and said tighter monetary policies were needed.
With emerging economies accounting for almost 40 percent of global consumption, a slowdown in these economies “would deal a serious blow to the global recovery,” the IMF warned.

Global economy in better shape
The health of the global financial system appears to have improved, with the economic clout of emerging nations on the rise even as developed countries continue to grapple with debt woes.
In signs of improvement, the world economy is estimated to have expanded by around 5 per cent in 2010, in sharp contrast to the lower output witnessed in 2009.
On either side of the Atlantic, the efforts to contain fiscal deficit and bolster economic growth have been in different trajectories. While crisis-hit Europe is clamouring for severe tightening measures, the United States continues to print more dollars.

In the wake of the ravaging crisis, power has shifted from the once-unshakable developed world to rapidly growing nations such as India and China.In a testimony to their rising economic clout, India and China are all set to get more voting power at the International Monetary Fund (IMF). The G-20 grouping has emerged as the most influential voice, with increased focus on nations such as India and China, whose consuming power is leading the global recovery.
Meanwhile, the word 'stimulus' continues to remain the buzzword for the world's largest economy, the US. Apart from continuing with a near-zero interest rate regime for three years, the US is now exploring newer ways to boost the still-sluggish recovery.
Federal Reserve Chief Ben Bernanke has hinted at further quantitative easing measures, after unveiling a plan to buy $600 billion-worth of government securities. What is more, President Barack Obama has announced fresh tax cuts and initiated steps to discourage outsourcing.

With Uncle Sam pumping in more dollars to rejuvenate the over $14 trillion economy and create more jobs, the spill-overs are nightmarish.
The cheap dollar has fuelled excessive fund flows into emerging nations, including India and China, which in turn has stoked concerns of overheating and asset bubbles.

More efforts required to slow deforestation
World efforts to slow deforestation should do more to address underlying causes such as rising demand for crops or bio-fuels, according to a report by the International Union of Forest Research Organizations (IUFRO).

It said a series of projects to protect forests had had limited success in recent decades—U.N. figures show that 13 million hectares (32 million acres) of forest were lost every year from 2000-09, an area equivalent to the size of Greece.
The report also suggested that the current U.N.-led efforts to protect forests had too narrow a focus on promoting trees as stores of carbon dioxide, the main greenhouse gas.
Deforestation accounts for perhaps 10 percent of all emissions of greenhouse gases from human activities. Trees soak up carbon as they grow but release it when they burn or decay.
The IUFRO study said a key problem was that deforestation, from the Amazon to the Congo, was often caused by economic pressures far away. A popular global brand of cookies, for instance, uses palm oil grown on deforested land in Indonesia.
IUFRO has urged policies of "embracing complexity" to help protect forests, including educating consumers, rather than rely on a one-size-fits-all mechanism such as carbon storage.
Authors of the IUFRO study said that the U.N. plan, known as REDD+, was promising. But their worry is that this won’t be enough.

Greenland ice melts set record in 2010
Greenland’s ice sheet melted at a record rate in 2010, and this could be a major contributor to sea level rise in coming decades. The ice in Greenland melted so much in 2010 that it formed rivers and lakes on top of the vast series of glaciers that cover much of the big Arctic island.
Summer 2010 temperatures in Greenland were up to 3 degrees C above average, and there was reduced snowfall. Greenland’s capital had the warmest spring and summer since records began there in 1873. Average summer temperatures vary widely, but in coastal areas hover around freezing.
This is in tune with studies released by the U.S. National Oceanic and Atmospheric Administration and the World Meteorological Organization finding that 2010 was tied with 2005 and 1998 for the warmest year since modern global temperature record-keeping began in 1880.
With less snow cover, more bare ice was exposed to the sun, and because bare ice is darker than snow, it absorbs more solar radiation. So the more ice is uncovered, the more warming sunlight it absorbs and the more vulnerable it is to melting.

The study was sponsored by World Wildlife Fund, NASA and the National Science Foundation.
“Sea level rise is expected to top 3 feet by 2100, largely due to melting from ice sheets,” according to World Wildlife Fund climate specialist Martin Sommerkorn.

Cancun Climate Summit
The UN climate conference, held at Cancun, Mexico in December 2010, reached a “compromise” to set up a $100 billion “Green Fund” to fight global warming, a decision India described as an “important step forward”, but there was no agreement on extending the landmark Kyoto Protocol on emissions cuts beyond 2012.
“Confidence is back, hope has returned,” host Mexican President Felipe Calderon said, minutes after a set of decisions was adopted at the end of the two-week conference of ministers from nearly 200 countries.
Progress at the conference included a broad agreement on technology-sharing mechanism that will ensure that poor and vulnerable countries are able to access green technologies easily and in a cost-effective manner.
A “Green Fund” has been set up that is expected to mobilise $100 billion per year by 2020, which will be given to developing countries for adaptation and mitigation purposes.
The decisions reached in this conference will be followed up in negotiations in 2011, and it is hoped that a legally binding treaty emerges at the next climate meet in Durban, South Africa.
Bolivia was the sole country to oppose the decision in Cancun, but was eventually overruled.
Many of the contentious issues were by-passed to reach compromises in Cancun. For instance, no number has been given for further emission reductions under the Kyoto Protocol and there is no commitment to continue the Kyoto Protocol after it expires in 2012. According to some groups, it is a “weak” text that will eventually lead to the death of Kyoto Protocol, the only treaty that imposes legally binding cuts on developed countries. Others said that it is a workable “compromise” for the moment.

India's contributions have been incorporated in the text, including the International Consultation and Analysis, which is a transparency mechanism to review whether developing countries are carrying out their domestic mitigation actions.
The talks were hailed by observers as a boost for “multilateralism” in climate talks, which had waned following the negotiations in Denmark in 2009, after being marred by a great deal of mistrust between developed and developing countries.
The Cancun deal appears to have pacified the US and China, which had been at loggerheads throughout the meet on methods for monitoring and verifying actions to curtail greenhouse gases.
Other main components included promotion of efforts in poorer nations to protect their climate-friendly tropical forests, with the prospect of financial compensation from richer nations. The final text contained vague compromise language on financing, monitoring and oversight.
The meet also decided to establish a Technology Executive Committee under the treaty to analyse needs and policies for transfer to developing nations of technology for clean energy.
China, Pak ink trade deals
Pakistan and China signed economic deals worth billions during the visit of Chinese Premier Wen Jiabao to this impoverished, conflict-ridden nation in December 2010. The two nations also stressed the importance of cultural exchange by inaugurating a new centre dedicated to what Islamabad calls their “all-weather” friendship.
China is Pakistan’s closest friend in Asia, giving Islamabad military aid and technical assistance, including nuclear technology. Crucially, most Pakistanis view China as an ally that, unlike Washington, doesn’t make demands for its assistance. But Beijing is hardly left empty-handed from its ties with Pakistan, which serves as a close, cheap source of natural resources to fuel its growing economy.
During Wen’s trip, the first by a Chinese premier in five years, the two governments signed deals worth $14 billion for 36 projects in Pakistan, while businesses in the two countries agreed to deals worth another $10 billion.
The 13 agreements included a $229 million donation from China to help with reconstruction from the devastating floods Pakistan suffered earlier in 2010, as well as a $400 million soft loan for Pakistan.
Terror to be India’s focus at UNSC
Even as India re-enters the United Nations Security Council or UNSC in January 2011, it will use its seat on the apex body to focus attention and apply pressure on terrorist groups that have targeted the country in the past. Indian officials have described this as a “high priority” area for the country as it commences its two-year term as an elected non-permanent member of the Council from the Asia region.
India will “vigorously pursue” addition to the sanctions list of entities, individuals and outfits involved in acts of terrorism affecting the country. Obviously, this includes frontal organisations of Pakistan-based groups like the Laskar-e-Tayyeba and Jaish-e-Mohammed that have carried out attacks against India and Indian interests.
This would involve focusing on listing of such entities through the Al Qaeda and Taliban Sanctions Committee, which falls under the auspices of the UNSC. At present, some individuals and groups blacklisted by the United States Treasury and State Departments have not faced similar action from the UN. The UN effort is focused on cutting off funding for the entities and placing travel restrictions upon them.
At the same time, this will also involve future decisions regarding possible delisting of those associated with the Taliban as part of the political process in Afghanistan that some, like the Pakistan establishment, have preferred. However, India has objected to the Taliban in the past and this could play a role in how India addresses the Afghanistan issue on the Council.
In fact, India’s presence on the Council will also mean that India will have formal leverage to play a role in Afghanistan—a change from the last one year when, due to pressure from Pakistan, there had been efforts to reduce India’s role in that critical region. Afghanistan, of course, remains a major matter before the UNSC, although significant decision-making is undertaken by the US-led coalition forces in that country.
India will also be engaged in dealing with other global matters while on the Council, including flashpoints like Iran, North Korea and the Middle East.
India also hopes to play a constructive role in “shaping the Council’s response to the African agenda.” In fact, almost immediately after India assumes its seat, the major issue before the UNSC could be the scheduled referendum in the Sudan and the possible reconstitution of that nation.

Business News

Two young Asian entrepreneurs in England—Indian-origin Laurence Nair Price and Pakistan-origin Hayley Hadfield—have created history of sorts by bagging a deal to sell lip-smacking lassi in luxury store of Harrods in central London. The lassi is called “Schmoo”.
Mahindra and Mahindra (M&M) has launched a compact SUV, called Thar, targeted at off-road enthusiasts, style-seekers and even war-veterans. Thar is an evolved version of the earlier brands like Commander Jeep.
The world’s second-largest retailer, Carrefour, has opened its first ‘cash-and-carry’ outlet in India in New Delhi.
Fortis Global Healthcare Holdings has decided to acquire a 30 per cent stake in Australia’s leading dental clinic chain Dental Corporation, for about Rs 450 crore.
Anil Ambani group company, Reliance Media-Works has inked pact with Russian World Studios (RWS) to outsource work related to film restoration, image processing and enhancement and HD conversion from Russia to the Indian company’s facilities in Mumbai and Burbank, USA.

DO YOU KNOW

The United Nations, in a resolution adopted during its 63rd General Assembly meeting in December 2008, had decided to observe 2011 as the International Year of Chemistry. 2011 marks the 100th anniversary of the founding of the International Association of Chemical Societies (IACS), which was succeeded by IUPAC a few years later.
The United Nations General Assembly has declared 2011 as the International Year of Forests to raise awareness on sustainable management, conservation and sustainable development of all types of forests.

The Union cabinet has approved the declaration of January 25 every year as “National Voters' Day” beginning from 2011 and to provide voters a badge with its logo and the slogan “Proud to be a voter—Ready to vote”.
The Article 326 of Indian Constitution was amended in 1988 to lower the voting age from 21 years to 18 years.
The International System of Units is the world’s most widely used system of measurements for commerce and science. It is made up of seven base units--metre, kilogram, second, ampere, kelvin, candela and mole—each of which represents a different physical quantity. Its origins can be traced back to 18th century France and it has been recognised internationally as the standard metric system since the 1960s.
The metre was once defined as the distance between two lines on a platinum-iridium prototype, but is now defined by the speed of light.
The Election Commission of India has decided to celebrate January 25 as “National Voters’ Day”, as part of its ongoing efforts to create awareness among the people about their greater participation in the electoral process.
Central Bank of India observed its 100th foundation day on December 23, 2010.
Objective
20,483 chess players took part in a tournament held in Ahmedabad to earn a plance in Guinness Book of World record.
Jal Hans is the first seaplane of India. It will be operated by Pawan Hans Helicopters Ltd and cater to island-hopping tourists in India. First service will be operationalised in Andamans.
Hazratganj in Lucknow marked its 200th anniversary on December 25, 2010.
Haryana has bagged the first prize in the Best States category for its performance in Energy Conservation Programmes in 2009-10. The State government had announced a five-year State Energy Conservation Action Plan in December 2007 with a target of achieving energy savings of 500 MW by 2012.
World Aids Day is observed on December 1.
The Bimal Jalan committee report is on working of capital market infrastructure in institutions. The committee has recommended stringent ownership norms for stock exchanges.
International Day of Persons with Disabilities is observed on December 3.
India-EU Summit was held in December 2010 in Brussels, Belgium.
Martina Navrotilova lead a team of 27 climbers to the top of Mt Kilimanjaro in Tanzania (at 5,895 meters), the world’s tallest free-standing mountain, to raise money and awareness for the Laureus Sport Good Foundation. She hit tennis balls off the top of Africa’s highest peak.

current Affairs: November 2010

NATIONAL AFFAIRS

Nitish wave sweeps Bihar

Voters in Bihar delivered a memorable and truly massive mandate to the NDA, led by Nitish Kumar of the Janata Dal (United). The NDA together cornered as many as 206 (JDU 115 and BJP 91) of the 243 seats in the Assembly, a landslide that had eluded even Lalu Yadav at his peak.
Even more spectacular was the strike rate of the BJP, which contested 102 seats and won 91 of them, winning virtually 9 of the 10 seats the party contested. The BJP appears to have done equally well in urban as well as rural constituencies, riding piggyback on the public image of Nitish Kumar.
The share of votes polled by different parties, however, tell a slightly different story. While the NDA got 40 per cent of the votes polled, up 2 per cent from the 38 per cent of the votes polled in the general election in 2009 and from 36 per cent polled by them in the last Assembly election in 2005.
Drastic improvement in Law and Order situation, speedy trials to convict 50,000 criminals, some from his own party, empowered women, reservation of half of the seats in local bodies and primary school teachers category for women were some of the major reasons for Nitish Kumar retaining power in Bihar.
Absence of local leaders and lack of ground work, and sudden decision to contest all 243 seats dissipated the focus and let to the dismal performance of Congress party.
On November 26, 2010, Nitish Kumar was sworn in as the Bihar Chief Minister for the second consecutive term and the third time at a simple ceremony at the sprawling Gandhi Maidan, Patna. Senior BJP leader Sushil Kumar Modi was sworn in as a Cabinet Minister and designated as Deputy Chief Minister.

NRIs to get voting rights
It’s celebration time for nearly 11 million Non-Resident Indians (NRIs) across the globe. They will now be able to exercise their franchise in the elections in the country of their origin. Both Houses of Parliament had passed the Representation of People (Amendment) Bill in the Winter Session of Parliament to grant voting rights to NRIs.
Citizens of India who have not acquired the citizenship of any other country and were living abroad owing to employment, education, or otherwise, are now eligible to register their names in the electoral rolls in the constituency of the address shown in their passport and to vote when and if they are physically present when polls are held.
Until now, an NRI’s name got deleted from the voters’ list if he or she stayed outside the country for more than six months at a stretch.

India’s first eco-sensitive zone on a major river
The Union government has decided to declare the natural course of the Ganga in 135 km stretch from Gaumukh to Uttarkashi in Uttarakhand as India’s first “eco-sensitive” zone on a major river. This means that part of the river cannot be disturbed for any projects. Following this decision, Prime Minister Manmohan Singh approved a proposal of scrapping three big hydel projects— Loharinag Pala, Bhairon Ghati and Pala- Maneri—and providing 2,000 MW of free power to Uttarakhand as compensation for the same.
The decision is direct fallout of Environment Minister Jairam Ramesh’s assurance to religious gurus, including senior BJP leaders, and environment experts that river Ganga will be allowed to run its natural flow in the 135-km stretch. The minister had support of non-official members of the authority, who had been advocating that no dams—small or big—be allowed on the river.

Mahadayi Water Disputes Tribunal
The Union government has constituted the Mahadayi Water Disputes Tribunal with a sitting Supreme Court judge, Justice J.M. Panchal as its Chairman. Justice Viney Mittal of the Punjab and Haryana High Court and a former judge of Andhra Pradesh High Court, Justice P.S. Narayana, have been appointed as members.
The Tribunal has been constituted on a request sent by Goa in July 2002, for adjudication of the water disputes with Karnataka relating to Mahadayi River. Maharashtra also stands to benefit from its adjudication. The need for setting up the three-member tribunal was being felt since the Union Ministry of Water Resources had tried to resolve the dispute, but was not successful.

Visit of President Patil to Abu Dhabi
Indian President Pratibha Patil made a goodwill visit to Abu Bhabi and Dubai in November 2010.
India’s economic aspirations and strong growth make it an ideal destination for foreign investment, President Pratibha Patil told members of the Abu Dhabi Chamber of Commerce.
All religions of the world unite was the President’s second message in Abu Dhabi.
At an interaction with students of Indian schools from the UAE at the Abu Dhabi Indian School, the President advised them to build friendships and develop the ability to work constructively as a team. She opined that education was not merely necessary to secure a job but an investment into the future and a way to imbibe the concepts of peace, harmony and tolerance.
Inaugurating the Indian Islamic Centre, the President said that it was a tribute to the collective efforts of the Indian Diaspora and would serve as a cultural bridge between India and the UAE.
The President arrived in Dubai to a grand reception given by the Indian community. She also launched a long-awaited 24-hour helpline for distressed Indian workers facing problems with their employers or contracts.

President Patil’s visit to Syria
Indian President Pratibha Devisingh Patil arrived on November 26, 2001, on a four-day state visit to the Syrian Arab Republic. Her visit assumed special significance since this was the first ever visit of by an Indian President to Syria.
Several Memoranda of Understanding (MoUs), including those on cultural exchange, were signed during the visit. Her talks with President al-Assad gave a new momentum to the bilateral relations in all fields, particularly on expanding economic and commercial cooperation. The President’s visit was aimed to bolster a political dialogue between the two countries and discussions were held on bilateral, regional and international issues, including West Asia peace process.

President Patil will also meet Syrian businessmen and industrialists to find new prospects for bolstering and developing economic and commercial relations between the two countries. Syria is an important country for India’s energy security needs.
Syria has already backed India’s demand for a permanent membership of the United Nations Security Council and has always tried to act as a moderator for toning down Pakistani rhetoric in the meetings of Organisation of Islamic Countries.

Visit of President Obama of USA
US President Barack Obama reached India for a three-day official visit on November 6, 2010. He arrived in Mumbai where he paid homage to the 26/11 Mumbai terror attack victims. Later, addressing the Indian and American entrepreneurs he said several landmark deals worth US $ 10 billion have been signed between Indian and American companies shortly before his arrival. These deals, he said, will help in creating more than 50,000 jobs back home in USA.
Among the biggest deals announced included Reliance Power’s purchase of 2,400 MW plants from GE and Spicejet’s deal to buy thirty three Boeing 737 aircraft.
President Obama landed in Delhi on November 7, 2010.
On November 8, President Obama addressed the Indian Parliament. The US President’s speech, which was interspersed with several India-specific references and continuously underlined the fast-improving partnership between New Delhi and Washington, was attended by a packed House, which included Vice-President Hamid Ansari, Prime Minister Manmohan Singh, Lok Sabha Speaker Meira Kumar, UPA chairperson Sonia Gandhi, Cabinet ministers and members of the two Houses of Parliament.
If Obama’s support to India for a permanent seat on the UN Security Council was aimed to please the hosts, the visiting President was equally forthright when he reminded India that this membership also comes with greater responsibilities which require it to spell out its position on issues like human rights violations.

Obama, who was given a standing ovation at the end of his mesmerising speech, also pleased his hosts with a specific mention to the terrorist organisations being harboured by Pakistan.
While speaking on Iran’s nuclear programme, he said the US and India “can pursue” the goal of securing the world’s vulnerable nuclear material. “We can make it clear that even as every nation has the right to peaceful nuclear energy, every nation must also meet its international obligation, and that includes the Islamic Republic of Iran,” he said.
India and the United States pledged to defeat all terrorist networks, including the Pakistan-based Lashkar-e-Taiba (LeT), and strengthen international cooperative activities that will reduce the risk of terrorists acquiring nuclear weapons or material.
Condemning terrorism in all its forms, Prime Minister Manmohan Singh and US President Barack Obama, in a joint statement, issued at the end of the American leader’s official engagements in India, called on Pakistan to bring to justice the perpetrators of the 26/11 Mumbai terror attacks.
They reiterated that success in Afghanistan and regional and global security required elimination of safe havens and infrastructure for terrorism and violent extremism in Afghanistan and Pakistan. The two leaders also emphasised the importance of close cooperation in combating terrorist financing and in protecting the international financial system.
Deciding to strengthen and expand the Indo-US global strategic partnership, the Indian PM and Obama called for an efficient, credible and legitimate United Nations to ensure a just and sustainable international order. Singh welcomed President Obama’s affirmation that in the years ahead, Washington looked forward to a reformed UN Security Council that included India as a permanent member.
Singh and Obama also expressed a commitment to strengthen international cooperative activities that would reduce the risk of terrorists acquiring nuclear weapons or material without reducing the rights of nations that played by the rules to harness the power of nuclear energy to advance their energy security. This sentence in the joint statement is obviously aimed at justifying the Indo-US civil nuclear deal under which India will develop nuclear energy with the assistance of major world powers to meet its growing electricity needs. Both sides expressed deep concern about the threat of biological terrorism and pledged to promote international efforts to ensure the safety and security of biological agents and toxins.
On the civil nuclear deal, they reiterated their commitment to build strong bilateral cooperation through the participation of American energy companies in India on the basis of mutually acceptable technical and commercial terms and conditions that enabled a viable tariff regime for the electricity generated.
The two leaders also decided to take mutual steps to expand US-India cooperation in civil space, defence and other high-technology sectors commensurate with India’s non-proliferation record and commitment to abide by multilateral export control standards.
Key health and Education pacts singed: A promise to help India battle old and emerging infections and another of forging collaborations in higher education were the high points of US President Barack Obama’s India visit, which saw two key pacts being inked in the sectors.
On the health front, President Obama and Prime Minsiter Manmohan Singh announced the setting up of the Global Disease Detection India Centre to come up under the MoU between the National Centre for Disease Control (NCDC), Delhi, and the Centre for Disease Control (CDC), Atlanta.
On the education front, the two sides committed themselves to a higher education summit in New Delhi in 2011 to develop “collaborations” in the area.
Building lab capacity at home for diagnoses of emerging infectious diseases using well characterised reference materials and advanced technology transfer that meets CDC and global standards will be the other major takeaways from health MoU.
India and the US also launched a joint initiative for an ‘Evergreen Revolution’ in agriculture to promote food security across the world. As part of the food security initiative, India’s expertise in agriculture sector will be shared with farmers in Africa. An agreement was also reached between the two nations for cooperation on forecast of monsoon, the most crucial weather feature for a good crop.
Obama said, “like the earlier collaboration between two countries in agriculture that ushered in ‘Green Revolution’ in India, he expected the ‘Evergreen Revolution’ to enhance food security for the world”.

