Sojourn to odyssey

  Current Affairs

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.

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.

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.




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.




 

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.


 

Current Affairs: June 2010

 

NATIONAL AFFAIRS


Compulsory public float rule issued
On June 5, 2010, the Union government made it mandatory for all listed companies to have a minimum public float of 25 per cent. Those below this level will have to get there by an annual addition of at least 5 per cent to public holding.

The move is expected to result in equity dilution of about Rs 1,60,000 crore by 179 listed companies. These include Reliance Power, Wipro, Indian Oil Corporation, DLF and Tata Communications.

According to the notification, ‘public’ will not include the promoter, promoter group, subsidiaries and associates of a company. ‘Public shareholding’ will mean equity shares of the company held by the public and not the shares held by the custodian against depository receipts issued overseas.

A company can increase its public shareholding by less than 5 per cent in a year if such increase brings its public shareholding to the level of 25 per cent in that year. If the public shareholding in a listed company falls below 25 per cent at any time, the company will have to bring the public shareholding to 25 per cent within 12 months from the date of such fall, compared with the two years allowed at present.

Bhopal Gas Tragedy verdict
On June 7, 2010, nearly 26 years after the world's worst industrial disaster left more than 15,000 dead in the Bhopal gas tragedy, former Union Carbide India Chairman Keshub Mahindra and seven others were convicted and sentenced to two years imprisonment.

Chief Judicial Magistrate Mohan P. Tiwari held the 85-year-old non-executive chairman of the Indian subsidiary of the US-based company and gave them punishment under less stringent provisions of the Indian Penal Code for causing death by negligence.

The 89-year-old Warren Anderson, the then Chairman of Union Carbide Corporation of USA, who lives in the United States, appeares to have gone scot free for the present as he is still an absconder and did not subject himself to trial. There was no word about him in the judgement.

The US based company reacted to the judgement saying neither it nor its officials were subject to the jurisdiction of the Indian court since they were not involved in the operation of the plant, which was owned and operated by Union Carbide India Limited.

In his 93-page verdict, Tiwari said the accused were not sentenced under section 304 IPC (culpable homicide not amounting to murder that provides a maximum of life imprisonment) since they were old age and were suffering from serious ailments including heart disease.

All the convicts applied for bail immediately after the sentencing and were granted relief on a surety of Rs 25,000 each.

Law Minister M. Veerappa Moily described the verdict as an example of “justice buried” and said there was need for fast-tracking such cases and ensuring proper investigation.

The BJP termed the order as “painful” and said the prosecution should appeal against the lower punishment. It also utilised the opportunity to reconsider the provisions of the nuclear liability Bill.

ONGC, OIL get freedom to price natural gas
In a significant development, the Union government has given national oil companies, Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL), freedom to price any additional natural gas produced from blocks given to them on nomination basis at market rates. So far, all gas—current and future—produced from blocks given to ONGC and OIL was priced at government-controlled rates, called administered price mechanism (APM).

Even the price of APM gas from June 1 has been more than doubled to $4.2 per million British thermal units, on a par with the rate at which Reliance Industries sells gas from its eastern offshore KG-D6 fields.

The government has also made a significant departure from the previous practice of pricing natural gas in rupees and has now decided to price it in US dollars.

State-run ONGC and OIL produce 54.32 million cubic metres of gas per day — about 40 per cent of the total amount originating from the country — through fields given to them on a nomination basis.

Petrol, Diesel prices freed from government control
On June 25, 2010, the Union government announced that prices of petrol and diesel would become market-driven, in line with the recommendations of a panel headed by former Planning Commission member Kirit Parikh.

An empowered group of ministers led by Finance Minister Pranab Mukherjee agreed to raise diesel prices by Rs 2 a litre for now. The fuel will eventually be freed from State control. Petrol has been freed fully.

The panel also increased prices of liquefied petroleum gas (LPG) by Rs 35 a cylinder and of kerosene by Rs 3 a litre, though both will remain under government control.

The decision will help to cut fuel subsidies and limit losses of State-run refiners.

The market-driven mechanism would mean users would have to pay more whenever international crude oil prices rise and less when they fall.

The move would bring down the government’s huge subsidy bill and relieve State-owned oil marketing companies of some of the burden they bear by selling fuels much below the market prices. This burden, also called under-recovery, is estimated at Rs 215 crore every day.

Jharkhand again under President’s rule
On June 1, 2001, Jharkhand came under Central rule with President Pratibha Patil accepting a recommendation of the Union Cabinet after the Congress and the BJP gave up efforts to form an alternative government following resignation of Chief Minister Shibu Soren.

The State Assembly will be kept in suspended animation during the President’s rule, which has been imposed for a second time in two years.

The Soren government was reduced to a minority on May 24 when the BJP, with 18 MLAs and the JD(U) with two, withdrew support to it. The JMM, with 18 MLAs and having the support of seven other legislators, was short of the required 42 in the 82-member House. The BJP took the decision after Soren voted against the cut motions sponsored by the opposition in Lok Sabha on April 27.

Jharkhand has seen seven CMs since its creation on November 15, 2000, came under President’s rule for the first time on January 19, 2009.

India, Canada sign civil nuclear pact
On June 28, 2001, India and Canada signed a civil nuclear cooperation agreement. The pact was signed during Prime Minister Manmohan Singh’s visit to Canada.

The deal, the ninth signed by New Delhi, significantly alters Canada’s stance towards India. The North American nation had led the world in pushing for nuclear isolation after the 1974 tests in Pokhran.

The US, France, Russia, Mongolia, Kazakhstan, Argentina, Namibia and Britain are the eight countries that have already signed similar pacts with India.

Among other things, the India-Canada Agreement for Cooperation in Peaceful Uses of Nuclear Energy provides for tie-ups in design, construction, maintenance, supply of uranium and waste management. The two countries can also promote cooperation in the development and use of applications related to health, industry, environment and agriculture.

Visit of South African President
On his maiden visit to an Asian country as the President of South Africa, Jacob Zuma was given a rousing reception by the Indian leadership on June 4, 2010, as the two countries signed three key pacts, including one on air services, and agreed to support each other’s candidature for the non-permanent seat at the UN Security Council for the 2011-2012 term.

A wide range of bilateral issues as well as global developments, including reforms of the UN Security Council, closer cooperation between the two countries at various international fora, particularly on climate change, and increasing the volume of bilateral trade, came for discussions during the talks.
Apart from the pact on enhancing air connectivity, the two countries signed an MoU on agriculture cooperation and another for linkages between the Foreign Service Institute of India and the Diplomatic Academy of South Africa.

Both India and South Africa are keen to increase the two-way trade, which currently stands at $7.5 billion annually. Zuma said he wanted that to grow to $10 billion by 2012.

Visit of Sri Lankan President
Sri Lankan President Mahinda Rajapaksa visited New Delhi on June 9, 2010. During his talks with Prime Minister Manmohan Singh, he sought to cool down tempers in India over the plight of Tamils in his island nation by promising to quickly resettle displaced Tamils and expedite a political solution to the ethnic issue.

The two countries also signed seven agreements, including a treaty on mutual legal assistance in criminal matters and an MOU on sentenced prisoners, after wide-ranging talks.

The two countries announced a major initiative to undertake a programme of construction of 50,000 houses for internally displaced persons (IDPs) in Northern and Eastern provinces of Sri Lanka with India’s assistance. India would also be taking up several projects for the reconstruction of the North and the East, including rebuilding of railway infrastructure, rehabilitation of Kankesanthurai harbour and Palaly Airport, construction of a cultural centre in Jaffna and several vocational training centres, renovation of the Duraiappaj stadium and rehabilitation of war widows.

The two countries also decided to resume the ferry services between Colombo and Tuticoran and between Thalaimannar and Rameswaram. India would also establish consulates general in Jaffna and Hambantota. India would also assist the island country in setting up a thermal power plant at Trincomalee.

At their one-on-one meeting which was followed by delegation-level talks, the Indian PM and the Sri Lankan President also discussed a wide range of bilateral issues, including the proposed comprehensive economic partnership agreement (CEPA), as well as international issues. Sri Lanka supported India’s case for inclusion in an expanded UN Security Council, as well as its candidature for a non-permanent seat for the 2011-2012 term.

The five other agreements, signed after the talks between the two sides, were: renewal of MoU on SDP schemes, MoU on setting up of a women’s trade facilitation centre and community learning centre, renewal of cultural exchange programme, MoU on interconnection of electricity grids and MoU on Talaimannar-Madhu railway line.

Indo-US strategic dialogue
The Strategic Dialogue between India and US is another “milestone” in bilateral relationship with the Obama Administration. External Affairs Minister S.M. Krishna and US Secretary of State Hillary Clinton co-chaired the first Cabinet-level Indo-US Strategic Dialogue, which helped to set the pace for the long-term strategic relationship between the two countries.



INTERNATIONAL AFFAIRS


Hatoyama resigns as Japan’s PM
Japanese Prime Minister Yukio Hatoyama, who ended five decades of single-party rule when he swept to power in August 2009, but stumbled when he confronted a long-time ally, the United States, resigned on June 2, 2010. Hatoyama quit at a meeting of leaders of the Democratic Party of Japan in Tokyo, becoming the fourth straight Japanese leader to leave after a year or less in office.

“Since last year’s elections, I tried to change politics in which the people of Japan would be the main characters,” he said later at a nationally broadcast news conference. But he conceded that his efforts weren’t understood.

Hatoyama ran for the premiership on a campaign platform of maintaining a more equal relationship with the United States, which still enjoys enormous support among most Japanese. His decision to challenge Washington over the details of a massive military base relocation plan on the island of Okinawa befuddled Japanese and American analysts and government officials alike.

Hatoyama also called for Japan to become more of an “Asian nation,” which sparked concern in Washington that he wanted to move away from the country’s pro-US stance and closer to China.

Finance Minister Naoto Kan succeeded Hatoyama as the new Prime Minister.

Maoists force Nepal PM to resign
Nepal’s Prime Minister announced his resignation on June 31, 2010, bowing to pressure from opposition Maoists who had been demanding his ouster in Parliament and on the streets. Prime Minister Madhav Kumar Nepal said in a televised speech that he decided to resign to end political deadlock and shore up the peace process.

Mr Madhav Kumar had taken over the post in May 2009 after the previous government led by the Maoists resigned following differences with the President over the firing of the army chief. He had the support of 22 political parties in Parliament and more than half of the 601 members in the Assembly. However, the Maoists, who have the largest number of seats in the Assembly, refused to support his government and instead staged protests to demand disbanding the government.

In May 2010, the Maoists had shut down the nation for more than a week, imposing a general strike. The protests also delayed the writing of a new constitution, which was supposed to be complete by May 2010. The deadline has now been extended by one year.

Landmark US Financial Reform Bill
On July 1, 2010, the US House of Representatives approved a landmark overhaul of financial regulations. The Bill would impose tighter regulations on financial firms and reduce their profits. It would boost consumer protections, force banks to reduce risky trading and investing activities and set up a new government process for liquidating troubled financial firms.

However, the Republicans say the Bill would hurt the economy by burdening businesses with a thicket of new regulations. They also point out that it ducks the question of how to handle troubled mortgage finance giants Fannie Mae and Freddie Mac, which Democrats plan to tackle in 2011.

Ethic Riots in Kyrgyzstan
Russia sent hundreds of paratroopers to Kyrgyzstan on June 13, 2010 to protect its military facilities as ethnic clashes spread in the Central Asian State, bringing the death toll from days of fighting to 97. Ethnic Uzbeks in a besieged neighbourhood of Kyrgyzstan’s second city Osh said gangs, aided by the military, were carrying out genocide, burning residents out of their homes and shooting them as they fled. Witnesses saw bodies lying on the streets.

The interim government in Kyrgyzstan, which took power in April 2010, after a popular revolt toppled President Kurmanbek Bakiyev, appealed for Russian help to quell the riots in the south.

Led by Roza Otunbayeva, the interim government sent a volunteer force to the south and granted shoot-to-kill powers to its security forces in response to the deadly riots, which began in Osh, before spreading to Jalalabad.

Renewed turmoil in Kyrgyzstan has fuelled concern in Russia, the United States and neighbour China. Washington uses an air base at Manas in the north of the country, about 300 km from Osh, to supply its forces in Afghanistan.

G-20 Summit meeting
A Summit meeting of Leaders from the Group of 20 economic powers was held in Toronto, Canada on June 28, 2010. The leaders have agreed to halve deficits by 2013 and stabilise or reduce the government debt-to-GDP ratio by 2016. At the same time, the bloc left it to individual countries to decide on levying taxes on banks or adopting other means to fund future bailouts.

Along the way, the G-20 leaders who completed their fourth meeting since the global financial crisis of 2008, also diluted their position on a number of problems they had decided to fix earlier. For instance, while reinforcing their desire to move to a more stringent capital structure, the communiqué issued after two days of discussions said countries would “aim” to put in place a new framework by the end of 2012, which was earlier the target date. Members will also get flexibility in phasing the new rules.

The good news is that once these rules are implemented banks will have more capital to deal with crises as the ratio of core Tier-I capital of a bank to its risk-weighted assets is expected to double from the present level of 2 per cent.

On trade, too, there was dilly dallying. The G-20 leaders, who had earlier said that the Doha Round of trade liberalisation talks should be concluded in 2010, have not mentioned any deadline now. All that has been said is that they will now deliberate on the ways to take forward the talks when they meet in Seoul in November 2010.

G-20 members have also decided against erecting any new trade and investment barriers.
The decision to increase the quotas for developing countries in the International Monetary Fund by the Seoul summit was touted as another gain.

While many elements in the 19-page statement were a reiteration of the earlier pledges, these were at least two new elements. One of them was a proposal to set up a working group on development. The other was the desire to focus on issues related to corruption with members urging to ratify and implement the United Nations Convention against Corruption.

However, the move by some developed countries to insert another new element — a levy on bank transactions — did not find a mention in the final text as the focus of the deliberations remained on reducing fiscal deficit levels. A key demand of European countries, was resisted by the US and developing countries such as India and Brazil.

Along with deficit reduction, G-20 leaders also agreed on ushering in structural reforms by emerging surplus economies, such as China. These countries, which can tailor their reform moves to strengthen social safety nets, should increase infrastructure spending and enhance exchange rate flexibility to reflect underlying economic fundamentals.

G-20 meeting of Finance Ministers
Finance Ministers and Central Bank Governors of G-20 countries met in Busan, South Korea on June 4, 2010.

At the top of the agenda was Europe’s debt crisis. The Ministers also discussed medium-term growth framework and how to solve economic imbalances which caused the global financial crisis. Canada, the current G-20 President, hopes to secure an agreement in Toronto on the broad suite of policies needed to reduce these imbalances. Individual countries would then commit themselves to specific policies at the next G-20 summit in Seoul.

Building on progress to date, the leaders affirmed their commitment to intensify efforts and to accelerate financial repair and reform. They also agreed that further progress on financial repair is critical to global economic recovery and requires greater transparency and further strengthening of banks’ balance sheets and better corporate governance of financial firms.

The leaders also committed to reach agreement expeditiously on stronger capital and liquidity standards as the core of our reform agenda and in that regard fully supported the work of the Basel Committee on Banking Supervision.

The leaders also emphasized the need to reduce moral hazard associated with systemically important financial institutions and reinforced their commitment to develop effective resolution tools and frameworks for all financial institutions on the basis of internationally agreed principles.

The G-20 was established in 1999, in the wake of the 1997 Asian Financial Crisis, to bring together major advanced and emerging economies to stabilize the global financial market. Since its inception, the G-20 has held annual Finance Ministers and Central Bank Governors’ Meetings and discussed measures to promote the financial stability of the world and to achieve a sustainable economic growth and development.

China announces plans to make its currency more flexible
Equity markets across the world made handsome gains on June 21, 2010, after China announced plans to make its currency, the yuan, more flexible against the dollar. India’s benchmark equity index, the Sensex, and the broad-based Nifty today touched their highest levels in more than two months.

Market analysts said China’s move would go a long way in lifting the global economic sentiment that was under the weather due to the Euro crisis. China’s decision would result in a higher growth rate, especially for countries that have a significant trade relation with the Asian behemoth, as currency appreciation would make imports comparatively cheaper in China.

According to Barclays Commodities, there is a thinking that a stronger yuan will “increase Chinese purchasing power” leading to an increase in its “purchases of base metals”. “This coincides with a strong set of Chinese trade data for May 2010, which showed that the country turned a net importer of aluminium and lead, while copper and zinc imports remained strong”.

UNSC slaps sanctions on Iran
On June 9, 2010, the UN Security Council slapped sanctions on Iran over its controversial nuclear programme, targeting the powerful Revolutionary Guard, ballistic missiles, and nuclear-related investments, despite opposition from Brazil and Turkey.

In the 15-member Council, 12 countries, including the US and Britain, voted in favour of the resolution, with Lebanon abstaining and Brazil and Turkey voting against.

The new resolution, which is fourth against Iran to be adopted by the UNSC, creates new categories of sanctions like banning Iran's investment in nuclear activity abroad, banning all ballistic missiles activities, blocking Iran's use of banks aboard and asset freezes for members of the Islamic Revolutionary Guard Corps.

The resolution blacklists entities that includes 15 enterprises of the Islamic Revolutionary Guards Corps, three entities owned by the Islamic Republic of Iran Shipping Lines and 23 industrial companies. The international community accuses Iran of seeking to develop an atomic weapon. But, Tehran has been maintaining that its uranium enrichment program is for peaceful civilian purposes.

India has been maintaining that it is opposed to such kinds of sanctions as it will affect the common people more than the establishment. Russia and China, which have previously raised objections against such sanctions, supported the resolution and said they were happy with the text of the resolution as long as it did not have any negative impact on the people.

Iran voiced defiance, saying it would not halt uranium enrichment and suggesting it may reduce cooperation with the UN nuclear agency.

SAARC nations pledge coordinated action to tackle terror
Members of SAARC have pledged to step up coordinated action against the common menace of terrorism, including steps to apprehend or extradite persons connected with acts of terrorism and facilitate real-time intelligence sharing.

The meeting of the Interior Ministers of the South Asian Association for Regional Cooperation, held on June 27, 2010 in Islamabad, Pakistan, also resolved to step up cooperation in real time intelligence-sharing and to consider Pakistan’s proposal for creation of SAARCPOL, an institution on the lines of Interpol.

The ministerial statement on cooperation against terrorism adopted at the meeting said the SAARC member States had underscored their “commitment to apprehend and prosecute or extradite persons connected, directly or indirectly, with the commissions of acts of terrorism”. They also reiterated their commitment to strengthen SAARC’s regime against terrorism.

The ministers resolved to ensure that “nationals and entities” of SAARC States who commit, facilitate or participate in commission of terror acts are “appropriately punished”.

The SAARC members—Afghanistan, Bhutan, Bangladesh, India, Pakistan, Maldives, Nepal and Sri Lanka—also acknowledged that linkages between terrorism, illegal trafficking of drugs, human trafficking, smuggling of firearms and threats to maritime security remained a “serious concern” and said these problems would be addressed in a comprehensive manner.

US-Russia ties improve
On June 25, 2010, US President Barack Obama declared he had succeeded in “resetting” the US-Russia relationship, which he said had reached its lowest point since the Cold War at the end of George W. Bush’s term in office. Obama was speaking to reporters in the East Room of the White House following meetings with Russian President Dmitry Medvedev.

Medvedev, meanwhile, agreed to allow a resumption of US poultry exports to his country which Russia had banned earlier in 201, claiming that a chemical used in the US violated its food safety rules.

But despite the bonhomie between the two leaders, who have met seven times since Obama took office, both Obama and Medvedev acknowledged that they had differences over certain issues, including Georgia. Relations between the two countries deteriorated after the Russian invasion of Georgia in 2008.

The US and Russian Presidents said they had resolved a majority of the obstacles in the path to Russia’s entry into the WTO. They have instructed their negotiators to work as quickly as possible to wrap up what Obama said were “difficult issues” that will require “some significant work”, but Medvedev described as “minor problems”.

The two sides released 11 joint statements at the end of their meeting. These covered promotion and implementation of open government; Kyrgyzstan; energy efficiency; strategic stability; counter-terrorism cooperation; inter-country adoption; Afghanistan; people-to-people connections; strategic partnership in innovation; Russia’s accession to the WTO; US-Russia Presidential Commission.

Canada government blamed for Kanishka crash
A long-awaited inquiry into the 1985 Air India Kanishka bombing, which killed 329 persons, mostly of Indian origin, has blamed the Canadian government for its failure to prevent the tragedy and recommended the appointment of a powerful security czar to resolve disputes between conflicting interests among security agencies.

“The government needs to take responsibility to avoid further failure and to prevent a return to a culture of complacency,” Justice John Major, the head of the Kanishka bombing inquiry commission, recommended on June 17, 2010, nearly 25 years after Canada's worst terrorist attack.

In the much-awaited final report from the commission that investigated the bombing of Air India Flight 182 on June 23, 1985, he observed that the national security continues to be badly organised between the RCMP and Canada's spy agency. He also recommended radical transformation in prosecution.
Meanwhile, Candian Prime Minister Stephen Harper assured the family members of the victims of the 1984 Air India Kanishka bombing that the government would respond “positively” to the recommendations made by an inquiry committee and said compensation would be offered to all.

Years of criminal investigation have yielded just one conviction, for manslaughter, against a British Columbia mechanic Inderjit Singh Reyat, who assembled bomb components.

G-8 leaders drop commitment to complete Doha round in 2010
On June 27, 2010, G-8 leaders met in Totonto, Canada for their annual Summit meeting. The leaders decided to drop a commitment to complete the troubled Doha trade round in 2010 and vowed to push forward on bilateral and regional trade talks until a global deal could be done.

In 2009, a G-8 summit in Italy and a Pittsburgh meeting of the Group of 20 both had committed to a 2010 end date that now looks impossible to meet.

Canadian Prime Minister Stephen Harper, who chaired the G-8 summit, said Doha was not dead. “I don't think we can afford to say that. We’ve got to find a path over time to get to a successful conclusion,” he told a closing news conference.

Doha round has been dogged by differences among trade powers who want more access to one another’s markets but have struggled to lower their own trade barriers.



 

DO YOU KNOW


An ongoing study by Singapore-based Centre for Liveable Cities to rank 64 cities across the world has ranked Geneva and Zurich as most liveable places in the world. Singapore is ranked third. None of the six Indian cities that were included in the study—Delhi, Mumbai, Bangalore, Chennai, Ahmedabad and Pune—find mention in the top 20, either in the global or Asian list.

From July 1, banks will move to a new, more transparent regime of loan pricing. They will jettison the Benchmark Prime Lending Rate (BPLR) and price loans off a ‘base rate’. Unlike the BPLR that was set somewhat arbitrarily by banks, the base rate will follow an explicit formula that factors in a bank’s cost of deposits, operating costs (expenses of running its branches, for instance), the cost of statutory drafts on bank funds imposed by the Reserve Bank of India (the Cash Reserve Ratio and Statutory Liquidity Ratio) and the profit margin. The base rate will help borrowers to compare interest rates offered by various banks and make the process of how banks arrive at interest rates for loans more transparent. RBI has stipulated that banks cannot charge below the base rate for most loans. (There are a couple of exceptions like agricultural loans and export credit.) While the new model will ensure greater transparency, it need not mean lower lending rates for borrowers.

The finance ministry has asked Insurance Regulatory and Development Authority (IRDA) to make following changes to ULIPS: Minimum risk cover is to be of times (against 5 times). Pension products to come with guarantee. Minimum lock-in raised to five years and minimum life cover to Rs one lakh.

Indian consumers are the greenest in the world, according to a global survey of 17 countries. Brazil is ranked number 2, while US consumers are ranked last, just below Canada. The survey uses an index of consumption habits and their environmental impact in five categories: goods, food, housing, transport and attitudes. India’s proclivity for small cars, its relatively low vehicle density (India has 12 vehicles per 1,000 people; the US has 765 per 1,000), the penchant Indians have for fruits and vegetables and locally grown foods over imports these contribute to the score.

Municipal Corporation of Delhi (MCD) has become the first municipal body of India to cash in on cutting down carbon emissions warming the planet. A municipal compost plant in south Delhi, run by the private sector ILFS group, generated a first modest cheque of Rs 5 lakh in carbon emission reduction (CER) credits for its plan to keep more than 9,000 tonnes of carbon over the next 10 years by stopping methane leaks from garbage.

World Environment
Day is celebrated on June 5.

World Day against Child Labour is observed on June 12.

World Blood Donor Day is observed on June 14.

Vaxiflu-S is India’s first indigenous vaccine to counter influenza-A H1N1, also known as swine flu.

India is ranked a lowly 128 on 2010 Global Peace Index. Pakistan (145) is placed among the five countries that were least peaceful. India had ranked 122 in 2009. New Zealand was ranked the most peaceful, followed by Iceland and Japan.

Shyam Saran Negi, resident of the remote Kalpa village in Kinnaur district of Himachal Pradesh, was the first to cast his vote in independent India’s first elections on October 23, 1951. Elections in snow-bound Kinnaur region were held ahead of other places in India, where the elections were held in January and February of 1952.

The world's largest gold coin, "Maple Leaf 2007" has been sold at an auction for $4.03 million. Measuring 53 centimetres in diameter and with a purity of 99.999 per cent, it is listed in the 2010 edition of the Guinness Book of World Records as the world’s biggest gold coin. The front side of the coin displays Queen Elizabeth II and the reverse shows three maple leaves, the national symbol for Canada. There are five Maple Leaf 2007 coins worldwide. One is owned by Queen Elizabeth II, two belong to unidentified investors in Dubai and the whereabouts of the fifth are unknown.

Tobin Tax is a levy on all spot conversions of one currency into another. It is imposed to prevent fluctuations in the market due to excessive capital inflows.

The Union government has approved infusing of Rs 6,211 crore into five public sector banks—Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank of India.


 

 

NATIONAL AFFAIRS


RBI measures to boost liquidity
The Reserve Bank of India (RBI) has announced special measures to provide liquidity in the system, which may face a cash crunch because of huge outgo on third generation (3G) telecom spectrum licences and payment of advance tax by companies.

On May 27, 2010, RBI allowed banks to avail of additional support under the liquidity adjustment facility (LAF). Till July 2, banks have been permitted to avail of support of up to 0.5 per cent of their net demand and time liabilities, which will provide an additional liquidity support of over Rs 20,000 crore.

In addition, RBI said that as an ad hoc measure, banks can seek a waiver for any shortfall in maintenance of the prescribed 25 per cent statutory liquidity ratio (SLR) while availing the temporary facility.

Decks cleared for first Defence University
More than 40 years after it was mooted, the Union Cabinet, on May 13, 2010, gave its approval to set up the nation’s first defence university at Binola, around 20 km from Gurgaon. It would aim at imparting education on strategic challenges to armed forces officials, bureaucrats, academicians, parliamentarians and trainees at military academies.

To be established at an estimated Rs 300 crore, the institute would come up on an area of about 200 acres. A sum of Rs 100 crore has been earmarked for land acquisition. The existing defence educational institutions like the National Defence College, New Delhi, College of Defence Management, Secunderabad, National Staff College, Wellington, and National Defence Academy, Pune, would also be affiliated to the INDU. At present, these institutions are attached to various universities across the country.

The proposed university, which would be fully autonomous and constituted under an Act of Parliament, would promote policy-oriented research on all aspects of national security as part of the strategic national policy-making. The university was first mooted in 1967 and the matter was accorded all seriousness after the 1999 Kargil conflict.

The government had set up a Kargil Review Committee, headed by strategic expert K. Subrahmanyam, which had recommended establishment of such a university to exclusively deal with defence and strategic matters. It will encourage awareness of national security issues by reaching out to scholars and an audience beyond the official machinery.

No law practice without clearing exam
From September 2010, law graduates will have to clear an entry-level exam to be eligible for legal practice. In a widely anticipated move, the Bar Council of India—the regulator for the legal profession—has decided to implement its decision of making aspiring lawyers walk the extra mile.

Till now, a law degree from a recognised university or a law institute was the sole eligibility criterion for getting registered as a lawyer.

Emissions up, but way lower than US, China
Driven by higher industrial growth, energy production and transport, an environment ministry report says the annual GHG (greenhouse gas) emission of India increased by around 58 per cent from 1994 to 2007, but per capita emissions were still much less than those of US or China. Greenhouse gas emissions per unit of the GDP, however, declined by more than 30 per cent during 1994 and 2007, says the country’s updated emission inventory “India: Greenhouse Gas Emissions 2007”.

The country’s net GHG emissions in 2007 were 1.9 billion tonnes compared to 1.2 billion tonnes in 1994. However against 1.5 tonnes of CO
2 per capita in 1994, the per capita GHG emission was estimated to be 1.7 tonnes of CO2 in 2007.

Even though India is ranked fifth in aggregate GHG emissions after US, China, the European Union and Russia in its contribution to global warming, emissions of US and China are almost four times that of India.

China and the US are the world's top emitters of greenhouse gases and disagreement between the two on slashing their carbon dioxide output was a major cause of the failure of the UN-sponsored climate change talks in 2009. At the Copenhagen Summit, India announced its intent to further reduce the emission intensity of the GDP by 20-25 per cent between 2005 and 2020 even as it pursues the path of inclusive growth.

No lie detector tests: SC
In a verdict expected to weaken cases against terrorists, other dreaded criminals and high-profile offenders, the Supreme Court has cited “mental privacy” to rule that police and other prosecuting agencies cannot forcibly conduct lie detector tests—narco-analysis, polygraph or brain electrical activation profile (BEAP, popularly known as brain mapping)—on accused, suspects or witnesses.

“Compulsory administration of any of these techniques is an unjustified intrusion into the mental privacy of an individual. It would also amount to cruel, inhuman or degrading treatment with regard to the language of evolving international human rights norms,” a Bench comprising Chief Justice K.G. Balakrishnan, R.V. Raveendran and J.M. Panchal held.

Further, placing reliance on the results gathered from these techniques would come into conflict with the right to fair trial. “Invocations of a compelling public interest cannot justify the dilution of constitutional rights such as the right against self-incrimination” guaranteed under Article 20(3) of the Constitution, the Bench said in the 251-page verdict.

The apex court also observed that the scientific validity of the techniques “has been questioned and it is argued that their results are not entirely reliable…empirical studies suggest that the drug-induced revelations need not necessarily be true”.

The Bench said that before arriving at the conclusion it also assessed the “tensions between the desirability of efficient investigation and the preservation of individual liberties” and the reasoning that these techniques “are a softer alternative to the regrettable and allegedly widespread use of third degree methods by investigators”.

At the end, the apex court made it clear that the eight-point guidelines issued by the National Human Rights Commission in 2000 for conducting narco-analysis tests should be strictly adhered to. Among the guidelines were: No lie detector tests should be administered except on the basis of consent of the accused. If the accused volunteers for a lie detector test, he should be given access to a lawyer and the physical, emotional and legal implication of such a test should be explained to him by the police and his lawyer. The consent should be recorded before a judicial magistrate.

OECD warns inflation will remain high
The Organisation for Economic Cooperation and Development (OECD) has argued that the Reserve Bank of India’s (RBI’s) process of raising policy interest rates is “still very low by historical standards”.

In a global economic outlook report, the Paris-based grouping warned: “With inflation remaining elevated and the recovery appearing to have taken root, there is a risk that price increases for inputs will flow through to second-round increases and that inflationary expectations will become destabilised. To mitigate this risk, sizeable further monetary tightening will be required through 2010 and into 2011.”

OECD projected the inflation rate to be 7.7 per cent in 2010 and 6.1 per cent in 2011. It expected the consumer price index rise to be at 10.2 per cent in 2010 and still hovering at 6.3 per cent in 2011. The trade deficit has been projected at $80 billion (imports of $405 billion) in 2010 and going up to $101 billion (imports of $478 billion up 13.1 per cent from 2010) in 2011 and real GDP growth in 2010 at 8.3 per cent and at 8.5 per cent in 2011.

OECD Chief Economist Pier Carlo Padoan said: “The outlook for inflation remains the main downside risk, especially if monsoonal rainfall is again deficient. In that case, food inflation would likely begin to risk anew. More generally, the strong state of domestic demand could lead to persistently higher inflation and an upward drift in inflationary expectations.”

Adding the context of anticipated deficit reduction being underpinned on “expected revenue growth, asset sales and some more modest tax measures”, Padoan added “the expected rebound in agricultural activity should help limit further increase in food prices, which have been a major contributor to high inflation. However, underlying inflationary pressures are likely to persist given the strong outlook for demand. Timely policy action to limit the scope for second-round price increases is, therefore, required. Monetary policy normalisation is also important in the light of relatively modest fiscal consolidation”.

National Water Mission gets Cabinet nod
The Prime Minister's Council on Climate Change has approved the National Water Mission, focusing on making water conservation a peoples' movement in the country.

Prime Minister Manmohan Singh, who chaired the meeting of the Council, highlighted the need to create a general consciousness of the need to use water in the most sustainable manner in view of its scarcity and assess the impact of climate change on water.

The Council felt that to make the Mission a peoples' movement it was essential to make available all data on water in the public domain, to be able to mobilise citizens, local bodies and State governments for focused action on water conservation and augmentation.

Members felt incentives should be provided for using water in a sustainable manner and that the Research and Development requirements of the mission should be focused upon.

Water Mission is one of the eight missions in the National Action Plan on Climate Change launched by the Prime Minister in 2009 to tackle the threats of global warming.

The government has already launched Energy Efficient and Solar Mission while a draft of Green Mission has been prepared for public consultation.

Economic growth better than expected
The Indian economy roared past estimates to post a whopping growth rate of 8.6% in the January-March quarter of 2010. The quarter's strong showing also helped India end the fiscal year with 7.4% growth, beating the earlier estimate of 7.2%. Manufacturing led the way, with a whopping 16.3% growth in the quarter and 10.8% overall, while even agriculture, which was expected to decline, ended with marginal growth of 0.2% year-on-year after growing 0.7% in Q4.

The GDP growth rate had slowed to 6.7% in 2008-09 following the global economic crisis, after topping 9% in the previous three years.

The first quarter growth in the gross domestic product (GDP) is better than expected. In February, the Central Statistical Organisation (CSO) had estimated that the Indian economy would grow at 7.2% in 2009-10, with growth of 7.7% in the fourth quarter. But the unexpectedly strong performance in the fourth quarter helped boost the final figure to 7.4%.

The fourth-quarter showing is particularly commendable in the light of a sudden dip in the third quarter to 6.5% from 8.6% in the second quarter due to the impact of a drought-like situation in the country.

China is the only large economy with a higher growth rate at 11.9% in the January-March quarter. The rest of the world is witnessing a fragile recovery, which is now under threat due to the brewing Euro-zone crisis. The sixteen developed countries in the Euro-zone expanded by just 0.2% in the quarter. At the same time, the Organisation for Economic Cooperation and Development (OECD)—a grouping of mostly developed countries including Europe that account for over 60% of the global economy—grew at only 0.7% in the quarter, against 0.9% in the previous quarter. US and Japan grew at 0.8% and 1.2%, respectively.

The 7.4% growth in 2009-10 also showed that stimulus provided by government yielded results.

Visit of President Patil to China
Indian President Pratibha Patil visited Beijing from May 27, 2010. She is the first Indian Head of State to visit China in a decade. She had been invited by her Chinese counterpart Hu Jintao and her trip coincided with the 60th anniversary of the establishment of diplomatic relations between India and China.

During her visit, Patil inaugurated China’s first Indian-style Buddhist temple in Luoyang city in Henan province.

Skirting contentious issues, she held discussions with the top Chinese leadership. Controversial issues such as Chinese border incursions, stapled visas for Kashmiris, Indian visas for Chinese telecom companies and Sino-Pak ties did not figure in the discussions. Patil sought Chinese support for New Delhi's permanent membership of the UNSC during talks. The Chinese leaders supported India's aspirations for UNSC permanent seat and assured the Indian leader that Beijing would back India’s bid in 2011’s election for a non-permanent membership of the UNSC.

Rs 67,000 crore 3-G bonanza for government
The bidding frenzy for third generation (3-G) spectrum came to an end on May 19, 2010, with leading operators Bharti Airtel, Reliance Communications and Aircel winning licences for 13 circles each. This was the 34th day of the auction and it saw the price of a pan-India, or nationwide, licence touching Rs 16,828 crore, nearly five times its base price. No single operator could garner enough cash to win bids for all the 22 circles that went under the hammer.

The government emerged as the biggest winner. The sale of wireless airwaves would make it richer by at least Rs 67,719 crore, the double of what it had targeted in the Union Budget 2010 and about 1 per cent of the country’s gross domestic product.

The proceeds from the sale of 3G and BWA spectrum will together help the government plug its fiscal deficit, projected at 5.5 per cent of GDP in the Budget. The winning operators said if the government allots them spectrum as promised, by September 1, they will be able to roll out 3G services in four to six months.

Seventy per cent of the revenue for spectrum comes from only six circles, while locations such as West Bengal, Himachal Pradesh, Assam and Jammu and Kashmir saw licences being awarded at virtually the base price. The surprise package was Bihar where the bids closed at Rs 203.46 crore, seven times its base price.

Ajmal Kasab convicted of 26/11 attacks
On May 3, 2010, a Mumbai court found 22-year-old Pakistani national, Mohammad Ajmal Kasab, guilty of mass murder and waging war against India, while acquitting two other accused, Fahim Ansari and Sabahuddin Ahmed for want of evidence, in the November 26, 2008 attacks on the city. Kasab is the lone surviving gunman from the attacks that killed 166 people. He has been given the death sentence.

“It was not a simple act of murder. It was war,” judge M.L. Tahiliyani said in a summary of the 1,522 page judgement. “This type of preparation is not made by ordinary criminals. This type of preparation is made by those waging war.”

The court also held 20 other accused, including Lashkar-e-Tayiba founder Hafiz Saeed, its operations chief Zaki-ur-Rehman Lakhvi and Abu Hamza, guilty of conspiracy.

Pakistan withdraws objection to J-K power projects
In a significant development, Pakistan, on May 30, 2010, withdrew its objection to construction of Uri-II and Chutak hydel power projects in Jammu and Kashmir. At the Indus Water Commissioner-level talks in New Delhi, the Pakistani side said it had no objection to the designs of the two power projects after the Indian side provided details of these.

Pakistan had earlier raised objections over the 240 MW Uri-II project being constructed on Jhelum river in Kashmir valley and the 44 MW Chutak plant being built on Suru, a tributary of Indus river in Kargil district of Jammu and Kashmir's Ladakh province. Pakistan had claimed that the projects would deprive it of its share of water.



INTERNATIONAL AFFAIRS


Hung House in Britain after 36 years
On May 7, 2010, Britain woke up to a hung Parliament, an election outcome that this country last experienced in 1974 when the then Prime Minister Edward Heath tried and failed to persuade the Liberal Party to join him in a coalition.

The Conservatives under David Cameron emerged as the single largest party with 306 seats in the 650-member House of Commons, while Labour bagged 258 and Lib Dems 57.

Eight NRIs won elections, four each from the Labour Party and the Conservatives. Likewise four Pakistani-origin MPs, Sadik Khan, Khalid Mahmood, Anas Sarwar and a woman lawyer Shabana Mahmood, were successful on behalf of the Labour Party.

The LibDems play an extremely important role in the formation of the next government, although they have not been able to attract as many votes as they hoped for. They were expecting to win more than 100 seats, but they had to be satisfied with less than 60. However, despite the poor show, they still hold the trump card and are destined to play the role of king-makers.

On May 11, Conservative leader David Cameron (43), who favours a ‘new special relationship’ with India, took charge as Britain’s youngest Prime Minister in nearly 200 years, heading a coalition with the support of centrist LibDems, and vowed to put aside party differences and provide a strong and decisive government. He made Liberal Democrats leader Nick Clegg Deputy Prime Minister.

EU steps to halt economic crisis
On May 10, 2010, European policy makers unveiled an unprecedented loan package worth almost $1 trillion and a program of bond purchases to stop a sovereign-debt crisis that threatened to shatter confidence in the euro. Following the announcement, stocks surged around the world, the Euro strengthened and commodities rallied.

The 16 Euro nations agreed in a statement to offer as much as 750 billion Euro ($962 billion), including International Monetary Fund backing, to countries facing instability and the European Central Bank said it will buy government and private debt. The rescue package for Europe’s sovereign debtors came little more than a year after the waning of the last crisis, caused by the US mortgage-market collapse, which wreaked $1.8 trillion of global credit losses and write-downs. Under US and Asian pressure to stabilise markets, Europe’s governments bet their show of force would prevent a sovereign-debt collapse and muffled speculation the 11-year-old Euro might break apart.

The new war chest would be used for countries like Portugal or Spain in case their finances buckle. Deficits are set to reach 8.5 percent of gross domestic product in Portugal and 9.8 percent in Spain in 2010, above the Euro region’s 3 percent limit. Both countries pledged “significant” additional budget cuts in 2010 and 2011.

The vow to push budget shortfalls below the Euro's 3 percent limit echoes promises that have been regularly broken ever since governments in 1999 set a three-year deadline for achieving balanced budgets. The Euro region’s overall deficit is forecast at 6.6 percent of gross domestic product in 2010 and 6.1 percent in 2011.

Britain, the EU’s third-largest economy, won’t contribute to a Euro rescue fund, though it backs efforts to restore stability.

Now Spain struggles
Spain’s socialist government is seeing its political power erode as it struggles to chart a path out of deep financial trouble, failing so far to satisfy conflicting demands to cut its budget and stimulate job creation.

The coming months could bring far more problems as Prime Minister Jose Luis Rodriguez Zapatero reforms the country’s labour market, risking national strikes and the loss of support from trade unions, a core source of his centre-left party’s strength.

Zapatero’s minority government is already running into serious trouble, although there appears to be no immediate threat of it falling.

A package of austerity measures was passed by only one vote in the Parliament’s lower chamber on May 27, 2010. Opposition parties have called for new elections.
 
The austerity package aims to cut spending by Euro 15 billion ($18.4 billion) over two years by freezing pensions and cutting civil servants’ wages.

But investors and lenders such as the International Monetary Fund are demanding that Spain reform its labour market, overhauling hiring and firing rules and moving to find jobs for the long-term unemployed and the young.

Europe’s top job creator only two years ago, Spain now has the highest unemployment rate—just over 20 per cent—of the 16 nations that share the Euro currency.

The resulting austerity package, nicknamed the “scissors action” by Spanish media, was welcomed by the European Union and the IMF, which said Spain’s “ambitious fiscal consolidation is under way to reach the three percent GDP deficit target by 2013”.

US asks Pak, China to follow NSG rule
The US administration has said that civil nuclear cooperation between Pakistan and China must be in compliance with rules of the Nuclear Suppliers Group (NSG) if China proceeds with plans to set up two new nuclear reactors in Pakistan.

China’s decision to sell nuclear reactors to Pakistan, which has not signed the nuclear Non-Proliferation Treaty, is proving to be a litmus test for President Barack Obama, who has championed the cause of curbing the spread of nuclear technology.

China has helped Pakistan set up nuclear reactors since 1991 when China National Nuclear Corporation (CNNC) entered into a contract with the Pakistan Atomic Energy Commission (PAEC) to build Chashma-1, a 325 MW nuclear power reactor. When it joined the NSG in 2004, China cited a Sino-Pakistan framework agreement that committed it to set up a second reactor, Chashma-2, for Pakistan.

CNNC and PAEC have also worked out a deal to set up two separate 650 MW reactors—Chashma-3 and Chashma-4.

Analysts say the Obama administration is reluctant to press China on the matter in case Beijing responds by dropping its tentative support for sanctions on Iran.
 
NSG rules prohibit the sale of sensitive nuclear technology and materials to nations that have not joined the Nuclear Non-Proliferation Treaty (NPT) and do not allow international monitoring of their nuclear activities.

Daryl Kimball, executive director of the Arms Control Association, says the agreement between China and Pakistan is “deeply troubling because we have China engaging in civil nuclear trade with a country that does not meet the requirements of the NSG for such trade.” He said the Obama administration should insist at the NSG that the Chashma -3 and -4 projects be discussed and it be determined that they not be permitted.