Loan scam
On November 24, 2010, the CBI arrested R.R. Nair, Chief Executive Officer (CEO) of LIC Housing Finance, and four other senior officers of public sector banks and financial institutions, including the LIC, the Bank of India, the Central Bank of India and Punjab National Bank, on bribery charges to facilitate corporate loans.
The arrests and the subsequent talk of a housing scam spooked stock markets that fell in the last hour of trading by 232 points with financials and real estate stocks, which were directly related to CBI’s action, bearing the maximum brunt.
The CBI said it had busted a racket wherein the private financial services company, its CMD and other associates were allegedly bribing senior officials of public sector banks and financial institutions for facilitating large-scale corporate loans. They were also gathering confidential business information from financial institutions.
Officials of various public sector banks and financial institutions, namely the Bank of India, the Central Bank of India, Punjab National Bank, LIC and LIC Housing Finance Limited were receiving illegal gratification from the private financial services company that acted as mediator for corporate loans and other facilities from financial institutions.

Post independence, India lost $462 bn in illicit financial flows
Post independence, India lost a staggering $462 billion in illicit financial flows due to tax evasion, crime and corruption, a research and advocacy group has said in a report. The report, released by Washington-based Global Financial Integrity (GFI), found that the faster rates of economic growth since economic reform started in 1991 led to a deterioration of income distribution which led to more illicit flows from India.

According to the primary findings of the report titled “The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008”, India lost a total of $213 billion in illicit financial flows (or illegal capital flight).
These illicit financial flows were generally the product of: tax evasion, corruption, bribery and kickbacks, and criminal activities.
From 1948 through 2008 the Indian private sector shifted away from deposits into developed country banks and moved more of its money into offshore financial centres (OFCs). The share of OFC deposits increased from 36.4 per cent in 1995 to 54.2 per cent in 2009, the report said.
The total present value of India’s illicit assets held abroad accounts for approximately 72 per cent of India’s underground economy. This means that almost three-quarters of the illicit assets comprising India’s underground economy—which has been estimated to account for 50 per cent of India’s GDP (approximately $640 billion at the end of 2008)—ends up outside of the country.

Telecom spectrum scam
On November 16, 2010, the CAG indicted former telecom minister A. Raja for ignoring the advice of Prime Minister, Finance and Law ministries to allocate 2G spectrum to new players in 2008 causing a whopping revenue loss of over Rs 1.76 lakh crore.
In the report, tabled in both houses of Parliament, the CAG noted that the ministry of communication and IT “decided to go ahead with arbitrarily deciding that the cut-off date for issuance of Letters of Intent would be advanced to September 25, 2007, and applications received would be decided on FCFS (first-come-first-served) basis.”
In November 2007, Prime Minister Manmohan Singh had written to the telecom ministry suggesting introduction of “transparent methodology” of auction, “revision of entry fee” in the “backdrop of inadequate spectrum and large number of applications received for fresh licences.”
    The CAG highlighted that the Law Ministry had suggested setting up of an Empowered Group of Ministers to discuss the large number of applications and spectrum pricing, but the telecom ministry rejected it saying “the need for forming and EGoM arises when a new policy is being framed and on this particular issue no new policy for grant of UASL (unified access service licences) was being framed.”
The auditor, however, said the “contention of the DoT is untenable as the rejection of the advice” of the Law Minister to have detailed deliberations on the issues in the EGoM on the ground that changes in policy might lead to litigation “goes against the well-established and time-tested procedures of functioning of the government and the collective responsibility of the Union Cabinet.”
    The report said the presumptive loss caused to the exchequer through spectrum allocation to 122 licencees and 35 dual technology licences in 2007-08 was Rs 1,76,645 crore. It pegged the figures on the basis of 3G auction held earlier this year in which the government mopped up over Rs 67,000 crore.
In the 77-page report, the CAG said the figure of the presumptive loss has been determined on the basis of various indicators like 3G auction and a price offered by an operator in 2007, besides scarcity value, nature of competition, business plans envisaged, number of operators and growth of sector.
    The auditor pointed out that spectrum was allotted by DoT to the existing operators beyond the contracted limits (6.2 Mhz) without imposing any upfront charge for such allotment.
    On the values determined through various indicators, the presumptive value of 2G spectrum on account of grant of 157 licences in different circles during 2007-08 would be in the range of approximately Rs 58,000 crore to Rs 1,52,038 crore.
    The value of spectrum held by 13 operators for 51 circles based on the 2001 rates works out to be Rs 2,561 crore, while its value based on above indicators like 3G auction would be Rs 12,000 to Rs 37,000 crore.
The CAG said that 85 out of 122 new licences issued to 13 companies in 2008 were granted to ineligible companies as all of them (85) did not have stipulated paid-up capital at the time of application. Further 45 out of 85 licencees were issued to companies which failed to satisfy conditions of main object clause in the memorandum of Association (MoA), the government auditor said.
The CAG said the process of giving dual technology licences to leading telecom firms including Reliance Communications and Tata Teleservices “lacked transparency and fairness”, and equal opportunity was denied to other similarly placed operators who could apply for use of dual technology only after formal announcement of the policy.
Noting that this approval (dual technology use) had violated Cabinet decision of 2003 to allow additional spectrum at 2001 prices, the auditor said, “Deviation from a Cabinet decision should normally be with the approval of Cabinet.Tatas have launched first indigenously manufactured helicopter cabin from the aero-space special economic zone near Hyderabad. The TAS project for the cabin was conceived in collaboration with US-based Sikorsky Aircraft Corporation, a subsidiary of United Technologies Corp., USA.
On November 1, 2010, the Reserve Bank of India raised the repo and reverse repo rates by 25 basis points (100 basis points equals one per cent), reflecting the continued government and RBI concerns over inflationary pressures. Repo rate is the rate at which RBI lends to banks and that now stands at 6.25%. Reverse repo is the rate at which RBI borrows from banks and that now stands at 5.25%.
Paris-based BNP Paribas has become the world’s biggest bank, with assets rising 34 per cent in last three years, reaching $3.23 trillion.

State-owned Indian Oil Corporation (IOC) has surpassed Reliance Industries to regain its position as India’s biggest refiner. This was achieved after completion of expansion of its Panipat refinery.

INTERNATIONAL AFFAIRS

Tentative deal in Iraq keeps Maliki in power
Iraq’s political leaders reached a tentative deal on November 10, 2010, to form a new government by giving a second term to Shiite Prime Minister Nouri al-Maliki, thus breaking the eight-month political stalemate that had plagued the country. The unexpected compromise, after a more than seven-hour meeting, came after the largely Sunni-backed bloc of Iraqiya, which won the most votes in March polls, begrudgingly agreed to back Maliki.
But even as the deal was announced, some Sunni leaders expressed dissatisfaction, a potentially troubling sign for the US as it moves toward the planned withdrawal of all of its forces by the end of 2011. A feeling of exclusion among Sunnis could prompt them to abandon the political process and renew an insurgency that has quieted significantly in recent years, although steady levels of violence continue.
US officials had been pushing a power-sharing agreement between Iraqiya leader Ayad Allawi, a secular Shiite, and Maliki, whom they tacitly backed for PM, as a way to break the Shiite leader’s monopoly on government authority and give the Sunni Arab minority a powerful role in Iraq’s next government.
Under the new agreement, it was agreed to appoint a speaker from Iraqiya, then name the current Kurdish President, Jalal Talabani, as President of Iraq. He, in turn, named Maliki as Prime Minister.

Junta’s proxy seeps Myanmar poll
Myanmar’s military-backed party captured 77 per cent of the Parliamentary seats contested in the November 7, 2010 elections, following polling widely decried as manipulated and unfair.
The results point to an overwhelming victory, but there has never been much doubt about the outcome because the junta-proxy, the Union Solidarity and Development Party (USDP), fielded candidates in nearly every district, whereas the largest opposition party was able to contest only 164 of the 1,159 parliamentary seats.
The government said the elections, the country’s first in two decades, were a major step towards democracy, but critics, including US President Barack Obama, said they were neither free nor fair.
The polling also sparked violence and some fears of an outright civil war among Myanmar’s ethnic minorities, who make up about 40 per cent of the population. Some have been fighting the central government since Myanmar gained independence from Britain in 1948.
The West denounced army-ruled Myanmar’s first election in 20 years while State media in China, a key ally of the regime, struck a discordant note by hailing the polls as a sign of progress.
Led by US President Barack Obama, numerous countries decried the vote as neither free nor fair and called for the release of political prisoners, including democracy icon Aung San Suu Kyi, who was sidelined in the polls.
China has long helped economically dysfunctional Myanmar to keep afloat through trade ties, arms sales, and by shielding it from UN sanctions over rights abuses as a veto-wielding member of the UN Security Council.

Backgrounder: Elections are very rare events in Myanmar. In the last half a century there was only one—in 1990, followed by the latest held on November 7). A devout Buddhist politician, U Nu, set up an unstable administration on the withdrawal of the British, survived the first two elections, but voluntarily retired after the second. His successor asked the army, soon after, to stand in for some time in the capacity of a caretaker. Nu returned for a second try at governing the multiple insurgency-ridden country, by decisively winning the 1960 election. Yet, in less than two years, the army dethroned the elected government in a coup.
The first military dictator, General Ne Win, was toppled by a students-led agitation in 1988, but another General took power and the military has since then showed no intention of loosening its grip on the country. Currently, Senior General Than Shwe is the top boss and nearing 80 in age.
The Generals did try to create a democratic façade for their rule at one stage by organizing a general election in 1990, but did not know how to tailor it to their desired narrow self-interest and watched their own make-believe civilian political party crushed by the voters. That largely fair election, witnessed by foreign journalists, gave only 10 of 492 seats to the army’s party and 392 to Aung San Suu Kyi’s National League for Democracy (NLD).
The junta responded with iron fist. The result of the election was annulled. Suu Kyi and her NLD were turned into targets for unceasing persecution. Suu Kyi has been under house arrest for 15 of the 20 years since then. She could not collect the Nobel Peace Prize she was awarded. Nor could she participate in the November 7 election because the military junta’s electoral laws were largely directed against her and her party.
Twenty years after that failed election, the army has staged another. This is an attempt no doubt at easing the growing pressure of adverse world opinion. As could be expected, the Generals were careful this time not to make the mistakes of 1990. A new constitution was framed and adopted by a referendum in which 99 per cent of the voters participated and over 92 per cent of them cast “yes” votes. The constitution reserves for the army one-fourth of the seats in each of the two Houses of Parliament and the more important ministries. Also, no constitutional change will be possible without a majority of more than three-fourths. A political party has been created with leading roles in it for about a score of men who were military officers till sometime back.
Prime Minister General Thein Sein resigned from the army to lead the civilian-looking outfit named the Union Solidarity and Development Party (USDP).
The electoral laws ruled out Aung San Suu Kyi’s participation. Neither convicted persons nor individuals opposing the State organizations could stand for any seat. Roughly 300,000 Buddhist monks representing the religious order were disenfranchised. So were the people in some rebellious ethnic minority areas. No one whose spouse or children are foreign citizens can become the head of the Myanmarese State. Suu Kyi’s British husband is now dead and her two sons are also British living in the UK.
Suu Kyi and the National League for Democracy found the dice so heavily loaded against them that they only had one choice—boycotting the sham election. Yet the junta wanted to be doubly sure; it ordered the dissolution of NLD and a few other parties on the ground that they failed to apply for permission to continue political activities.
There were no election observers from abroad and unlike in 1990, when 60 foreign journalists were granted visas a few days before the polling, no news-person from outside was let in.

Democrats lose control of US House of Representatives
A disenchanted American electorate, in a snub to President Barack Obama, handed a bruising defeat to his Democratic Party and put the Republican Party back in control of the US House of Representatives in mid-term elections on November 4, 2010.
The loss of Democratic control of the House will be an obstacle to Obama’s ability to push through his agenda over the next two years. However, it is by no means an indicator of the President’s own fate. In 1994, the Republicans took control of Congress under Bill Clinton’s Presidency. Clinton, a Democrat, went on to serve for a second term. Besides Clinton, Harry Truman and Dwight Eisenhower both lost control of at least one house of Congress in the mid-terms. No President in the past century has lost his bid for a second term in office after losing the majority in the mid-term elections.
However, Republicans are in no mood to work with the Democrats and the party’s leaders have vowed to do everything possible to ensure that Obama is only a one-term President.
Ireland becomes second Euro nation to seek aid
On November 22, 2010, Ireland became the second euro country to seek a rescue as the cost of saving its banks threatened by a re-run of the Greek debt crisis that destabilized the currency.
The aid, which Irish officials said as recently as November 15 they didn’t need, marked the latest blow to an economy that more than doubled in the decade ending in 2006. The bursting of the real-estate bubble in 2008 plunged the country into a recession and brought its banks close to collapse. With Irish bond yields near a record high, policy makers are trying to keep the crisis from spreading.
The package for Ireland will total as much as 60 percent of gross domestic product, compared with 47 percent for Greece.
The bailout follows two years of budget cuts that failed to restore market confidence as the cost of shoring up the financial industry soared.
UNDP Human Development Report
India is ranked 119 out of 169 countries on the Human Development Index (HDI) of the UNDP’s 2010 Human Development Report.
This marks an improvement of just one rank between 2005 and 2010 though the report, a special 20th anniversary edition, places India among top 10 performers globally in terms of HDI measured on income growth. The category is led by China. India comes 10th after Botswana, South Korea, Hong Kong, Malaysia and Mauritius.
China has improved eight notches (from 2005 to 2010) to secure the 89th position. In South Asia, Nepal has gained five places to reach the 138th rank. Maldives has risen four places to 107; Sri Lanka at 91 too has beaten India in the rankings, though Pakistan has lost two ranks to fall to 125, while Bangladesh is up one at 129.
Though high on GDP growth, India reports severe inequalities (the report for the first time measures inequalities, gender gaps and multidimensional poverty as markers of human development) while several low-income nations have posted huge profits by investing in education and health. Nepal is the only South Asian country, which despite low income, stands as the third best performer in the top 10 movers the report highlights.
These movers are the 10 nations (out of 135 studied for development indicators) that made the largest HDI improvements over the past 40 years. Oman leads the pack having invested its energy earnings in health and education. Except China, which is second on this list thanks to income gains (recording 21 fold jump in per capita income since 1980), all other nine countries are top movers due to health and education benefits. These are Nepal, Indonesia, Saudi Arabia, Lao PDR, Tunisia, South Korea, Algeria and Morocco. India is 16th in the category.

While India’s HDI value has increased from 0.320 in 1980 to 0.519 in 2010, higher than South Asia’s average of 0.516, India still lags behind among medium HD nations. South Asia, particularly India, post shocking percentage losses in HDI values if inequalities are counted.
The best HDI ranker in the world, Norway, loses just 6.6 per cent to inequality while China loses 23 per cent and Bangladesh 29.4 per cent.
Global giants join hands to save climate
On November 29, 2010, the first day of the Cancun Climate Summit, the global consumer goods industry announced two major initiatives on climate protection: to halt deforestation practices and phase out climate damaging refrigerants that have high global warming potential.
In a statement issued from Paris, this was announced by the Consumer Goods Forum, a CEO-level organisation of 400 global consumer goods manufacturers and retailers with combined revenue in excess of $ 2.8 trillion. The initiatives were announced by the board of directors, comprising 50 CEOs and co-chaired by Muhtar Kent, CEO, The Coca-Cola Company and Lars Olofsson, CEO of Carrefour.
On deforestation, the Consumer Goods Forum decided to mobilise their collective resources to help achieve zero net deforestation by 2020.
On refrigeration, the Forum agreed to begin phasing out hydrofluorocarbon (HFC) refrigerants as of 2015 and replace them with non-HFC refrigerants.
Deforestation is one of the principal drivers of climate change, accounting for 17 per cent of greenhouse gases today. The consumer goods industry, through its growing use of soya, palm oil, paper and board, creates many of the economic incentives which drive deforestation.
Refrigeration plays a vital role in the retail and consumer goods industry but is also a significant and growing source of greenhouse gases. HFCs are powerful greenhouse gases that are thousands of times as potent as carbon dioxide. While they currently have a relatively small aggregate impact on global warming, HFC emissions are projected to represent 9-19 per cent of projected greenhouse gas emissions in 2050. The US government has targeted HFC reduction as a priority climate action under the Montreal Protocol, and garnered support from 91 nations at 2010 Montreal Protocol conference in Bangkok.

World mayors sign climate change pact
Mayors from around the world have signed a voluntary pact in Mexico City to reduce greenhouse gas emissions. The pact was signed at a meeting meant as a precursor to the UN-sponsored talks in Cancun.
Participants from some 135 cities and urban areas signed the pact committing them to adopt a number of measures to stem climate change.
Meanwhile, a new study has found that fossil-fuel gases edged back less than hoped in 2009, as falls in advanced economies were largely outweighed by rises in China and India.
Annual emissions of carbon dioxide from the burning of oil, gas and coal were 30.8 billion tonne, a retreat of only 1.3 per cent in 2009, compared with 2008, a record year.
USA, Australia ink space surveillance pact
On November 8, 2010, Australia and the US signed a pact to increase space surveillance over the Asia-Pacific region by expanding the reach of US military satellites.
The two countries signed a ‘space situational awareness’ partnership at the conclusion of the annual US-Australia security and military dialogue, under which Washington would place more satellite tracking sensors in Western Australia.
The network would give Americans a strategic surveillance capacity over the southern hemisphere to track space and missile launches from China as well as Korea.
The signing of a space pact comes as US and its allies in the Pacific region have accused China of trying to militarise space by investing heavily in space technology.
A space situational awareness partnership statement issued at the conclusion of the security meet said that the US and Australia shared a deep concern about the “congested and contested nature of outer space”.

G-20 Summit
The Seoul Action Plan, agreed at the end of the two-day Summit of the G-20 leaders, called for moving towards more market-determined exchange rates. An undervalued Yuan or a weak Dollar also has ramifications for India and several other countries in terms of their exports becoming uncompetitive. The G-20 group includes India, the US, China, Germany, France, Brazil, Russia and Japan.
In the face of a currency war between the US and China, global leaders, including Prime Minister Manmohan Singh, agreed to refrain from ‘competitive devaluation’ and bring in exchange rate flexibility to ensure that no country gets undue advantage.
These measures, the leaders said, would help mitigate the risk of excessive volatility in capital flows facing some emerging market economies.

Cablegate Crisis in USA
The United States was catapulted into a worldwide diplomatic crisis on November 29, 2010, with the leaking to various international media of more than 250,000 classified cables from its embassies, many sent as recently as February 2010. At the start of a series of daily extracts from the US embassy cables Arab leaders are privately urging an air strike on Iran and that US officials have been instructed to spy on the UN leadership.
The cables include comments on a shift in relations between China and North Korea, high-level concerns over Pakistan’s growing instability, and details of clandestine US efforts to combat al Qaeda in Yemen. The cables also contain specific allegations of corruption, as well as harsh criticism by US embassy staff of their host governments, from Caribbean islands to China and Russia.
The State department’s legal adviser wrote to the founder of WikiLeaks, Julian Assange, warning that the cables were obtained illegally and that the publication would place at risk “the lives of countless innocent individuals … ongoing military operations … and co-operation between countries”.
The electronic archive of embassy dispatches from around the world was allegedly downloaded by a US soldier and passed to WikiLeaks.
The US embassy cables are marked “Sipdis”—secret internet protocol distribution. They were compiled as part of a programme under which selected dispatches, considered moderately secret but suitable for sharing with other agencies, were automatically loaded on to secure embassy websites, and linked with the military’s Siprnet internet system.
More than 11,000 are marked secret, while around 9,000 of the cables are marked noforn (no foreigners).

North Korea shells South Korean island
On November 23, 2010, North Korea fired scores of artillery shells at a South Korean island, killing two soldiers, in one of the heaviest attacks on its neighbour since the Korean War ended in 1953. South Korea was conducting military drills in the area at the time but said it had not been firing at the North.
The attack came as the reclusive North, and its ally China, were pressing regional powers to return to negotiations on its nuclear weapons programme and revelations that Pyongyang is fast developing another source of material to make atomic bombs.
It also followed moves by leader Kim Jong-il to make his youngest, but unproven, son his heir apparent, leading some analysts to question whether the bombardment might in part have been an attempt to burnish the ruling family’s image with the military.
At least 200 North Korean shells hit Yeonpyeong, which lies off the west coast of the divided peninsula near a disputed maritime border. Most landed on a military base there. Photographs from Yeongyeong island, just 120 west of Seoul, showed columns of smoke rising from buildings.
South Korean President Lee Myung-bak, who has pursued a hard line with the North since taking office nearly three years ago, said a response had to be firm following the attack. But he made no suggestion the South would retaliate further, suggesting Seoul was taking a measured response to prevent things getting out of hand.
The two Koreas are still technically at war—the Korean War ended only with a truce—and tension rose sharply early 2010 after Seoul accused the North of torpedoing one of its navy vessels, killing 46 sailors.
The US strongly condemned the attack and called on North Korea to “halt its belligerent action,” and urged nuclear-armed North Korea to “fully abide by the terms of the Armistice Agreement” that ended the Korean War.
Russian Foreign Minister Sergei Lavrov condemned the shelling, warning of ‘colossal danger’ from Korean tensions and calling for an end to any hostilities.

Business News

Institute of Microbial Technology (IMTECH), a Chandigarh based biotechnology laboratory, has signed a $150-million licensing agreement with Nostrum Pharmaceuticals, a US company, for new-generation clot busters developed by it.
According to a scheme approved by the Ministry of New and Renewable Energy (MNRE), the union government will provide financial incentive for each electric vehicle sold in India during the remaining part of the 11th Plan—2010-11 and 2011-12. The scheme envisages incentives of up to 20 per cent on ex-factory prices of the vehicles, subject to a cap of Rs 4000 for low-speed electric two-wheelers, Rs 5000 for high-speed electric two-wheelers, Rs 60,000 for seven-seater three-wheeler and Rs one lakh for an electric car.
Axis Bank has acquired investment banking arm of Enam securities for Rs 2,067 crore. Asset Management Company and insurance broking arm of Enam are not part of the deal.