Iran ready for nuke fuel swap
It’s being regarded as a major diplomatic coup that could spell the beginning of the end of the isolation of Iran from world affairs. On the sidelines of the G-15 summit in May 2010, Iran dramatically announced that it has arrived with Brazil and Turkey a deal that could possibly break the nuclear stalemate, stave off sanctions being contemplated by the UN and the US against Iran and bring the contentious issue back to the negotiating table.

Under the agreement Tehran will ship 1,200 kg of low-enriched uranium (LEU) to Turkey in exchange for fuel for a research reactor. Turkey will keep Iran’s LEU and the IAEA and Iran can monitor the fuel.

Iran is a signatory to the Nuclear Non-Proliferation Treaty regime (NPT) which had enabled it to received nuclear technology for civilian use from other NPT signatories, including the US in return for committing that it would not be diverted or misused for military purposes. In 2002, Iran was discovered to have clandestinely set up a uranium enrichment plant and a heavy water unit without informing the IAEA. Since then major powers led by the US have got the UN to impose severe sanctions and refuses to lift them till Tehran's comes clean and puts an end to all clandestine use.

Apart from curbs on banking and trade, heavy sanctions had been imposed on some key public sector enterprises of Iran and the Iranian Revolutionary Guard Council, the striking arm of the current regime.

Currently Iran is estimated to have 1,500 kg of 3.5 per cent (low) enriched uranium. For running research reactors like the Tehran facility for medical purposes, the uranium needs to be medium enriched to 20 per cent. According to a deal, Iran would swap 1,200 kg of its stockpile of low-enriched uranium in exchange for 120 kg of medium-enriched uranium that is to be supplied by the Vienna Group.

For making weapons grade material, uranium has to be enriched to at least 90 per cent. At least 300 kg of this highly enriched uranium is needed to develop an atom bomb. By keeping Iran’s low enriched uranium stockpiles to around 3,000 kg, the world hopes that it would prevent it from crossing the threshold of nuclear material needed to make a bomb.

Reacting to the Iran’s deal with Brazil and Turkey, the US pointed out that Tehran’s decision to continue with some enrichment of nuclear fuel is a direct violation of UN Security Council and that the details of the agreement must be conveyed to the International Atomic Energy Agency before it can be considered by the international community.

UK responded by saying that Iran’s actions remain a serious cause for concern. “There is a need for a continued effort to impose sanctions.”

EU responded by saying that “this is a right direction but it does not answer all the concerns raised over Iran’s nuclear programme.

Tension between Koreas escalates
On May 24, 2010, South Korea announced steps to tighten the vice on the North’s already stumbling economy in punishment for sinking one of its navy ships, with both sides stepping up their war-like rhetoric.

The United States, which backs Seoul, warned that the situation was “highly precarious”. China, the North’s only major ally, urged calm. The mounting tension followed report by international investigators accusing the North of torpedoing the Cheonan corvette in March 2010, killing 46 sailors in one of the deadliest clashes between the two since the 1950-53 Korean War.

The United States, which has 28,000 troops on the peninsula, threw its full support behind South Korea and said it was working hard to stop the situation from escalating.

Few analysts believe either Korea would dare go to war. The North’s military is no match for the technically superior South Korean and US forces. And for the South, conflict would put investors to flight.



 

DO YOU KNOW


India scores poorly among the middle-income countries when it comes to health care and well-being of mothers. The country is ranked 73 in the list of 77 nations rated for the “best place to be a mother”, according to a report by child rights organisation Save the Children. What is more shocking in the “State of the World's Mothers 2010” report is that India is rated much lower than a host of conflict-ridden African countries like Kenya and Congo. China is at 18th place, Sri Lanka at 40, while Pakistan lags behind India at 75th place. Bangladesh, featured in the list of 40 least developed countries, is ranked 14. The report analysed a total of 166 countries, among which Sweden is placed at the top while Afghanistan is at the bottom.

A depository receipt is a type of negotiable financial security that is traded on a local stock exchange but represents a security, usually in the form of equity that is issued by a foreign publically listed company.

A survey of slums in cities and towns with a population of over one lakh as per the 2001 Census, says there are 189 cities and towns in India with big slums. Andhra tops the list—it has 36 cities and towns with a slum population of 50,000 and above. It is followed by Maharashtra with 26, Uttar Pradesh (25), West Bengal (21) and Madhya Pradesh (15). Other States with a sizable slum population in its cities are Haryana (8), Chhattisgarh (6) and Gujarat and Rajasthan (5 each). Goa and Kerala and north-eastern States, barring Meghalaya, are the only States where slums are non-existent.
The Centre has launched two programmes to improve the living conditions of slum-dwellers across the country. Jawaharlal Nehru National Urban Renewal Mission (JNNURM) provides funds to States for creating housing and infrastructural facilities for the urban poor in 65 cities, including Mumbai, under the Basic Services to Urban Poor Programme (BSUP). For the remaining 124 towns, the Integrated Housing and Slum development Programme (IHSDP) has been introduced. The components for assistance include provision of basic services to the slum dwellers, whom the government prefers to call urban poor.

The world's first gold vending machine has been set-up in a hotel in Abu Dhabi in the UAE. The 'Gold To Go' machine gives out 1, 5 and 10 gram gold bars as well as gold coins.

Spectrum is radio frequencies used to transmit voice, video and data. 2-G and 3-G are second generation and third generation spectrum, respectively. The fourth generation is being tested. 3-G facilitates high-end use and faster transmission of video images and data etc. 2-G spectrum is used only for voice transmission.

National Technology Day is observed on May 8.

In a rating of 423 cities, done by the Union Urban Development Ministry—to check their access to proper sanitation facilities, how the solid waste is managed and quality of drinking water—Chandigarh has been ranked on the top of the list, followed by Mysore, Surat, New Delhi, Tiruchirrapalli and Jamshedpur. Charu (Rajasthan), Lakhimpur (UP), Pilibhit (UP) and Srinagar (J&K) were listed among the bottom ten. The survey found 190 cities on the brink of public health and environmental emergency.

Vienna has retained its ranking as the place offering the best quality of living in the world in an annual survey which was dominated by European cities. The survey, by management consultancy Mercer, said Western European cities had fared well despite the global economic downturn, with Zurich coming in second place, followed by Geneva in third position. In Asia, Singapore remains the highest-ranking city at 28, followed by Japanese cities Tokyo (40), Kobe and Yokohama (both at 41), Osaka (51) and Nagoya (57). Baghdad retained its position at the bottom of the list as the place offering the worst quality of life. Bengaluru remains the best placed among Indian cities in the global list at 140th rank. New Delhi climbed to 143 rank from 145th slot in 2009. Mumbai moved up four places to 144th rank.

Sahara India has won the sponsorship rights of Indian cricket team till 2013.

The 11th International Indian Film Academy (IIFA) awards were held in Sri Lanka.

India observed May 21 as Anti-Terror Day to mark former Prime Minister Rajiv Gandhi’s assassination on May 21, 1991.

The per capita income of India grew by 10,5 per cent to Rs 44,345 in 2009-10, against Rs 40,141 in 2008-09. The per capita income (at 2004-05 prices) stood at Rs 33,588 in 2009-10, against Rs 31,821 a year ago. Per capita income means income of each Indian if national income is evenly divided among the country’s population of 117 crore. The size of the economy rose to Rs 62,31,171 crore in 2009-10, up 11.8 per cent over previous year.

The Reserve Bank of India has decided to increase the cash withdrawal limit for ATMs to Rs one lakh in a single day.


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NATIONAL AFFAIRS


RBI hikes key rates to tame inflation
On April 20, 2010, the Reserve Bank of India announced a 25 basis points increase in repo and reverse repo rates as part of monetary tightening measures to rein in inflation. The apex bank also announced a 25 basis points increase in the Cash Reserve Ratio (CRR) for banks. Following the hikes, the CRR now stands at 6 per cent while the repo and reverse repo rates stand at 5.25 per cent and 3.75 per cent, respectively.

The RBI expected the hike in CRR to absorb Rs 12,500 crore from the banking system. The apex bank said it was tightening liquidity in a bid to rein in inflation which was hovering in double digits. The RBI, however, expected inflation to remain at 5.5 per cent during FY 11 with the GDP growing at 8 per cent.

FDI on Tobacco banned
On April 8, 2010, the Union government notified the ban on Foreign Direct Investment (FDI) in cigarette manufacturing. Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes have been put under the list of sectors where FDI is prohibited.

The government took the decision to enhance public accountability towards proliferation of the anti-smoking regime in the country. The decision to ban FDI is the latest in the government's long-standing drive against smoking. In 2008, the government had banned smoking at public places and put a curb on tobacco advertisements.

Earlier, 100 per cent FDI was permitted in cigarette manufacturing, but an industrial licence was needed and the proposals required to be approved by the Foreign Investment Promotion Board (FIPB).

New foreign investment policy document
The Union government has launched a new policy document consolidating the plethora of rules and norms governing foreign investment in the country under one comprehensive document. The move is aimed at making available all information on FDI policy in one place.

It will lead to simplification of the policy; greater clarity of understanding of foreign investment rules among foreign investors and sector regulators, as also predictability of policy direction.

Having a single policy platform that would subsume the 178 press notes would also ease the regulatory burden for government; it will be updated every six months. This consolidated press note will be superseded by a press note to be issued on September 30, 2010 to ensure that the framework document on FDI policy is kept updated.

Chinese hackers crack India’s top defence secrets
The computer systems of scores of Indian embassies, military establishments and corporate bodies, as well as the email account of the Dalai Lama, were hacked by a Chinese cyber spy ring between September 2009 and April 2010.

Hundreds of documents, including classified files, were stolen, says a Canadian cyber-security team that monitored the ring—the Shadow Network—for eight months.

The Shadow Network focussed on India, especially its military. The Canadians, in effect, hacked the hackers and saw many documents themselves.

The Chinese hackers stole foreign ministry reports on India’s policy in West Africa, Russia and West Asia. They got National Security Council secretariat assessments of security situations in Assam, Nagaland, Tripura and Manipur, as well as the Maoist problem.

The penetration of India’s defence establishments was remarkable. Three air force bases, two military colleges and an array of military institutes like the Army Institute of Technology, Pune, were broken into.

The hackers seemed interested in any defence information they could find: from sensitive issues like live fire exercises and Project Shakti—the army’s artillery command system—to more innocuous material like personnel files.

“This is a very serious, broad spectrum assault,” said strategic technology expert Ajay Lele, whose own agency, the Institute for Defence and Security Analysis (IDSA), was robbed of 180 documents.

The ring is believed to be based in Chengdu, in China’s Sichuan province. The cyber-sleuths, based at the University of Toronto’s Munk School of Global Affairs, avoided saying this was government-approved but did say it was “possible”.

The Indian security establishment has little doubt the Shadow Network is cast by Beijing. Says K. Santhanam, former IDSA head: “These rings are normally consortia in which Chinese academia, intelligence and military work together.”

Education becomes a basic right
The Right of Children to Free and Compulsory Elementary Education Act came into force in the country from April 1, 2010, amid an emotional appeal of collective effort by Prime Minister Manmohan Singh and loads of applauses for the government from various parties, including those in the Opposition—the BJP and the Left.

Prime Minister Manmohan Singh recalled the 100-year old resolve of Gopal Krishna Gokhale, who urged the Imperial Legislative Assembly to confer on the Indian people the Right to Education.

With the RTE Act coming into force, the fundamental right to education as incorporated in the Constitution under Article 21 A also became operative.

Right to Education (RTE) Act has, however, come into force amid a whopping shortage of 5.3 lakh school teachers. Add to this, an additional seven lakh teachers that would be required for proper implementation of the Act that gives a three-year window period to States to make education a fundamental right of children in 6-14 age group and mandates setting up of neighbourhood schools with full infrastructure.

Uttar Pradesh tops the list, contributing 32 per cent of all existing teachers’ vacancies in the country. Next is the Left Front-ruled West Bengal, where 53,000 posts were lying vacant, as per MHRD records. Bihar has 51,000 vacancies, the figure for Chattisgarh and Orissa, the other educationally backward States, is 37,000.

Single-teacher schools are another big challenge for the RTE law. Currently, 9 per cent (about one lakh) of the total 12 lakh schools at primary level have only one teacher, whereas the RTE Act specifies that any school with enrollment of up to 60 students must have at least two teachers.

Union Budget passed after Rs 400 crore tax relief
On April 29, 2010, Finance Minister Pranab Mukherjee announced changes in tax proposals that will benefit coffee growers, new hospitals and construction sector while making it clear that service tax on domestic travellers would be Rs 100 per domestic journey and a maximum of Rs 500 for international travel.

Mukherjee announced these concessions that would cost the exchequer Rs 300-400 crore a year but did not touch the demand for rolling back the hike in petroleum and fertiliser prices on which the entire opposition walked out before Lok Sabha passed the Finance Bill, 2010.

Explaining the reasons for his inability to concede the opposition's demand, he said the financial position was such that oil marketing companies faced an under recovery of Rs 85,000 crore in 2010, apart from heavy outgo on account of subsidies, interest and other payments.

Five years of National Rural Health Mission
As India celebrated completion of five years of National Rural Health Mission on April 12, 2010, Assam won the best performing State award among the north-eastern State category for implementing the programme well.

Rajasthan was adjudged the best performing State among the high-focus areas, while Tamil Nadu claimed the award in the category of non-focus States.

Claiming credit for arresting the infant mortality rate (down to 53 in 2008 from 58 in 2005 when NRHM started) and maternal mortality rate (down to 254 in 2004 as against 301 in 2003), Health Minister Ghulam Nabi Azad said the government was in the process of designing a comprehensive programme on population stabilisation in consultation with the State governments.

For the record, India has missed the goal of reaching 2.1 total fertility rate by 2010, as envisaged in the National Population Policy of 2000.

For the future, five challenges have been listed for NRHM—transition from curative to preventive health care, human resource management, setting of output and outcome targets, convergence and inclusive growth and approaches to public health that look at the different stages of health transition at State and district levels so that appropriate strategies can be adopted.

SC quashes expulsion of Amarinder Singh by Punjab Assembly
In what is being viewed as a major political victory for former Punjab Chief Minister and Congress leader Capt Amarinder Singh, the Supreme Court has ruled that his expulsion from the State Assembly on September 10, 2008 was “constitutionally invalid” and ordered restoration of his membership.

If Amarinder had committed any irregularities in the allotment of land to a private builder when he was Chief Minister during the tenure of the 12th House of the Vidhan Sabha, the proper course of action for the State government should have been to move the criminal law machinery, a five-member Constitution Bench headed by Chief Justice K.G. Balakrishnan held.

Further, the alleged improper exemption of land from the Amritsar Improvement Scheme “was an executive act” in his capacity as Chief Minister which “did not distort, obstruct or threaten the integrity of legislative proceedings in any manner”, the apex court ruled.

Also, the exemption had taken place during the 12th term of the Vidhan Sabha, whereas the constitution of the Special Committee to inquire into it took place during the 13th term. “It was not proper for the Assembly to inquire into actions that took place during its previous term, especially when there was no relatable business that had lapsed from the previous term.”

The court clarified that its judgment would not act as a hurdle against the investigation, if any, into the alleged role of Amarinder Singh in the Amritsar Improvement Scheme notified on January 13, 2006.

Visit of Afghan President Karzai
Afghan President Hamid Karzai, during his two-day trip to New Delhi on April 26, 2010, sought to allay India’s concerns over the proposed re-entry of the Taliban in the Afghanistan government.

Karzai indicated that his government would enter into a power-sharing arrangement with those elements of Taliban who had accepted the country’s constitution and were not part of the Al Qaida.

His meeting with Prime Minister Manmohan Singh came in the backdrop of moves being initiated by the Afghan government to enter into a power-sharing arrangement with the so-called “moderate” elements of the Taliban. New Delhi is worried that such a development will lead to the increased influence of Pakistan in Afghanistan.

In a statement issued after the meeting, Karzai said they had discussed the upcoming Afghanistan peace consultative jirga that, he explained, should “comprise people of Afghanistan, those from all walks of life to advise on how to move forward for reintegration and reconciliation of those elements of Taliban and others who have accepted the Constitution and are not part of the Al Qaida or any terrorist network.”
The Afghan President also requested Prime Minister Singh to send representatives to the follow-up to the London conference in Kabul so that “India can participate once again in Afghanistan’s reconstruction”.

India was forced to backtrack on the Taliban issue after the US and other European countries encouraged Karzai to do business with the Taliban at the London conference held in early 2010. While the US and NATO countries are looking for an exit route from war-ravaged Afghanistan, India is worried that that this will have an adverse impact on the security and stability of the region.

Bangladesh lifts ban on Indian films
On April 24, 2010, Bangladesh announced that it has lifted an almost four-decade ban on Indian films in a bid to boost attendances at cinemas. The move, however, drew loud complaints from local actors and directors.

Films produced by Bollywood were banned from cinemas in Bangladesh since the country’s independence in 1972 in a bid to protect the local movie industry.

The lifting of the ban comes amid warming relations between India and Bangladesh after ties worsened between the neighbours when an Islamist-allied government was in power in Dhaka from 2001 to 2006.

But not everyone supports the move. “Indian films will completely destroy our film industry and our culture. At least 25,000 people will be jobless,” said Masum Parvez Rubel, a leading star and a co-coordinator of a front against Indian films.

India, China Prime Ministers to connect via hotline
On April 7, 2010, India and China signed an agreement to establish a hotline between Prime Ministers of the two countries, as External Affairs Minister S.M. Krishna and his Chinese counterpart Yang Jiechi resolved to take the bilateral relationship to new heights.

The agreement, under which dedicated phone lines will be set up in the Prime Minister's office of the two countries, was signed by Krishna and Yang after their talks in Beijing. This would enable Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao to hold direct conversations whenever they want.

This is the first time in recent years that India has established a dedicated hotline facility with any country. The two countries also decided to strengthen their cooperation in regional forums and on addressing issues like global financial crisis and climate change.

Summit meeting between India-Pak Prime Ministers
On April 29, 2010, Prime Minister Manmohan Singh and his Pakistani counterpart Yousaf Raza Gilani held their first bilateral meeting in nine months to end the diplomatic stalemate in ties between their two nations since the 26/11 Mumbai terror attacks.

At their hour-long meeting, described as an “exercise in soul searching” by Indian officials, the two leaders decided to upgrade the bilateral dialogue to the political level, something which Islamabad had been insisting upon for months.

After the Pakistani premier assured Manmohan Singh that his government would not allow the misuse of the Pakistani territory for launching terror attacks in India, the two PMs instructed their foreign ministers and foreign secretaries to meet “as soon as possible” to work out the modalities to pave the way for a “substantive dialogue” on all issues of mutual concern to restore trust and confidence in the relationship.

Political analysts, however, pointed out that this was not the first time that the Pakistani leadership has promised not to allow the misuse of the country’s soil for anti-India activities. This commitment has been given to India time and again by Islamabad since January 2004 when Pervez Musharraf was at the helm of affairs.

The two PMs did agree that there was lack of mutual trust that was impeding the normalisation process and it was time to think afresh on the way to move forward.

ISI mole in MEA held
Madhuri Gupta, a promotee officer of the Ministry of External Affairs who was posted as Second Secretary at the Indian mission for the last three years, was arrested by Delhi police on April 25, 2010, on the charge of passing sensitive information to her contacts in Pakistan’s ISI.

“We have reasons to believe that an official at the High Commission of India in Islamabad had been passing information to Pakistan intelligence agencies. The matter is under investigation. The official is cooperating with our investigations and inquiries,’’ MEA spokesman Vishnu Prakash.

Fifty three-year-old Madhuri, who is a spinster, was summoned to New Delhi on the pretext of discussions on the SAARC Summit when she was taken into custody.

Medical Council Chief held for taking bribe
The Central Bureau of Investigation (CBI) has arrested Medical Council of India (MCI) president Ketan Desai in Delhi on charges of corruption.

Desai and an associate, J.P. Singh, were picked up for allegedly demanding Rs 2 crore for granting recognition to a private medical college in Punjab. It is the MCI’s responsibility to maintain standards in medical education and in the profession.

Desai is also accused of granting recognition to several colleges that didn’t meet required criteria. In 2001, he had stepped down as MCI president after the Delhi High Court indicted him on corruption charges.

Meghalaya gets its 9th CM in 12 years
Meghalaya Chief Minister D.D. Lapang submitted his resignation to Governor R.S. Mooshahary on April 19, 2010, paving the way for his deputy Mukul M. Sangma to take charge.

Sangma, elected as leader of the Congress Legislature Party (CLP), was sworn in as the 25th CM since Meghalaya acquired Statehood in April 1970.

Political instability in Meghalaya has seen eight CMs coming and going in the past 12 years. Only two CMs have completed five-year terms since the State was formed.

The Congress-led ruling alliance has a comfortable majority of 44 in the 60-member Assembly, though the Congress has 28 MLAs of its own. Its partners are the United Democratic Party with 10 MLAs and six others, including three Independents.

Sangma, known to be a Lapang loyalist, is a four-time MLA from Ampatigiri Assembly constituency. More importantly, he is believed to be the counter of Congress to Nationalist Congress Party veteran and former Lok Sabha Speaker Purno A. Sangma in the Garo Hills half of Meghalaya. This Garo tribe-inhabited half has a traditional ambivalent relationship with the other half dominated by Khasi-Jaintia tribes.

Trouble began for Lapang after some Congress MLAs wanted him to drop three Independents and the lone regional party (KHNAM) MLA from the Cabinet. Lapang declined, saying he could not betray “friends” who helped him form the Congress-led Meghalaya United Alliance (MUA) government.

The Independents and some regional party MLAs had broken away from the NCP-backed Meghalaya Progressive Alliance to help Lapang cobble together the MUA government on March 19, 2008, after voters delivered a fractured verdict in the Assembly elections that year.

Naxals kill 73 security personnel in the deadliest attack ever
In the biggest Naxal strikes in the country, the Left-wing extremists killed 76 jawans of the Central Reserve Police Force (CRPF) and critically wounded eight others in the restive Dantewada district of Chhattisgarh on April 6, 2010.

The rebels had meticulously planned the entire operation; inviting security personnel to walk into the trap laid on the Chintalnaar-Tademetla road, about 100 km from the district headquarters and some 540 km south of the State capital.

The Naxalites, who were reportedly 1,000 in number, had planted landmines and created temporary bunkers on the hilltops to easily target the jawans. The kaccha road where the incident took place had been surrounded by hilly terrains and dense forests.