DO YOU KNOW

April 11, 1954 has been declared as the most boring day of the 20th century. Every day something significant happens, but nothing remarkable is known to have happened on this day, according to experts who inserted over 300 million important events of the century in a computer search programme to calculate.
From January 2011, all telemarketers’ mobile numbers will start with the same three digits: 700. This move is part of the ‘Customer Call Preference Regulation’ on curbing unsolicited marketing calls and SMS messages.
The third summit on Global Agenda was held in Dubai in November 2010. The summit gave an opportunity to social, political and business leaders across the world to benchmark key developmental issues against global realities.
The 16th United Nations Climate Change Conference took place in Cancun, Mexico, from November 29, 2010. India was among the 190 UN members who took part in the 12-day event.
The Bimal Jalan committee was set-up to review the ownership and working of capital markets infrastructure institutions (MIIs). One major recommendation of the report is that only banks, insurance companies and domestic financial institutes with a net worth of Rs 1,000 crore be roped in as anchor investors.
Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, called SABLA, aims to empower adolescent girls between ages 11 to 18 years by providing them nutrition, Iron and Folic Acid (IFA) supplementation, health check-up, nutrition and health education, counselling/guidance on family welfare, vocational training etc.
The UN Education, Scientific and Cultural Organisation (UNESCO) has included French food in its list of world’s “intangible cultural heritage”. Peking opera and Spanish flamenco dancing have also been included in the list.
Poultry giant Venky’s has become the first Indian company to own an English Premier League (EPL) club. It has taken over Blackburn Rovers for $36.8 million.
Crompton Greaves Ltd, part of the $4 billion Avantha Group, has become the world’s first company to develop high range power product—1200 KV capacitive voltage transformer (CVT). Earlier, China had established the commercial 1,100 KV system successfully.
UN World Day of Remembrance for Road Accident Victims is observed on November 21.
Former Indian Prime Minister Indira Gandhi (ranked 9th) and Mother Teresa (ranked 22nd) are among Time magazine’s “25 Most Powerful Women of the Past Century”. The list is topped by Jane Addams, an outspoken advocate for women suffrage, who was the first American woman to win the Nobel Peace Prize.
Oil & Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC), SAIL and NTPC have been given the Maharatna status by the government. This status empowers these companies to form financial joint ventures and wholly-owned subsidiaries and undertake mergers and acquisitions without government approval for up to Rs 5,000 crore in one project or 15 per cent of their net worth.
National Legal Services Day is observed on November 9.
The G-20 Summit meeting was held in Seoul, South Korea.
Sachin Tendulkar has been named as the official ambassador of Cricket World Cup, 2011.
Ace shooter Gagan Narang was India’s flag-bearer during the opening ceremony of the 16th Asian Games held at Guanghzhou, China.
The Central government has renamed the Amritsar airport as Sri Guru Ram Dass Jee International Airport.
Chinese President Hu Jintao has been named the most powerful person in the world by Forbes magazine, ahead of US President Barack Obama who takes number two spot. Mrs Sonia Gandhi has been ranked 9th, Prime Minister Manmohan Singh 18th. Reliance Industries Chairman Mukesh Ambani, Tata Chairman Ratan Tata and head of ArcelorMittal Lakshmi Mittal are also part of the list of 68 people.
India was ranked 119 in terms of human development, according to UNDP’s Human Development Report 2010.
National Cancer Awareness day is observed on November 7.
Barack Obama was the fourth US President to address Indian MPs in the historic central hall of Parliament. Three of his predecessors—Dwight Eisenhower in 1959, Jimmy Carter in 1978 and Bill Clinton in 2000—were given the rare honour of addressing the Lok Sabha and Rajya Sabha MPs. Before Obama, former Russian President Vladimir Putin and former Japanese Prime Minister Shinzo Abe addressed Indian MPs in 2007.
Taj Falaknuma Palace in Hyderabad is India’s most expensive hotel. The palace was once the exclusive preserve of the rulers of Hyderabad. The grand presidential suite at the hotel costs Rs 5 lakh per night.
Uttarkhand based NGO Himalayan Chipko Foundation has been awarded the Green Apple award at the House of Commons, London, for exposing the Hak Hakook scam in which timber meant for villagers in the State was sold to the timber mafia.
World Diabetes Day is observed on November 14.

Current Affairs: October 2010NATIONAL AFFAIRS

India trails in Global Hunger Index
The IFPRI’s Global Hunger index ranks India in the “alarming” group (the categories: moderate, serious, alarming and extremely alarming), below many failed States ruled by tyrants and despots. The ranking considers the number of children under five who are underweight, malnourished or wind up dead, particularly girls.
In Asia, everyone, except Bangladesh, which is just one rank below India, is doing better. China is at number nine, Pakistan at 59, Nepal at 56. India is bested by a host of tottering States, including Guinea-Bissau, Togo, Burkina Faso, Sudan, Rwanda and Zimbabwe.
India’s approach to hunger has been to throw a programme at every failing. There is the world’s largest programme for nutritional, health and school needs of children under six, the Integrated Child Development Services (ICDS), which runs 1.4 million centres nationwide with a budget of Rs 7,806 crore for 2020-11. Then, there is the world’s biggest cooked-meal programme, covering 119 million children in government schools up to class VIII with a budget of Rs 9,440 crore. India also has the world’s largest public distribution system (PDS) for subsidised food, with a budget of Rs 55,578 crore, and the world’s biggest cash-for-work programme, the National Rural Employment Guarantee Act (NREGA), with a budget of Rs 40,100 crore.
Hunger in India is definitely not a problem of resources. However, hunger persists despite spectacular economic expansion, and it is disproportionate to rising incomes.
Behind every story of hunger and malnutrition is a collective national apathy towards the poor, an unreformed, struggling agriculture sector, the low status of women and collapsing administration. In addressing hunger, the biggest question remains: who’s in charge? Evidence abounds in leaky multi-billion dollar, anti-hunger programmes: a quarter of the money spent on mid-day meals never reaches the poor, a third in the NREGA and more than half on the PDS. The failures of the PDS are especially acute. Only 36 per cent of its poor have below-poverty-line (BPL) cards to access cheap food. Nearly 60 per cent of these cards are with people who are not officially poor.

National Green Tribunal Notified
The National Green Tribunal (NGT) was officially notified on October 19, 2010 with its Chairperson, Justice Lokeshwar Singh Panta taking charge of his office. The tribunal is exclusively dedicated to environmental issues.
Established by an Act of Parliament (the National Green Tribunal Act of 2010), it will have circuit benches across the country to try all matters related to and arising out of environmental issues. The tribunal, which shall also consist of other members, who are experts in the field of environmental and related sciences, has been empowered to issue directions for the compensation and restitution of damage caused from actions of environmental negligence.
This is the first body of its kind that is required by its parent statute to apply the “polluter pays” principle and the principle of sustainable development.
The erstwhile National Environment Appellate Authority had ceased to exist with the launch of the NGT.

Tobacco India Report
Global Adult Tobacco Survey (GATS) for India, 2009-10, conducted on 99.9 per cent of India’s population in 29 States, UTs of Chandigarh and Puducherry has submitted its report. According to it, India’s obsession with tobacco continues despite laws to tell the users of its lethal consequences. Though 64 per cent of all adults believe tobacco leads to heart attacks, 35 per cent (one-third) continue to consume tobacco in some form or the other.
Highlights of the report are:
—52 percent adults exposed to second hand smoke at home, highest in J&K (68%), lowest in Chandigarh (15%); 29 percent exposed in public places.
—Cigarette smokers’ monthly expense is Rs 400, as against Rs 94 for bidi smokers.
—Monthly cigarette expenditure is highest in Arunachal (Rs 1,265), lowest in Jharkhand (Rs 181.70).
—Mizoram has highest tobacco use (67%), while Goa (9%), Punjab (12%), and Chandigarh (14%) have lowest.
—Mizo women are most addicted (62% use tobacco) as against least addicted in Punjab (under 1%), Chandigarh, Himachal and Goa (under 5%).
—Most tobacco use is in East (45%), Northeast (44%), and lowest use is in North (19%).

India signs Convention on Supplementary Compensation at IAEA
On October 27, 2010, India signed the Convention on Supplementary Compensation (CSC) at the IAEA in Vienna that will enable the country to undertake nuclear commerce.
The convention sets parameters on a nuclear operator’s financial liability in the event of a nuclear accident.
The convention was adopted in September 1997 and opened for signature at Vienna a few days later at the 41st General Conference of the IAEA. The convention provides for compensation in case of transnational implications of a nuclear accident and has been signed by 14 countries. However, only four countries—USA, Argentina, Morocco and Romania—have ratified it so far.
Upon entry into force, the convention would establish a uniform global regime for compensation to victims in the event of a nuclear accident. The CSC provides for the establishment of an international fund to increase the amount available to compensate victims and allows for compensating civil damage occurring within a State’s exclusive economic zone, including the loss of tourism and fisheries-related income.
It also sets parameters on a nuclear operator’s financial liability, time limits governing possible legal action, requires that nuclear operators maintain insurance or other financial security measures and provides for a single competent court to hear claims.
All States are free to participate in the convention regardless of their involvement in existing nuclear liability conventions or the presence of nuclear installations on their territories. Notably, India is the only country to have such a provision, which was added after wide political pressure.

Visit of Prime Minister Manmohan Singh to Malaysia
Prime Minister Manmohan Singh visited Kaula Lumpur on October 27, 2010. The highlight of the visit was agreement between India and Malaysia to forge new ties on two of the most important issues for their economies—sealing the Comprehensive Economic Cooperation Agreement (CECA) and contain the threat of terrorism through establishment of a Joint Working Group on Counter Terrorism, besides collaboration in defence.
The two leaders said that the Free Trade Agreement (FTA) will be signed by January 31, 2011 and this will be implemented by July 1, 2011.
Taking into account the India-ASEAN trade in goods agreement, that came into effect from January 1, 2010, both sides have offered ASEAN plus market access in goods. India and Malaysia have also agreed to provide access of each others’ services market across all modes and various sectors. The two countries will now finalize areas of economic cooperation in infrastructure development, creative industries, tourism, SMEs, business facilitation, science and technology and human resource development.
Malaysia is the second largest trading partner for India within ASEAN, and India is the largest trading partner for Malaysia in South Asia, excluding China. Bilateral trade between the two countries is now estimated at $ 10.5 billion, and this has doubled in the past five years.
The two leaders, while condemning terrorism in all its forms and manifestations, agreed to enhance cooperation in counter terrorism, through information sharing and setting up a Joint Working Group on counter-terrorism. This is of great importance for India as Malaysia is understood to be emerging as a logistics, regrouping and fund raising hub for three militant groups—militants from Punjab, Tamil Tigers and Al-Qaeda. Jamia Islamia, based in Indonesia, is an Al Qaeda affiliate, and is helping the latter in logistics and fund raising there. India and Malaysia have also agreed to enhance defence exchanges and cooperation through regular exchanges between the defence ministers and senior defence officials, chiefs of armed forces and regular service to service staff talks and regular ship visits.
The two sides also signed as many as five agreements. These include MoU on cooperation in field of traditional systems of medicine; MoU on Cooperation in Terrorism; MoU for Cooperation in IT sector; Agreement between CSIR and UNIK of Malaysia on Research and Development Collaboration; and, Cultural Exchange Programme.

India-Russia to jointly develop advance stealth jet
India and its old military partner Russia will soon ink a deal to jointly develop an advance stealth fighter. Defence Minister A.K. Antony said during the visit of his Russian counter-part A.E. Serdyukov on October 7, 2010, that he has sorted out all issues regarding the joint development of the fifth generation of fighter aircraft (FGFA).
Apart from this, the joint development of the multi-role transport aircraft (MTA) will be the other major military programme between the two nations over the next ten years.
Notably, the announcement balances out the “perceived” tilt in India’s decision to buy a series of aircrafts from the US. This includes medium haul transporters, the C-130-J, long-range maritime reconnaissance aircraft, the P8-I, and some VVIP jets from Boeing.
The FGFA will be the IAF’s frontline fighter from 2016-2017 onwards and will cost the nation $25 billion, dwarfing the much-hyped $11-billion deal for the purchase of another 126 fighters. With stealth technology, super manoeuvrability and supersonic speed, it will match the F-22 raptor produced by the US.
In case of the MTA, the two nations formed a $600 million joint enterprise in September 2010, for designing and producing it. The planes will be designed at carrying load of around 20 tonne, with speeds in the region of 900 km, and will be an asset on shorter runways in Ladakh and the North East. Design specialists from Ilyushin, maker of best-selling transport plane, IL-76, will be on board.

N-deal with South Korea
India and South Korea have struck a deal to finalise an agreement on civil uses of nuclear energy. This was a major success for India during the Prime Minister Manmohan Singh’s Asia tour.

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INTERNATIONAL AFFAIRS

EU bows to German call for debt mechanism
German Chancellor Angela Merkel has won European Union backing for a rewrite of EU treaties to create a permanent debt-crisis mechanism by 2013, to prevent a repeat of the Greece-led shock that jolted the Euro. As the biggest contributor to Euro 860 billion ($1.2 trillion) in loans and pledges to stem 2010-s debt crisis, Germany wants to spare taxpayers the costs of any future operations to rescue financially distressed States.
Bonds in Greece, saved from the brink of default by EU and International Monetary Fund loans in May, led a decline by so- called peripheral European securities as Germany’s triumph spurred concern that the EU mechanism will force bond holders to bear the costs of future bailouts. The extra yield investors demand to hold Greek 10-year debt over German equivalents rose to 813 basis points. German bonds advanced as investors sought safer assets, paring their weekly drop.

G-20 raises developing nations’ quota in IMF
The Group of 20 Finance leaders struck a landmark deal on October 22, 2010, to boost developing countries’ power in the International Monetary Fund, even as they failed to set targets for a wide-ranging global economic rebalancing. The IMF deal was hailed by fund MD Dominique Strauss-Kahn as a ‘historical’ moment that will see Europeans give up two seats on its 24-strong board to powerful developing countries and transfer 6 percent of votes to them.

India is world’s third largest carbon emitter
India is now world’s third biggest carbon dioxide emitting nation after China and the US. The new emission data from the United Nations was a cause of worry for India’s climate negotiators at the next round of talks in Tianjin in China, held in October 2010.
China, in 2009, moved to the top position while contributing 23 per cent of the total global emissions and India, in 2010, surpassed Russia to take the third position with five percent.
The saving grace is that the difference in total carbon emissions between the US (22 per cent) and India is still huge. Russia's emissions have been falling because of economic slowdown.
India's per-capita carbon emission is still lowest in the world (about 4.5 tonnes) but the demand for energy is rising, especially among the middle-class.
The pressure on India and China to reduce emissions is rising. US chief climate negotiator Todd Stern told a meeting of major economies forum that a legally binding climate treaty was not possible until India and China take “obligation” to reduce emissions.

ASEAN Summit
The 17th ASEAN Summit was held in Hanoi, Vietnam, on October 28-30, 2010. The meeting was considered a success, with all members agreeing to cooperate with one another in solving the region’s economic downturn.
The 17th ASEAN Summit focused on the contents of building the community and implementing the ASEAN Charter, external relations and key role of the body, sustainable development and coping with global challenges.

Business News

After three decades and more than 220 million units, Sony has stopped selling its Walkman cassette player in Japan, admitting the gadget could not keep up in the digital age. Cherished by a generation of joggers, school children and music fans since its launch in 1979, the Walkman evolutionised the way people listened to music but has since been overtaken by another icon of the modern era—the iPod. The July 1, 1979, roll-out of the portable cassette player helped transform Sony into a global electronics powerhouse. The Japanese giant sold 30,000 Walkmans in the first two months after its launch, and 50 million within a decade.
Eurocopter, a company owned by European consortium, European Aeronautic Defence & Space Co. NV (EADS), has become the first global chopper company to open an office in India.
Pfizer Inc has decided to acquire King Pharmaceuticals, a move that will bolster the pharma major’s presence in the pain treatment segment.
Hewlett-Packard has appointed former SAP AG CEO Leo Apotheker as its CEO and President.

Bharti Airtel will partner telecom equipment suppliers Ericsson and Huawei to expand and manage its mobile network in Bangladesh.

India strengthens ties with Vietnam
India has enlarged its scope of cooperation and relations with Vietnam—another “not-so-happy” neighbour of China. Defence Minister A.K. Antony, during his visit to Vietnam, announced a slew of measures to expand cooperation as part of the nation’s “look east policy” aimed at engaging key countries situated east of India.
Under an arrangement, New Delhi will provide support to Vietnam to enhance and upgrade the capabilities of its services in general and Navy in particular. Apart from capacity building for repair and maintenance of its equipment, most of which are of Russian origin, the armies of the two countries will also cooperate in areas like IT and English training of Vietnamese Army personnel.
In return, Hanoi has offered maintenance and repair facilities at Vietnamese ports and called for more ships of the Indian Navy to visit them. The navies of the two nations often exercise together.
To take their ties to the next level, both the armies will also have joint training in mountain and jungle warfare in India in 2011 and will also work towards developing cooperation among defence institutes.

CWG Corruption probe
Prime Minister Manmohan Singh has appointed a high-level committee headed by a former Comptroller and Auditor General, V.K. Shunglu, to go into allegations of corruption related to the Commonwealth Games held in New Delhi in October 2010.
The developments came as opposition parties, which had held their fire during the 12-day event, stepped up their demand for thorough probe into corruption charges so that those guilty can be brought to book
ASEAN-India Summit
The 8th ASEAN-India Summit was held at Hanoi, Vietnam on October 30, 2010. Addressing the heads of the state of ASEAN countries, Prime Minister Manmohan Singh said the conclusion of a “services and investment agreement” between India and ASEAN would be an important step in “our goal of comprehensive economic cooperation”.
With an aim to play a more significant role in the growing economies of the region, India has been pushing its case for having a bilateral pact in services and investment at the earliest. Through this pact, India wants to get a foothold in all ASEAN countries for its growing pharmaceutical industry, besides allowing ease in visa regimes for its IT professionals, healthcare workers and teachers in Brunei, Cambodia, Laos, Indonesia, Malaysia, Vietnam, Myanmar, Philippines, Singapore and Thailand (ASEAN nations).
With an agreement in place for free trade in services and investment, India can offer a bigger share of the pie to these countries in its infrastructure sector that is poised for a major growth.
Addressing the other leaders at the summit, which came out with a five-year ‘Plan of Action’ outlining a roadmap for enhanced multi-faceted cooperation, Manmohan Singh said: “India’s economy is expected to witness a sustained growth rate of 9-10 per cent in the coming years, which would offer many opportunities for trade and investment. Our experience of implementation shows that we need to work very hard at all levels if we have to accelerate the pace of engagement as outlined in the plan of action”.
Prime Minister Manmohan Singh’s Japan visit
Prime Minister Manmohan Singh visited Japan on October 25, 2010. The visit ended with the successful conclusion of negotiations for the Comprehensive Economic Partnership Agreement (CEPA). As a first step in realising CEPA, both countries agreed to a “sweeping” liberalisation of their bilateral visa regime.
The successful conclusion of CEPA is expected to elevate trade and economic relations between the two countries to the next level. Though the trade between the two nations remained almost stagnant for decades, it has been growing rapidly since past three years. The agreement will foster new business opportunities, enhance competitiveness of private sectors, and encourage closer partnership between the private sectors in India’s teeming SMEs and Japan’s infrastructure and hi-technology enterprises.
India is hoping that the CEPA coming into place will also balance out the trade imbalance between the two countries. As of now, trade between the two countries is strongly in favour of Japan.
India is also hoping that its generic pharmaceutical and IT sectors will benefit largely as this agreement opens up the Japanese market for India. While Japan exports marine products, iron ore and petroleum products to India, electrical and electronic goods, iron and steel products, chemicals and auto components are exported by India.
Since India-Japan CEPA is truly comprehensive for trade in goods, investment and services, besides allowing movement of natural persons, it will improve the India-Japan partnership and enhance their global partnership. This will also mean that goods being traded will become cheaper, with the lifting of trade barriers.
The issue came up for discussion during the bilateral meeting of the Prime Minister with the President of the Republic of Korea, Lee Myung-bak, at Hanoi, on the sidelines of the 17th ASEAN Summit. The Korean President has

invited the Prime Minister to Korea in 2011 and the deal is likely to be signed then
With this, Korea becomes the ninth country with which India will be signing the nuclear agreement. Ever since the Nuclear Suppliers Group (NSG) ended India’s isolation from global nuclear commerce mainstream in 2008, India has signed civil nuclear pacts with U.S.A, France, Russia, Canada, Mongolia, Kazakhstan, Argentina and Namibia.

DO YOU KNOW

India's per capita income grew by 10.5 per cent to Rs 44,345 in 2009-10 against Rs 40,141 in the year-ago period, according to government data. The World Bank, however, pegs India's per capita income at a much higher $1,180 per year. India ranks a poor 161st in the world in terms of per capita incomes. The per capita income was slightly higher than Rs 43,749 as calculated by the Central Statistical Organisation in its advance estimates for FY10. However, per capita income grew by 5.6 per cent last fiscal if it is calculated on the basis of 2004-05 prices, which is a better way of comparison and broadly factors inflation. Per capita income (at 2004-05 prices) stood at Rs 33,588 in FY10 against Rs 31,821 in the previous year, according to estimates of national income. Per capital income means income of each Indian if national income is evenly divided among the country's population of 117 crore (Rs 1.17 billion).
The size of the Indian economy rose to Rs 62,31,171 crore (Rs 62.3 trillion) in the 2009-10, up 11.8 per cent over Rs 55,74,449 crore (Rs 55.7 trillion) in FY09.
According to the World Bank categories, nations with per capita income (PCI) less than $935 are 'low income;' nations with PCI from $936 to $3,705 are 'lower middle income;' those with PCI from $3,706 to $11,455 are 'upper middle income;' and those with PCI from $11,456 or more are 'high income.'
From January 1, 2011, India will extend “visa on arrival” facility to nationals of Cambodia, Vietnam, Philippines and Laos.
Volkswagen’s Bugatti, costing upwards of Rs 16 crore, is India’s most expensive car.
The Union government has okayed two new naval bases on the eastern coast of India, at Paradip (Oddisa) and Tuticorin (Tamil Nadu).
India has slipped to 87th spot in Transparency International’s latest ranking of nations, based on level of corruption. The “Corruption Perception Index” ranks Denmark, New Zealand and Singapore as the top three in the list with lowest level of corruption.
The International Cricket Council (ICC) and Castrol, the world’s leading lubricant company, have announced an agreement that makes Castrol the official performance partner of ICC with a unique presence at all ICC cricket events for the next five years.
The Securities and Exchange Board of India (SEBI) has raised the application limit for retail investors to Rs 2 lakh, from Rs one lakh.
The International Renewable Energy Conference was held in New Delhi in October 2010.
India became a sectoral dialogue partner with ASEAN in 1992. It became a full dialogue partner in 1995. India and ASEAN have been holding annual summits since 2002. The 8th India-ASEAN Summit was held in Hanoi, Vietnam on October 29, 2010.
India will celebrate 2013 as the centenary milestone year to showcase the heritage of the Indian film industry.
Bharat Diamond Bourse in Mumbai is said to be the world’s largest bourse, with all the essential facilities—cutting, polishing, trading, banking and customs—under single roof.
World Standards Day and World Sight Day are observed on October 14.
The Rail Coach factory, Kapurthala, has rolled out India’s first AC double-decker rake from its premises. The first AC double-decker train has been introduced between Howrah (West Bengal) and Dhanbad (Jharkhand).
The UN General Assembly has elected India, Germany, South Africa and Columbia to two-year seats on UN Security Council. The term will begin in January 2011. The four countries will be the non-veto-holding members of the 15-nation body.
“Conversations with Myself” has been written by former South African President Nelson Mandela.
Krishna Poonia won India’s first Commonwealth Games athletics gold, in 2010 Games, after Milkha Singh in 1958.
Finance Minister of India, Pranab Mukherjee has won 2010 Finance Minister of the Year for Asia award, conferred by Emerging Markets, part of Euromoney Institutional Investor Plc.
World Mental Health Day is observed on October 10.
Three Indian women—all from the corporate sector—find a spot on the Forbes list of 100 most powerful women in the world, topped by US First Lady Michelle Obama. Chennai-born PepsiCo CEO Indra Nooyi came in at No 6, while Axis Bank CEO Shikha Sharma and ICICI Bank Managing Director & CEO Chanda Kochhar were ranked 89th and 92nd, respectively. Surprisingly missing from 2010 list is Congress President Sonia Gandhi. She came in at No 13 in 2009.
Beijing Olympic gold medallist Abhinav Bindra led the 619-strong Indian contingent in the opening ceremony of the Commonwealth Games, 2010.