The CRPF jawans did not get much time to take position and retaliate. The Naxalites opened indiscriminate fire from the bunkers located at strategic points and detonated a series of landmines.

A key reason for the CRPF’s dismal response to the Naxal attack has been their lack of training. As CPO units poured into Chhattisgarh for Operation Green Hunt, 5 battalions of the Border Security Force (BSF), 5 battalions of the Indo-Tibet Border Police (ITBP) and 2 battalions of the Sashastra Seema Bal (SSB) were all put through jungle warfare orientation courses at Chhattisgarh’s well-reputed Jungle Warfare College in Kanker. The CRPF, inexplicably, refused to undergo this training.

Training at the Jungle Warfare College, as every organisation except the CRPF seems to have known, has underpinned anti-Naxal operations in Chhattisgarh since 2005, when the college was set up with the help of the Indian Army. Over the last five years, Chhattisgarh has trained 12,700 policemen (including 3700 from other States) at this institution. The college’s credo: Fight the guerrilla like a guerrilla.

Instead of providing adequate training to each battalion that is sent into counter-insurgency operations, the CRPF has relied heavily for success on “elite” units, like its feared “Naga Battalion” which was based in Bastar for several years before being pulled out. In 2008, the Home Ministry authorised the CRPF to raise 10 COBRA (Commando Battalions for Resolute Action) units, for counter-Naxal operations. But the regular battalions remain largely untrained, pushed at will from election duty, to counter-insurgency, to patrolling riot-affected areas, to anti-Naxal operations. The Home Ministry’s approach has always centred on getting the CRPF to the trouble-spot. After that, it is left to the harried battalion or company commander to deliver the goods.

The answer clearly lies in carefully training CPOs, especially before they go into counter-insurgency operations.

New strategy to counter Naxals
The Union government is tweaking its strategy to deal with Naxals. The list of changes includes: segregation within the CRPF to have specialist anti-insurgency units, which will be trained to “attack first”; introduction of unmanned aerial vehicles (UAVs) for surveillance; more choppers; and re-training of men on the pattern of Indian Army before induction.

“Operations will go on…rather they are still on,” said well-placed sources, adding that 10 such battalions had been trained specially for the “attack first” policy which is the dictum of the Army and the BSF in dealing with adversaries.

The training will include ramping up of infrastructure with firing ranges and also the use of the existing training facilities of the Army in Jungle warfare. The Army’s jungle warfare expertise is such that even the Chinese Army conducted a joint exercise with India in 2009.

For effective use, the CRPF—comprising 2.30 lakh personnel—will be segregated into two parts. One will help the State governments in maintaining law and order duties, while the other, comprising younger men, will deal with insurgents.

The CRPF has also made it clear that the State governments have to start raising special operations groups of its local policemen, like in Andhra Pradesh and J&K. The local boys know the population and glean out good information from villagers which comes handy.


INTERNATIONAL AFFAIRS


Interim government formed by Opposition in Kyrgyzstan
Opposition alliance headed by former Foreign Minister Ms Roza Otunbayeva formed an interim government in Kyrgyzstan on April 8, 2010, dissolving Parliament and asked the toppled President Kurmanbek Bakiyev to quit as they shored up global diplomatic support for the new regime.

Announcing that they would run the turbulent Central Asian nation for six months, Ms Otunbayeva said the new alliance proposed to hold new elections within this period.

In her first action, Ms Otunbayeva, designated the head of the interim government, said that a US airbase outside the capital Bishkek, which is seen vital to the NATO campaign in nearby Afghanistan would remain open despite the shift in power.

Historic Bill to clip powers of Pakistan’s President
On April 19, 2010, President Zardari signed into law sweeping constitutional reforms relinquishing key powers designed to bolster parliamentary democracy weakened by military rule. The 18th Amendment had earlier been cleared by Pakistan’s Parliament and sent to him for his signature.

The amendment removes the head of State’s power to sack the Prime Minister and dissolve Parliament. It also removes many of the sweeping powers amassed by military dictators Pervez Musharraf and Zia-ul-Haq. The Bill also abolishes a clause barring the election of a Prime Minister for more than two terms. This would allow the Nawaz Sharif, who was toppled by Musharraf in 1999, to become Prime Minister again.

The amendment effectively makes the President of Pakistan a titular head of State who can only formally appoint heads of the armed forces, dissolve the National Assembly and appoint Provincial Governors on the advice of the Prime Minister. The law also takes away the President’s power to appoint and dismiss the heads of the Election Commission and the Public Service Commission.

UPFA returns to power in Sri Lanka
President Mahinda Rajapaksa's UPFA impressively returned to power on April 9, 2010, bagging 117 of 225 seats in the first post-LTTE era Parliamentary polls in Sri Lanka, with its closest rival UNF securing just 46 and detained ex-army chief Sarath Fonseka's DNA failing to touch even a double digit mark.

In Sri Lanka, the general elections directly decide 196 seats while the remaining 29 members are chosen based on the percentage of votes secured by each party.

The UPFA, which campaigned to get a two-third majority in the House, fell short of just six members to get the magic figure which is needed to bring about constitutional changes that the President wants to put in place. These changes include the scaling down of the executive powers vested with the President, as well as a change in the country’s proportional representation (PR) system of elections.
The main opposition United National Party (UNP) saw much of its voter base eroded in the poll, the first since the defeat of the Tamil Tigers, winning only 60 seats, down from the 82 it had won in the 2004 general election.

A third party led by detained former Army Commander Sarath Fonseka won seven seats, including one for the retired general, while the majority of the seats in the north and east were won by the Tamil National Alliance.

Civil strife in Bangkok
Thailand has been sliding to anarchy for the last few months with the capital Bangkok turning out to be a virtual battlefield. The current violence is the culmination of a political strife that has been brewing ever since Prime Minister Thaksin Shinawatra was overthrown in a military coup in September 2006.

The protests looked like they had ended when Democrat Party leader Abhisit Vejjajiva became the Prime Minister in December 2008. But in March, the pro-Thaksin group launched a new wave of protests to bring down the government.

The tension has escalated in recent months as the protesters laid siege to the capital Bangkok. As security forces launched a crackdown, violence escalated, leaving many dead.

Apart from the pro-Thaksin angle, the protests are also seen as an initiative to bring in more participation for the common people—read rural mass—in government formation.

In the December 2007 elections, held 18 months after the coup, Thaksin's vote bank remained loyal, though he was in exile. His allies came to power but fell following sustained protests by Yellow Shirts and unfavourable court rulings. In March 2009, Thaksin's supporters in red shirts poured into the streets of Bangkok, forming the United Front for Democracy Against Dictatorship.

Though it was mostly made of the rural poor, students and pro-democracy activists joined them. Claiming that the judiciary was biased against Thaksin, they question the legitimacy and credibility of the current government. What began as innocuous sit-in protests outside government offices quickly turned violent when they stormed the venue for ASEAN summit, forcing its cancellation.

The Yellow Shirts, called the Peoples' Alliance for Democracy, who are bitterly opposed to Thaksin, were behind the street protests that led up to the military coup of September 2006. They were also instrumental in forcing Thaksin's allies out of power in 2008.

If the Red Shirts are mostly rural poor, the Yellow Shirts comprise royalists, businessmen and the urban middle-class. They wear yellow because it is the Thai King's colour. Media-baron Sondhi Limthongkul and General Chamlong Srimuang are seen as the leaders of this outfit. In 2006, as the Yellow Shirts shut down the capital, the army ousted Thaksin.

US, Russia ink pact to cut N-arsenal
On April 8, 2010, the United States and Russia signed a landmark strategic nuclear disarmament treaty. Presidents Barack Obama and Dmitry Medvedev signed the pact at a ceremony in the mediaeval Prague Castle after talks that covered nuclear security, Iran's atomic programme and an uprising in the Central Asian State of Kyrgyzstan, where both major powers have military bases.

The treaty will cut strategic nuclear arsenals deployed by the former Cold War foes by 30 per cent within seven years, but leave each with enough to destroy the other.

Obama said the agreement had “ended the drift” in relations between Moscow and Washington and sent a strong signal that the two powers that together possess 90 per cent of all atomic weapons were taking their disarmament obligations seriously.

Icelandic Volcano causes air travel mess in Europe
Europe saw air traffic chaos in April 2010 as a plume of ash from the Icelandic volcano that erupted under the Eyjafjallajokull glacier, made northern Europe a no-fly zone. An estimated 63,000 flights were cancelled, effecting more than five million passengers who were trying to get in and out of major cities of Europe. The eruption of the volcano caused the greatest air travel chaos since the Second World War II.

Goldman Sachs, another US financial behemoth in trouble
Goldman Sachs, the most profitable securities firm in Wall Street history, released more than 70 pages of email and other documents on April 25, 2010, ahead of a US Senate sub-committee hearing on the firm’s actions throughout the mortgage meltdown. The firm disputes the US Securities and Exchange Commission’s (SEC’s) claim that Goldman Sachs misled investors in a 2007 collateralised debt obligation (CDO) about the role played by hedge fund Paulson & Co, which bet the CDO would collapse.

SEC has accused Goldman Sachs of “making materially misleading statements and omissions” in connection with a synthetic collateralised debt obligation (CDO)—Abacus—that the firm structured and marketed to investors.

Goldman Sachs is said to have created marketing material about Abacus and invited its clients—investment managers of banks, insurance companies, pension funds, etc—to invest in the CDO. It is said to have given an impression to the investors that the residential mortgage-backed securities that made up the CDO were hand-picked by ACA Management—then seen as a reputable fund manager, looking after dozens of CDOs. Goldman clients invested in the CDO, believing these loans were of good quality.

SEC claims Goldman deliberately hid from its clients John Paulson’s involvement, which was a huge conflict of interest. Since Paulson was looking to short the sub-prime market, he was most likely to have picked the worst possible bonds.

Within a year, 99 per cent of the assets within Abacus were downgraded. Paulson, who was by this time betting against Abacus by buying $15 million worth of credit default swaps (CDS) on Abacus, earned around $1 billion from the trade.

Bonn climate talks
Delegates to the first UN climate talks after Copenhagen met in April 2010 in Bonn and agreed to intensify their negotiations on curbing greenhouse gases before 2010’s decisive ministerial conference in Cancun. As representatives of the 192 countries that are party to the UN Framework Convention on Climate Change (UNFCCC), they had a messy task. In the end, the parties to the UNFCCC merely “noted” the existence of the accord, as some were utterly opposed to it.

The aim of the negotiators was to pick up the broken pieces of the Danish meeting and see what could be salvaged and turned into a proper global agreement at the next UNFCCC conference, in Cancun, Mexico in December 2010.

The United States seems to be the only country that still sees the Copenhagen accord as having a life of its own. Almost all the rest, including countries that have “associated” themselves with the accord have insisted that the UNFCCC remains the only agreed decision-making forum. Hence the discussions in Bonn revolved around which bits of the accord could be brought into the UNFCCC and how.

The Bonn talks were mainly about procedures—for example, which texts to start with, how many meetings to hold before Cancun, whether to mandate the chair to prepare draft text, and so on—but there was also much informal stock-taking about which pieces could be put together by Cancun.

While some countries continued to call for an all-or-nothing approach, most feel that it is more realistic to aim for a number of less ambitious, partial agreements on several elements. These include ways to transfer climate-friendly technologies and funds for adaptation to climate change from rich to poorer countries, as well as a deal that would compensate countries for keeping their forests intact.

This would mean delaying the more difficult decisions on ambitious targets for countries to reduce their greenhouse gas emissions, and an overall legally binding agreement to the conference in South Africa at the end of 2011 or beyond.

Over 110 nations back Copenhagen climate deal
More than 110 nations, including top greenhouse gas emitters led by China and the United States, back the non-binding Copenhagen Accord for combating climate change, according to a first formal UN list.

The list, of countries from Albania to Zambia, helped to end weeks of uncertainty about support for the deal, agreed at an acrimonious summit in the Danish capital in December 2009. The list was compiled by the UN Climate Change Secretariat.

The accord, falling short of a binding treaty sought by many nations, sets a goal of limiting global warming to below 2 degrees Celsius. But, it does not spell out what each nation has to do.

It also promises almost $10 billion a year in aid for poor nations from 2010-12, rising to at least $100 billion from 2020, to help them slow emissions growth and cope with impacts such as floods, droughts and rising sea levels. Apart from China and the United States, the list also includes top emitters such as the European Union, Russia, India and Japan.

The accord was merely “noted” by the 194-nation summit after objections by a handful of developing nations, including Venezuela, Nicaragua, Cuba and Sudan. The United Nations then asked all countries to say if they wanted it to be listed. Many big emerging economies were initially reluctant to sign up after the deal failed to gain universal support, even though the original text was worked out by President Barack Obama with leaders of China, India, Brazil and South Africa.

Nations not on the list include many Organization of Petroleum Exporting Countries nations such as Saudi Arabia, which fear a loss of oil revenues if the world shifts to renewable energies, and some small island States which fear rising sea levels.

BASIC countries seek environment treaty by 2011
India, China, Brazil and South Africa, jointly called BASIC countries, have said that the legally binding climate treaty on reduction of carbon emission should be finalised latest by 2011 as the “world could not wait indefinitely”.

The third meeting of BASIC ministers concluded in Cape Town April 25, 2010.

The statement also said that the developing countries strongly support international legally-binding agreements, as the lack of such agreements hurts developing countries more than developed nations.

The ministers said that negotiations should follow a two-pronged approach. One track is on long-term cooperative action to combat climate change. The other is for developed countries to commit to what extent they will reduce their greenhouse gas emissions after 2012, when the current commitment period of the Kyoto Protocol runs out.

The next BASIC ministerial meeting will be held at the end of July 2010 in Brazil, followed by one hosted by China at the end of October 2010.

International Conference on Nuclear Disarmament
Iran hosted an international conference on nuclear disarmament on April 17, 2010. Delegates from more than 60 countries, including as many as 25 foreign ministers or deputy foreign ministers, attended the conference, ignoring attempts by the West to dissuade them from attending the meet.

The presence of so many countries came as a pleasant surprise to Iran itself. Iranian Foreign Minister Manouchehr Mottaki said the response to the conference was overwhelming. He said the conference would go a long way in achieving the goal of nuclear disarmament and presenting to the international community the true nature of his country’s nuclear programme.

Even as the US was making a strong pitch for further sanctions against Iran, China and Russia, two permanent members of the UN Security Council, attended the meet. India, another key global player, was also present at the conference, though it was only represented by the Joint Secretary (Disarmament) in the External Affairs Ministry.

Iran showcased the two-day event to demonstrate that its nuclear programme was aimed at meeting its growing energy needs and that it has no military agenda.

Iran moots establishment of independent global group under the UN to plan nuclear disarmament and suspension of membership of the US and others which from the board of governors.

India opposes sanctions against Iran and feels that Tehran should enjoy all rights to develop N-energy for peaceful purposes.

Plot to sell Uranium foiled by Georgia
Georgian security forces have foiled a criminal plot to sell weapons-grade uranium in the black market, the country’s President told a gathering of world leaders on April 13, 2010.

The revelation brought a sense of urgency to the Washington summit on nuclear security, where Barack Obama called on the rest of the world “not simply to talk, but to act” to destroy vulnerable stockpiles of nuclear material, or to safeguard them against theft by terrorists.

Georgian sources said the highly-enriched uranium HEU was intercepted in a sting operation carried out by the Tbilisi authorities in March 2010. They said the uranium was more than 70 per cent enriched and appeared to have been pure enough to use in a crude nuclear weapon.

The amount seized was small, but Georgian officials said the gang was offering the HEU as a sample of a bigger quantity available for purchase.

“The Georgian ministry of interior has foiled eight attempts of illicit trafficking of enriched uranium during the last 10 years, including several cases of weapons-grade enrichment. Criminals associated with these attempts have been detained,” the Georgian President said.

Visit of Chinese President to USA
Chinese President Hu Jintao, during his visit to USA in April 2010, told US President Barack Obama that their two nations should defuse economic strains through negotiations, but neither leader touched on the yuan dispute. Hu also covered the Iran nuclear dispute and China’s demands over Tibet and Taiwan, two areas that recently flared as sore-spots in US-China relations.

The potentially touchy issue of China’s currency, the yuan, did not appear in either country’s public account of the chat. Domestic US political pressure has been building on the Obama administration to label China a “currency manipulator”.

The relationship between Beijing and Washington has been dragged down in recent months by disputes spanning China’s currency and internet controls, US arms sales to the self-ruled island of Taiwan, and Obama’s meeting with exiled Tibetan spiritual leader the Dalai Lama.

Both leaders agreed to work hard to ensure positive results at a second round of their Strategic and Economic Dialogue in May.

The United States welcomed Hu’s decision to attend the nuclear security summit, saying it would allow them to address a “shared interest in stopping nuclear proliferation and protecting against nuclear terrorism”.

SAARC Summit, 16th
The 16th SAARC summit began at Thimpu, Bhutan, on April 28, 2010, with India’s Prime Minister Manmohan Singh and leaders of seven other member nations pledging to combat extremism and terrorism, launch joint initiatives to deal with climate change and boost intra-regional trade.

The Summit ended on April 29, 2010, with leaders adopting the ‘Thimphu statement’ on climate change, signing an agreement on trade in services and expressing their firm resolve to stamp out terrorism from the region. The next summit would be held in the Maldives in 2011.

Facing criticism for the slow pace of development in the region, the SAARC leaders reiterated their commitment to implement the South Asian Free Trade Agreement (SAFTA) in letter and spirit to boost intra-regional economic cooperation for the prosperity of their people. The closing ceremony of the summit was attended by leaders from all the eight SAARC countries—India, Pakistan, Bangladesh, Nepal, Afghanistan, Bhutan, Sri Lanka and the Maldives. Representatives of nine observer countries—Mauritius, South Korea, China, Japan, Iran, the US, the EU, Australia and Myanmar—were also present.

The seven-page ‘Thimphu Silver Jubilee Declaration-Towards a Green and Happy South Asia’’ emphasised the importance of reducing dependence on high-carbon technologies for economic growth and hoped promotion of climate resilience will promote both development and poverty eradication in a sustainable manner.

In line with India’s position, the SAARC countries underlined that global negotiations on climate change should be guided by the principles of equity, and common but differentiated responsibilities and respective capabilities as enshrined in the UN framework convention and conducted in an open, transparent and inclusive manner. They also underscored the need to initiate the process to formulate a common SAARC position for the Mexico conference on climate change in December.

The SAARC leaders agreed to establish an inter-governmental expert group to develop clear policy directions for regional cooperation as envisaged in the SAARC Plan of Action on Climate Change. The leaders directed the SAARC Secretary-General to commission a study aimed at accreditation of SAARC with the Kyoto Protocol’s Adaptation Fund as a regional entity for undertaking adaptation projects in South Asia.

IBSA Summit
The 2nd India-Brazil-South Africa (IBSA) Summit was held in Brasilia on April 15, 2010. Speaking at the Summit, Prime Minister Manmohan Singh said the grouping of leading developing economies must speak against the protectionist policies, “which are only short-sighted and self-defeating in the long run”. IBSA can contribute to the shaping of the global agenda and highlighting the issues of concern to developing countries, he added.

Underlining that the world must ensure that “we do not repeat the mistakes of the past”, the Prime Minister said for the global economic recovery to be sustainable, it must be anchored in the real economy.

He also underlined the need for the IBSA to coordinate its positions in the G-20 and continue to pursue the early conclusion of the Doha round of trade negotiations “because a fair and rule-based multilateral trading system is in our interest”.

Nuclear Security Summit
World leaders, including Indian Prime Minister Dr Manmohan Singh, attending the Nuclear Security Summit in Washington D.C., on April 12, 2010, set a stiff four-year target to secure all vulnerable nuclear material in the world to prevent terrorists from laying their hands on any of them.

In a communiqué issued at the end of the summit, the leaders emphatically stated: “Nuclear terrorism is one of the most challenging threats to international security” and agreed that “strong nuclear security measures are the most effective means to prevent terrorists, criminals or other unauthorised actors from acquiring nuclear material.” Another summit would be held in 2012 in South Korea to review the progress.

At a press conference after the summit, US President Barack Obama, under whose initiative the summit was convened, acknowledged that the task was tough but had to be done. Obama said: “This is an ambitious goal, and we are under no illusions that it will be easy. But the urgency of the threat, and the catastrophic consequences of even a single act of nuclear terrorism, demand an effort that is at once bold and pragmatic. And this is a goal that can be achieved.”

Indian Prime Minister Dr Manmohan Singh said he was satisfied with the outcome of the summit and that it had endorsed what India had been pressing for at various international forms in the past several years.

The summit also recognised that even as nations fulfil their national responsibilities these could not addressed by countries working in isolation. What was needed was a sustained, effective programme of international cooperation. The leaders agreed that at the international level the need was for compliance with existing key conventions and initiatives.


 

DO YOU KNOW


In an indication of sustained economic growth, the per capita income in Delhi has increased to Rs 78,690 in the financial year 2007-08 as against the national figure of Rs 33,283. Delhi's per capita income is the third highest in the country with Chandigarh having per capita income of Rs 110,676 topping the list and closely followed by Goa at Rs 105,582.

The Unique Identification (UID) project of India has been renamed as ‘Aadhaar’.

India has achieved the Millennium Development Goal (MDG) for drinking water by providing 84 per cent of its rural population with access to improved sources of water.

With the Right to Education Act coming into force, India has joined the league of 135 countries that have legal guarantee to provide free and compulsory education to children.

BPL Studylite is India’s first eco-friendly rechargeable light-emitting diode (LED) study lamp. It has bagged the Red Dot Product Design Award in the Lighting category, one of the most prestigious international product design awards.

World Book Day is observed on April 23.

Oil India Limited has been granted the coveted ‘Navratna’ status by the government, a move that will empower the board of the compant.

A unique coincidence was created when General V.K. Singh took over as Chief of Indian Army on March 31, 2010. All the three serving Chiefs (Army, Air Force and Navy) are from the same squadron of the National Defence Academy (NDA).

The 37th National Games will be hosted by Chattisgarh.