Current Affairs: September 2010NATIONAL AFFAIRS

RBI’s mid-term review
The RBI, in its first mid-quarter review of its monetary policy, increased repo and reverse repo rates leaving the cash reserve ratio (CRR) unchanged as it battles to contain inflation.
The central bank noted that food inflation has risen to 15.10 per cent for the week ending September 4, thus making it necessary to rein in liquidity. As a result, RBI raised short-term borrowing rate (reverse repo) by 0.50 percentage points to 5 per cent and lending rate (repo) by 0.25 percentage points to 6 per cent. The increased rates aim to make financing costly thus curbing consumption.
However, the RBI said that inflation rates have reached a plateau. The apex bank also signalled banks to raise fixed deposit rates and also noted that the government was on target to contain the fiscal deficit.

Unique Identification Authority of India
The Union Cabinet has cleared a new law providing for strict penal action and hefty fines going up to Rs 1 crore to guard against misuse of data collected for allotment of a Unique Identity Card or a Aadhar number to Indian citizens.

The proposed legislation, titled the National Identification Authority of India Act, seeks to give statutory powers to the Unique Identification Authority of India (UDAI), created as an attached office under the Planning Commission.
The decision to enact a legislation was taken after fears were expressed over the privacy and security of data collected by the UDAI. In addition, several civil rights groups had also pointed out that actions of the UDAI could well be questioned in the absence of a legal framework.
This scheme of providing unique identity number to the citizens of the country took off on September 29 when Prime Minister Manmohan Singh presented the first such number at a function in the tribal district of Nandurbar in Maharashtra.

Job scenario in India improves
According to the Ma Foi Randstad Employment Trends Survey, there is optimism in the economic scenario across all sectors of India and most of the new jobs have been created are in services. Conducted among 650 companies across 13 industry segments that included eight Indian cities, the survey revealed 418,000 jobs were created between January and June, 2010, with the healthcare sector creating 121,000 jobs, and another 63,000 in the hospitality sector. The top five sectors leading the boom are healthcare, hospitality, real estate and construction, information technology and IT-enabled services, and education, training and consulting.
Real estate and construction leads with the highest growth in number of people employed. It also expects growth in average salary by about four per cent, followed by pharma (3.5 per cent) and healthcare (3.4 per cent) during the third quarter.
The estimated proportion of experienced workforce is the highest in the pharma sector, 87 per cent. Healthcare is estimated to have the highest percentage of freshers,at 38 per cent. Kolkata has the highest estimated percentage of experienced workforce, at 82 per cent, and New Delhi the highest estimated percentage of freshers (35 per cent).

Fund to boost innovation
The National Innovation Council (NIC), a body to promote new ideas for inclusive development, has announced the setting up of a Rs 1,000 crore fund to encourage innovation.
“A major portion of the fund will come from the private sector and not the government,” the chairman of the council, Sam Pitroda, said.
One of the council members and renowned film-maker, Shekhar Kapur, also mooted the idea of starting a television reality show that would provide a platform for the young minds to showcase their innovative ideas for solving the problems of the economy.
Set up by Prime Minister Manmohan Singh, the council is aimed at energising innovation initiatives so as to make them part of the national effort aimed at reducing poverty, improving governance and making development more inclusive.

The aim of NIC is to herald a mindset change and create a push at the grassroots level so that more and more people are involved in shaping a national-level innovation strategy.
The council’s mandate also includes formulating a roadmap on innovation for the 2010 to 2020 period, focusing on inclusive growth.

Munda sworn in as Jharkhand Chief Minister
On September 11, 2010, BJP leader Arjun Munda became the eighth Chief Minister of the 10-year-old Jharkhand State, as leader of a coalition with, among others, the Jharkhand Mukti Morcha. Munda, who is having a go at the top job for the third time, will have two deputies — Sudesh Mahato of the All Jharkhand Union and JMM patriarch Shibu Soren's son, Hemant Soren.
Although the function at the Governor's house showed the deep rift in the BJP over the tie-up with the JMM—the BJP's partner last time in a government that lasted only for five months—Munda said he would focus on strengthening the party's grass-root level.

Visit of President of Mozambique
On September 30, 2010, during a meeting between President of Mozambique Armando Guebuza and Prime Minister Manmohan Singh, India and Mozambique inked three pacts and a credit line of $500 million was extended to that country for infrastructure projects, agriculture and energy.
The two countries have also decided to create a partnership based on greater political engagement, deepening of economic cooperation, strengthening of defence and security cooperation, specially to secure sea lanes against piracy, and cooperation in capacity building and human resource development.
India would also support establishment of training and planning institutions in Mozambique to support capacity building in the coal industry, besides supporting capacity building for the defence and police forces of that country, the Prime Minister said.
Expressing concern over the safety and security of sea lanes in the Indian Ocean, Guebuza assured to provide all possible assistance to protect them.

Dhaka okays crucial highway link to Kolkata
In major development, Bangladesh has finally agreed to start the construction of a highway that will not only provide transit facilities, ensuring easy movement of goods, but also drastically shorten the circuitous route—crucial from the military point of view—between north-eastern States and the port city of Kolkata.
The project—to be primarily financed by India—is part of the larger Asian Highway network project connecting the Asian nations. The highway project between India and Bangladesh had been hanging fire for more than five years, with Dhaka stalling it for one reason or the other—primarily due to pressure from Pakistan and China.
The change came after the Sheikh Hasina Government came to power and in July 2009 Indian negotiators managed to push Bangladesh to ink the inter-governmental agreement.
The first route will enter from Bengal into Bangladesh at the existing Benapole land port on the border and run across eastwards via Jessore and Dhaka; passing through Sylhet, located on the north-eastern edge of Bangladesh, it will enter Assam/Meghalaya.
The second axis will start from North Bengal and enter Bangladesh at Panchgarh and run southwards via Srirajganj to Dhaka and further southeast to Cox Bazar and Chittagong before entering into Myanmar. India will be able to use both routes.
Once ready, the highway will solve India’s major problem of moving goods into north-eastern States of Nagaland, Tripura, Mizoram and Manipur. At present, it can take up to five days for a truck from Kolkata to reach these areas, adding up to the costs, besides the time delay.
Crucial military pact with South Korea
Signalling a dramatic change in its strategic positioning, especially vis-à-vis China, India, on September 3, 2010, entered into a crucial joint research and manufacturing agreement with South Korea to co-develop and co-produce military equipment.
Both countries are neighbours of China and have a rather testy and tense relationship with it.

On the military front the importance of the agreement can be gauged from the fact that India has such agreements for co-developing and co-producing military equipment with its traditional “friend” Russia and other ally, Israel. It also has product-based cooperation for joint production of key military equipment with the French and Italians. Following the agreement, experts have placed India-South Korea military relations at par with Indian relations with Russia and Israel.
Memorandums of Understanding were signed following a 90-minute discussion between high-level delegations led by Defence Ministers, AK Antony and Kim Tae-young, respectively. This was the first-ever visit of an Indian Defence Minister to South Korea.
Historical Background
The ‘first title suit’ was filed on January 19, 1885. It was submitted by Mahant Raghubirdas in the court of Faizabad sub-judge, seeking permission for “puja” (worship) rights over a “chabootra” (platform) in front of the mosque which he claimed was Ram’s birthplace.
In his February 24, 1885, order, the judge said: “It (chabootra) was so close to the existing masjid that it would be contrary to public policy to grant a decree authorising plaintiff to build a temple as desired by him.”
Sub-Judge Hari Kishan said: “It is most unfortunate that a masjid should have been built on land specially held sacred by the Hindus, but as the event occurred 356 years ago, it is too late now to remedy the grievance. All that can be done is to maintain the status quo. In such a case as the present one any innovation could cause more harm and derangement of order than benefit.”
Then Raghubirdas moved to the Faizabad district judge, Colonel J.E.A. Chambier, who, after a spot inspection, dismissed the appeal on March 17, 1886, on the same grounds.
Raghubirdas then filed an appeal before the Oudh Judicial Commissioner, W. Young, who also declined his plea in his judgment of November 1, 1886.

INTERNATIONAL AFFAIRS

Gillard manages to retain power in Australia elections
On September 7, 2010, ending weeks of political uncertainty, Australia’s first woman Prime Minister Julia Gillard staked claim to form a new government after two king-maker independent MPs extended support to her Labour party, giving it a wafer-thin one-seat majority in the first hung Parliament in nearly 70 years.
Labour now controls 76 seats in Parliament’s 150-member House of Representatives, with the opposition Coalition of Liberal party leader Tony Abbott having 74 seats.
Gillard said her minority government would be held to higher standards of accountability as a result of the deal struck with the independents. She added that her government will spend $9.9 billion on development projects as part of the deal with the rural independents.

Political crisis in Nepal continues
On September 26, 2010, Nepal's Constituent Assembly failed for the eighth time, during the past four months, to elect a new Prime Minister. The deadlock continues, partly because other mainstream parties do not trust the single, largest party, Unified Communist Party of Nepal (Maoist), because it continues to put its faith in one-party rule and continues to threaten it would resume armed struggle.
The last 20 years have seen Nepal move from a Hindu kingdom to a democratic and secular republic. The 239 year old monarchy was cast aside in 2006 and people voted for a Constituent Assembly and an interim government in 2008. Maoists emerged as the largest single party but fell short of a majority.
In the 601-member House, two seats are vacant and if the Speaker and the Deputy Speaker are excluded, it has an effective strength of 597 members. The break-up is as follows : Unified CPN (Maoists): 237, Nepali Congress: 114, UML: 108, four Madhes based parties: 82, smaller parties & others: 56.
Unified CPN (Maoist) continues to say it has no faith in parliamentary democracy, believes in one-party rule and insists on absorbing its underground militia into the Nepalese Army. It also tried to take arbitrary decisions and sought the removal of the President and the Army Chief. Other parties are not sure it would change its spots.
The Constituent Assembly has failed to finalise the Constitution as mandated. The Assembly extended its own life by one year to complete the task. But differences persist. In the absence of a consensus between parties, there is a caretaker government with few powers.
Having failed to sack the then Army Chief over the integration of the armed Maoist guerrillas, Prachanda resigned as Prime Minoster and Maoists pulled out of the government in 2009; then they forced the next government headed by Madhav Kumar Nepal of UML to also quit.

China-Japan spat
China suspended high-level exchanges with Japan on September 19, 2010, and promised tough counter-measures after a Japanese court extended the detention of a Chinese captain whose trawler collided with two Japanese coastguard ships.
The spat between Asia’s two largest economies has flared since Japan arrested the captain, accusing him of deliberately striking a patrol ship and obstructing public officers near uninhabited islets in the East China Sea.
Beijing viewed the detention as illegal and invalid.

UN convention on terrorism moves a step forward
Rocked by a wave of audacious terrorist attacks in the last two years, Pakistan has finally realised the futility of opposing the proposed Comprehensive Convention on International Terrorism (CCIT) just because India was in the forefront of initiating it at the United Nations in 1996.
Pakistan, along with some other Organisation of the Islamic Conference (OIC) countries, had led the campaign against the proposed convention on various grounds. It had argued that self-determination should be outside the purview of the convention. It had also insisted that international humanitarian laws should be taken into account while finalising the text of the convention. Both these objections were seen as aimed at embarrassing India on Jammu and Kashmir since Islamabad has been demanding the right to self-determination for Kashmiris and seeking international intervention on the issue.
The opposition to the convention had also come from the US and Israel with the latter insisting that acting against terrorists indulging in killing innocent people be brought under its purview.
The global treaty seeks to criminalise all forms of international terrorism and deny terrorists, their financers and supporters access of funds, arms and safe havens.
The situation has considerably changed with just a handful of countries still not convinced why they should back it. “Most countries are now in favour of the early adoption of the convention but there is a small number of holdouts, may be 10 to 15…efforts are on to convince them also to support it so that a strong message goes out to all terrorist organisations that the international community is united and determined to jointly fight the menace of terrorism.

Visit of Polish Prime Minister
Polish Prime Minister Donald Tusk visited India on September 7, 2010. The Indo-Polish defence cooperation figured prominently during talks between the visiting dignitary and Prime Minister Manmohan Singh.
Since most of the Indian military hardware was acquired in the 1970s from the then Soviet Union, Poland, which was a key ally of former USSR, has the spares and the technology for upgrading the equipment with the Indian forces.
Poland is keen to sell tank recovery vehicles to India. The proposal was made during Antony’s visit to Warsaw in April for a meeting of the joint working group (JWG) on defence cooperation between the two countries.
A tank recovery vehicle is a type of armoured fighting vehicle used to repair battle or mine damaged as well as broken down vehicles during combat operations, or to tow them out of the danger zone for more extensive repairs.
Apart from making these vehicles available to India, Poland has shown interest in providing to New Delhi its sophisticated military hardware up-gradation and maintenance technology. It is also interested in joint ventures with Indian companies.
Poland can also help India upgrade Indian T-72 tanks, BMP II infantry combat vehicles and a variety of air defence systems purchased from the former Soviet Union.
But more than defence ties, it is the prospect of a quantum jump in economic ties with Poland that excites New Delhi. Poland, a key member of the European Union (EU), is considered by India as a gateway to Europe and Central Asia.

Allahabad High Court Verdict on Babri Masjid-Ram Janambhoomi dispute
On September 30, 2010, the much-awaited judgement of the Lucknow Bench of the Allahabad High Court unanimously ruled that the idols of ‘Ram Lalla’ in the makeshift temple at the disputed site in Ayodhya cannot be removed.
The three-judge Bench of Justices S.U. Khan, Sudhir Agarwal and Dharamveer Sharma separately delivered the historic verdict. In a 2-1 majority verdict, Justices Khan and Agarwal decreed that the 2.7-acre land comprising the disputed site should be divided into three equal parts and be given to Sunni Waqf Board, Nirmohi Akhara and the party representing ‘Ram Lala Virajman’ (Ram deity).
However, the third judge Justice D.V. Sharma ruled that that the disputed site is the birth place of Lord Ram and that the disputed building constructed by Mughal emperor Babur was built against the tenets of Islam and did not have the character of the mosque. The Bench directed maintenance of status quo at the site for three months and invited suggestions from all the parties for demarcation of the land.
The judges also dismissed the claims of the Sunni Central Waqf Board over the Babri Mosque due to limitation or becoming time barred as well as the claim of the Nirmohi Akhara.
With a 2-1 majority, the Bench held that all the three parties, namely Muslims, Hindus and Nirmohi Akhara were joint titleholders of the property in dispute. Both Justices Sudhir Aggarwal and SU Khan made it clear that the share of the Muslim parties shall not be less than one third of the total area of the premises. “...If while allotting exact portions some minor adjustment in the share is to be made then the same will be made and the adversely affected party may be compensated by allotting some portion of the adjoining land,” observed Justice Khan.
The area under the erstwhile central dome where the idols are placed in the makeshift temple has been allotted to the Hindus. The inner courtyard has been given to both the communities “since it was being used by both since decades and centuries”, noted Justice Aggarwal.
The ‘Ram Chabootra’, ‘Sita Rasoi’ and ‘Bhandar’ area in the outer courtyard will go to the Nirmohi Akhara. The outer courtyard is once again to be shared by the Nirmohi Akhara and the Muslim parties.
Highlights
—2.7 acre disputed site to be divided in three equal parts.
—Two portions to be handed over to Hindus, Muslims will get one.
—All three parties—Muslims (Sunni Waqf Board), Nirmohi Akhara and the parties representing ‘Ram Lalla Virajman’—declared joint title-holders.
—The portion below the central dome, where the idol of Lord Rama is presently kept in makeshift temple, belongs to Hindus.
—All three parties may utilise the area to which they are entitled to by having separate entry for egress and ingress of the people without disturbing each other’s rights. The parties may approach Centre which shall act in accordance with the directions and also as contained in the SC verdict.

Young observed: “This spot is situated within the precincts of the grounds surrounding a mosque erected some 350 years ago, owing to the bigotry and tyranny of the emperor who purposely chose this holy spot, according to Hindu legend, as the site of his mosque.”

DO YOU KNOW

A high-speed train in China has set a new world speed record during a trial run. The train hit a maximum of 416.6 km per hour on its journey between Shanghai and Hangzhou. The train is designed to run at a speed of 350 km per hour.
Amir Khan’s “Peepli Live”, a satire on media’s trivialisation of farmers’ suicide, has been selected as India’s official entry at the 2011 Oscars, in the Best Film category.
The Union Cabinet has approved the National Identification Authority of India Bill, 2010, which envisages making UIDAI a statutory body.
Finance Minister Pranab Mukherjee launched the Swavalamban Scheme of Life Insurance Corporation (LIC) on September 25, 2010. The scheme seeks to provide pension scheme to the un-organised sector. Under the scheme, the Central government will contribute Rs 1,000 per year to each National Pension Scheme (NPS) account opened in year 2010-11 and for the next three years, till 2013-14.
The World Tourism Day is observed on September 27.
The UN Summit on the Millennium Development Goals, or MDGs, was held in September 2010 at UN Headquarters in New York, USA.
Chowmhalla Palace in Hyderabad, spectacular 18th century monument, has been selected for the Heritage “Award of Merit” by the UNESCO, for cultural heritage conservation for 2010.
The Business Standard Best Business Schools Survey 2010 shows that India’s top business schools are: Indian Institutes of Management in Ahmedabad and Kolkata, Indian Institute of Foreign Trade in New Delhi, Institute of Management Technology at Ghaziabad, Management Development Institute at Gurgaon, National Institute of Industrial Engineering in Mumbai and XLRI Jamshedpur.
A new wholesale price index series with an updated product portfolio was launched on September 14, 2001. The series will have 2004-05 as the base year, as against 1993-94 in the previous model. Some important items included in the new series basket are: flowers, lemon, crude petroleum, scooter and motorcycle tyre, polymers, marble, silver and gold.
The Employee Provident Fund trustees have decided to raise the interest for 2010-11 to 9.5 percent.
The World Tiger Summit was held in September 2010 in St. Petersburg, Russia.
The six living species of Tigers are: Amur, Bengal, Indochinese, Malayan, South China and Sumatran. The Bali, Caspian and Javan tigers have become extinct.
Navodaya Vidyalayas celebrated 25 years of existence in 2010. A befitting match to costly private schools, the Navodayas have shown in last 25 years how gifted children with humble means can rise to life.
India has replaced the US as the second most important Foreign Direct Investment (FDI) destination for trans-national corporations, according to a survey conducted by UNCTAD. Global FDI flows are expected to jump from $1.2 trillion in 2010 to $1.5 trillion in 2011 and $1.6-2.0 trillion in 2012.
As per the Quacquarelli Symonds (QS) World University rankings, Cambridge University, UK, is the top university of the world, followed by Harvard University, USA, Yale University, US, University College London (UCL), UK, and Massachusetts Institute of Technology, USA, in that order.
Rajkot People’s Cooperative Bank does not offer any job to people who smoke cigarette or eat gutkha. Even the customers with the habits have to pay higher interest on loans.
Reliance Industries has been ranked second in the list of world’s 10 biggest ‘sustainable value creators’—companies that have been successful in creating the most shareholder value over the last decade—prepared by Boston Consulting Group. Brazil-based mining and materials giant Vale has been ranked the top value creator.
India’s first agri-biotechnology institute, the National Agri Food Biotechnology Institute (NABI) is being set up in Mohali, near Chandigarh.

Current Affairs: August 2010

NATIONAL AFFAIRS

Foreign Contribution Regulation Bill
Organisations of political nature and those involved in religious conversions will henceforth be barred from accepting foreign funds. Also, persons holding political positions like MPs and MLAs can no longer enjoy foreign hospitality and must intimate the government of their visits abroad, personal or official.
After letting private organisations bring in unaccounted foreign remittances for 34 years, the government has brought to the Lok Sabha the Foreign Contribution Regulation Bill, 2010, to regulate the acceptance and utilisation of foreign contribution of hospitality by certain individuals or associations and to prohibit such acceptances for activities detrimental to national interest. The Lower House passed the Bill, which the Rajya Sabha had already cleared.
At the root of the law is the concern that out of 40,173 NGOs (in 1993 there were just 1,500) accepting foreign funding, only 18,796 have submitted their audited accounts. For the rest, the government doesn’t know the source of funding.
So far, Rs 12,000 crore has “officially” come through the foreign route, of which 60 per cent has come from religious organisations, some from countries as small in population as Canada, Mauritius and Luxembourg.
The government’s data shows that in 2005 and 2006, there were over 32,144 organisations taking foreign funds in India. Only 18,000 declared their funding. In 2005-2006, of the Rs 7,000 crore that came from foreign sources, Rs 3,075 crore came for religious organisations. This explains why the new law (which replaces the 1976 legislation) bans foreign funds for conversion purposes.
Significant amounts (to the tune of Rs 7,229 crore) have also come in for education, with no monitoring. In the run-up to the new FCR Bill 2010, the government banned 41 outfits from taking foreign remittances; sealed accounts of 11 and asked 45 to take permission first.
With the new law, the government has also capped administrative expenses at 50 per cent of all inflows to NGOs (India has about 20 lakh).

Nuclear Liability Bill
On August 25, 2001, the UPA government successfully shepherded the Civil Liability for Nuclear Damage Bill, 2010, through the Lok Sabha, with active support from the BJP and strategic absence of some fence-sitters such as the Samajwadi Party.
Quashing opposition from the Left Bloc and other critics, Prime Minister Manmohan Singh denied that the Bill was railroaded through the House to serve US interests. “This Bill is a completion of a journey to end the nuclear apartheid, which the world had imposed on India in the year 1974,” he said.”
The government managed to bring the BJP on board in return for accepting amendments to the controversial Clause 17(b) and dropping the word “intent”. The new formulation of 17(b), now states that suppliers would be liable where “the accident has resulted as a consequence of an act of a supplier or his employees, done to cause nuclear damage, and such act includes supply of equipment or material with patent or latent defects or sub-standard services”.

While his government achieved what appeared even a few months ago to be an impossible task—getting the Lok Sabha to pass the Bill— Manmohan Singh announced that the government would give safety issues top priority. “Concern about nuclear safety is one, which I fully share. I assure (you) we will do everything to strengthen the Nuclear Regulatory Board to ensure that safety concerns receive the attention that they must, if we are to use nuclear power as a major source for generating and meeting India’s need for energy,” he said.

The key points of the Bill are:
—Controversial Clause 17(b) amended by dropping the word ‘intent’.
—Compensation cap to be paid by the operator at Rs 1500 crore provided in the Bill is not the ‘limit’.
—Compensation will be decided by the Claims Commissioner and the operator will have to pay.
—Government assumes full liability for even a plant not operated by it.
—The Bill is necessary for full implementation of civil nuclear deal signed with the USA in 2006.

Bill to provide women equal guardianship rights
A Bill paving way for the women to get equal rights in guardianship and adoption of children has been passed by the Rajya Sabha.
The Personal Laws Amendment Bill seeks to amend the Guardians and Wards Act, 1890 and the Hindu Adoptions and Maintenance Act, 1956. It also seeks to allow the mother, along with the father, to be appointed as a guardian, making the process gender-neutral.
Besides, it aims at removing hurdles in the way of a married woman to adopt. She can give a son or daughter for adoption.
For adoption and guardianship, under the existing Act, only the father is considered to be the natural guardian of the child in a Hindu family and only unmarried, divorced women and widows are allowed to adopt a child. Women separated from their husbands and engaged in lengthy divorce battles cannot adopt a child.

Annual Supplement to Foreign Trade Policy 2009-14
The government has extended sops worth Rs 1,052 crore to exporters, particularly for the labour-intensive textile, handicrafts and leather sectors, to help them see through the fragile economic recovery globally. The revenue implication of these measures would be Rs 1,052 crore. The government also made it clear that the popular Duty Entitlement Pass Book (DEPB) scheme, which has been in vogue for over a decade, is being extended for the last time.
Experts said drawing the curtains on the DEPB scheme was inevitable as it was considered incompatible with the global trade rules under WTO.
A number of additional products from sectors like engineering, leather, textiles and jute have also been added to the existing two per cent interest subvention scheme. Handloom, handicrafts, carpet and the SMEs have been getting this facility, which will now be available till March 31, 2011.
The government also extended the zero-duty Export Promotion Capital Goods (EPCG) scheme by one year to March 31, 2012. The scheme, which was announced in August 2009, was to expire on March 31, 2011. Steps to reduce transaction cost of exports too were announced in the policy.

India-Japan Strategic Dialogue
On August 21, 2010, visiting Japanese Foreign Minister Katsuya Okada held the fourth round of strategic dialogue with External Affairs Minister S.M. Krishna. The two sides discussed the nuclear pact, comprehensive economic partnership agreement (CEPA), other bilateral and international issues, including UN reforms and the situation in Afghanistan and Pakistan.
However, the focus was clearly on the nuke deal, the discussions on which the two countries propose to conclude as quickly as possible without setting any time-line.
Addressing a joint press conference with Krishna after the three-hour talks between the two sides, Okada candidly admitted that initiating negotiations with India on the nuclear pact was the toughest decision he had taken during his stewardship of the Japanese Foreign Ministry, given the fact that India was not a signatory to the NPT. He also acknowledged that the proposal for a nuclear agreement with India was facing sharp criticism back home, since Japan is the only country to have experienced a nuclear attack.
He also told the Indian side that the philosophy of nuclear disarmament and non-proliferation must be incorporated in the proposed accord on nuclear cooperation.
Asked if Japan had advised India against detonating another nuclear device, Okada said: “I don’t think we can suggest to India to refrain from conducting a test…but if such a thing were to happen, we shall have no option but to suspend our cooperation with India (in the field).”
The two countries will continue and enhance consultations within the G-4 process for reforms of the UN, including the Security Council. They also welcomed the inclusion of the US and Russia in the East Asia Summit (EAS).

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INTERNATIONAL AFFAIRS

China overtakes Japan as second-largest economy
After three decades of spectacular growth, China has passed Japan in the second quarter of 2010 to become the world’s second-largest economy behind the United States. The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendancy is for real and that the rest of the world will have to reckon with a new economic superpower.
The recognition came on August 16, 2010, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.
Experts say unseating Japan—and in recent years passing Germany, France and Great Britain—underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030.
For Japan, whose economy has been stagnating for more than a decade, the figures reflect a decline in economic and political power. Japan has had the world’s second-largest economy for much of the last four decades, according to the World Bank. And during the 1980s, there was even talk about Japan’s economy someday overtaking that of the United States. But, while Japan’s economy is mature and its population quickly aging, China is in the throes of urbanization and is far from developed, meaning it has a much lower standard of living, as well as a lot more room to grow.
China is already a major driver of global growth. The country’s leaders have grown more confident on the international stage and have begun to assert greater influence in Asia, Africa and Latin America, with things like special trade agreements and multi-billion dollar resource deals. Beijing is also beginning to shape global dialogues on a range of issues; for instance, in 2009 it asserted that the dollar must be phased out as the world’s primary reserve currency.
While the United States and the European Union are struggling to grow in the wake of the worst economic crisis in decades, China has continued to climb up the economic league tables by investing heavily in infrastructure and backing a $586 billion stimulus plan.
There are huge challenges ahead, though. Economists say that China’s economy is too heavily dependent on exports and investment and that it needs to encourage greater domestic consumption—something China has struggled to do. The country’s largely state-run banks have recently been criticized for lending far too aggressively in 2009, while shifting some loans off their balance sheet to disguise lending and evade rules meant to curtail lending growth.
China is also locked in a fierce debate over its currency policy, with the United States, European Union and others accusing Beijing of keeping the Chinese currency, the renminbi, artificially low to bolster exports—leading to huge trade surpluses for China but major bilateral trade deficits for the United States and the European Union. China says that its currency is not substantially undervalued and that it is moving ahead with currency reform.
Regardless, China’s rapid growth suggests that it will continue to compete fiercely with the United States and Europe for natural resources but also offer big opportunities for companies eager to tap its market.

US ends combat mission in Iraq
On August 31, 2010, US President Barack Obama announced an end to the US combat mission in Iraq, not with a declaration of victory but rather a sombre admission that the US had paid a “huge price.”
Announcing an end to Operation Iraqi Freedom in a nationally televised speech from the White House, the President said the Iraqi people now have lead responsibility for the security of their country.
But as US troops roll out of Iraq, the country continues to be locked in a political stalemate with disagreement over who will lead it, after elections failed to throw up a clear winner.
Obama urged Iraq’s leaders to “move forward with a sense of urgency to form an inclusive government that is just, representative, and accountable to the Iraqi people.” “And when that government is in place, there should be no doubt: The Iraqi people will have a strong partner in the United States. Our combat mission is ending, but our commitment to Iraq’s future is not,” he added.
Anthony Cordesman of the Center for Strategic and International Studies said while US troops may have withdrawn, the Iraq war is not over, it is not “won,” and any form of stable end state in Iraq is probably impossible before 2020.
A transitional US force will remain in Iraq with a mission of advising and assisting Iraq’s security forces, supporting Iraqi troops in targeted counter-terrorism missions, and protecting US civilians.

Mid-East Summit
US President Barack Obama waded into a new round of Middle East diplomacy September 1, 2010, seeking momentum for revived peace talks clouded by a flare-up of West Bank violence and a deadlock over Jewish settlements.

Obama met Israeli Prime Minister Benjamin Netanyahu as he launched a series of one-on-one meetings with Middle East leaders attending a US-led peace summit that culminated with the first direct Israeli-Palestinian talks in 20 months.
With Obama's peace bid facing broad skepticism and the clock ticking toward the September 26, 2010 expiration of an Israeli settlement construction freeze, Israel's defence minister sounded a conciliatory note about the prospects for sharing Jerusalem, an issue at the heart of the decades-old conflict. But big obstacles remain to Obama's quest for a peace deal that eluded so many of his predecessors.
Hamas militants declared war on the talks even before they began, killing four Jewish settlers in the occupied West Bank, vowing more attacks and underscoring the threat hard-liners pose to the fragile peace process.
The summit marked Obama's riskiest plunge into Middle East diplomacy, not least because he wants the two sides to forge a deal within 12 months, a target many analysts call a long shot.

Cricket shamed again
Yet another match-fixing scandal rocked Pakistan cricket on August 29, 2010, engulfing its captain Salman Butt, brilliant pace duo of Mohammad Asif and Mohammad Amir and four other players, leading to the arrest of a bookie in London and questioning of the players by the Scotland Yard after a tabloid sting.
The ‘News of the World’ tabloid alleged that a Pakistani man Mazhar Majeed had paid bribes to the players to bowl no-balls in the series and the Lord’s Test. The video evidence that the tabloid has presented also shows Majeed talking about his links with Indian bookies.
The two Pakistanis who bowled no-balls allegedly on directions from Majeed were Asif and Aamir. Both bowlers delivered three no-balls during the Lord’s Test.

National Innovation Council
Prime Minister Manmohan Singh has approved the setting up of a National Innovation Council to prepare a road map for the 'Decade of Innovation 2011-2020'. Sam Pitroda, adviser to the Prime Minister on public information infrastructure and innovations, will head the National Innovation Council.
The Council has been given the mandate to evolve an Indian model of innovation focussing on inclusive growth and creating an appropriate eco-system conducive to fostering inclusive innovation.
It will delineate appropriate policy initiatives within the government required to spur innovation. It will also promote the setting up of sectoral innovation councils and state innovation councils.
While encouraging all important sectors of the economy to innovate, the NIC will take special efforts to facilitate innovation by micro, small and medium enterprises.
Innovation in public services delivery and encouraging multi-disciplinary and globally competitive approaches for innovations would be focused on by the council

DO YOU KNOW

“A Journey” is a memoir written by former British Prime Minister Tony Blair.
The N.C. Saxena Committee was set up by the Ministry of Environment and Forests. It details the manner in which laws were flagrantly flouted to facilitate the Vedanta Alumina Ltd project in Orissa. The project is aggressively opposed by the local tribal groups.
India remained the largest recipient of World Bank loans in 2009-10. The World Bank, through its lending arms IBRD and IDA, committed $9.3 billion in financial assistance to India in 2009-10, more than the aid committed by the US and European Union. Next in line were South Africa ($3.8 billion), Brazil ($3.7 billion) and Turkey ($3.0 billion).
The Indian Parliament has hiked the salary of Members of Parliament to Rs 50,000 per month. Two key allowances (constituency and office expenses) have also been increased to Rs 45,000 each.
Airtel has bagged the title sponsorship rights for the India cricket team’s home games for two-and-half years, at a cost of Rs 3.33 crore per match.
Rajiv Gandhi Akshay Urja Diwas is observed on August 24.
The 2010 Academic Ranking of World Universities has ranked Harvard University as the top University of the world for the eighth year in the annual ranking. Harvard is followed by University of Cambridge, Yale University, University College London (UCL), Imperial College London, University of Oxford, University of Chicago, Princeton University, Massachusetts Institute of Technology (MIT) and California Institute of Technology (CALTECH).
“Oh yaaron, India ne bula liya”, composed by A.R. Rahman, is the theme song of Commonwealth Games, 2010. It has been directed by Shyam Benegal and produced by Bharat Bala.
With his Independence Day speech on August 15, 2010—the seventh—Manmohan Singh edged past Atal Behari Vajpayee to become the Prime Minister of India who has addressed the nation on Independence Day the third-highest number of times. Jawaharlal Nehru addressed the nation 17 times and Mrs Indira Gandhi 16 times.
On September 1, 2010, South-East Asia’s first Sports Injury Centre was opened on the campus of Safdarjung Hospital, New Delhi, in partnership between the government and six private players.
An elephant, named Stumpy, is the official mascot of the 2010 Cricket World Cup.
UNESCO has granted the World Heritage status to Jantar Mantar in Jaipur which is a celebrated astronomical observatory built in 18th century. This is India’s 28th and Rajasthan’s second site (after Keoladev National Park) to be given the World Heritage status.

Current Affairs: July 2010

NATIONAL AFFAIRS

Business takeover code re-written
The Takeover Regulations Advisory Committee under the chairmanship of C. Achuthan, in its 139-page report to the Securities and Exchange Board of India (SEBI), has proposed sweeping changes on critical issues, including the open offer trigger, offer size, indirect acquisitions, exemptions from open offer obligations, calculating the offer price and competing offers. This comes nearly 16 years after the guidelines were formally notified for the first time and after 23 amendments to the last major review in 1997.
The takeover panel, formed by SEBI in September 2009, has recommended an increase in the open offer trigger from 15 per cent to 25 per cent. Further, the open offer has to be made for all the shares of the target company, instead of the current practice of an offer for acquiring an additional 20 per cent. Analysts said the proposed rules would raise the financing required for taking over a firm, but would encourage investors taking strategic stakes in companies.
The panel, which also had Tata Steel Ltd Chief Financial Officer (CFO) Koushik Chatterjee and Larsen & Toubro Ltd CFO Y M. Deosthalee as members, concluded that since a holding level of 25 per cent permits the exercise of de facto control over a company, this could be fixed as the appropriate open offer trigger threshold in the Indian context.
The committee has also noted that the 100 per cent open offer requirement could result in an acquirer ending in holding beyond the maximum permissible non-public shareholding, which may require the acquirer to either de-list or bring down his holding to meet the continuous listing requirements. The panel has recommended that the acquirer may state upfront his intention to de-list if his holding in the target company were to cross the de-listing threshold, pursuant to the open offer.
In the absence of any such disclosure or when the response to the open offer is below the de-listing threshold, the acquirer would be required to either proportionately reduce both his acquisitions under the agreement that triggered the open offer and the acquisitions under the open offer or to bring down his holding to comply with continuous listing requirements.
The committee has also recommended that a short public announcement should be made by the acquirer on the date of entering in to an agreement followed by a detailed public statement within five business days thereafter. The overall time-line for an open offer has been brought down from 97 days to 57 business days.
The committee, in its attempt to enable transparent consolidation by persons already holding in excess of 25 per cent, has recommended voluntary offers of a minimum size of at least 10 per cent and a maximum size of such number of shares that would not result in any kind of breach of the maximum non-public shareholding permitted under the listing agreement. Under the existing regulations, an offer for a percentage lesser than minimum prescribed percentage can only be by shareholders holding more than 55 per cent.
The panel has also recommended that creeping acquisition be permitted only for acquirers who hold more than 25 per cent of the voting capital, subject to aggregate post-acquisition shareholding not exceeding the maximum permissible non-public shareholding. It has, however, left the annual creeping acquisition limit unchanged at five per cent.
In another recommendation that is expected to enhance the corporate governance norms, the committee has made it mandatory for the independent directors of the target company to give their recommendation on the open offer. Also, no appointment of representatives of the acquirer to the board of directors of the target company would be permitted unless the acquirer places 100 per cent of the consideration under the open offer in cash in an escrow account.
Major changes have also been proposed in the manner minimum price payable is calculated. According to the committee, the offer price would be the highest of (i) market price to be based on 12 weeks volume weighted average of market prices as against higher of weekly averages of market prices for 26 weeks or 2 weeks; (ii) a qualitative improvement and expansion in the look back provision; (iii) in the case of indirect acquisitions, ascription of value to the target company under certain circumstances.
Also, any kind of non-compete fee or control premium paid to promoters will have to be factored in while calculating the open offer price for the minority shareholders.

PM’s panel pegs exports at $216 billion
India's exports are projected to grow by about 22 per cent to $216 billion in 2010-11, on the back of recovery in global trade, according the Prime Minister's Economic Advisory Council.
With contraction in global merchandise demand, India's exports declined by 4.7 per cent to $176.6 billion in 2009-10. However, in the first two months of 2010-11 exports grew by 35.7 per cent.
The International Monetary Fund has projected that exports, at constant price, from emerging and developing economies would increase by 10.5 per cent in 2010. Exports from the advanced economies are also expected to rise by 8.2 per cent.
India-Iran sign six pacts
In their first interaction after the UN imposed the fourth round of sanctions on Tehran in June 2010 over its controversial nuclear programme, India and Iran, on July 8, 2010, signed six pacts, including one on cooperation in new and renewable energy and another on increasing the number of flights between the two countries. The MOUs were signed at the end of the two-day meeting of the India-Iran joint commission.
The other four accords were: agreement on transfer of sentenced prisoners; MOU on cooperation in small-scale industry between the National Small Industries Corporation (NSIC) and the Iranian Small Industries and Industrial Parks Organisation (ISIPO); programme of cooperation on science and technology; and MOU on cooperation between the Central Pulp and Paper Research Institute (CPPRI) of India and the Gorgan University of Agricultural Science and Natural Resources (GUASNR).
The signing of the agreements clearly reflected New Delhi’s intention that it would pursue an independent policy on Iran, notwithstanding the American pressure on it not to enlarge the area of its engagement with Tehran.
Although it is committed to abide by the UN sanctions on Tehran, New Delhi maintains that the Iranian nuclear issue must be resolved through negotiations since the sanctions would only hurt the common Iranian people. While recognising Iran’s right to develop nuclear energy for peaceful purposes, it has also advised Iran to strictly abide by the IAEA guidelines while pursuing its nuclear programme.
The two sides also discussed the situation in Afghanistan at length with both of them expressing their common stakes in the stability of the violence-torn country. New Delhi is believed to have pressed for structured and regular consultations with Tehran on defeating terrorists in Afghanistan and in the

Visit of Myanmar’s military ruler
Ignoring worldwide concerns over human rights violations in Myanmar, New Delhi rolled out a red carpet welcome for Myanmar military ruler General Than Shwe on July 27, 2010. Top Indian leaders held wide-ranging talks with him on a plethora of issues, including bilateral ties as well as international developments.
The increasing Chinese influence in the South East Asian nation is apparently weighing heavily in the mind of the Indian leadership as it seeks to increase its engagement with Myanmar, particularly in the vital energy sector and in fighting Indian insurgents operating along the India-Myanmar border.
The two countries signed five accords after talks between Prime Minister Manmohan Singh and the 77-year-old leader of the military ‘junta’. Simultaneously, the EXIM Bank of India extended a line of credit of $60 million to the Myanmar Foreign Trade Bank.
The treaty on mutual legal assistance in criminal matters is expected to help the two countries combat transnational organised crimes, terrorism, drug trafficking, money laundering and smuggling of arms and explosives. The MoU on Indian grant assistance for implementation of small development projects is aimed at boosting Indian investments in energy, transport and infrastructure sectors.
Strategic observers say the change in India’s policy towards Myanmar was prompted by China wooing the military ‘junta’ to make deep inroads into virtually every sphere of Myanmar’s economic activity. Though China has its own strategic interests in engaging the ‘junta’ in Myanmar, the military rulers are worried that their image outside the country is sullied because of its poor record in protecting human rights.
The military ruler wants to correct this image by introducing some kind of democracy. His visit to India was also aimed at gaining global respectability.

INTERNATIONAL AFFAIRS

Cluster ammunition treaty comes into force
A landmark UN-sponsored treaty banning cluster munitions came into force from August 1, 2010, but all major powers, the US, China, Russia, Israel and India have shunned it. The new instrument is expected to be a major advance for global disarmament and humanitarian agenda.
The convention has been signed by 107 States and entered into force six months after 37 countries ratified the treaty, which was concluded in 2008.
Cluster bombs are both air dropped and used by artillery guns, and the shells open before impact and scatter hundreds of shrapnel, causing widespread casualties over a wide area. Many of such ammunition fail to explode and lie dormant for years killing or maiming hundreds of civilians, long after the conflicts have ended.
From Asia only five countries—Afghanistan, Indonesia, Japan, Laos and Philippines—are the signatories.

Global community commits to peace initiative in Afghanistan
An international conference on Afghanistan was held on July 20, 2010 in Kabul, Afghanistan. The international community reiterated its commitment to continue to support peace and reintegration and said it looked forward to the local peace jirgas that included men and women at district and provincial level to discuss elements of an enduring peace.
The government of Afghanistan is to engage with the UN Security Council and the international community for de-listing Taliban elements from the sanctions list in accordance with agreed procedures and common Afghan and international responsibility.
The international community expressed its support for Karzai’s objective that the Afghan national security forces should lead and conduct military operations in all the provinces by the end of 2014.
On the issue of security, the meeting recognised that civilian casualty and protection of civilians are of great concern and noted that most civilian casualties are caused by insurgent attacks. They also reiterated that the international military forces remain committed to the objective of a steady reduction in the rate of civilian casualties.

Kyrgyzstan vote for parliamentary democracy
In a development that could have far reaching political impact in the region, Kyrgyzstan is all set to become Central Asia’s first parliamentary democracy, with an overwhelming 90.55 per cent voters backing a new constitution which strips the President’s wide ranging powers.
After publishing the official results of the June 27 referendum, the Kyrgyz Central Election Commission (CEC), on July 1, 2010, declared Roza Otunbayeva as the transitional President till December 31, 2011.
It also formally dissolved the Presidential parliament, which was in jeopardy in the wake of violent ouster of President Kurmanbek Bakiyev’s regime in April 2010.
In line with the new constitution, the 120-strong Kyrgyz Parliament, after October 2010 elections, will appoint the Prime Minister and the government.
The referendum, the first step towards legitimacy of the present regime, took place in the midst of inter-ethnic violence in the southern regions of Osh and Jalalabad and exodus of hundreds of thousand refugees to neighbouring Uzbekistan.