The tiny north-eastern state of Mizoram recently set a Guinness World Record for the “largest and longest dance”. A 10-minute performance of its colourful traditional bamboo dance, Cheraw, saw an astounding 10,736 dancers in 671 groups set a record in the heart of Aizawl.

World Health Day is observed on April 7.

Prime Minister Manmohan Singh, cricketer Sachin Tendulkar and economist Amartya Sen are among nine Indians figuring in the Time magazine’s annual list of 100 most influential people.

Oil and Natural Gas Corporation (ONGC) has added 83 million tonnes (mt) of oil and gas reserves in 2009-10, the highest in two decades. The reserve had gone up due to Kasomarigaon discovery in Assam, South Mahadevpatnam and Pennugonda in Krishna-Godavari onland, GK-28-1 in Kutch offshore and PER-1 in Mumbai offshore. The company produced 24.858 million tonnes of crude oil in the 2009-10 fiscal, lower than the target of 25.764 million tonnes. Gas production at 23.1 billion cubic metres was higher than 22.24 bcm target.

India's say in the World Bank has increased a bit after member nations approved a shift in voting rights, while its peer China's voice in the funding agency has grown louder than that of Germany, France and the UK. Both India and China hitherto enjoyed an identical 2.8 per cent voting rights. India’s voting power stands increased to 2.9 per cent and that of China leaped to 4.4 per cent— placing it third overall. India is now the seventh largest member in terms of voting power, with United States leading the table with 15.9 per cent, Japan (6.8 per cent), China (4.4 per cent), Germany (4.0 per cent), France (3.8 per cent) and the UK (3.8 per cent).

A non-government organisation, Aranyak, has found that the Kaziranga National Park in Assam has 32 tigers per 100 sq km, as compared to Corbett National Park, Uttarkhand, which has 20 tigers for the same area.

The Indian Air Force has laid the groundwork for operationalising its latest fighter base at Phalodi in Rajasthan.


 

 

Current Affairs: March 2010

CURRENT NATIONAL AFFAIRS

BANKING & FINANCE
RBI raises repo, reverse repo
On March 19, 2010, the Reserve Bank of India (RBI) surprised banks and money market players by raising key policy rates 25 basis points. The move, aimed at taming inflation and anchoring inflationary expectations, marked a reversal in the easy monetary policy regime amid signs of strong economic revival.

The central bank said the repo rate, or the rate at which banks borrow from RBI, is being increased 25 basis points to 5 per cent. Similarly, the reverse repo rate, or the rate at which surplus cash is parked with the central bank, was increased to 3.5 per cent, from 3.25 per cent earlier.

This was the second action since January 2010, when RBI announced a 75-basis point rise in the cash reserve ratio (CRR) to 5.75 per cent.

But, unlike CRR, which is used to manage liquidity in the system, an increase in the repo and reserve repo rates is aimed at signalling an increase in interest rates.

RBI joined central banks in Australia and Malaysia, which raised rates in March, while Norway and Israel did so at the end of 2009. The US Federal Reserve and the European Central Bank are among those waiting for evidence of a more concrete recovery before they unwind record low borrowing costs.

DEFENCE
Delhi High Court orders for Permanent Commission for Women Officers
On March 12, 2010, in a path-breaking judgement, the Delhi High Court has directed the Centre to offer within two months Permanent Commission (PC) to Short Service Commissioned (SSC) women officers of the Air Force and the Army at par with male SSC officers with all consequential benefits, including promotion.

At present, the Indian Army offers permanent commission to women after 10 years of SSC. This is applicable to those who were recruited after March 2009 and that too only in two streams — the Judge Adjutant General (JAG) branch and the Education corps. Women are also recruited in Signals, Engineers, Ordnance and Air Defence but are not eligible for PC.

In the IAF, women are offered a permanent option in the Legal, Accounts and Education corps. Women chopper and transport pilots, engineering corps, Logistics and Meteorological streams are not eligible for permanent commission. At present, there are about 1,050 and 827 women officers in the Army and the IAF, respectively. Separately, the Navy has 280 women.

The benefit would be extended to women officers recruited prior to change of policy (March 2009) and the PC shall be offered to them after completion of five years. However, these benefits would be available only to women officers in service or who approached the HC but retired when the case was pending in the court, the Bench clarified.

The court made significant remark on having women in combat roles saying “the claim of absorption in areas of operation not open for recruitment of women officers cannot be sustained being a policy decision.”

LAW POINT
Live-in not an offence: SC
The Supreme Court has opined that a man and woman living together without marriage cannot be construed as an offence. “Living together is not an offence. It cannot be an offence,” a three judge bench of Chief Justice K.G. Balakrishnan, Deepak Verma and B.S. Chauhan observed.

The court said even Lord Krishna and Radha lived together according to mythology. The apex court made the observation while reserving its judgement on a special leave petition filed by noted south Indian actress Khusboo seeking to quash 22 criminal cases filed against her after she allegedly endorsed pre-marital sex in interviews to various magazines in 2005.

The judges grilled the counsel for some of the complainants in the case and repeatedly stressed that the perceived immoral activities cannot be branded as offence.

The apex court further said the views expressed by Khusboo were personal. “How does it concern you. We are not bothered. At the most it is a personal view. How is it an offence? Under which provision of the law ?” the bench asked the counsel.

Khusboo had approached the apex court after the Madras High Court in 2008 dismissed her plea for quashing the criminal cases filed against her throughout Tamil Nadu.

Promotion fundamental right: SC
The Supreme Court has ruled that governments at the Centre and States should “act as model employers” and that all eligible employees virtually had a “fundamental right” to promotion as guaranteed under Article 16 of the Constitution.

A Bench comprising Justices R.V. Raveendran and Asok Kumar Ganguly made the clarification while directing the Centre and the Union Public Service Commission to grant promotion with retrospective effect to members of the Uttar Pradesh State Civil Service (SSC) who had been affected by a delay of more than two years in the cadre review following the creation of Uttaranchal (now Uttarakhand) in 2000.

The Centre and the UPSC contended that the statutory mandate of a cadre review exercise every five years “is qualified by the expression ordinarily” and as such it was not necessary to undertake it every five years. The Bench, however, did not buy this argument. “We hold that the statutory duty which is cast on the State government and the Central government to undertake the cadre review exercise every five years is ordinarily mandatory subject to exceptions which may be justified in the facts of a given case.

“Surely, lethargy, inaction, an absence of a sense of responsibility cannot fall within the category of just exceptions,” the apex court ruled, obviously indicting the UP government for not responding to the Centre’s reminders.

The court accepted the government’s arguments that Rule 4(2) did not have retrospective effect, but refused to interfere with the Delhi HC order which had, by using its special power under Article 142 of the Constitution, directed the Centre to “mitigate the hardship and denial of legitimate rights of the employees” in view of the “facts and circumstances of the case.”

LEGISLATION
Foreign Education Bill
After several years of debate, the Union Cabinet, on March 15, 2010, unanimously approved a Bill that would allow foreign education providers to set up campuses in India and offer degrees. A Bill to this effect was first introduced in the Rajya Sabha in August 1995. The new one is expected to be introduced in Parliament and be voted into law by the monsoon session of 2010.

This is a milestone which will enhance choices, increase competition and benchmark quality. A larger revolution than even in the telecom sector awaits us,” said Kapil Sibal, Union Minister for Human Resource Development (MHRD).

The Foreign Educational Institutions (Regulation of Entry and Operations, Maintenance of Quality and Prevention of Commercialisation) Bill will allow foreign universities to invest at least 51 per cent of the total capital expenditure needed to establish the institute in India. Such institutes will be granted deemed university status under Section 3 of the Universities Grants Commission (UGC) Act, 1956.

The Bill aims to regulate the entry, operation and maintenance of quality assurance and prevention of commercialisation by foreign educational institutions, besides protecting the interest of the student community from sub-standard and ‘fly by night’ operators.

The Bill is aimed at not only bringing in investment in the education sector, but also draw in foreign students, besides helping check the flight of Indians to study (then work and settle) abroad.

PLANNING & ECONOMY

India’s food security goals in danger
An alarming new report by the World Bank has shown that an increasing number of aquifers in India are reaching unsustainable levels of exploitation, endangering long-term food security goals. If current trends continue, in 20 years about 60 per cent of all aquifers in the country will be in a critical condition, putting at risk over a quarter of the harvest, concludes the report “Deep Wells and Prudence: Towards Pragmatic Action for Addressing Groundwater Overexploitation in India”.

The report rings alarm bells for policy makers, warning them against status quo. A rainfall deficit in 1963-66 had decreased India’s food production by 20 per cent, but a similar drought in 1987-88 had very small impact on food production due to widespread prevalence of groundwater, which is now declining.

India is the largest groundwater user in the world, exploiting 230 cubic kilometres of groundwater every year—over a quarter of the global total. Today, groundwater supports 60 per cent of irrigated agriculture and more than 80 per cent of rural and urban water supplies.

Even though there is a major dependence of many sectors on groundwater and it is being overexploited, there is little investment in its management. This inaction has arisen mainly because the solutions often proposed for groundwater management are very controversial, including “command-and-control” regulation of wells and curbing the supply of free or cheap power for groundwater irrigation.

FOREIGN RELATIONS

India to sign extradition treaties with Iran, Sri Lanka, Brazil, France & Israel
After signing extradition treaties with Saudi Arabia and South Korea, India has finalised draft agreements with five more nations—Iran, Sri Lanka, Brazil, France and Israel. The government is now working out the dates on which the treaties can formally be signed.

The treaty with Saudi Arabia was signed in February, during Prime Minister Manmohan Singh’s visit to Riyadh. Another such treaty was signed with South Korea when its President, Lee Myung-Bak, visited New Delhi in January 2010.

With bilateral cooperation in security and counter-terrorism measures assuming significance, India has stepped up efforts to formalise agreements with other nations so suspects can be brought back to the country to be tried under Indian laws. Indian government is giving extradition treaties the utmost importance as intelligence inputs suggest that some nations could be used as safe heavens by terrorists and the underworld.

India has extradition treaties with several countries, including Nepal, Belgium, Netherlands, Canada, UK, Switzerland, Bhutan, USA, UAE and the Russian Federation.

Loan agreement with Japan
India has signed an agreement for Rs 10,500 crore (Yen 215.611 billion) Official Development Assistance (ODA) from Japan. This includes Rs 1,648.36 crore for the second phase of Delhi mass rapid transport system project (DMRTS), Rs 4,422.83 crore for the dedicated rail freight corridor and Rs 2,933 crore for Chennai metro.

Six projects will be covered under the loan, including Sikkim Biodiversity Conservation and Forest Management Project, Kolkata East-West Metro Project (II) and Rengali Irrigation Project (III). With this, the cumulative commitment of ODA from Japan has reached Rs 15,5840 crore.

Visit of Prime Minister Putin of Russia
Russian Prime Minister Vladmir Putin’s one-day visit New Delhi on March 13, 2010, has gone some distance in adding a strong economic dimension to ties between the two nations. The visit helped in building a roadmap to strengthen economic ties, including in the pharmaceutical sector, getting Russian investments in infrastructure projects and accessing Russian markets for Indian services.

Demonstrating the solidity of their strategic relationship to the world, India and Russia sealed multi-billion dollars deals in key areas like defence, nuclear energy, diamond, petroleum and aviation as Russian Prime Minister Vladimir Putin reaffirmed Moscow’s support to Delhi in its fight against terrorism.

The visit is noted for the success in taking this vital strategic partnership forward, giving the much needed economic impetus. A host of steps aimed at scaling up the current $7.5 billion bilateral trade to $20 billion by 2015 were set in motion.

Besides agreement on nuclear reactors, an MoU for cooperation in Russia’s satellite navigation system was also agreed upon during the visit.

Russia announced its readiness to build 16 nuclear reactors for power stations in India. An important agreement was the umbrella pact between the National Power Corporation of India Limited (NPCIL) and the Atom Stroy for Kudankulam III and Kudankulam IV nuclear reactors as part of the nuclear cooperation accord between the two sides. The agreement on peaceful uses of nuclear energy is expected to open more avenues of nuclear cooperation between the two countries. The two sides also signed a pact on serial construction of Russian designed nuclear reactors.

The most significant accords between the two sides were on the Admiral Gorshkov aircraft carrier that was approved by the Union Cabinet for the purchase of the vessel at $ 2.33 billion and the supply of 29 MIG 29K—the sea variant of the fighter used by the IAF—valued at $ 1.5 billion.

India-USA agree on N-reprocessing
India and the United States have reached a deal on reprocessing American-origin spent nuclear fuel to be supplied to India under the landmark civil nuclear agreement signed in September 2008.

The talks were wrapped up well before the August deadline. The US statement noted that these arrangements will enable Indian reprocessing of US-obligated nuclear material under IAEA safeguards. Completion of these arrangements will facilitate participation by US firms in India’s rapidly expanding civil nuclear energy sector.

The reprocessing arrangements were negotiated pursuant to Article 6 (iii) of the US-India civil nuclear cooperation agreement, also called the 123 Agreement. Under the 123 Agreement, India will construct new facilities dedicated for reprocessing the safeguarded nuclear material under IAEA safeguards.

The advanced consent agreement is only the third of its kind ever undertaken by the US. The US has such agreements with the European consortium EURATOM and Japan. China, Brazil, Indonesia, South Korea, which have 123 Agreements with the US, do not have such agreements.

RESERVATIONS
SC okays quota for Andhra Muslims
On March 25, 2010, the Supreme Court okayed religion-based reservation in government jobs and educational institutes in Andhra Pradesh but referred the matter to a constitution bench to decide on its constitutional validity.

In an interim order, a bench headed by Chief Justice K.G. Balakrishnan extended the benefit of four per cent reservation in jobs and education to 14 other backward classes of Muslims in the State. In the process, it stayed the February order of the State High Court that had quashed the Andhra Pradesh Reservation for Socially and Educationally Backward Classes of Muslims Act, 2007.

But the apex court refused to grant quota benefit to a 15th category of Muslims mentioned in the Act as the social groups were not specified. It also made it clear this was a temporary measure. The constitution bench is expected to take up the case in August 2010.

According to Andhra government, the reason for giving four per cent quota to backward Muslims was because they constitute 5-6 per cent of the State's population. The creamy layer—those who earn over Rs 4 lakh annually, children of class-I officers working with the State/Central governments and those who hold constitutional posts—are not entitled.

All parties barring the BJP welcomed the decision.

Rajya Sabha passes historic Women’s Reservation Bill
Fourteen years after it was envisaged, the Rajya Sabha, on March 10, 2010, passed the landmark Women’s Reservation Bill that will pave the way for reserving 33 per cent seats for women in Parliament and State Assemblies. But prior to that, the legislation has to be seen through in the Lok Sabha.

Of the 186 members present in the Rajya Sabha, 185 voted in favour of the Bill. Barring the parties from the Hindi-belt—Samajwadi Party, Rashtriya Janata Dal and BSP—all other parties that included the constituents of Congress-led UPA and BJP-led NDA supported the Bill that was to carry out the 108th amendment to the Constitution for enabling reservation.

The Congress-led UPA, the BJP-led NDA and also the Left parties were on the same side as the Parliament authored the “historic move”, which could upstage several well ensconced politicians but ensure proper representation of women, which languishes at 11 per cent in Lok Sabha.

SP and RJD MPs walked out even before the discussion began. BSP’s leader in Upper House Satish Chandra Misra walked out after expressing his party’s point of view: “We support the cause of reservation, however, oppose the Bill in its present form.”

The proposed legislation to reserve 33.3 percent seats in Parliament and State Legislatures for women was drafted first by the H D Deve Gowda-led United Front government. The Bill was introduced in the Lok Sabha on September 12, 1996. Though it has been introduced in Parliament several times since then, the Bill could not be passed because of lack of political consensus.

Main points of the legislation


  • Seeks to reserve one-third of seats for women in Lok Sabha and State Assemblies.
  • Allocation of reserved seats shall be determined by the authority prescribed by the Parliament.
  • One-third of the total seats reserved for SCs and STs shall be reserved for women from these groups in LS and Assemblies.
  • Reserved seats may be allotted by rotation to different constituencies in the State or Union Territory.
  • Reservation of seats for women shall cease to exist 15 years after the commencement of the Act.
TERRORISM; LAW & ORDER
Union Cabinet okays tougher laws to deal with hijackers
With terror threats in the aviation sector looming large, the Union government has decided to make the Anti-Hijacking Act of 1982 tougher by including death sentence as a punishment for hijacking a plane with intention of creating a terror strike.

A cabinet meeting headed by Prime Minister Manmohan Singh approved the amendments to be incorporated in the existing Act, which at present only provides for life imprisonment and fine.

The anti-hijack policy that was revised and approved by the Cabinet Committee for Security in 2005 could not be made a law primarily due to lack of consensus on the punishment for the hijacker, having intent of creating terror strike and caught alive.

The policy also has provision for immobilisation of the plane and disallowing it to take off, if the hijack occurs on the Indian soil. Notably, during the Kandahar hijack in December 1999, in which passengers and crew members were exchanged for four dreaded terrorists, security forces had failed to immobilise the plane when it had landed at the Amritsar airport. The CCS, in August 2005, had cleared the proposal to shoot down a commercial plane if it was hijacked. It also strictly ruled out any negotiations with hijackers on meeting any of their demands.

According to the policy, if a rogue aircraft paid no heed to ATC warnings and deviated from its specified path or headed towards any strategic spot, a decision on shooting it down would come into play. In case of an emergency situation, the shoot down orders could be given by the Prime Minister, the Defence Minister or the Home Minister, whoever could be contacted first.

CURRENT INTERNATIONAL AFFAIRS

USA
Law on healthcare passed
On March 23, 2010, US President Barack Obama signed into law the landmark Health Care Bill that introduces sweeping reforms in the USA’s healthcare system, capping a historic legislative victory that had eluded several of his predecessors. It will take four years to implement fully many of the reforms.

Obama said that henceforth insurance companies will no longer be able to drop people's coverage, when they get sick or they won't be able to place lifetime limits or restrictive annual limits on the amount of care they can receive.

The President said once this reform is implemented, health insurance exchanges will be created, a competitive marketplace, where uninsured people and small businesses will finally be able to purchase affordable quality insurance.

Obama said this legislation will also lower costs for families and for businesses and for the federal government, reducing deficit by over $1 trillion in the next two decades.

WORLD ECONOMY
IMF paints grim picture of fiscal tightening needs
Developed countries with big budget deficits must start now to prepare public opinion for the belt-tightening that will be needed starting 2011, says John Lipsky, the International Monetary Fund’s first deputy managing director. He added that the scale of the adjustment required was so vast that it would have to come through less-generous health and pension benefits, spending cuts and increased tax revenues.

Policy-makers should already be making it clear to their citizens why a return to prudent policies is a necessary condition for sustained economic health, Lipsky said.

The IMF estimates that, by raising real interest rates, maintaining public debt at its post-crisis levels could reduce potential growth in advanced economies by as much as half a percentage point annually.

Second, fiscal institutions must be strengthened to withstand adjustment fatigue. Options include reinforcing fiscal responsibility legislation and improving tax collection.

Third, entitlement reforms such as increases in the retirement age would have favourable long-term fiscal effects but do little near-term damage to aggregate demand.

RBI to buy IMF notes worth $10 bn
The Reserve Bank of India (RBI) has signed an agreement with the International Monetary Fund (IMF) to purchase notes worth up to $10 billion to improve the ability of the international lender to provide timely and effective balance-of-payment assistance to member countries. IMF will issue the notes in the special drawing rights (SDR)-denominated form. The pact is a temporary bilateral arrangement for one year, which might be extended to two years.

The pact is part of the international effort to support IMF’s lending capacity following the decision of the Group of 20 nations at its London Summit (held in April 2009) to treble IMF’s resources to $750 billion.

Generally, IMF will give a five-day notice to RBI about its intention to issues notes, including the amount. It will restrict issuance to a principal amount not exceeding SDR 500 million in any calendar week.

At the beginning of each quarter, IMF will also provide estimates for the amount for which notes will be issued during a three-month period.

Permanent increases in IMF’s resources are expected to take place through an increase in quotas and standing borrowing arrangements currently under negotiation.

ENVIRONMENT
India and China Okay Copenhagen Pact
On March 9, 2010, India and China formally backed the Climate Change Accord hammered out in Copenhagen in 2009, calling for voluntary cut in greenhouse gas emissions. Both the countries submitted official letters to the UN Climate Change Secretariat saying that they agreed to being listed in the preamble of the Accord, subject to certain conditions.

India made it clear, however, that the accord is a political document and not a legally binding one.

INTERNATIONAL RELATIONS
Google leaves China
Late on March 23, 2010 night, the Internet giant Google shut its Chinese website and shifted its search engine services to uncensored Hong Kong after two months of confrontation with Beijing over censorship and alleged hacking attacks. But those re-routed to Hong Kong still couldn’t access sensitive websites as these were blocked by Chinese filters.

Google’s bold censure of the business environment in the world’s number three economy—and the biggest online market of 384 million netizens— had left the fate of its future China operations in doubt.

Soon after Google’s announcement, Beijing lashed out by calling the action “totally wrong” and saying it “violated the written promise” it made four years ago, when it arrived, promising to self-censor online services as required by Chinese law.

Chinese Foreign Ministry spokesman Qin Gang said the exit would not affect Sino-US relations unless someone politicised the issue.

China believes its citizens need strict censorship. It blocked YouTube after the Tibet riots in March 2008, fearing the spread of mass unrest through the Internet. Facebook and Twitter were blocked after the Xinjiang riots in July 2009.

US President Obama’s visit to Afghanistan
On March 28, 2010 US President Barak Obama sneaked into Afghanistan under the cover of darkness, to avoid being targeted by militants. This was his first visit to the country since taking office. For security reasons, the trip was cloaked in secrecy.

Obama met Afghan President Karzai in the palace’s outdoor grounds and stood under a pavilion for a brief welcoming ceremony. The President spent roughly six hours in the country.
During their meeting the Afghan leader was invited to the White House on May 12, 2010. Mr Obama also tackled Mr Karzai on his failure to make any meaningful reforms since he narrowly won a second term in fraud-ridden polls in 2009.

Mr Karzai made grandiose promises in his inauguration speech but so far he has failed to deliver. At the time, US officials said he had six months to reform or risk losing American support.