Fresh US sanctions on North Korea
US Secretary of State Hillary Clinton announced on july 21, 2010 that Washington would impose new sanctions on communist North Korea in a bid to stem the regime's illicit atomic ambitions.
The UN Security Council has imposed stiff sanctions on North Korea in recent years to punish the regime for defying the world body by testing nuclear weapons and long-range missiles, and illegally selling arms and weapons.
With few allies and diminishing sources of aid, the impoverished North Korea is believed to be turning to illicit ventures to raise the much-needed cash. Pyongyang also walked away in 2009 from a disarmament-for-aid pact with five other nations that had provided the country with fuel oil and other concessions.

Pakistan, China ink six pacts
Pakistan and China reiterated their resolve to further strengthen strategic relationship between the two countries, increase the level of economic cooperation and take concrete measures to further bring their people closer, during the visit of Pakistan’s President Asif Ali Zardari to China in July 2010. The two countries pledged to make joint efforts to fight terrorism, and signed six deals of cooperation in the areas of agriculture, healthcare, justice, media, economy and technology.
US slaps toughest sanctions on Iran
On July 1, 2010, even as he signed into law the toughest sanctions against ever passed by the US Congress at the White House, US President Barack Obama said the doors of diplomacy are still open for the regime in Tehran.
The Iran Sanctions Act affects the gasoline, financial, insurance and shipping sectors, among others, as it seeks to impose a heavy economic cost on Iran for continuing with its nuclear programme.
The sanctions bar foreign countries from exporting refined petroleum to Iran, as well as restrict access to US financial institutions for any entities that help Iran’s Revolutionary Guard Corps.
Also, it prevents investment, transfer of technology and development of Iran’s energy sector, and makes it easier for States and localities to divest from companies that do business with Iran.

Unified Command to battle Naxals
In what is a first step at forming a common strategy for States hit by Naxal violence, the Centre announced, on July 13, 2010, setting up of a Unified Command in Chhattisgarh, Jharkhand, Orissa and West Bengal. Realising that development and action in Maoist areas should be together, the Centre also announced that over Rs 1,750 crore would be spent on developmental projects in the four States.

The Chief Secretary of each State will head the Unified Command, which will have a retired Major-General as its member. The CRPF will depute an IG-level officer for ‘operations’ while an equal rank officer from the State police force will coordinate the entire effort.
The Home Minister said that there was need for a Unified Command only in these four states and Andhra Pradesh, Maharashtra and Bihar had been omitted for the time being.
The Centre has also told the States that the Member-Secretary of the Planning Commission will work to modify existing norms and guidelines to ensure rapid development in the targeted 34 districts: Rs 800 crore will be spent on strengthening police stations and another Rs 950 crore on road connectivity in these districts. The government will fund the establishment and strengthening of 400 police stations in affected districts at the rate of Rs 2 crore a police station on 80:20 basis over a period of two years.
The Planning Commission is also considering a special development plan for the affected districts and States with emphasis on road connectivity, primary education, primary healthcare and drinking water.
Already in force in militancy-hit Jammu and Kashmir and Assam, the Unified Command structure includes Army, paramilitary and State police, who work in coordination. The Army would not be involved in anti-naxal operations for now. However, IAF helicopters would be used for supplies and evacuation.
Visit of British Prime Minister
British Prime Minister David Cameron came visiting India in July 2010. Talking on terrorism affecting the region, he said that Pakistan could not be allowed to harbour militants and promote terror against India, Afghanistan and the rest of the world. On his first visit to India after becoming Prime Minister in May 2010, he laid out the basis for a new “enhanced relationship” with India. Apart from Cameron’s own tough talk on terrorism, his business minister Vince Cable announced the UK was prepared to export civil nuclear technology to India, bringing Britain in line with the stance taken by the United States, Russia and France.
Travelling to Bangalore and then to Delhi, Cameron signed a Rs 5,082 crore agreement for the Indian Air Force and Navy to buy an additional 57 Hawk Advanced Jet Trainer aircraft from British Aerospace Systems. India and the UK also made announcements in the field of immigration, education and signed an agreement on cultural cooperation.
Cameron welcomed India’s support to Afghanistan, Nepal and Bhutan, its “intellectual leadership” at the G20, and said the time was ripe for India to find a place in the UN Security Council.

DO YOU KNOW

Apple Computers has emerged as the world’s most valuable brand in the 50 top valuable brand list of the Forbes magazine. Apple was followed by software major Microsoft, Beverages firm, Coca Cola and technology giant IBM. Search engine Google was fifth in the ranking. McDonald's, General Electric, Marlboro, Intel and Finnish handset maker Nokia featured in the top 10 list.
On July 27, 2010, Reserve Bank of India (RBI) announced a 0.25 percentage point hike in the repo rate (the rate at which it lends to commercial banks), raising it to 5.75 percent, and a 0.50 percentage point hike in reverse repo rate (the rate at which RBI borrows from the commercial banks), raising it to 4.5 per cent. The trigger for hike was a fresh effort to tame high inflation.
Currency option is a derivative instrument that gives the owner the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
The United Nations decided to observe the first “Nelson Mandela Day” on July 18, 2010, in honour of the Nobel laureate who is regarded as the father of the new South Africa.

APRIL 15

2011-04-15T04:21:00.000-07:00

9 per cent GDP growth rate in 2011-12 difficult, says Montek

Concerned over high headline inflation, Planning Commission today raised doubts over clocking the targeted 9 per cent economic growth in the current fiscal."We may not hit 9 per cent (economic growth rate in 2011-12). 6 per cent is the rate of inflation which we should be willing to accept this fiscal," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters here.The government and the Planning Commission had earlier projected a growth rate of 9 per cent during 2011-12, up from 8.6 per cent in the previous fiscal.Referring to rise in headline inflation to 8.98 per cent in March from 8.31 per cent in February, Ahluwalia said, "inflation has been a concern. It has not come under control as much as I had hoped. There is need to use fiscal and monetary policy to get rid of supply constraint wherever they exist."Referring to growth prospects in the current fiscal, he said, it may be difficult to achieve 6 per cent farm sector growth expected to be recorded during 2010-11."There is no chance for agriculture to grow at 6 per cent this fiscal, it may probably grow at 3 per cent", he said.He pointed out, "Even to stay at 8.6 per cent GDP growth this fiscal, industry will have to do much better. Now industry has done about 7.8 per cent in 2009-10 (so far till February end)".According to the latest data, the index of industrial production for April-February last fiscal stood at 7.8 per cent and the factory output dipped to 3.6 per cent in the month of February as compared to 3.9 in January.

Kanishtha Dhankhar crowned Pantaloons Femina Miss India World 2011

Mumbai, April 15 (IANS) Kanishtha Dhankhar was crowned Pantaloons Femina Miss India World 2011 at a gala event here Thursday night. She will represent India at the global pageant later this year.Ankita Shorey was crowned Miss India International 2011, while Hasleen Kaur is Miss India Earth 2011.The event saw scintillating performances by Anushka Sharma, Malaika Arora Khan, Hard Kaur and Sonakshi Sinha, music band SQS and television actors Gaurav Kapoor, Sushant Singh Rajput, Harshad Chopra and Gaurav Chopra.
The finalists were judged by personalities like Kangna Ranaut, Dino Morea, Fardeen Khan, Urmila Matondkar, Ritu Kumar, Shiamak Davar, Leander Paes, Tarun Mansukhani and Sajid Nadiadwala.Last year, Sushmita Sen's production company Tantra Entertainment had been awarded the India franchise to select participant for the Miss Universe contest and the winner - Ushoshi Sengupta had represented India at the international pageant.
Other than the crowning of Miss India, Nadiadwala also announced Ankita Mohapatra as the winner of the Bollywood Diva title, who will be cast in a forthcoming film under Nadiadwala Grandson Entertainment banner.

Headline inflation surges in March; rate hike seen

NEW DELHI (Reuters) - The headline inflation surged to nearly 9 percent in March, far above forecasts, on higher fuel and manufacturing prices, adding pressure on the Reserve Bank of India (RBI) to take bolder action despite raising interest rates eight times since March 2010.

The RBI had widely been expected to raise policy rates by another 25 basis points at its next review on May 3, but analysts said Friday's inflation figure and a steep upward revision of the January reading add to the case for a 50 basis point increase.

"The market was shocked to see this number and it's showing an increase across the board. The chances of a more aggressive policy action have increased," said Manish Wadhawan, director and head of rates at HSBC India.

The wholesale price index, the country's main inflation gauge, rose 8.98 percent from a year earlier, above the median forecast for an 8.36 percent rise in a Reuters' poll and higher than the annual rise of 8.31 percent in February.

The March reading was above the central bank's projection of 8 percent for the final month of the last fiscal year.

"With inflation numbers of this magnitude, especially core inflation, RBI may feel compelled to be a bit more aggressive next time around and move by 50 bps," wrote Credit Suisse economist Devika Mehndiratta.

Still, with economic growth moderating and the central bank's oft-stated preference for a "calibrated" approach to tightening policy, economists and traders still mostly expect another 25 basis point rise at the next review.

The 10-year bond yield rose 8 basis points (bps) on the day to 8.01 percent after the data, while the 1-year swap rate climbed as much as 19 bps to 7.70 percent. The 5-year swap rate moved up 12 bps on the day to 8.21 percent.

The 30-share BSE index extended its fall to 1.5 percent from 1 percent before the data. The partially convertible rupee weakened marginally to 44.53 per dollar from 44.51 just before the figures were released

UPWARD REVISION

In a worrying sign that monthly data may be understating price pressures, January's reading was revised sharply higher to 9.35 percent from 8.23 percent earlier, and traders said the March reading could eventually be adjusted upwards into double-digits.

"It seems that inflation trajectory has changed. The expected decline in inflation is just not happening and looks like we have underestimated the underlying pressure on prices," said Ashutosh Datar, an economist at IIFL in Mumbai.

"More monetary tightening is inevitable after today's data and the case for a 50 basis point hike in May is strengthened," he said.

The food price index rose an annual 9.47 percent in March, compared with a reading of 10.65 percent in the previous month, while the fuel price index rose an annual 12.92 percent from 11.49 percent in February.

Manufacturing inflation quickened to 6.21 percent in March, its highest since April 2010, compared with 4.94 percent recorded in the prior month.

Central banks across Asia are grappling with quickening inflation, even as high oil prices threaten to slow global economic growth.

Singapore tightened monetary policy on Thursday, while South Korea 's central bank revised its 2011 inflation forecast upward on Wednesday, after keeping interest rates steady.

Analysts expect China will again raise reserves requirements for banks and hike interest rates to put a lid on consumer prices after its inflation jumped to a 32-month high.

In India, manufacturing output, which makes up 80 percent of industrial production, grew an annual 3.5 percent during February, compared with 16 percent a year ago.

Several analysts have cut their India growth forecasts for the fiscal year that started this month, citing the risks from inflation, especially as rising global oil and commodity prices begin to hit the manufacturing sector. The economy is esxpected to have grown 8.6 percent in the year that ended in March.

Prime Minister Manmohan Singh's government, which faces potential erosion of support during ongoing state elections this month over various corruption scandals and rising prices, may have to live with high-level of inflation in coming months

"The government is expected to raise diesel and other fuel prices after the result of state elections next month, putting additional pressure on headline inflation," said N.R. Bhanumurthy, an economist at National Institute of Public Finance and Policy, a Delhi-based think-tank.

(Additional reporting by Swati Bhat in MUMBAI; Editing by Malini Menon and Tony Munro

SC asks Satyam to give Rs 617 cr bank guarantee in tax dispute

Australia's Shane Watson became No.1 all rounder in one-day international in the latest ICC rankings by replacing Bangladesh's Shakib Al Hasan.

APRIL 14

2011-04-13T22:22:00.000-07:00

14 Apr, 2011, 03.54AM IST

Cash transfer for school attendance is in works

NEW DELHI: Poor families sending their children to school could get a cash incentive based on the attendance of their child.
The Planning Commission has taken note of a report that has suggested the measure to magnify the impact of the Right To Education law
The Chronic Poverty Report report, prepared by six experts and published by the Indian Institute of Public Administration , suggests merging conditional cash transfers with the existing schemes such as the mid day meal as an effective way of incentivising education for the poor.
"Demand for education from poorest households need stimulating as much as supply and quality of education need investment," says the report. It adds that conditional cash transfers can supplement the mid-day meal scheme, and scholarships for disadvantaged groups in stimulating demand for schooling in poverty stricken households.
Cash transfers conditional to school attendance has been successful in improving school enrollment and reducing dropout numbers in Latin America. "It would be gainful for India to gain a perspective on what has worked there (in Latin America)," noted the report.
Conditional cash transfer (CCT) schemes involve money transfer directly to poor households in response to the beneficiary fulfilling specific conditions. In the case of education, these could be minimum attendance of children in schools, attendance in health clinics, participation in immunisation programs and others.
Variations of the scheme have been tried out successfully in India, notably in Bihar where the state provided cash to girl students to buy bicycles so that they could go to school everyday. "Other states and even the centre should think about such schemes as they do work," an official at the Bihar Education Project Department told ET.
The Bihar government spent 174.36 crore on the scheme over three years and benefited 8.71 lakh girls and helped bring down the dropout rate in the state from 25 lakh to 10 lakh in a span of four years.
The central government has implemented around six CCT schemes, including the National Programme for Education of Girls at the elementary level under the Sarva Shiksha Abhiyan in 2003. The scheme provided 150 to every school going girl child a year but it had somewhat lesser impact. "The scheme is a moderate success as the cash element was not much, but more people in rural areas responded to the scheme and enrollment of girl children," said a Planning Commission official. The enrollment rate of girl child under the scheme in rural areas increased from 28% to 47% in three years after the implementation of the scheme.
Hyun H Son, Manila-based economist with the Asian Development Bank , says CCT programmes in Latin America and other developing countries has been perceived as "magic bullet" for poverty reduction. However, he says for the schemes to work, countries need to have very strong administrative delivery and monitoring mechanisms.
There are some dissenting voices though. A UNDP 2009 report has criticised CCTs for "short term motives" that might prove inadequate to meet the challenge and need to be supplemented by other broad based programmes.
Experts in India also say that in India CCTs to stimulate demand can only act as a supplementary act as the greater priority is to ensure the quality and infrastructure of education system. "Money cannot substitute for quality of the education provided. I feel there is enough demand but less capacity for schools to absorb the demand," says Himanshu, an assistant professor in JNU and a visiting fellow at Centre de Sciences Humaines, New Delhi. He adds that to make the Bihar 'bicycle' scheme a success, the government invested extensively in education infrastructure before launching the scheme.

13 Apr, 2011, 02.43AM IST, Divya Rajagopal,ET Bureau

NBFC licences put on hold till review of finance company guidelines

MUMBAI: Toyota Kirloskar , and Daimler, the maker of Mercedes cars, will have to wait a few more months to begin their business of lending for car and equipment purchases as the Reserve Bank of India put on hold new licences awaiting new guidelines, said two people familiar with the decision.

The central bank, which is in the midst of tightening rules for lenders who don't fall under the 'banks' category, has told some of the applicants for the finance company licence that it may not issue one till the new rules come into force, said those people who did not want to be identified. It might take RBI two to three months to come out with its new guidelines.

Jain Irrigation and German electrical equipment-maker Siemens are the other companies planning to set up a finance company that would fund purchases of their own product, helping their businesses grow. Europe's biggest automobile company, Volkswagen , recently got the licence for such a company. It will invest 120 crore to expand the business.

Manufacturing companies such as General Electric and others across the globe do fund equipment purchase that has helped them grow. Even state-run Bharat Heavy Electricals plans to set up a non-banking finance company. However, reckless funding could result in the collapse of even the parent company. GE, the top manufacturing company in the world, had to seek the help of US authorities during the 2008 crisis as there were few takers for its commercial paper.

Because of these companies' role in the financial markets, the RBI set up a committee under deputy chairman Usha Thorat to finalise a new set of guidelines after raising their capital requirements recently. RBI believes that there is a need to strengthen the supervision of the 12,500 NBFCs in the country due to the high exposure of banks to NBFCs at over 15 lakh crore.

"The recent global financial crisis has highlighted the regulatory imperatives concerning the non-banking financial sector and the risks arising from regulatory gaps, arbitrage and systemic inter-connectedness," said the RBI statement. "A need was, therefore, felt to reflect on the broad principles that underpin the regulatory architecture for NBFCs keeping in view the economic role and heterogeneity of this sector and the recent international experience."

The RBI has taken some measures in that direction. In the last four months, it has reduced the arbitrage opportunities of NBFCs. It has also increased the capital adequacy ratio of NBFCs to 15 % and removed the priority sector status of gold-loan companies.

But NBFCs are also seeing a growth in retail lending. NBFCs presently have a 26% market share, which is expected to go up to 47% in the next three years, says a report by rating agency Crisil . The profitability of NBFCs has also peaked to the 2007 levels. Hence, in the next three years, NBFCs' non-mortgage lending is expected to match the levels of a commercial bank, provided there are no regulatory challenges

11 Apr, 2011, 02.08AM IST,

Pranab to seek Yashwant's help in PFRDA bill clearance

NEW DELHI: Finance minister Pranab Mukherjee is likely to reach out to BJP leader Yashwant Sinha to get an early green signal for the Pension Fund Regulatory and Development Authority (PFRDA) Bill. Sinha heads the parliament's standing committee on finance whose nod is necessary to get the long-pending bill passed.

On hold since 2004, the PFRDA Bill that gives a statutory backing for a pension sector regulator was re-introduced in the Lok Sabha in the recent Budget session.

Conceived when Sinha was finance minister in the Atal Behari Vajpayee government, the Bill had been introduced in the last Lok Sabha, but lapsed with the UPA failing to convince their former allies - the Left parties.

The chairman of the interim PFRDA, which operates under an executive order, said that the government is now keen to get the Bill passed in Parliament's monsoon session.

"The finance minister will speak to Mr Sinha and point out that Bill is his baby, in a way, as it originated in his time as finance minister," PFRDA chairman Yogesh Agarwal told ET. "Mr Sinha will be requested to either not ask for the Bill to be referred to the standing committee or clear it quickly after it's referred," he said.

The Bill was scrutinised by the parliamentary committee on finance in UPA's first innings, before it lapsed. However, technically it has to be seen by the present Lok Sabha before clearance. Mukherjee is expected to point out to his NDA predecessor that all the suggestions of the previous Lok Sabha's standing committee have been incorporated in the present Bill.

A fortnight ago, the BJP had bailed out the UPA on the introduction of the Bill in the Lok Sabha. Congress' floor managers bungled up in ensuring their MPs' attendance while CPM leader Basudeb Acharia moved a division motion - which entails MPs voting on whether a Bill must be introduced at all.

Though Acharia had asked the BJP to support his motion, the party decided to vote with the government, defeating the division motion with 115 votes for the Bill and just 43 against. This marked the first time in recent years when the Congress and BJP came together to push reforms. Though the government expects less resistance from the BJP on financial sector reforms, the opposition party has said it will decide its stand on the content of pending financial bills in May.

BJP spokesperson Prakash Javadekar recently clarified that the party had 'only supported the introduction of the pension bill' and its stand on all pending financial bills would be discussed in May. "We are in favour of right type of financial reforms," he said last week.

Apart from the PFRDA Bill, the government introduced the Banking Laws (Amendment) Bill and a constitutional amendment bill to enable the proposed Goods and Service Tax regime in the Budget session. The government has kept the foreign direct investment (FDI) limits in the pension sector outside the purview of the PFRDA Bill.

This may have been prompted by its experience in the insurance sector. Though it is keen to raise the FDI limit from 26% to 49%, the government has been unable to get the Insurance Laws (Amendment) Bill past Parliament.

12 Apr, 2011, 04.08PM IST,PTI

Rs 72,000-cr income tax refunds in 2009-10: CBDT

NAGPUR: The Income Tax department has refunded as much as Rs 72,000 crore to tax payers across the country in 2009-10, Central Board of Direct Taxes ( CBDT )) Chairman Sudhir Chandra said here.

"The Income Tax department has improved its tax refund rate and Rs 72,000 crore have been refunded to tax payers in the fiscal year 2009-10 against Rs 57,000 in the previous financial year," Chandra said addressing the passing out of 63rd batch of Indian Revenue Services (IRS), here yesterday at the National Academy of Direct Taxes.

Chandra said the tax collection has gone up rapidly and this fiscal which ended on March 31, 2011, the booty was to the tune of Rs 4.50 lakh crores against a target of Rs 4.46 lakh crores which was revised from Rs 4.30 lakh crores.

The issue of delayed refunds was not a healty trend and was tarnishing the department's image. Hence, it has cleared 78,00,000 refund cases in the process, he claimed.

Union Minister of State for Railways K H Munniappa's son Narsimha Raju was among the pass outs.

Deepika Mohan was awarded the coveted Finance Minister's Gold Medal for best all round performance. There were 123 officer-trainees from 23 different states.

Uttar Pradesh topped the list with highest number of 26 trainees followed by Tamil Nadu (17), Bihar (14) and Maharashtra (8).

13 Apr, 2011, 06.50PM IST,PTI

Doha trade negotiations on the verge of collapse

GENEVA: The Doha trade negotiations are on the verge of collapse due to unrealistic demands by leading industrialised countries that want China , India , and Brazil to "harmonise" a large percentage of their industrial tariffs well below current applied rates, sources said.

World Trade Organisation director general Pascal Lamy today informed members of the G-90 coalition that there are "unbridgeable" differences over "sectorals" in Doha industrial goods, sources said.

The G-90 includes countries from Africa, Pacific and Caribbean as well as least-developed countries.

Lamy said his meetings with the US, China, India, and Brazil over the last fortnight revealed that the gaps in positions among members are too wide and not amenable for any closure at this juncture, an African trade envoy told PTI.

As part of the sectoral negotiations, the US wants China, India, and Brazil to reduce their tariffs on chemicals, industrial engineering goods, and electricals and electronics close to zero.

Washington justified its demand on the ground that the three "emerging" countries are the major beneficiaries in the global trading system.

Though the Doha mandate calls for "voluntary" participation in the sectoral negotiations, the US has turned the tables by saying that unless the three developing nations agree to its demand for reducing tariffs close to zero through a basket approach it would not move, sources said.

The three developing countries flatly rejected the US demand on sectorals saying they would only participate on a voluntary basis to conclude the Doha agreement, said trade officials from these three countries.

Consequently, Lamy has now given up his plan to issue the "draft final texts".