Mr Obama also addressed 2,500 US troops at Bagram air force base, nine miles from Kabul. He praised them for their courage, sacrifice and focus, and warned of tough days ahead.

US, Russia seal N-arms cut deal
US President Barack Obama and Russian President Dmitry Medvedev sealed a landmark arms-control treaty on March 28, 2010 to slash their countries’ nuclear arsenals by a third.

After months of deadlock and delay, a breakthrough deal on a replacement for the Cold War-era START pact marked Obama’s most significant foreign policy achievement since taking office and also bolsters his effort to “reset” ties with Moscow.

Russia made clear, however, that it reserved the right to suspend any strategic arms cuts if it felt threatened by future US deployment of a proposed Europe-based missile defence system that Moscow bitterly opposes.

The agreement replaces a 1991 pact that expired in December 2009. Each side would have seven years after the treaty takes effect to reduce stockpiles of their most dangerous weapons—those already deployed—to 1,550, from the 2,200 now allowed, and also cut their numbers of launchers to half.

INTERNATIONAL TERRORISM
Chechen insurgency re-surfaces in Russia
During the six years since the last suicide bomb attack on the Moscow subway, Muscovites came to think of themselves as insulated from the guerrilla warfare. Terror, however, returned to the heart of Russia on March 30, 2010, with two deadly suicide bombings on the Moscow subway at rush hour, including an attack at the station beneath the headquarters of the secret police. At least 40 people were killed and more than 60 wounded in the blasts.

Russian police had killed several Islamic militant leaders in the North Caucasus recently, which raised fears of retaliatory strikes and escalating bloodshed by the militants. The bombings showed that the beleaguered rebels are still strong enough to inflict harm on an increasingly assertive Russia, and they followed a warning in February 2010 from Chechen rebel leader Doku Umarov that “the war is coming to their cities.”

Prime Minister Vladimir Putin, who built much of his political capital by directing a fierce war against Chechen separatists a decade ago, promised to track down and kill the organizers of what he called a “disgusting” crime.

Headley pleads guilty to all 12 charges
In a volte-face, Pakistani-American LeT operative David Coleman Headley, accused of plotting the 26/11 Mumbai terror attacks and conspiring to target a Danish newspaper, has pleaded guilty before a US court. Charged on 12 counts, he admitted guilty in all of them.

Headley (49), who was arrested by FBI's joint terrorism task force on October 3, 2009, told US District Judge Harry Leinenweber that he wanted to change his plea to guilty, in an apparent bid to get a lighter sentence than the maximum death penalty.

Headley, son of a Pakistani diplomat and a Philadelphia socialite, admitted to using his friend Tahawwur Rana's immigration company as a cover for surveillance activities in India and Denmark on behalf of Pakistan-based terrorist groups, including LeT.

Headley admitted guilty in all six counts of conspiracy involving bombing public places in India, murdering and maiming persons in India and providing material support to foreign terrorist plots and LeT; and six counts of aiding and abetting the murder of US citizens in India.


In an indication of sustained economic growth, the per capita income in Delhi has increased to Rs 78,690 in the financial year 2007-08 as against the national figure of Rs 33,283. Delhi's per capita income is the third highest in the country with Chandigarh having per capita income of Rs 110,676 topping the list and closely followed by Goa at Rs 105,582.

India has signed an agreement for Rs 10,500 crore Official Development Assistance from Japan. This includes Rs 1,648 crore for the second phase of Delhi Metro project.

World Water Day is observed on March 22 every year to focus attention on the importance of fresh-water and advocating for the sustainable management of fresh-water resources.

Asian Forum of Parliamentarians on Population and Development (AFPPD) hosted a conference in Manila, Philippines, in March 2010, on indigenous peoples, climate change and rural poverty.

From April 1, 2010 consumers in 13 cities of India, including Delhi and Mumbai, shifted to use of environment friendly Euro-IV complaint petrol and diesel.

According to the Liveability Index 2010, prepared jointly by the CII and the Institute for Competitiveness, Delhi is the best city to live in, followed by Mumbai. A liveable city, according to the report, is not just an urbanised area in an urbanised region defined by the presence of a municipality. Liveability refers to an urban system that contributes to the physical, social and mental well being and personal developments of all its inhabitants.

The ceiling for payment of gratuity to private sector employees has been raised from Rs 3.5 lakh to Rs 10 lakh.

The Union Cabinet has approved the proposal to declare Andaman and Nicobar set of Ports as a major port and establish the Andaman and Nicobar Port Trust with its HQ at Port Blair.

The UAE has become the world’s fourth biggest weapons importer. China, India and South Korea are the top three arms importers, in that order.

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CURRENT NATIONAL AFFAIRS

AGRICULTURE
Scientists slam study behind Bt Brinjal ban
A vital study cited by Environment Minister Jairam Ramesh to justify his decision to disallow the commercial cultivation of Bt brinjal in India is flawed, claim top European scientists. Mr Ramesh had referred to the findings of France-based Caen University professor Gilles-Eric Séralini and his team, which had branded Bt brinjal—India’s first genetically modified (GM) food crop—“unsafe”.

Experts claim that Séralini was unduly influenced by the renowned international NGO Greenpeace—with its aggressive green agenda—which sponsored the study, and never carried out a peer-reviewed laboratory study on GM crops he called hazardous, including Bt maize and Bt brinjal, its gene or seeds.

The European Food Safety Association, a risk assessment body, has trashed Séralini’s findings on Monsanto’s MON 863, a variety of Bt maize.

On February 9, 2010, the Union government decided to freeze the introduction of Bt Brinjal in India till independent scientific studies established health and environment safety of the product to the satisfaction of both public and experts.

Bt Brinjal is a genetically modified vegetable that is infused with Cry1Ac gene from a bacterium, bacillus thuringiensis, to make the plant resistant to fruit and shoot borers and certain pests.

The Environment Ministry has appointed a Genetic Engineering Approval Committee (GEAC) to regulate research, testing and commercial release of genetically modified crops, foods and organisms. The GEAC had cleared Bt Brinjal for commercial release in October 2009. According to GEAC Bt Brinjal would reduce farmers’ dependence on pesticides and enable higher yields.

EDUCATIONUniform Math and Science content for Class 11 and 12
From the 2011 academic session, students of Classes XI and XII across the country will study a uniform science and math curriculum. Currently, course content of these critical subjects varies with the State school board an institution is affiliated to.

The idea is to have for every student a level playing field for entry to professional colleges. The government has also received the approval of all school boards—including State boards—to work towards a single, national-level entrance exam for all engineering and medical courses in India from 2013. Gradually, such an exam would be extended for entry to colleges of other disciplines, such as law.

One test would mean the end of plenty like IIT-JEE, AIEEE and State exams for engineering colleges and various State-level PMTs, beside national level PMT, which the CBSE conducts. This, the Human Resource Development (HRD) Ministry believes, would lessen the burden on students, who have to prepare for different exams, which bring their own levels of stress.

ENVIRONMENTIndia to launch mission to cut emissions
India will spare no efforts to contribute to the success of post-Copenhagen process, Prime Minister Manmohan Singh declared on February 6, 2010, as he announced the launch of a National Mission on Enhanced Energy Efficiency, aimed at cutting carbon emissions by 99 million tonnes. Within the ambit of our National Action Plan on Climate Change, India has already unveiled one of the world's most ambitious plans for promoting solar energy, targeting an installed capacity of 20,000 MW by the year 2022. The initiative is expected to lead to avoidance of capacity addition of nearly 20,000 MW and reduce carbon dioxide emissions of almost 99 million tonnes.

LAW POINTCourts do not need nod for CBI probe: SC
On February 17, 2010, the Supreme Court upheld the constitutional validity of courts’ powers to order CBI probe without the consent of State governments but with a rider: the powers should be used cautiously and sparingly. The five-judge Constitution Bench, headed by Chief Justice K.G. Balakrishnan, said that such powers have to be used sparingly in exceptional and extraordinary circumstances in cases having national and international ramifications. Otherwise, the CBI will be flooded with such directions in routine cases. Such powers are vested with the apex court and High courts to ensure protection of fundamental rights of citizens under Article 21 of the Constitution, it said.

LEGISLATIONJudicial Standards and Accountability Bill
The proposed Judicial Standards and Accountability Bill, which will replace the four decade-old Judges Inquiry Act, has laid down 14 guidelines for judges. These guidelines will be called judicial standards.

Major highlights of the Bill are:


  • No judge shall give an interview to the media in relation to any of his judgement delivered, or order made, or direction issued, by him in any case adjudicated by him.
  • No judge shall enter into a public debate or express his views in public on political matters, except views expressed by a judge in his individual capacity on issues of public interest, other than as a judge during a private discussion or at an academic forum.
  • The Bill bars the judges from allowing any member of his family, who is a practising lawyer, from using the residence in which the judge actually resides or use of any other facilities provided to the judge, for professional work of any family member.
  • The proposed law expects judges not to delay delivering a judgement beyond three months after conclusion of arguments and have bias in judicial work or judgements on the basis of religion, race, caste, sex or place of birth.
  • Any wilful breach of judicial standards could be treated as misbehaviour and lead to a disciplinary panel initiating proceedings against the erring judge.
  • A complaint alleging misbehaviour or corruption would be referred to a scrutiny panel comprising three judges. If the panel finds merit in any complaint, it would be forwarded to an Oversight Committee, which after investigating the matter can refer it to the President for initiating action against the judge.
N-liabilities Bill
In an important step towards the implementation of the Indo-US civilian nuclear deal, the Union government is to introduce a Bill to facilitate the entry of American companies in the nuclear sector. The Civil Liability for Nuclear Damage Bill, 2009 is commonly known as the nuclear liability Bill.

The Bill aims at limiting the liability of a nuclear plant operator to Rs 300 crore in the eventuality of an accident and provides for appointing a claims commissioner with powers of a civil court to arbitrate such cases. It also provides for the penalty to be paid by the operator and not the supplier companies, which would mainly be American in this case. 

The operator would not be liable for any nuclear damages if the incident is caused by “grave national disaster of exceptional character”, armed conflict or an act of terrorism and is suffered by the person on account of his own negligence.

The Bill also provides for the establishment of the Nuclear Damage Claims Commission, which will have one or more claims commissioners for a specified area. The claims commissioner shall have all the powers of a civil court for the purpose of taking evidence on oath, enforcing attendance of witnesses, compelling the discovery and production of documents and other material objects.

Environment activists have described the attempt to cap the level of compensation for victims of a nuclear accident as a violation of fundamental rights. Currently, the Atomic Energy Act, 1962, allows the government-owned Nuclear Power Corporation of India to operate nuclear power plants in the country.

PLANNING & ECONOMYUnion Budget, 2010
On February 26, 2010, Finance Minister Pranab Mukherjee presented a Budget that broadly focused on fiscal stabilization. The Union Budget was presented at a time when the Indian economy was on the path of revival and almost all demand indicators had turned significantly positive. Investment and consumption demand was also on a revival mode. The buoyancy in the manufacturing sector and up-tick in import and export were also working well for economic growth prospects. In the current economic scenario, what was required from the Budget was a further push for consumption and investment. The Budget announcements tried to do just that.

Highlights:


  • Additional Rs 1,65,000 cr for bank re-capitalisation
  • Rs 3000 cr for agricultural impetus
  • Farm loan payments to be extended for six months
  • Fertilizer subsidy to be reduced
  • Rs 100 cr woman farmer fund scheme
  • Coal regulatory authority to be set up
  • Clean energy fund to be established
  • Interest subvention of 2% to be extended for handicrafts and SMEs
  • Rs 200 cr for Tamil Nadu textile sector
  • Interest subvention for housing loans up to 1 lacs
  • Allocation to defence raised to Rs 1.47 lakh cr
  • Defence capex raised to Rs 60,000 cr
  • Divestment target of Rs 25,000 cr
  • Rs 1200 cr assistance for drought in Bundelkhand
  • Rs 48000 cr for Bharat Nirman
  • NREGA scheme allocation raised to Rs 41,000 cr
  • Allocation to health Rs 22,300 cr
  • Allocation for school education up from Rs 26,800 cr to Rs 31036 cr
  • Allocation to power sector at Rs 5130 cr
  • Rs 10,000 cr allocated for Indira Awaas Yojna
  • Social Security Fund to have corpus of over Rs 1000 cr
  • Rs 2400 cr for MSMEs
  • Government to contribute Rs 1000 per month for pension security
  • Rs 5400 cr allocated for urban development
  • Rs 66100 cr allocated for rural development
  • Rs 1900 cr allocated for UID project
  • Gross tax receipts Rs 7.46 lakh cr
  • Government to set up National Mission for delivery of justice
  • 15% rise in planned expenditure
  • Fiscal deficit target of 5.5% in FY11
  • Excise on all non smoking tobacco raised
  • Televisions to be costlier
  • Mobile phones to become cheaper
  • Cement to be costlier
  • Refrigerators to be costlier
  • Jewellery to be more expensive
  • Monorail granted project import status
  • CDs to be cheaper
  • Excise duty on CFL halved to 4%
  • Bank farm loan target: Rs 3.75,lakh crore
  • Nutrient based fertiliser subsidy scheme to come into force from April 1, 2010
  • To build 20 km of highway every day
  • Income tax on income upto Rs 1.6 lakh: Nil
  • Income tax on income above Rs 1.6 lakh and upto Rs. 5 lakh: 10 per cent
  • Income tax on income above Rs.5 lakh and upto Rs. 8 lakh: 20 per cent
  • Income tax on income above Rs. 8 lakh: 30 per cent
Economic Survey 2010

  • Economy likely to grow by up to 8.75 per cent in 2010-11.
  • Full recovery; return to 9 per cent growth in 2011-12.
  • Broad recovery gives scope for gradual stimulus roll back.
  • High double-digit food inflation in 2009-10 major concern.
  • Signs of food inflation spreading to other sectors.
  • Farm & allied sector production falls 0.2% in 2009-10.
  • Need serious policy initiatives for 4% agriculture growth.
  • Moots direct food subsidy via food coupons to households.
  • Favours making available food in open market.
  • Favours monthly ration coupons usable anywhere for poor.
  • Gross fiscal deficit pegged at 6.5 pc of GDP in 2009-10.
  • India 10th largest gold holding nation at 557.7 tonnes.
  • Exports in April-December 2009 down 20.3 per cent.
  • Imports in April-December 2009 down 23.6 per cent.
  • Trade gap narrowed to USD 76.24 bn in April-December.
  • 32.5% savings & 34.9% investment (of GDP in 2008-09) put India in league of world's fastest growing nations.
  • Government initiates steps to boost private investment in agriculture.
  • Wants credit available at reasonable rates on time for private sector to invest in agriculture.
  • Slowdown in infrastructure that began in 2007, arrested.
  • Domestic oil production to rise 11 per cent in 2009-10.
  • Gas output up 52.8 per cent to 50.2 billion cubic meters with RIL starting production.
  • India world's 2nd largest wireless network with 525.1 million mobile users.
  • Virtually every second Indian has access to phone.
  • Auction for 3G spectrum to provide existing and foreign players to bring in new technology and innovations.
Railways Budget, 2010
Union Railways Minister Mamata Banerjee presented the Railways Budget, 2010, on February 24. No change in passenger fares was announced—Planning Commission was pitching for a hike—and the freight rates on select, but significant items such as kerosene and food grains, were cut to keep prices down.

54 new trains, including 10 Durantos, were announced. The Minister also promised to construct over 1,000 km of new rail lines over next one year.

The operating ratio, proportion of expenses to earnings, which was a healthy 75 per cent in 2007-08, was up to 94.7 per cent in 2009-10. The Railways hope to bring it down to 92.3 per cent in 2010-11. Though the budget proposes to raise net surplus from Rs 951.03 crore in 2009-10 to Rs 3,173 crore in 2010-11, these figures were called “peanuts” by experts when compared to the figures of some years ago.

Only Rs 373.09 crore was provided for new projects. Many projects come with riders: they’re either proposed in the public-private partnership (PPP) mode or are “subject to sanction by the Finance Ministry and Planning Commission”.

Highlights:


  • No increase in passenger fares.
  • Rs.100 reduction in freight per wagon for fertilisers and kerosene.
  • Free travel for cancer patients in 3rd AC classes.
  • Cost-sharing in public-private-partnership (PPP) mode in some gauge-conversion projects.
  • Further extension of Kolkata Metro on priority basis; stations to be named after Bahadur Shah Zafar, Tagore family.
  • Karmabhoomi trains to be introduced for migrant labour.
  • New Janmabhoomi train between Ahmedabad and Udhampur.
  • Special 'Bharat Teertha' train to be run around India to commemorate Rabindranath Tagore's 150th birth anniversary. A special train to be run from West Bengal to Bangladesh to commemorate the anniversary.
  • Railway line to be extended from Bilaspur in Himachal Pradesh to Leh in Jammu and Kashmir.
  • Andaman and Nicobar Islands to get railway line from Port Blair to Diglipur.
  • Sikkim capital Gangtok to be connected by rail from Rangpo.
  • Impact of Sixth Pay Commission recommendations placed at Rs.55,000 crore.
  • Gross earnings in 2009-10 estimated at Rs.88,281 crore.
  • Working expenditure in 2009-10 estimated at Rs.83,440 crore.
  • Expenses during 2010-11 estimated at Rs.87,100 crore.
  • Thrust on expansion in 2010-11 with allocation of Rs.4,411 crore.
  • Net profit of Rs.1,328 crore in 2009-10.
  • Ten automobile ancillary hubs to be created.
  • Policy decision to employ one member of family whose land is requisitioned for railway projects.
  • North-south, east-west dedicated freight corridors to be created.
  • Centre for railway research to be established with Indian Institutes of Technology and Defence Research and Development Organisation.
  • Design, development and testing centre for railway wheels at Bangalore.
  • Five sports academies to be set up; astroturf to be provided for development of hockey; employment opportunities for sports persons.
  • Railways to be lead partner for Commonwealth Games.
13th Finance Commission
The Union government has accepted most of the recommendations of the Thirteenth Finance Commission headed by former Finance Secretary Vijay Kelkar.

The Commission has told governments at the Centre and States to set their fiscal house in order, even as it raised the share of taxes that the States would be entitled to receive over the next five years by 1.5 percentage points.

In addition, the Commission, a Constitutional body that is appointed every five years to recommend a tax-sharing formula between the Centre and States, has suggested a roadmap for the introduction of a single-rate goods and services tax (GST), the key indirect tax reform to create a common market in India.

Its stringent new roadmap for fiscal responsibility suggests, among other things, that the overall debt of the Centre and States be capped at 68 per cent of gross domestic product (GDP) from the current 82 per cent, and 75 per cent recommended by the Twelfth Finance Commission.

The Finance Commission has recommended that the Centre reduce debt to 45 per cent of GDP by March 2015, against 54.2 per cent at present. For States the reduction in debt is recommended at 2 percentage points to 25 per cent. The relatively less stringent condition for States comes with the rider that the Fiscal Responsibility and Budget Management Act allows the Centre to borrow on behalf of the States to help them counter macro-economic shocks. During the financial crisis, the Centre had relaxed the cap on the fiscal deficit.

The Finance Commission has said the Centre should transfer 32 per cent of the taxes it collects to States, against 30.5 per cent at present. The overall ceiling— including transfers to local bodies—on transfers from the Centre’s gross revenue has been raised from 38 to 39.5 per cent.

Among proposals that provide a thrust to fiscal federalism, the commission has recommended that local bodies receive up to 2.5 per cent of the divisible tax pool. Of this, up to 1 per cent can be incentive-linked.

While there is more reason for the States to cheer since the commission proposes an increase in grants, much of it is tied to specific spending programmes such as those for elementary education and environment. There is, however, a performance incentive of Rs 1,500 crore for Assam, Sikkim and Uttarakhand and a grant of Rs 51,800 crore to meet the deficits of Jammu & Kashmir, Himachal Pradesh and the north-eastern States (excluding Assam).

Like its predecessor, the Thirteenth Finance Commission has recommended a debt relief scheme for the States. The first element is to cap the interest rate on a part of the loans from the National Small Savings Fund at 9 per cent from up to 10.5 per cent. This will translate into a benefit of Rs 28,360 crore to the States. In addition, there is a Rs 4,506 crore benefit with the government accepting the suggestion to write off central loans that are not administered by the finance ministry but were outstanding at the end of 2009-10.

Including the higher grants-in-aid, Madhya Pradesh, Uttar Pradesh and Maharashtra would be the biggest beneficiaries in terms of share of transfers. Himachal Pradesh, Uttarakhand and Jammu and Kashmir would be the top losers.

The Finance Commission has projected that tax receipts would see a compounded annual growth rate of over 17 per cent between March 2010 and March 2015, while nominal GDP growth is estimated at 13.2 per cent.

Prescribing a zero revenue deficit as the golden rule, the Commission has recommended that the endeavour for all States should be to reach that level by 2014-15.

Union Cabinet raises Urea prices
On February 18, 2010, the Union government decided to raise urea prices by 10 per cent. It also allowed the industry to fix retail prices of other subsidised fertilisers, while limiting the government’s subsidy burden under a new policy that will determine the subsidy on phosphorus and potash based on their nutrients.

The decision, to take effect from April 1, 2010, will help the government reduce its fertiliser subsidy bill, estimated at Rs 50,000 crore for 2009-10. But, the move will hit farmers, even as fertiliser companies will stand to gain. The latest decision does away with the practice of government fixing a maximum retail price and aims at replacing the current system of giving subsidy to the industry with direct assistance to farmers.

The switch to the nutrient-based fertiliser plan is significant as companies will now be able to change retail prices of only nutrient-based fertilisers (nitrogen, phosphorus, potash and sulphur), which will help the government cap the subsidy on these fertilisers. The move is also expected to attract fresh investment in the fertiliser industry.

The government’s annual subsidy bill on fertilisers in 2008-09 was estimated at Rs 75,849 crore, which was expected to be brought down to Rs 49,980 crore in 2009-10. The bulk of the increase in the fertiliser subsidy is on account of the sale of decontrolled fertiliser with concession to farmers. Urea accounts for about 30 per cent of the total fertiliser subsidy burden.

POLITICALJustice Srikrishna committee to look into formation of Telangana
The Union government has set-up a five-member committee headed by Justice B.N. Srikrishna to look into the modalities of forming the separate State of Telangana. The committee has been given time till December 31, 2010 to consult all sections of the society and submit report. The terms of reference of the committee are:


  • Examine the situation in Andhra Pradesh with reference to demand for separate Telangana State, as well as the demand for maintaining the present status of a united Andhra Pradesh.
  • Review developments in the State since its formation and their impact on the progress and development of different regions of the State.
  • Examine the impact of recent developments in the State on different sections of people such as women, children, students, minorities, OBCs, SC and STs.
  • Consult all sections of people, especially political parties and elicit their views on a range of solutions that would resolve the present difficult situation.
  • Identify the key issues that must be addressed.
  • Consult organisations of other civil societies such as industries, trade unions, farmer organisations, women students.
  • Make any other suggestion and recommendations that the committee may deem appropriate.
  • The protagonists of separate State, however, rejected the terms of reference of the Justice Srikrishna committee and vowed to intensify their agitation. The Telangana Rashtra Samithi (TRS), which has been spearheading the statehood agitation, struck a belligerent note and announced that its MPs, MLAs and MLCs would resign in protest.
  • Rejecting the terms of reference and the ten-month time frame given for the committee, the TRS chief said the Centre had once again cheated the people of Telangana by backtracking on its December 9, 2009 statement announcing initiation of the process for formation of separate State.
Taking serious objection to the inclusion of the demand for continuation of united Andhra Pradesh among the terms of reference, he said: “what is the point in looking into the demand for united Andhra Pradesh when it already exists now? There is only one popular movement going on in the State and that is for separate Telangana State.”

However, the leaders from coastal Andhra and Rayalaseema regions found comfort in the open-ended nature of the panel’s terms. “We welcome the terms of reference, which are fairly balanced. It will give an opportunity for a thorough assessment of the ground situation,” a ruling Congress MP from coastal Andhra region said.

FOREIGN RELATIONS
Asian group endorses seat to India in UN Council
India's candidacy for a non-permanent seat in the Security Council has been endorsed by all 53 member States of the Asian group in the UN General Assembly. Nineteen countries, including Nepal, Sri Lanka, Afghanistan and Bangladesh, spoke in favour of giving India a slot on the Security Council table from January 2011.

In January 2010, India's path to a non-permanent seat got cleared after its sole competitor from Asia, Kazakhstan, backed out of the race.

The Security Council is made up of 15 States—five permanent members who have the veto power and 15 non-permanent members elected for a two-year term. To win, India needs two-thirds of the General Assembly vote, which adds up to about 128 counties saying yes to India's presence in the Council.

Running after more than a decade, India orchestrated a year-long campaign led by India’s envoy to the UN Hardeep Singh Puri, who campaigned in New York and at multilateral events at the United Nations.

The last time India had a seat at the Council was in 1992. In 1996, Japan won with India trailing behind with approximately 40 votes.

Visit of Nepalese President
President of Nepal Ram Baran Yadav visited New Delhi from February 15, 2010. In an effort to make the visit a truly successful event, India offered a 250-million dollar soft loan through EXIM Bank and signed four major accords with the Himalayan nation.

India also offered to supply 50,000 tonne of wheat, 20,000 tonne of rice and 10,000 tonne of yellow peas to its neighbour. An additional 2,000 tonne of wheat would be provided to Nepal, if required.

The four accords signed by the two countries are: new air services agreement, MOU on development of railway infrastructure at five border points, MOU on development of India-Nepal friendship polytechnic at Hetavda in Makwanpur district of Nepal; and MOU on establishment of India-Nepal friendship convention centre at Birgunj in Nepal.

During the delegation-level talks, the Indian Prime Minister hoped that the peace process and drafting of the constitution would be completed in Nepal as per the schedule. Sixty-two-year-old India-educated Yadav expressed his gratitude to the Indian leadership for assisting his country in its economic development.

The Presidential visit came on the eve of a new constitution the Nepal government has pledged to promulgate in May 2010. Nepal's fragile peace process that began after a decade of insurgency is expected to be consolidated by the new statute. However, hiccups continue, with the Maoists now saying they will agree to the rehabilitation of their guerrilla army, the People's Liberation Army (PLA), only after the new statute came into effect.

Talks with Pakistan end without much headway
A breakthrough eluded India and Pakistan at the Foreign Secretary-level talks with New Delhi rejecting Islamabad’s plea for the resumption of the composite dialogue process (CDP) and handing over three fresh dossiers to the neighbouring country linking elements in Pakistan, including JuD chief Hafiz Saeed, with terrorist activities on the Indian soil.

At the first official dialogue between the two countries after a 14-month hiatus, on February 25, 2010, India focused on terrorism emanating from the Pakistani territory, while Pakistan raised the Kashmir, water and Baluchistan issues.

The three-hour talks, seen by diplomatic observers more as an exercise in scoring brownie points by the two sides, ended with Foreign Secretary Nirupama Rao and her Pakistani counterpart Salman Bashir announcing at separate press briefings that they would remain in touch and continue endeavours to restore trust in the relationship. However, it was quite clear from the statements of the two top diplomats that they would have to cover a lot of distance in putting the peace process between the two neighbours back on track.

Prime Minister Manmohan Singh’s visit to Saudi Arabia
On February 26, 2010, Prime Minister Manmohan Singh became the first Indian Prime Minister in 28 years to visit Saudi Arabia. During the visit, Saudi Arabia expressed concerns over extremism in Pakistan as New Delhi and Riyadh firmed up a strategic partnership.

Prime Minister Manmohan Singh unveiled a roadmap for comprehensive economic partnership as he addressed captains of industry from both the countries.

Foreign Minister Prince Saud al-Faisal, who had a discussion with Singh, later spoke of the “dangerous trend” of extremism in Pakistan and made it clear that Riyadh had nothing to do with the Taliban. Saudi Arabia and Pakistan were among the few countries that had recognised the Taliban regime in Afghanistan.

The Saudi minister said, “Pakistan is a friendly country. Therefore, any time one does see dangerous trends in a friendly country, one is not only sorry but worried. And it is indeed the duty of all political leaders in Pakistan to unite to see that extremism does not find a way to achieve its aim in the country and this can only happen with united political leadership in Pakistan. This, we hope, Pakistan will possibly achieve.”

India sees Saudi Arabia as a strategic partner for promoting peace, stability and economic development. Such a partnership will bring benefits not only to the two countries but to the region. After discussions between Mr Singh and King Abduallah, the two sides signed the Riyadh declaration.

The Delhi Declaration, signed during the historic visit of King Abdullah to India in 2006 as the chief guest on India's Republic Day, had charted out a new path of cooperation between India and Saudi Arabia across a range of fields including security, bilateral trade and investment, culture, science and technology. According to the new declaration, keeping in view the development of relations between the two countries, and the potential for their further growth, the two leaders decided to raise their cooperation to a strategic partnership covering security, economic, defence and political areas.

Visit of President of Turkey
The Turkish President, Abdullah Gul, visited India on February 9, 2010 and held wide-ranging talks with Prime Minister Manmohan Singh on all issues of mutual interest, including the international situation. Apart from the declaration on terrorism, the two countries issued a document on cooperation in the field of science and technology.

Days after keeping New Delhi out of the Istanbul conference on Afghanistan at the instance of Pakistan, Turkish President Abdullah Gul sought to placate India by strongly endorsing its position on the issue of terrorism.

Turkey is the first Organisation of Islamic Conference (OIC) member to support India’s call for early conclusion of a comprehensive convention on international terrorism, which finds a mention in the joint declaration on terrorism. Turkey’s position is being seen as a major departure from that of OIC, which is not willing to exclude armed forces from the purview of the convention.

On Afghanistan, the Turkish President praised the role being played by India in the reconstruction plan in the embattled nation.

India, UK ink N-pact
On February 11, 2010, India signed a civil-nuclear cooperation declaration with Britain, making it the eighth country to sign such a pact with New Delhi after India secured approval of the Nuclear Suppliers’ Group (NSG) to undertake nuclear commerce in September, 2008. It is a general umbrella agreement on civil-nuclear cooperation between the two countries.

India has already signed nuclear deals with France, the USA, Russia, Kazakhstan, Namibia, Mongolia and Argentina. A nuclear agreement between India and Canada has also been finalised. Germany and South Korea have also expressed their desire to cooperate with India in the field of civil-nuclear energy.

The pact is expected to provide legal framework to British companies to export components and products.

RESERVATIONSAndhra HC quashes quota for Muslims
In a major setback to the Andhra Pradesh government’s Muslim reservation policy, the High Court, on February 8, 2010, struck down a legislation providing four per cent quota for the minority community in jobs and educational institutions.

A seven-member constitutional bench headed by Chief Justice A.R. Dave found fault with the way the survey was conducted by the Backward Classes Commission, whose recommendations had formed the basis for quota policy.

The State Assembly had passed the legislation in July 2007 providing four per cent reservation for socially and educationally backward Muslims by including them among backward classes. The quota was made applicable to 15 Muslim groups identified by the Andhra Pradesh Backward Classes Commission as socially and educationally backward. These were categorised as BC-E Group for the purpose of providing reservation.

Acting on a bunch of writ petitions filed by several individuals and organisations challenging the legislation, the court—in a majority verdict—termed the commission’s survey as “irrational and unscientific” and held the legislation as “unsustainable”.

TERRORISM; LAW & ORDERMaharashtra, West Bengal ‘poor performers’ in fight against naxalites
Maharashtra and West Bengal, which have been hit by terrorist and Maoist violence, are among the seven States that have fared poorly in modernising their police force. According to official documents, put together by the Home Ministry, Maharashtra and West Bengal have been labelled as “poor performing States” as they failed to use the funds sanctioned to them by the Centre for upgrading their police force and intelligence apparatus.

The Centre earmarked Rs 1,230 crore for 2009-10 for the scheme for modernisation of the State police forces (MPF), which is meant primarily to equip State governments to deal with emerging challenges to internal security like terrorism and naxal violence.

The poor performing States have outdated and obsolete weapons and even the extremist-prone police stations are often not supplied with modern weapons, and even when it is supplied police personnel are not trained to use them. Their police communication network does not function efficiently, they do not have enough vehicles and their forensic laboratories lack proper infrastructure.

CURRENT INTERNATIONAL AFFAIRS

DISASTER
Chile hit by 8.8 magnitude earthquake
On February 27, 2010, more than two million people were affected in some way and more than 300 people were killed as an 8.8-magnitude earthquake hit coastal Chile. Santiago, capital of Chile, is 200 325 km northeast of the epicentre.

The quake was 700 to 800 times stronger, but at a greater depth—35 km—compared to the shallow 14 km depth of the Haiti quake, which contributed towards much of the damage there.

Coastal Chile has a history of deadly earthquakes, with 13 quakes of magnitude 7.0 or higher since 1973. As a result, experts said that newer buildings are constructed to help withstand the shocks. Still, the damage from Chile's earthquake was widespread. A 15-story high rise near the southern city of Concepción collapsed; the country's major north-south highway was severed at multiple points; and the capital city's airport was closed after its terminal sustained major damage.

The epicentre was just a few kilometres north of the largest earthquake recorded in the world: a magnitude 9.5 quake in May 1960 that killed 1,655 and unleashed a tsunami that crossed the Pacific.

WORLD ECONOMYUS Fed signals end to emergency liquidity
On February 20, 2010, the US Federal Reserve Board sent its most explicit signal yet that the emergency supply of liquidity to financial markets is done and the most aggressive monetary policy easing in its 96-year history will eventually reverse. Chairman Ben S Bernanke and his colleagues at the Board of Governors raised the rate charged to banks for direct loans by a quarter-point to 0.75 per cent. It was the first increase in the discount rate since June 2006.

The Fed portrayed the decision as a “normalization” of lending that would have no impact on monetary policy. The assurances didn’t stop investors from increasing bets that the Fed would tighten policy in the fourth quarter. The dollar rose and US stock futures fell after the announcement.

US central bankers closed four emergency lending facilities in February 2010 and are preparing to reverse or neutralize the more than $1 trillion in excess bank reserves they have pumped into the banking system. The discount-rate increase will encourage banks to borrow in private markets rather than from the Fed. In any case, financial institutions have reduced their reliance on the Fed window. Banks had borrowed $14.1 billion as of February 17, 2010, representing less than 1 per cent of the central bank’s $2.28 trillion in total assets. A year ago, borrowing stood at $65.1 billion.

Greek debt crisis tests euro zone

The euro, the single currency that 16 EU (European Union) countries share, is usually highlighted as one of the main achievements of the European project; a rare example of “success” in what has increasingly become a beleaguered tale of EU infighting and lack of vision. But, a threatening debt crisis, with Greece as the main offender, has put the euro-zone to test like never before in its 11-year-long history. February 2010 saw the euro coming in for a pummelling, sending ripple across global markets.

However, it is the political crisis that is posing a question mark before the very future of the EU. The result is a monetary union that features a common currency without a matching fiscal or political union. Thus, although the European Central Bank sets interest rates for the euro-zone, it does so in a vacuum, with constituent governments retaining control over fiscal and economic policy.

The large disparities between euro-zone nations have been thrown into sharp relief by the global economic crisis. On the one hand, you have the unflatteringly named PIGS (Portugal, Ireland, Greece and Spain), all of whom are finding accruing debt increasingly expensive, leading to the spectre of State bankruptcy. The worst of the lot is Greece. Its economy shrank by 1.2 per cent in 2009. Having been found out to be cooking its books for years, Greece’s public debt is expected to break 120 per cent of output.

The poor economic condition of the PIGS, in particular Greece, has thrown up a conundrum for the large, surplus economies of the euro-zone like France, Germany and the Netherlands.

There are three options on the table, none of which are finding immediate takers. The first is to issue a common euro-zone bond, which would be placed at Greece’s disposal. But countries with good credit, like Germany, are opposed to the idea because of the higher interest rates that would result.

An alternative is giving bilateral financial aid with economically healthy countries in the euro-zone taking out loans on the financial market at good rates and passing these on to Greece.

The final option is an old-style IMF bailout, perhaps the most sensible of the choices. But, for the IMF to come to Greece’s rescue would be a slap in the face of EU, implying that it cannot take care of its own house and requires an institution that has always been sceptical of the euro to act as saviour.

Basic Capabilities Index 2009
The Basic Capabilities Index (BCI), 2009, has found that South Asia will get 80 points on the index by 2015, 10 points higher than the present value of 70. India received 68 points in the index, an increase of meagre four points since 2004.

The global NGO Social Watch’s index of 130 countries says 100 points defines well-being of the citizens based on children getting education till primary level, child mortality rate and percentage of births attended by skilled labourers. The BCI does not use income as an indicator.
 
According to the index, South Asia, a region with worst BCI in 2004, has been making fast progress, but the situation is still “extremely critical”.  Since 2004, the report said, one-third of the countries failed to raise their BCI value by more than one per cent and only one out of six countries showed significant progress.

The index also tells about the increasing gap in living standards of rich and poor in the world. The highest BCI is 97 of Iran and lowest is 44 of Chad in Africa, followed by Afghanistan, Ethopia, Bangladesh and Nepal.

Japan still world’s second largest economy
Retaining its position as the world's second largest economy, the Japanese economy grew at a faster-than-expected pace of 1.1 per cent in the last three months of 2009.

China, the fastest-growing large economy, clocked a growth of 10.7 per cent in the December 2009 quarter, bringing it at a sniffing distance to surpass Japan as the second largest economy in the world.

Japan’s economy, which is primarily exports-driven, rose 1.1 per cent in the fourth quarter of 2009. On an annual basis, GDP expanded a much higher pace at 4.6 per cent. For the whole of 2009, the Japanese economy shrank 5 per cent and is valued at 474.92 trillion yen (about $5.1 trillion). The better-than-expected Japanese growth in the December 2009 quarter was mainly driven by better exports and effects of stimulus measures. To bolster the recession-hit economy, Japan had unveiled stimulus measures worth over $130 billion.

NUCLEAR PROLIFERATION
Iranian President declares Iran a nuclear State
Iranian President Mahmoud Ahmadinejad declared on February 11, 2010, that Iran had produced its first batch of 20 per cent enriched uranium, amidst a growing view in the West that Tehran is bluffing.

“Iran was now a nuclear State,” Ahmadinejad told a huge rally of supporters on the 31st anniversary of the Islamic Revolution. Experts say that once Iran can enrich uranium to 20 per cent it should move relatively quickly toward 90 per cent purification, weapons-grade fuel.

Former U.S. officials and independent nuclear experts say continued technical problems could delay—though probably not halt—Iran’s march towards achieving nuclear-weapons capability, giving the US and its allies more time to press for a diplomatic solution.

While Iran says its nuclear program is entirely peaceful, Western nations suspect that the country is intent on developing an atomic bomb.


“Exercise Milan” was the largest naval war game hosted by India, in February 2010, with the participation of 12 navies of the Asia-Pacific region.

It was in India that letters were taken by air for the first time in the world. The historic event took place in Allahabad on February 18, 1911, coinciding with Kumbh Mela in that year.

The Rail Coach Factory (RCF) at Jalandhar has developed India’s first air-conditioned, double-decker prototype coach. The Railways has decided to introduce these coaches on the ‘yuva’ trains.

Indian Standard Time (IST) is set in accordance with the 82.5 degree East longitude. While India has just one time zone, Russia has 11 times zones, USA 10, Australia 9, and Canada 6. France and its dominions have 12 time zones and UK and its overseas territories use 8 time zones.

Under Project Saraswati, which is the first of its kind in India, ONGC proposes to dig deep—more than half a kilometre—into aquifers along the path the ancient Saraswati river is once believed to have taken.

The fifth global steel summit was held in Goa in February 2010 to serve as a forum to strengthen ties between steel makers and miners.

South Africa will host the Champions League Twenty20 cricket tournament in September 2010. In 2009 India had hosted the tournament. The tournament will feature 12 teams, including three from 2010 IPL.

Vancouver, Canada has been named as the world’s most liveable city. Delhi and Mumbai are placed at 113th and 117th, respectively, in the survey conducted by Economist Intelligence Unit (EIU). Among the top ten are four Australian cities—Sydney, Melbourne, Perth and Adelaide. Zimbabwe’s Harare is lowest ranked.

Morarji Desai holds the record of presenting the Union Budget in the Lok Sabha ten times. Yashwant Sinha has presented seven Budgets and C.D. Deshmukh and P. Chidambaram have done it six times.

The first 600 MW unit of the prestigious Rajiv Gandhi Thermal Power project at Khedar, near Hisar, Haryana became operational on February 10, 2010. The coal handling capacity of the plant, at 2,400 tonnes per hour, is the highest in India.

The per capita income of India in 2009-10 was Rs 43,749 according to the advance estimates of Central Statistical Organistation. It was Rs 40,141 in 2008-09. After taking inflation into account, per capita income isc estimated to grow by 5.4 per cent at Rs 33,540 in 2009-10, against Rs 31,821 during 2008-09.

Contribution of exports to the economic expansion during 2009-10 is estimated to fall to 18.6 per cent from 23.5 per cent in 2008-09.

CSO estimates that the population of India will go up from 1.15 billion to 1.17 billion during 2009-10, registering an annual increase of 1.38 per cent.




 

Current Affairs: January 2010

CURRENT NATIONAL AFFAIRS

AGRICULTURE
Bt Brinjal controversy
Faced with vehement protests by farmer groups and the green lobby, as also some States, the Union government has decided to freeze the introduction of Bt Brinjal in the country till independent scientific studies established health and environment safety of the product to the satisfaction of both public and experts.

Although India’s biotechnology regulator, the Genetic Engineering Approval Committee (GEAC), has cleared Bt brinjal for regular agriculture purposes, the detractors say that the variety may have passed the yield test and the pest-resistance analysis, but its edibility is yet to be confirmed.

Three major brinjal producing States, West Bengal, Bihar and Orissa, which account for nearly 60 per cent of the produce, have also refused to endorse the product. The governments of Madhya Pradesh and Chhattisgarh also specified that they would not have Bt Brinjal in their States.

The variety has been developed by Maharashtra Hybrid Seeds. It has been created by inserting gene from the soil bacterium bacillus thuringiensis into brinjal, which is said to give the plant resistance against insect pests.

BANKING & FINANCERBI monetary policy review
There is a shift in RBI’s monetary policy stance to managing the revival of the economy from managing the crisis. In its review on January 29, 2010, the central bank has accepted a 7.5% growth with 8.5% inflation.

RBI is worried about the high inflation rate but its governor D. Subbarao pointed out that it is mainly on account of supply side constraints. The condition could further deteriorate. "With growth accelerating in the second half of 2009-10 and expected to gain momentum over the next year, capacity constraints could potentially reinforce supply side inflationary pressure," the review document said.

Therefore, the Reserve Bank's new shift in the policy stance from managing the risk to managing the recovery made it to take a relatively milder action to increase the cash reserve ratio by 0.75 percentage point to take out Rs 36,000 crore from the system. Besides that, it did not take any harsh measure.

On the food inflation front, the central bank pinned its hope on good rabi crop and good monsoon in 2010. Assuming a normal monsoon, it expected inflation to moderate from July 2010 onward.

At the same time, RBI expressed its worry over the industrial growth, as it is not broad based, and underlined the need for consolidating it. The RBI's document on macro-economic development showed that while industries like food products, beverages, tobacco and related products showed a negative growth, industries like basic metals & alloys and paper & paper products were still decelerating. On the other hand, the RBI document showed industries like transport equipment, rubber, petroleum, textile products and a host of other industries were growing.

PLANNING & ECONOMYRural poor estimated at 42%
Agriculture sector in India continues to suffer, save for sharp growth in some years. The expert group to review the methodology for estimation of poverty, chaired by Suresh Tendulkar, has now suggested that the poverty ratio at the all India level was actually 37.2% in 2004-05.

Rural poverty was projected at 41.8% and urban at 25.7% by the committee, as against official estimates of 28.3% and 25.7% for rural and urban population, respectively.

In the past, the poverty line was defined in terms of per capita consumer expenditure at 1973-74 market prices and adjusted over time and across States for changes in prices keeping unchanged the original 1973-74 reference poverty line baskets of goods and services. The all-India rural and urban poverty line baskets were derived separately, assuming per capita daily calorie intake of 2,400 for rural people and 2,100 for urban population.