Instead, he would circulate "documents" from the chairs for the Doha negotiating bodies on April 21.

In a fax sent to members on Monday, he said, "These documents will be accompanied by an introductory report by the TNC chair in which I will, inter alia, report on the consultations I am conducting currently."

The sudden volte-face took place on Friday last following a meeting between the director general, who is also the chair for the Doha trade negotiations committee, and the respective negotiating chairs, sources said.

"The Doha Round is dead," a South American trade envoy told PTI, arguing that "it is time for members to acknowledge this and make appropriate corrections."

Given the differences in Doha industrial goods, particularly sectorals, it is clear from the day one that it would be difficult to prepare a text.

"We are somewhat surprised by Lamy's admission that gaps on sectorals are unbridgeable, as we had repeatedly told him several months ago," said another trade envoy. In the absence of a plan to issue texts before Easter, it is clear that members will now have to prepare for a "soft-landing," said one trade envoy here.

He implied that members will continue to work without any deadline until there is some convergence.

Another trade envoy said, "The window of opportunity to conclude the Doha trade negotiations in 2011 is now almost impossible. Since 2008, differences in the three Doha market access areas of agriculture, industrial goods and services have significantly widened."

14 Apr, 2011, 12.16AM IST,Reuters

World trade talks hinge on India, China, Brazil: US

WASHINGTON: The fate of long-running world trade talks depend on whether China , India and Brazil are willing to make a deal that will open their markets to additional foreign goods and services, U.S. Trade Representative Ron Kirk said on Wednesday.

"If I can just be blunt, the question is whether they are willing to walk in the room, close the door and hammer out a deal," Kirk said in a speech at a trade symposium hosted by U.S. Customs and Border Protection.

The remark came one day after European Union Trade Commissioner Karel De Gucht warned that the nearly 10-year-old round of talks were at a difficult stage and there was "no reason to be optimistic" about the chances for success.

"We're still at the table," Kirk said. "There's an anxiety that we may not get there. But we think it would be a real shame if we weren't able to find a way to rationalize global trade and get a Doha deal that works for everyone."

Kirk said developing countries often complain that the United States and the European Union have long dominated the process of establishing the international rules for trade.

"We've gladly opened that door and shown them we have three more chairs: one for China, one for India and one for Brazil."

"No three economies have benefited more from trade liberalization over the last 10 years than China, India and Brazil. That's a good thing," Kirk said.

"But with that blessing comes a responsibility, and we believe China, India and Brazil have the opportunity to find out just how bloody awful it is to bring these things to a close," Kirk said.

Despite De Gucht's bleak assessment of the talks, Kirk said he thought substantial progress had been made over the past 18 months in persuading other WTO members that a draft July 2008 deal did not do enough to open markets around the world to more trade.

13 April current affair (banking)

2011-04-13T00:47:00.000-07:00

Bank loans grow 21.4% in 2010-11, deposits rise 15.8%

Bank loans registered a growth of 21.38 per cent in 2010-11, while deposit growth stood at 15.84 per cent, according to data released by the Reserve Bank of India (RBI).

While credit growth was higher than RBI’s projection of 20 per cent in 2010-11, deposit growth fell short of the 18 per cent projection. Deposit growth for 2009-10 was 17 per cent, while the growth in credit was 16 per cent.

The growth in loans came off sharply in the last fortnight of the financial year ended March 25, compared to the previous fortnight, in which credit growth was 23.20 per cent. In the fortnight ended March 25, banks disbursed Rs 82,593 crore worth of loans. Deposits grew by Rs 64,333 crore in the fortnight.

Analysts and bankers said a growth rate of 18 per cent in deposits and 20 per cent in credit should be sustainable for banks in 2011-12. With policy rates expected to rise further, banks may not be willing to raise loan rates, owing to liquidity coming back into the system. Typically in the beginning of a financial year, the demand for loans is slack.

“We feel interest rates have peaked. But since inflation is still high, there is a chance of RBI raising policy rates further in May. However, a rise in policy rates will not necessarily mean an immediate hike in deposit and lending rates,” said RK Bansal, executive director and group head (retail banking), IDBI Bank. He said IDBI Bank had no plans to cut retail term deposit rates, nor to raise lending rates. “For the current financial year, because of a low-base, I expect around 20 per cent growth in deposits. I also expect 18-20 per cent growth in credit,” Bansal said.

Liquidity concerns have also ebbed since the beginning of the financial year, as banks become net lenders to the central bank’s liquidity adjustment facility. Liquidity was in deficit mode during the second half of the current financial year, which saw rates heading north.

“Currently, there are no liquidity pressures. Hence, banks may want to withdraw their special rates on deposits. But banks may not reduce rates, as deposits from retail segment are yet to pick up. So they may want to wait and watch before slashing interest rates on deposits,” said a official from a public sector bank.

BRIC nations no longer emerging markets: O'Neill

Press Trust of India / Beijing April 13, 2011, 12:30 IST

BRIC nations are no longer emerging markets as they have become growth markets for world economy, Goldman Sachs Asset Management chairman Jim O'Neill has said.

"I don't think of Brazil, Russia, India and China, (BRIC) as emerging markets. It is an insult and inopportune. And in any case, they are different markets," O'Neill, who invented the term 10 years ago, told China Daily in an interview ahead of BRICS summit on Thursday.

An expanded version of BRIC, BRICS includes Brazil, Russia, India, China and South Africa, the leaders of which are meeting at Sanya in China for the two-day summit beginning today.

"The BRIC economies are increasingly the major story for the world economy, they have lifted the world economy's growth trend from 3.7% to 4.5% in my view," O'Neill said while preferring to use the old acronym BRIC even though South Africa has joined the group making it the BRICS.

South Africa is attending the summit for the first time.

On South Africa’s entry to the fast-growing countries club, O' Neill said that with $350 billion economy, South Africa was smaller than the BRIC members.

Even the economies of India and Russia, the smallest of the original BRIC grouping, are five times bigger than South Africa.

"I guess South African involvement may have something to do with Africa as a continent, but I doubt other big countries such as Nigeria see them as their representative," he said.O'Neill said Poland, Saudi Arabia, Argentina and Iran should be called emerging markets.

Goldman Sachs plans to redefine the world of emerging markets by adding Mexico, South Korea, Turkey and Indonesia to a new grouping with the four original BRIC members and title them as "growth markets".

According to O'Neill, the BRIC countries are the leading "growth economies", and the other four are and will remain smaller.

The BRIC economies are currently worth around $11-12 trillion, while the figure for the United States is $15 trillion, he said, observing that by 2018, they will probably be bigger than the US.

He estimates that by 2020, the combined GDP of the four original BRIC members will be around $25 trillion, while that of the eight "growth markets" will be around $30 trillion.

Bric nation

The acronym was coined by Jim O'Neill in a 2001 paper entitled "Building Better Global Economic BRICs".^[1][2][3] The acronym has come into widespread use as a symbol of the shift in global economic power away from the developed G7 economies towards the developing world.
According to a paper published in 2005, Mexico and South Korea were the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed, as they were already members of the OECD.^[4]
Several of the more developed of the N-11 countries, in particular Turkey, Mexico, Nigeria and Indonesia, are seen as the most likely contenders to join the BRICs. Some other developing countries that have not yet reached the N-11 economic level, such as South Africa, aspire to BRIC status. Economists at the Reuters 2011 Investment Outlook Summit, held on 6–7 December 2010, dismissed the notion of South Africa joining BRIC.^[5] Jim O'Neill told the summit that he was constantly being lobbied about BRIC status by various countries. He said that South Africa, at a population of under 50 million people, was just too small an economy to join the BRIC ranks.^[6]
Goldman Sachs has argued that, since the four BRIC countries are developing rapidly, by 2050 their combined economies could eclipse the combined economies of the current richest countries of the world. These four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.^[7][8]
Goldman Sachs did not argue that the BRICs would organize themselves into an economic bloc, or a formal trading association, as the European Union has done.^[9] However, there are some indications that the "four BRIC countries have been seeking to form a 'political club' or 'alliance'", and thereby converting "their growing economic power into greater geopolitical clout".^[10][11] On June 16, 2009, the leaders of the BRIC countries held their first summit in Yekaterinburg, and issued a declaration calling for the establishment of an equitable, democratic and multipolar world order. Since then they have met in Brasília in 2010 and will meet in China in 2011.^[12]

Summits

Summit	Participant	Date	Host country	Host leader	Location
1st	BRIC	June 16, 2009	Russia	Dmitry Medvedev	Yekaterinburg
2nd	BRIC	April 16, 2010	Brazil	Luiz Inácio Lula da Silva	Brasília
3rd	BRICS	April 14, 2011	China	Hu Jintao	Sanya

South Africa will attend the summit for the first time in 2011 in Sanya, Hainan province which may be renamed as BRICS, after receiving a formal invitation from China in 2010

current affair

2011-04-13T00:37:00.003-07:00

India to get 25% in Kazakh oilfield

Coming for a price of $400 million (approximately R1,800 crore), the stake will be purchased by ONGC Videsh Ltd (OVL). A contract for the same will be signed during Prime Minister Manmohan Singh’s three-day visit to Astana starting April 15. Singh will attend the bilateral summit meeting between India and Kazakhstan.

With the focus on energy and trade, India and Kazakhstan are expected to sign at least six agreements, including the one on their civil nuclear cooperation besides OVL’s participation in the Satpayev oil block. The two sides will also ink an inter-governmental framework pact on non-military atomic cooperation.

Confirming the move, senior ONGC officials said Kazakhstan plans to transfer a 25% stake in the Satpayev area to OVL and the balance 75% will be held by Kazakh’s national oil firm KazMunaiGas, which is also the operator of the field.

The stake was originally awarded to ONGC Mittal Energy Ltd, a venture between India’s largest energy explorer Oil and Natural Gas Corp and ArcelorMittal chief Lakshmi Mittal. However, following Mittal’s exit from the venture in 2009, ONGC decided to take control of the entire 25% stake.

The Satpayev oil field is situated in the highly prospective region of north Caspian Sea and in proximity to at least four fields. A peak output of 287,000 barrels per day (14.3 million tonnes a year) is envisaged from the 256 million tonnes of reserves in the field.

OVL will pay $26 million as signing amount to the Kazakhstan government, officials said. It will also pay $80 million as a one-time assignment fee. Besides, OVL has committed a minimum exploration investment of $165 million and an additional optional expenditure of $235 million.

The 1,582-sq km Satpayev block holds 1.8 billion barrel of inplace oil reserves. It lies in proximity to major fields such as Karazhanbas, Kalamkas, Kashagan and Donga, where significant amounts of oil has been discovered.

Kazakhstan had initially planned to give 50% stake to OVL in the Satpayev and Makhambet blocks in the Caspian Sea. Later, it reduced the offer to 25%.

General Kowledge topic

2011-04-13T00:31:00.000-07:00

Word juridictory day on 20 February.

IMF headquarter is at Washington.

India’s century book by Kamalnath.

PNB launched first biometric ATM in India.

By 2021 75% contribution to the Indian GDP by Urban Sector.

National Bank of Pakistan opened its first branch in India.

Hindu right action force is formed in Malaysia.

100 low budget hotel are launched by Indian railway with private coperation.

12 april GK

2011-04-12T06:21:00.000-07:00

Japan

raises nuclear crisis level to 7, as bad as Chernobyl

atomic crisis on Tuesday, the first time the ranking has been invoked since the Chernobyl disaster in 1986. The incident at the crippled Fukushima Daiichi nuclear plant was sparked by last month's earthquake and tsu nami, which killed more than 13,000 people, with around 14,500 people still missing.The re-grading to a "major accident" puts Fukushima on a par with the 1986 Chernobyl disaster, the world's worst ever-peacetime nuclear event. The meltdown at Chernobyl in the then Soviet Union spewed a large volume of toxic radiation, poisoning large areas of land and affecting thousands of lives.

Officials said it was difficult to estimate exactly how much radiation had been released in Japan's nuclear emergency. But available estimates "show levels equivalent to Level Seven," a safety agency official said.

Workers at Fukushima Daiichi are battling to control overheating reactors whose cooling systems were knocked out by last month's enormous waves.

The re-assessment from level five on the scale came as Japan was rocked by yet another powerful aftershock from the 9.0 magnitude quake that unleashed a devastating tsunami on March 11.

The 6.2 magnitude tremor hit 77 kilometres east of Tokyo on Tuesday and swayed buildings in the capital, temporarily shutting down subway services and halting bullet trains. US geologists originally put the magnitude at 6.4.

In a fresh setback, a fire broke out early Tuesday morning at a battery unit outside a building at the No. 4 reactor unit, but was quickly extinguished and did not spread to other areas, plant operator Tokyo Electric Power said.

The operator said it was not related to Tuesday's quake.

Already frayed nerves had been pushed further Monday after coastal areas were put on alert for a tsunami up to one metre (three feet) high after a 6.6 magnitude quake, which was known to have killed at least one person, Jiji Press reported.

Japan

's meteorological agency withdrew the warning less than an hour later as the nation marked a month since the monster quake and towering tsunami of March 11.

Tokyo said Monday it was augmenting the evacuation area around the plant because of long-term health worries, even as the government said the danger of a large leak of radioactive materials was fading.

"The possibility that the situation at the nuclear plant will deteriorate and lead to new leakage of massive radioactive materials is becoming significantly smaller," chief government spokesman Yukio Edano told reporters.

He later told reporters the government was concerned over the effect of long-term exposure to radiation and would be ordering people to leave certain areas more than 20 kilometres (12 miles) from the plant, which are currently outside the exclusion zone.

But Edano said a uniform extension of the zone was not appropriate.

The assessment that the bulk of the danger had passed seemed to jar with Tuesday's reports that the government is boosting its assessment of the incident.

Kyodo reported that preliminary figures from Japan's Nuclear Safety Commission revealed the battered plant released 10,000 terabecquerels of radiation per hour for several hours at one point after the March 11 disasters.

According to the International Nuclear Events Scale, level seven incidents are ones with a "major release of radioactive material with widespread health and environmental effects requiring implementation of planned and extended countermeasures."

People around the country had fallen silent at 2:46 pm Monday in remembrance of the victims of Japan's worst catastrophe since World War II.

Around 150,000 people are still in emergency shelters after losing their homes or being evacuated from around the leaking Fukushima Daiichi plant.

IMF lowers India's growth forecast to 8.2 pc

International Monetary Fund (IMF) has lowered India's economic growth rate forecast to 8.2 % for 2011 and warned that boom like conditions could lead to over-heating of the economy. "The challenge for many emerging and some developing economies (is) to ensure that present boom-like conditions do not

develop into overheating over the coming year," the IMF said in its World economic Outlook report.

The multilateral lending agency had earlier projected the country's economy to grow by 8.4 % in 2011.

IMF took note of the high inflation in India, recorded at 8.31 % in February, even as RBI expects it to come down to 8 % by March-end.

"Signs of overheating are starting to materialise in a number of economies. Most of the increase in headline inflation in recent months has been due to a spike in food prices, but core inflation has also been increasing in a number of economies, most notably India," IMF said.

Further, it projected the Indian economy to grow at a moderate 7.8 % in 2012 and cautioned that rising commodity prices and disruptions to oil supply could pose new risks to economic recovery.

"Commodity prices have increased more than expected, reflecting a combination of strong demand growth and a number of supply shocks. These increases conjure the spectre of 1970s-style stagflation, but they appear unlikely to derail the recovery," the IMF said.

According to the international multilateral organisation, the inflationary pressure is likely to increase further as high food and energy prices would require an increase in wages.

On global growth trends, IMF said, Asia would outpace other regions on the back of strong export performance,buoyant private domestic demand, besides rapid credit growth.

It said the financial conditions continued to improve after the global crisis, although they remained unusually fragile.

"In many emerging market economies, demand is robust and overheating is a growing policy concern. Developing economies, particularly in sub-Saharan Africa, have also resumed fast and sustainable growth," IMF said.

It added, "Given the improvement in financial markets, buoyant activity in many emerging and developing economies, and growing confidence in advanced economies, economic prospects for 2011–12 are good."

However, it retained its projection for global economic growth at 4.5 % in 2011 and 2012, which is lower than 5 % growth it projected for 2010.

MF lowers India's growth forecast to 8.2 pc

International Monetary Fund (IMF) has lowered India's economic growth rate forecast to 8.2 % for 2011 and warned that boom like conditions could lead to over-heating of the economy.

BRICS should coordinate in key areas of development: PM

Cautioning that the traditional sources of economic growth are under stress coupled with fresh uncertainties around the globe, Prime Minister Manmohan Singh today said that it would be to the advantage of five-nation BRICS grouping to coordinate in key areas of development.

Govt steps likely to bring down inflation: Pranab

Finance minister Pranab Mukherjee today said that while food inflation has come down, it still remained a matter of grave concern and steps are being taken to bring it down.

Chorus to raise rates as inflation hits world economy

It’s not India alone, where authorities are battling to keep growth on track while reining in price. HT reports. Growing concern

· Breathe easy: Your EMIs aren’t likely to go up soon

India still 2nd best FDI spot, recent dip temporary: Nomura

Nomura India has said despite recent massive slump in FDI inflows, the country remains the hottest investment destination in the world after China and that inflows will return to the pre-crisis peak by early 2012.

Govt confident of achieving fiscal deficit target

The Indian government will meet the fiscal deficit target during the current fiscal and not exceed its borrowing limit, top finance ministry officials said on Saturday.

Corruption hits the poor harder, says Pranab

The food security bill which the government is working on, and the implementation of the Direct Tax Code and unified Goods and Services Tax would go a long way towards bringing about inclusive growth, finance minister Pranab Mukherjee said here on Friday. HT reports.

The other side of corruption

So you thought corruption was only for babus and netas? While abuse of office in the government or public sector by politicians or bureaucrats is commonly called political corruption, the role that the private sector plays in influencing it is often not in public focus.Gaurav Choudhury reports. Graft League

Fuel price hike coming after assembly polls?

Spiralling global crude oil prices - currently hovering at $121 a barrel - would have burnt a big hole in the pockets of consumers by now were it not for the assembly elections in five states. Anupama Airy reports. Crude punch

Expedite taxation deal, Pranab urges the Swiss

Finance minister Pranab Mukherjee today urged Switzerland to immediately ratify the Double Taxation Avoidance Agreement (DTAA) that was signed between the two countries last August.

Effects of recession to echo in 2012 says WTO

World trade will carry the scars of the financial crisis into 2012, the World Trade Organization said today, predicting 6.5% growth for this year, a rate much more modest than last.

Food inflation down to 9.18 pc for week ended March 26

Food inflation fell to 9.18% for the week ended March 26, the lowest level in almost four months, on the back of a decline in the prices of pulses.

‘Chinese economy to slow down to 9.6% this year’

Chinese economy is expected to slowdown to grow around 9.6% this year from 10.3% last year, due to inflation pressures and tightening of monetary policy, according to a report released by the Asian Development Bank (ADB) on Wednesday.

ADM faces govt probe on investment norm violation

The US-based agro products giant ADM (Archer Daniels Midland) is facing investigations in India on charges of manipulating the investment norms laid out by Foreign Investment Promotion Board (FIPB) of the ministry of finance.Vivek Sinha reports.

NTPC to add 30,000 mw capacity, 15 new thermal plants

Domestic power major, NTPC Ltd on Wednesday said that it plans to set up 15 new thermal power projects in the next 5-7 years, over and above the plants the company is currently executing, with a total capacity of about

2011-04-12T05:55:00.001-07:00

CURRENT AFFAIRS: FEBRUARY 2011

NATIONAL AFFAIRS

Union Budget 2011 Highlights

Standard rate of excise duty held at 10 percent; no change in CENVAT rates.
Personal income tax exemption limit raised to Rs 180,000 from Rs 160,000 for individual tax payers.
For senior citizens, the qualifying age reduced to 60 years and exemption limit raised to Rs 2.50 lakh.
Citizens over 80 years to have exemption limit of Rs 5 lakh.
To reduce surcharge on domestic companies to 5 percent from 7.5 percent.
A new revised income tax return form 'Sugam' to be introduced for small tax papers.
raise minimum alternate tax to 18.5 percent from 18 percent.
Iron ore export duty raised to 20 percent
Nominal one per cent central excise duty on 130 items entering the tax net. Peak rate of customs duty maintained at 10 per cent in view of the global economic situation.
Service tax widened to cover hotel accommodation above Rs 1,000 per day, A/C restaurants serving liquor, some category of hospitals, diagnostic tests.
Service tax on air travel increased by Rs 50 for domestic travel and Rs 250 for international travel in economy class. On higher classes, it will be ten per cent flat.
Works of art exempt from customs when imported for exhibition in state-run institutions; this now extended to private institutions.

Subsidy bill in 2011-12 seen at 1.44 trillion rupees.
Food subsidy bill in 2011-12 seen at 605.7 billion rupees.
Revised food subsidy bill for 2010-11 at 606 billion rupees.
Revised fertilizer subsidy bill for 2010-11 at 550 billion rupees.
Revised petroleum subsidy bill in 2010-11 at 384 billion rupees.
State-run oil retailers to be provided with 200 billion rupee cash subsidy in 2011-12.

Fiscal deficit seen at 5.1 percent of GDP in 2010-11.
Fiscal deficit seen at 4.6 percent of GDP in 2011-12.

Total expenditure in 2011-12 seen at 12.58 trillion rupees.
Plan expenditure seen at 4.41 trillion rupees in 2011-12, up 18.3 percent.

Gross tax receipts seen at 9.32 trillion rupees in 2011-12.
Non-tax revenue seen at 1.25 trillion rupees in 2011-12.
Corporate tax receipts seen at 3.6 trillion rupees in 2011-12.
Tax-to-GDP ratio seen at 10.4 percent in 2011-12; seen at 10.8 percent in 2012-13.
Customs revenue seen at 1.52 trillion rupees in 2011-12.
Service tax receipts seen at 820 billion rupees in 2011-12.

Economy expected to grow at 9 percent in 2012, plus or minus 0.25 percent.
Inflation seen lower in the financial year 2011-12.

Disinvestment in 2011-12 seen at 400 billion rupees.
Government committed to retaining 51 percent stake in public sector enterprises.

Net market borrowing for 2011-12 seen at 3.43 trillion rupees, down from 3.45 trillion rupees in 2010-11.
Gross market borrowing for 2011-12 seen at 4.17 trillion rupees.
Revised gross market borrowing for 2010-11 at 4.47 trillion rupees.

To create infrastructure debt funds.
FDI policy being liberalized.
To boost infrastructure development with tax-free bonds of 300 billion rupees.
Food security bill to be introduced.
To permit SEBI registered mutual funds to access subscriptions from foreign investments.
Raised foreign institutional investor limit in 5-year corporate bonds for investment in infrastructure by $20 billion.
Setting up independent debt management office; Public debt bill to be introduced in parliament soon.
Bills on insurance, pension funds, banking to be introduced.

To allocate more than 1.64 trillion rupees to defence sector in 2011-12.
Corpus of rural infrastructure development fund raised to 180 billion rupees in 2011-12.
To provide 201.5 billion rupees capital infusion in state-run banks in 2011-12.
To allocate 520.5 billion rupees for the education sector. Rs.21,000 crore forSarva Shiksha Abhiyan.
To raise health sector allocation to 267.6 billion rupees.
Rs.500 crore more for national skill development fund.
Rs.54 crore each for AMU (Aligarh Muslim University) centres at Murshidabad and Mallapuram.
Rs.58,000 crore for Bharat Nirman; increase of Rs.10,000 crore.
Mahatma Gandhi National Rural Employment Guarantee Scheme wage rates linked to consumer price index; will rise from existing Rs.100 per day.
Infrastructure critical for development; 23 percent higher allocation in 2011-12.

Removal of supply bottlenecks in the food sector will be in focus in 2011-12.
To raise target of credit flow to agriculture sector to 4.75 trillion rupees.
3 percent interest subsidy to farmers in 2011-12.
Cold storage chains to be given infrastructure status.
Capitalisation of National Bank for Agriculture and Rural Development (NABARD) of 30 billion rupees in a phased manner.
To provide 3 billion rupees for 60,000 hectares under palm oil plantation.
Food storage capacity to be augmented; 15 more mega food parks to be set up in 2011-12; of 30 sanctioned in previous fiscal, 15 set up.
Comprehensive policy on further developing PPP (public-private-partnership) model.

To move towards direct transfer of cash subsidy for kerosene, LPG and fertilizers.
Financial Sector Legislative Reforms Commission, headed by former Supreme Court judge B. Srikrishna, to complete its work in 24 months; to overhaul financial regulations.
Five-fold strategy against black money; 13 new double taxation avoidance agreements; foreign tax division of CTBT strengthened; strength of Enforcement Directorate increased three-fold.
Bill to be introduced to review Indian Stamp Act.
New coins carrying new rupee symbol to be issued.
Anganwadi workers salary raised from Rs.1,500 to Rs.3,000.
Housing loan limit for priority sector lending raised to Rs.25 lakh.

Railway Budget, 2011For the third year in a row, Railway Minister Mamata Banerjee made an attempt to come out with the “aam aadmi” budget sparing the passengers and industry from fare and freight hikes and announcing the highest ever investment of Rs 57,630 crore, with 68 new trains.

On February 25, 2011, presenting her third Railway Budget in UPA-II in the Lok Sabha, Mamata vowed to build a stronger railroad infrastructure based on the Vision 2020 document while announcing a slew of concessions, including reducing the eligibility age of senior women citizens from 60 to 58 years and raising the fare concession for senior citizens (above 60) from 30 to 40 per cent.

The budget estimates for 2011-12 project a freight loading of 993 million tonne and a passenger growth of 6.4 per cent. Ordinary working expenses have been estimated at Rs 73,650 crore and appropriation to depreciation reserve fund pegged at Rs 7,000 crore.

A provision of Rs 6,735 crore has been made for dividend payment and the excess for railways for the new fiscal has been projected at Rs 5,258 crore, with an operating ratio of 98.1 per cent.

Gross traffic receipts have been fixed at Rs 94,840 crore, which is higher by Rs 75 crore over budget estimates. The ordinary working expenses have been fixed at Rs 67,000 crore. A target of 1,300 km of new lines, 867 km of doubling of lines and 1,017 km of gauge conversion has been set.

Indian Railways, the world’s second largest under a single management, has a network of 64,099 km to ferry as many as 18.9 million passengers on 7,000 trains daily, from 6,906 stations. It also runs 4,000 freight trains to carry 850 million tonne of cargo.

Highlights

No hike in passenger fare and freight rates.
Highest ever plan outlay of Rs 57,630 crore proposed.
Rs 9,583 crore provided for new lines.
1,300 km new lines, 867 km doubling of lines and 1,017 km gauge conversion targeted in 2011-12.
56 new Express Trains, 3 new Shatabdis and 9 Durontos to be introduced.
16,000 ex-servicemen to be given jobs in railways.
Ten-year backlog of 1.75 lakh jobs to be addressed.
Durontos on the Allahabad-Mumbai, Pune-Ahmedabad, Sealdah-Puri, Secunderabad-Visakhapatnam, Madurai-Chennai routes.
Integrated suburban network to be set up in Mumbai, Chennai, Ahmedabad.
A bridge factory in Jammu & Kashmir and a state-of-art institute for tunnel and bridge engineering proposed at Jammu.
New Shatabadi to link Ludhiana with New Delhi.
New weekly train, "Vivek Express", on Bandra (T)-Jammu Tawi Express route via Marwar-Degana- Ratangarh -Jakhal-Ludhiana.
Industrial park in Nandigram, Metro coach factory for Singur.
Centre for excellence in software at Darjeeling.
Concession for senior citizens increased from 30% to 40%.
Age for senior women citizens’ concession reduced to 58 from 60.
Pradhan Mantri Rail Vikas Yojana to be launched.
Student special .trains to be started; start of Rajrani Express.
Multi-purpose smart card to be introduced for all-India travel.

Review of economic growth story of India
As per the Economic Survey 2011, non-Congress States are scripting India’s economic growth story. The Survey places Bihar on top in terms of performance on growth, with the State posting a whopping 16.59 per cent growth in 2008-2009, the latest year for which the data
is available.

But Gujarat pips Bihar (which is followed by Orissa, Haryana and Uttrakhand) to the lead spot when the growth performance is measured from 2002-2003 onwards to 2009. Interesting to see is the fact that out of top five growing States in the country, four are ruled by non-Congress governments, with the exception of Haryana which stands fourth in this list.

The Economic Survey reveals that though Rajasthan, followed by Andhra Pradesh, UP, Madhya Pradesh, Tamil Nadu and Bihar, provided maximum employment under MNREGA in 2009-2010, it was Punjab (ruled by the Shorimani Akali Dal-BJP combine) which employed the maximum Scheduled Castes under the programme (Punjab also reports the lowest number of people below poverty line in India) while the BJP-ruled Madhya Pradesh employed the maximum STs, followed by Jharkhand, Gujarat and Chhattisgarh.

After Punjab, the maximum SC employment under MNREGA was reported from Tamil Nadu, UP, Haryana and Bihar.

On gross enrollment ratios in elementary education also, the Opposition-ruled States of Jharkhand (where the JMM and BJP are in coalition), Madhya Pradesh, Chhattisgarh and Gujarat rank the highest. So far as the progress under the National Rural Health Mission goes, the maximum health centers have come up in Tamil Nadu, followed by Karnataka, Andhra Pradesh, Maharashtra, Uttar Pradesh and Bihar.

Ironically, though they are doing well in terms of economic growth, non-Congress ruled states like Orissa and Bihar continue to perform poorly on poverty indicators. “The percentage of people below the poverty line is very high in Orissa, Bihar, Chhattisgarh, Jharkhand, Uttrakhand and Madhya Pradesh.

Rural income inequality is the highest in Haryana and urban income inequality is the highest in Madhya Pradesh.

Plan to deal with black money menace
Union Finance Minister Pranab Mukherjee has said that the government had adopted a five-fold strategy to deal with the problem of generation and circulation of black money. Presenting the Budget, he said: “The five-fold strategy consists of joining the global crusade against black money, creating an appropriate legislative framework, setting up institutions for dealing with illicit funds, developing systems for implementation and imparting skills to the manpower for effective action.”

He added that while the membership of the Financial Action Task Force was secured in June 2010, the government has also joined the Task Force on Financial Integrity and Economic Development, Eurasian Group and Global Forum on Transparency and Exchange of Information for Tax Purposes.

“Discussions have also been concluded for 11 Tax Information Exchange Agreements and 13 new Double Taxation Avoidance Agreements (DTAAs), along with revision of provisions of 10 existing DTAAs,” he said.

India, Japan sign free trade agreement
On February 16, 2011, India and Japan signed a comprehensive economic partnership agreement (CEPA) to open markets and reduce barriers on goods, services and movement of people between the two countries.

The pact was signed between Commerce and Industry Minister Anand Sharma and Japanese Foreign Affairs Minister Seiji Maehara in Tokyo.

Indian government has set a target of doubling bilateral trade to $25 billion by 2014, which is currently at $10.3 billion. CEPA will lead to a quantum increase in bilateral trade and investment flows, by relaxing barriers to trade in goods, services and movement of natural persons, besides enhanced cooperation on protection of intellectual property.

This agreement is the most ambitious agreement signed by India so far and covers trade in goods, services and investment under its ambit. This agreement follows from the commitment of the two Prime Ministers in October 2010. The agreement has ensured that the sensitive sectors for India are fully protected, including agriculture, fruits, spices, wheat, basmati rice, edible oils, wines and spirits and also certain categories of industrial products such as auto and auto parts.

India, Malaysia ink free trade pact
On February 18, 2011, India and Malaysia signed a comprehensive market opening pact that throws up myriad trade opportunities for both sides and give a boost to India's Look-East Policy and the prospects for its economic integration with South-East Asia.

India’s Commerce Minister Anand Sharma and his Malaysian counterpart Mustapa Mohamed, in the presence of Prime Minister Najib Razak and several leading captains of industry from both sides, signed the Comprehensive Economic Cooperation Agreement (CECA).

The agreement, which was reached after seven rounds of negotiation, will see Indian mangoes, cotton, motorcycles, trucks and basmati rice attract less duty in Malaysia, among other things.

As a quid pro quo, the South-East nation will face less barriers on the sale of its fruit, engineering goods and chemicals in India.

Shivraj V. Patil panel report on 2G scam
Unveiling the report of the Shivraj V Patil panel that went into the lapses made during the allocation of the 2G Spectrum, Telecom Minister Kapil Sibal said on February 4, 2011, the committee had concluded that all decisions on Spectrum allocation since 2003 by successive governments, including the UPA regime, were procedurally wrong.

In what could be a damning admission of Raja not following procedures despite advice from other ministries, the report says that the DoT did not follow the advice of the Law Ministry or the views of the Finance Ministry over Spectrum pricing.

The findings on procedural lapses are being sent to the CBI, which is looking into the criminal culpability in the scam.

ULFA agrees to unconditional talks
After three decades of armed conflict that cost thousands of lives in Assam, the outlawed United Liberation Front of Assam( ULFA) has finally decided to sit for “unconditional” talks with the Government of India.

On February 5, 2011, leaders of the outfit informed that ULFA had been invited by Union Home Minister P. Chidambaram for a preliminary round of talks in New Delhi, as a prelude to formal negotiations that would materialize once ULFA submitted its charter of demands.

With this ULFA has finally given up its earlier preconditions of, one, holding talks in a third country; two, including “sovereignty” as the core issue; three, of having a UN observer for the talks.

The ULFA foreign secretary, Sasadhar Choudhury, pointed out that preconditions set by both ULFA and the government had stood in the way of holding peace talks since 1992, the year ULFA leaders had met then Prime Minister P.V. Narasimha Rao only to renege on their promise to come forward for a dialogue on a later date.

On ULFA commander-in-chief Paresh Barua airing his opposition to dialogue, the outfit leaders said he had done it before the general council of ULFA decided on unconditional talks. “The decision of the general council is binding on everyone. Anyone defying it will face disciplinary action as per the provision of the ULFA’s constitution. Paresh Barua was invited to both the central executive committee and general council meeting, but he didn’t come. We have conveyed our decision for talks to him and are waiting for his response,” the ULFA leaders said.

ULFA claims to have been founded on April 7, 1979. It initiated major violent activities in 1990, which led the Union government banning the organisation. Military operations against it by the Army also began in 1990.

In the past two decades, some 10,000 people have died in clashes between the rebels and the government.

In December 2009, the chairman and the deputy commander-in-chief of ULFA were arrested. There has also been a large ULFA crackdown in Bangladesh in last one year, which significantly assisted India and led to ULFA softening its stand and dropping the demand for independence as a condition for talks.

Godhra Train Burning Case
On February 22, 2011, thirty one persons were convicted and 63 others, including the main accused Maulvi Umarji, were acquitted by a special court in the 2002 Godhra train burning incident that left 59 persons dead and triggered violence in Gujarat that claimed the lives of over 1200 people.

The trial, conducted inside the Sabarmati Central Jail, Ahmedabad, began in June 2009 with the framing of charges against 94 accused. The accused were charged with criminal conspiracy and murder in burning of the S-6 coach of the train on February 27, 2002, near Godhra, about 125 km from Ahmedabad, in which 59 people were killed.

As many as 253 witnesses were examined during the trial and over 1,500 documentary evidences were presented before the court by the Gujarat police.

There were a total of 134 accused in the case, out of which 14 were released due to lack of evidence, five were juvenile, five died during proceedings of over nine years, and 16 are absconding. Of the 94, against whom the trial was conducted, 80 are in jail and 14 are out on bail.

Two different panels appointed to inquire into the 2002 case had given different views on the Godhra train burning incident. The Nanavati Commission, appointed by the Gujarat government to probe the carnage, had in the first part of the report concluded that the fire in the S-6 coach was not an accident, but was caused by throwing petrol inside it. The one-man U.C. Banerjee Commission appointed by the Railway Ministry under Lalu Prasad Yadav had said that the fire was "accidental". The Court accepted the conspiracy theory.

INTERNATIONAL AFFAIRS

People power forces Hosni Mubarak to quit as President of EgyptOn February 11, 2011, Hosni Mubarak stepped down as Egypt's President, handing over to the army and ending three decades of autocratic rule, bowing to escalating pressure from the military and protesters demanding that he go.

A military council would run the affairs of the Arab world's most populous nation, till a free and fair presidential election is held in September.

After a speaker made the announcement in Cairo's Tahrir Square, hundreds of thousands of protesters broke down in tears, celebrated and hugged each other chanting: “The people have brought down the regime.”

The 82-year-old Mubarak's downfall after 18 days of unprecedented mass protests was a momentous victory for people power and is sure to rock autocrats throughout the Arab world and beyond.

The sharpening confrontation had raised fear of uncontrolled violence in the most populous Arab nation, a key US ally in an oil-rich region where the chance of chaos spreading to other long stable but repressive States troubles the West. Washington has called for a prompt democratic transition to restore stability in Egypt.

Hundreds of thousands of protesters rallied across Egypt, including in the industrial city of Suez, earlier the scene of some of the fiercest violence in the crisis, and the second city of Alexandria, as well as in Tanta and other Nile Delta centers.

Since the fall of Tunisia's long-time leader Zine al-Abidine Ben Ali, which triggered protests around the region, Egyptians had been demonstrating in huge numbers against rising prices, poverty, unemployment and their authoritarian regime.

Nepal finally gets a Prime minister after seven months and sixteen attempts
Ending a seven-month-long standoff over the Prime Ministerial election, Nepal's Parliament, on February 3, 2011, elected veteran communist leader and chairman of the Communist Party of Nepal-Unified Marxist Leninist (CPN-UML) Jhalanath Khanal as the new Prime Minister of the Federal Republic of Nepal.

UML chairman Khanal, 61, was elected by securing 368 votes in the 601-member Parliament.

Khanal proved lucky and became the third communist Prime Minister after the April 2006 uprising by replacing his fellow comrade Madhav Kumar Nepal after the Unified CPN-Maoists, the single largest party in the Parliament, decided to withdraw its candidate and forge a Left alliance by extending support to Khanal.

Jhalanath Khanal, who was elected chairman of the UML in February 2009, was born in Ilam in May 1950. A graduate in political science and history from Tribhuvan University, Khanal entered politics in 1965. He was one of the founding members of the National Co-ordination Committee for all Communist Revolutionaries of Nepal in 1975 and CPN (ML) in 1978. He was jailed for a total of 26 months in his early political career and went underground in 1979.

After restoration of democracy, he was a minister in the interim government formed in 1990. He was elected as a lawmaker in the 1991 and 1994 general elections.

G-20 ministers reach deal to correct economic flaws
G-20 Finance Ministers have reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security, an issue pressed by India.

After two days of hard bargain by their Finance Ministers, major economies, faced with uneven recovery and downside risks, reached a text in the face of tough resistance from China to agree on guidelines for removal of structural flaws in the global economy.

However, the document did not talk about an issue of much interest to India. New Delhi wanted that G-20 should urge all jurisdictions to conclude Tax Information Exchange Agreements so that menace of black money in tax havens can be tackled.
This issue seems to have been put on back seat as a lot of time was spent on reaching an agreement with China, which was opposed to inclusion of foreign exchange reserves and its exchange rate among the guidelines. China is sitting on a $2.8 trillion forex reserves and is accused by the US of manipulating its currency yuan.

Faced with a double-digit food inflation, India also pressed for a coordinated approach to tackle food, commodity and oil price volatility, which make emerging economies "vulnerable".

The ministers agreed on a plan to strengthen the international monetary system (IMS) with regard to disruptive capital flows and disorderly movement in exchange rates, a matter of great concern to India.
The document also expressed its worries on the impact of rising oil prices, which have exceeded $100 per barrel.

On the most contentious guidelines to remove structural imbalances, the communique appeared to have accommodated China's objections to including forex reserves and current account deficit. The communiqué, instead, said that indicative guidelines, without targets will be used to assess: i) public debt and fiscal deficit; private savings and private debt; ii) external imbalances composed of trade balance and net investment income flows and transfers, taking into due consideration of exchange rate, fiscal, monetary and other policies.

US, Russia launch nuclear arms reduction pact
On February 5, 2011, US Secretary of State Hillary Clinton launched a landmark nuclear arms reduction pact with Russia, a showpiece of Washington’s “reset” of ties with its former Cold War enemy.

The new START officially came into force when Clinton and Russian counterpart Sergei Lavrov exchanged ratification documents at a security conference in the German city of Munich.

“Today we exchange the instruments of ratification for a treaty that lessens the nuclear danger facing the Russian and American people and the world,” Clinton said.

The chief US diplomat hailed the pact as another example of “clear-eyed” cooperation between the two military powers, “part of a journey we have been taking for more than 60 years.” Lavrov told the Munich conference that the agreement would “enhance international stability.”

The pact slashes existing warhead ceilings by 30 per cent over the next 10 years and limits each side to 700 deployed long-range missiles and heavy bombers. The original 1991 pact expired at the end of 2009 amid stark differences over how the two sides planned to proceed.

Business News

Reliance Industries Ltd and UK’s oil and gas exploration company BP have announced a historic deal under which BP will pay $7.2 billion to acquire 30 per cent equity stake in 23 oil and gas production sharing contracts that RIL operates in India, including the KG D6 block. Future performance payments of up to $1.8 billion could be paid based on exploration success.

Fortis Global Healthcare Holdings will acquire a majority stake in Australia’s Dental Corporation Holdings (DCH). Fortis Global is the wholly-owned overseas investment vehicle of Fortis Healthcare Ltd.

Educomp Solutions has picked up a majority stake in test preparation company Gateforum Educational Services which provides preparatory tools for Graduate Aptitude Test in Engineering (GATE), an entrance test for admission to postgraduate courses in technical institutes in India.

Nokia Oyj, the world’s biggest maker of mobile phones, has formed a software partnership with Microsoft Corp., betting that together the two companies can challenge Google Inc and Apple Inc.

DO YOU KNOW

India’s first inland fish processing unithas been set up in the village of Bhutana in Karnal district of Haryana. The unit has been set up in technical collaboration with ZTM BPD Unit, South Zone, Central Institute of Fisheries Technology, Cochin, which comes under the Indian Council of Agricultural Research (ICAR).

As per the Economic Survey, 2011,India has the fourth largest foreign exchange reserves in the world. India’s foreign exchange reserves touched $ 297.3 billion in December 2010, from 279.1 billion in March.

The National Science Day is observed on February 28 to mark the discovery of Raman Effect by Sir C.V. Raman in 1928, for which he was awarded the Nobel prize.

To reduce the burden of small tax-payers, a new, simplified income tax return form, Sugam, has been introduced.

The Union Budget 2011 has increased the Defence budget by 11 per cent. Additional Rs 17,071 crore have been allotted over 2010 Budget figure of Rs 1,47,344 crore. About Rs 69,199 crore has been earmarked for capital expenses like weapons, planes, ships, special classified projects etc.

The Budget 2011 has earmarked Rs 52,000 crore for education, out of which Rs 21,000 crore will be spent on Sarv Shiksha Abhiyan, Rs 6,213 crore on secondary education and Rs 2,200 crore on higher education.

The Hyderabad international airport has bagged the first rank in its category in the latest Airport Service Quality (ASQ) rankings of the Airports Council International (ACI).

The theme song of Cricket World Cup, 2011 was “De Ghuma Ke”. It was composed by the trio of Shankar, Ehasan and Loy

India received foreign direct investment (FDI) worth $21 billion 9Rs 96,104 crore) in the calendar year 2010, a decline of 22 per cent over 2009.

The SAARC Foreign Ministers’ meet was held in Thimpu, Bhutan on February 8, 2011.

The NASSCOM India Leadership Forum (NILF) was held in Mumbai in February 2011.

Mahatma Gandhi and the Tibetan spiritual leader the Dalai Lama have been listed by the Time magazine as the world’s top 25 political icons. Time’s top 25 political icons are: Mahatma Gandhi, Alexander the Great, Mao Zedong, Winston Churchill, Genghis Khan, Nelson Mandela, Abraham Lincoln, Adolf Hitler, Ernesto ‘Che’ Guevara, Ronald Reagan, Cleopatra, Franklin Roosevelt, the Dalai Lama, Queen Victoria, Benito Mussolini, Akbar the Great, Lenin, Margaret Thatcher, Simón Bolívar, Qin Shi Huang, Kim Il-Sung, Charles de Gaulle, Louis XIV, Haile Selassie, King Richard the Lionheart and Saladin.

India has agreed to temporarily lend fragments of Buddha’s bones, famously known as Kapilavastu relics, to Sri Lanka for an exposition to celebrate his 2600th year of enlightenment in 2011.

China has emerged as the world’s largest economy, surpassing Japan, which had held on to the position for over four decades. At the end of 2010, Japanese economy was estimated to be worth about $5.5 trillion and that of China $5.8 trillion. USA continues to be the largest economy of the world with the economy worth $14.6 trillion.

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