The Tendulkar panel has made four major departures from the past practices. It moved away from the calorie intake criteria for determining poverty line. Instead, it tests for adequacy of actual food expenditure near the poverty line to ensure aggregate nutrition, rather than just calories.

Two, it has recommended adoption of uniform PLB for the urban and rural population, breaking away from the past practice of two separate baskets. This has been done to get rid of the problem of outdated PLB, a major criticism of the existing poverty line.

Three, it has suggested a new price adjustment procedure based in the same data set as the one used for poverty estimation, rejecting the earlier practice of using price indices that are generated externally, specific to population segments and were outdated.

And four, it incorporates explicit provision in the price expenditure on health and education, which in any case has been rising. The official poverty estimate, in contrast, assumes basic health care and education services would be provided by the State, and although the 1973-74 base takes note of the private expenditure on these items, it does not take into account the increase in the proportion for total expenditure over the years.

The Tendulkar panel has also recommended that 365-day mixed reference period be used to collect data instead of the past practice of using 30-day uniform reference period. The advantage of using MRP is that data integrity is better when respondents are asked about their expenditure in the 365 days prior to the survey, particularly on items of low frequency consumption such as clothes, footwear and durables, than when they are questioned on expenditure on the preceding 30 days.

Nutrient-based subsidy policy cleared
The Union government has approved the Nutrient Based Fertiliser Subsidy (NBS) plan with effect from April 1, 2010. This is likely to have positive sentimental impact on share prices of fertiliser companies. Under the new policy, the companies can fix retail fertiliser prices. However the urea prices will be increased by Rs 483 per tonne or 10 per cent.

“The hike in urea prices is not going to impact the bottom-line or EPS of fertiliser companies as extra 10 per cent will go from farmer’s pocket directly. However, looking at the shift in policy, it’s a big positive for the industry,” said an analyst.

Fertilisers are sold at government-fixed prices, which are lower than their costs of production or import. The difference is met through subsidy. The NBS does away with maximum retail price. It proposes to replace the current system of giving subsidy to the industry with direct assistance to farmers.

Solar Mission launched
Prime Minister Manmohan Singh launched India’s Solar Energy Mission (named Jawaharlal Nehru National Solar Mission) on January 11, 2010. The main aim of the mission is to help generate 20,000 MW of solar power by 2022.

The Prime Minister urged the industry to create ‘Solar Valleys’ on the lines of Silicon Valleys and asked business houses to view the Solar Energy Mission as a business opportunity. He added that the success of the mission had the potential of transforming India’s energy prospects while contributing to national and global efforts to combat climate change.

The solar mission assumes important because it holds the centre-stage of the country’s activities to combat climate change. The mission is an important part of the country’s National Action Plan on Climate Change and is trying to establish the country as a global leader in solar energy, not just in terms of solar power generation but also in solar manufacturing and generation of this technology.

The mission targets 1,100 MW grid solar power, 7 million sq meter solar collectors and 200 MW off grid solar applications in first phase by 2013, and 20,000 MW grid solar power, 20 million sq m solar collectors and 2,000 MW off grid solar applications by the year 2022.

New adult literacy mission gets under-way
The Union government has chosen 19 States to start adult literacy classes under the all-new Sakshar Bharat Mission, which the Prime Minister launched in September 2009.

The mission, with a whopping budgetary support of $1 billion, seeks to educate 70 million illiterates by 2012; 60 million being women. Its first phase began on January 15, 2010 in 167 districts of 19 States, which have, in the past, displayed commitment to adult literacy.

The selected States are the ones that continued to stress adult literacy even after the old National Literacy Mission (NLM) was disbanded. Some States like Punjab and Himachal neglected the sector, with none having any ongoing adult literacy component or programme.

The mission aims to achieve 100 per cent literacy in 365 low literacy districts where adult female literacy rate is 50 per cent less as per the 2001 census. The final goal, however, is to take national literacy level from 64 per cent to 80 per cent by 2017, and reduce the gender gap from 21 to 10 per cent. In the first phase, Rajasthan has clinched the maximum number of projects for 31 districts. Close behind is Uttar Pradesh with projects for 26 districts, Andhra Pradesh 18, Gujarat 13 and Uttarakhand five.

The focus will be on learning beyond reading, writing and arithmetic to include life skills and employment as part of adult literacy. The idea is to retain learners and not lose them to lack of post-literacy avenues.

Another thing that sets the Sakshar Bharat Mission apart from the NLM is its complete ownership with the Gram Panchayat. The past programme was controlled by districts, which used to get certificates for compliance. Now the programme will be run and monitored by Panchayats and learners will be the king.

Social Situation Report
With over 40 per cent of people in India still living on less than $1.25 (around Rs 60) a day, India now stands third in terms of the highest proportion of extremely poor people in South Asia, next only to Nepal and Bangladesh, with corresponding percentages at 54.7 and 50.5, respectively.

The latest UN Report on the World Social Situation 2010, places India below Pakistan, Myanmar and Sri Lanka in terms of extreme poverty. Pakistan is the only nation in the sector to have achieved the Millennium Development Goal (MDG) of cutting poverty by half between 1990 and 2015. It had 73 per cent of the people in ‘extreme poverty’ 15 years ago; it now has 22.6 per cent as against its MDG target of 29.3 per cent.

India is lagging on the front, and must have an annual poverty reduction rate of 4.7 per cent (between 2005 and 2015) against 1.4 between 1990 and 2005 if it wants to meet the MDG target of 27 per cent; so far it has touched only 41.6 per cent. Rural India has 43.8 per cent of the people in extreme poverty as against 36.2 per cent in urban areas.

This underlines the need for inclusive growth in India, as stated by the UN report, which credits China, and to some extent India, for reduced global poverty in the past two decades when the number of people living on less than $1.25 a day came down from 1.9 billion to 1.4 billion.

EDUCATIONForty four deemed universities to be de-recognised
The HRD Ministry has decided to de-recognize as many as 44 "Deemed Universities", spelling uncertainty for nearly two lakh students who are enrolled with them. The Ministry's decision amounts to an acknowledgement of irregularities in conferring the "deemed" tag to these institutions under the first UPA government in which Arjun Singh was the HRD minister.

These deemed Universities were found deficient on many grounds—ranging from lack of infrastructure to lack of evidence of expertise in disciplines they claim to specialize in.

The HRD Ministry emphasized that the affected students would be taken care of. The Ministry's task force has recommended that institutions not found fit for deemed University status "revert to status quo ante as an affiliated college of the State University of jurisdiction so that students would be able to complete their ongoing courses and obtain degree from the affiliating University." Similarly, medical and dental colleges not found suitable can affiliate to State University or State medical University.

In case, the institution is unable to obtain affiliation, efforts would be made to facilitate the migration/re-enrolment of the affected students in other institutions. Doctoral students will have to re-register in affiliating Universities and those in distance education should either go to IGNOU or State open Universities. While these safeguards have been recommended, the students are nonetheless likely to go through a phase of uncertainty as they move from one University to another.

Tamil Nadu has the distinction of having 16 of the 44 de-recognized deemed Universities, 15 of them private and one government-sponsored.

Karnataka has six de-recognized deemed Universities; Uttar Pradesh four; Haryana, Uttarakhand, Rajasthan and Maharashtra three each; Gujarat, Orissa, Andhra Pradesh, Delhi, Bihar, one each. The three government-run institutions to be de-recognized are: Nava Nalanda Mahavira in Bihar, Rajiv Gandhi National Institute of Youth Development, Tamil Nadu, and National Museum Institute of the History of Art, Conservation and Musicology, New Delhi.

National Knowledge Network
The Union government has approved the setting up of a National Knowledge Network (NKN) that will connect all major educational institutions like the IITs, the IIMs and top universities for exchange of information and research.

One of the important recommendations of the National Knowledge Commission (NKC) is to inter-connect all knowledge institutions through high speed data communication network. This would encourage sharing of knowledge, specialised resources and collaborative research. The government’s decision to set up such a network was announced in 2008-09 and an initial amount of Rs.100 crore was allocated to the Department of Information Technology, Ministry of Communications and IT for this.

The architecture of the NKN will be scalable and the network will consist of an ultra-high speed core (multiples of 10Gbps and upwards) to provide a nationwide ultra high-speed data-network highway. The IT mesh will connect around 1,500 institutions and the setting up of core network is expected to be completed in a span of two years.

The network will enable scientists, researches and students from diverse spheres across the country to work together for advancing human development in critical and emerging areas.

Health, education, grid computing, agriculture and e-governance are the main applications identified for implementation and delivery on NKN.

Model rules for RTE Act
On January 30, 2010, the Union government approved model rules for the Right to Education Act 2009, which requires State governments to make free and compulsory elementary education a right of every child between 6 and 14 years of age.

The model rules, list priorities for States, which would have to conform to the standards under the Act within three years of its commencement; non-conformation could bring de-recognition. The Act, passed by the Parliament in August 2009, is yet to be officially notified though.

To begin with, the rules ask school management committees or the local authorities to identify children, who have never been to school or not managed to complete elementary education, and arrange for their special training in appropriate classes so that they can ultimately be integrated into the system. Any child above 6 years of age will be entitled to free special training either at school or residential facility, before he/she is ready to enter school at a convenient level. Such children would be allowed to complete elementary education even after they have attained 14 years, for the obvious reasons that they enter the school late.

At least one primary school (class I to V) must be located within a km of walking distance of the neighbourhood; for schools with classes VI to VIII, this distance would be three km. States need to provide more neighbourhood schools in highly populated areas and ensure safety of students in areas with tough terrains.

But before a school comes up, the States would have to undertake a mapping to identify all children in remote areas, including those from disadvantaged groups. This must be done in a year and the data updated every year.

For the first time, the law mandates maintenance of records of all children from birth to 14 years of age through a household survey to be updated every year. The rules further prescribe strict norms for non-segregation of students and safe transport for disabled children to ensure that they attend school.

Also, there is flexibility on birth certificate for admission. If formal birth record is not available, an affidavit would suffice, so would a hospital/ANM or anganwari record.

Adequate qualification for teachers has been stressed upon, with the academic authority (to be set up under the Act) to enlist the qualifications for teachers, who would get five years to upgrade their skills. An important part of the rules pertains to specifications on recognition of elementary level schools. The Act will, for the first time, mandates recognition of such schools within three years of the commencement.

ENVIRONMENTIndia submits proposed carbon cuts to UN
On January 30, 2010, India submitted its proposed emission intensity cut targets by 20-25 per cent by 2020 to the UN, a day before the world body’s January 31 deadline for submitting the climate change mitigation steps under the Copenhagen Accord.

However, it made it clear to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) that all its domestic mitigation actions were entirely voluntary in nature and not legally binding, a position India had maintained at Copenhagen Summit in Denmark.

Though agriculture sector contributes around 14 per cent of the total GHG emissions, India has kept it out of the purview of the mitigations actions in its blueprint submitted to the UN to ensure food security.

LAW POINTCJI comes under RTI ambit, says Delhi HC bench
In an unusual display of checks and balances within the judiciary, the Delhi High Court, on January 12, 2010, rejected the contention of the Supreme Court that the office of the Chief Justice of India was beyond the ambit of the Right to Information Act.

A full bench of the High Court, comprising Chief Justice A.P. Shah, Justice Vikramjit Sen and Justice S. Muralidhar, unanimously dispelled the fear raised by the apex court that the extension of RTI to the CJI’s office would undermine judicial independence.

Referring to a resolution adopted by Supreme Court judges in 1997, a resolution adopted by a conference of Chief Justices in 1999 and the UN-sponsored 2001 Bangalore principles of judicial conduct, the HC said, ‘‘Well defined and publicly known standards and procedures complement, rather than diminish, the notion of judicial independence.’’

The HC verdict came in the context of the prolonged controversy over whether the declarations of assets made by judges should be put in the public domain.

Free to criticize religions but without hate
In a significant ruling, a three-judge bench of the Bombay High Court has held that in India criticism of any religion—be it Islam, Hinduism, Christianity or any other—is permissible under the fundamental right to freedom of speech and that a book cannot be banned on those grounds alone.

However, the criticism must be bona fide or academic, said the Court, as it upheld a ban issued in 2007 by the Maharashtra government on a book titled “Islam—A Concept of Political World Invasion by Muslims.” The book contained an “aggravated form of criticism made with a malicious and deliberate intention” to outrage the feelings of Muslims, the Court said.

Delivering the landmark verdict, the Court upheld the State’s ban on a book but at the same time brought joy to civil rights activists when it held that, “in our country, everything is open to criticism and religion is no exception. Freedom of expression covers criticism of religion and no person can be sensitive about it.”

The Court also found “totally unacceptable” the author’s argument that banning the book in the age of the internet is passe and pointless.

FOREIGN RELATIONSIndia-ASEAN trade treaty gets operational
The Union government has notified the rules to operationalise the India-ASEAN free trade agreement, which came into effect from January 1, 2010. The rules specify that products having more than 35 per cent of local content will get preferential tax treatment under the free-trade treaty.

The rules also specify the methodology for calculation of the cost of products to be traded between India and the Association of South East Asian Nations (ASEAN).

New Delhi had signed the an agreement on August 13, 2009, in Seoul with ASEAN for duty-free import and export of as many as 4,000 products ranging from steel to apparel to sugar and tobacco over a period of eight years.

While the pact opens the 1.7-billion consumer market to each other, it also eliminates duties on 80 per cent of goods traded between the two regions by 2016.

Visit of Bangladesh Prime Minister
On January 11, 2010, India committed one billion dollars line of credit for developmental projects in Bangladesh and transformed its bilateral ties by signing five accords, including three key security pacts to expand counter-terror cooperation, during the visit of Bangladesh Premier Sheikh Hasina.

“This visit has opened a new chapter in India-Bangladesh relations, reflecting the unity of minds and hearts,” Manmohan Singh told Sheikh Hasina.

The one-billion dollar line of credit is the largest ever one-time bilateral financial assistance India has provided to any country. This will be used for construction of railway bridges and lines, supply of coaches and locomotives and buses, and assistance in dredging, an issue of pressing concern to Dhaka.

India also agreed to supply 250 MW of electricity through its central grid. The two sides also took major steps to improve connectivity, including the start of the Akhara-Agartala rail link.

The ties between the two nations had suffered under the previous regime in Dhaka over a host of tricky issues, including the alleged sheltering of insurgents from India’s north-eastern States in Bangladeshi territory.

The three security-related pacts signal a major step forward in expanding counter-terror cooperation and in addressing India’s concerns over this issue that had earlier strained their ties. The pacts will help New Delhi press Dhaka for the extradition of suspected insurgents from its north-eastern States who have taken shelter in Bangladeshi territory over the years.

During her visit, Sheikh Hasina was also conferred the prestigious Indira Gandhi Prize for Peace, Disarmament and Development.

Visit of Prime Minister of Malaysia
On January 20, 2010, India and Malaysia y signed an extradition treaty and two other accords during the visit of Malaysian Prime Minister Mohd Najib Tun Abdul Razak. The extradition treaty will enable India to seek the transfer from Malaysia of Indians who commit crime on the Indian soil and take refuge in the South East Asian nation.

A Malaysia-India capital market collaborative agreement was signed between the Securities and Exchange Board of India (SEBI) and the Security Commission of Malaysia. The third agreement was in the field of higher education.

Prime Minister Manmohan Singh and the Malaysian leader discussed a wide range of issues, including bilateral ties as well as international developments. India’s ties with ASEAN were also discussed at length. Mr Razak strongly pitched for the early conclusion of a Comprehensive Economic Cooperation Agreement (CECA) between the two countries.

With bilateral trade exceeding $10.5 billion in 2008-09, Malaysia is India’s second largest trading partner (after Singapore) among the 10 ASEAN members. Infrastructure, IT, biotechnology, energy and education have emerged as promising areas of cooperation between the two countries.

Nepal assures of no anti-India activity from its soil
Indian External Affairs Minister S.M. Krishna visited Kathmandu on January 15, 2010. During his meetings with his counterpart Sujata Koirala he gave positive gesture to Nepal to the latter’s long-standing proposal to review the Nepal-India Peace and Friendship Treaty-1950.

In return, Nepal sought to address India's concerns with regard to fake currency being smuggled from here, pledging that it would not allow its territory to be used against its neighbour.

India and Nepal also agreed to “cooperate closely” to end the menace of terrorism and extremism, including human trafficking, smuggling of arms and fake Indian currency.

During the meeting, Nepal raised serious concerns over the highly controversial issues on border encroachment from the Indian side whereas the Indian officials urged Nepal to cooperate with India by signing the much-awaited Extradition Treaty that Nepal had been dilly dallying to sign.

Five MoUs regarding the construction of Terai roads with Indian assistance at an estimated cost of Rs 805 crore, a project worth Rs 9.2 crore for the Nepal Stock Exchange Ltd and Central Depository Services (India) Ltd, Rs 6.3-crore electrification project, and construction of a Science Learning Centre with India’s assistance of Rs 16.6 crore, were signed during the visit.

During his meeting with Unified Communist Party of Nepal-Maoists chairman Pushpa Kamal Dahal, alias Prachanda, Mr Krishna expressed disappointment on their ongoing anti-India movement.

However, just a day after he met with Krishna when he had said he received positive response from him to address their concerns, Prachanda, in his address to party cadres in Khotang district, criticised India and said it has played negative role by backing up other political parties to uphold civilian supremacy in Nepal.

Visit of Korean President
Cooperation in the civilian nuclear energy field was high on the agenda during the meeting between Prime Minister Manmohan Singh and South Korean President Lee Myung-bak, on January 25, 2010. Presdent Myung-bak was also the chief guest at the Republic Day.

During the visit the two countries signed accords in diverse areas, including IT and civilian space, following the talks between the two leaders.

President Lee Myung-bak began his four-day visit to India with a visit to the Hyundai factory near Chennai to meet Korean businessmen living in the city before reaching New Delhi.

Regional and global issues, including the intensification of economic ties and cooperation in sphere of civilian nuclear cooperation and space technologies, figured prominently during talks between the two sides. Closer cooperation in combating global financial recession was also discussed in the context of the G-20 summit to be held in Seoul later in 2010.

Apart from the civilian nuclear sector, the two sides also agreed to look at the possibility of joint venture co-operation in research and development, and manufacture of military equipment including through transfer of technology, the joint statement said. The two leaders also agreed to work towards a revised double taxation avoidance convention before the end of 2010.

The Posco steel project in Orissa was also discussed with both sides agreeing that there was a need to expedite the project, which has been facing delays for three years. The two leaders also recognised the need to expedite the implementation of the POSCO project in Orissa,’’ the joint statement said. The Indian side assured South Korea the government is doing its best to expedite the project, which continues to be entangled in land acquisition issues. The Indian side further hoped that South Korean investment would expand in the infrastructure and manufacturing sectors.


CURRENT INTERNATIONAL AFFAIRS


CONFERENCE
Commonwealth Speakers’ Conference, 20th
The 20th Commonwealth Speakers’ Conference was held in New Delhi from January 5, 2010. It was inaugurated by Prime Minister Manmohan Singh.

Describing the growth of regional parties as a challenge for governance and conduct of parliamentary democracy, Mr Manmohan Singh said: “Though the aspirations of smaller parties may often be anchored in narrow considerations, they carry great weight for their constituents. In the end, democracy must respond to everyday concerns of the common man and Parliament should be the forum to address such concerns.” The remark was in obvious reference to the growing influence of sub-regional parties in coalition politics and Parliament.

Presiding officers from 42 Commonwealth nations were present (some in traditional Speaker robes). The Conference discussed, among other things, the Speaker’s role as a mediator and administrator of Parliament and use of technology in disseminating information on Parliamentary proceedings.

The forum also saw India voicing the aspirations of developing nations on climate change.

AFGHANISTANLondon Declaration
A one-day international conference on Afghanistan was held on January 27, 2010 in London. Seventy Foreign Ministers and officials of international organisations attended the convention at the 185-year-old Lancaster House.

British Prime Minister Gordon Brown, hosting the conference with Afghan President Hamid Karzai and UN Secretary General Ban Ki Moon, announced in his opening address the establishment of a $500 million 'trust fund' to buy "peace and integration" with warriors who are engaged in violence for economic rather than ideological reasons. A whopping $140 million has been pledged already for 2010.

During his pre-conference discussion with the British Foreign Secretary David Miliband, External Affairs Minister of India, S.M. Krishna, specifically said, “there should be no distinction between a good Taliban and a bad Taliban.” But this clearly fell on deaf ears. The participants rejected India's argument that there were no degrees of Talibanism.

It was also unclear whether remnants of Afghanistan's Northern Alliance, once cultivated by India, would be accommodated in any way. There was also no reference to the erstwhile Foreign Minister, Abdullah Abdullah, who put up a spirited fight in the first round of the recent controversial Presidential election and exposed fraud before withdrawing from the contest.

Pakistan supports a differentiation between Taliban segments, including being generally soft towards the Afghan Taliban, which was sponsored by the Pakistani Army's Inter-Services Intelligence.

As a goodwill gesture, the conference was preceded by a lifting of United Nations sanctions on five leaders of the obscurantist Taliban regime, which was ousted by armed forces led by the United States after the 9/11 attack on New York by the Afghanistan-based Al Qaida. Among the beneficiaries is a former foreign minister Wakil Ahmad Muttawakil.

In keeping with United States President Barack Obama's plan to start withdrawing American troops in a little over 18 months, Brown also declared that to fill the breach the strength of the Afghan army would be increased to 134,000 by October 2010 and to 171,600 by October 2011. Corresponding enlargements would also occur in respect of the Afghan police. The template for Afghanistan is similar to the one utilised in Iraq.

The Taliban central leadership rejected the London declaration on Afghanistan while several top Pakistani leaders said they support dialogue with the Taliban to end the conflict.

The statement by the Leadership Council of the Islamic Emirate of Afghanistan issued in Pashto said: “The US and its allies should have freed all prisoners from jails in Guantanamo Bay, Afghanistan, Pakistan and elsewhere, removed the names of all Taliban members from the UN ‘blacklist’ and refrained from sending more troops if they really meant to take the proper steps for ending the Afghan conflict.”

The statement argued that the ‘Mujahideen’ were not fighting for money or to grab power. Describing as baseless that most Taliban fighters were not ideologically committed, it claimed that nobody compelled the ‘Mujahideen’ to take up arms and fight the invaders.

Accusing President Obama and Prime Minister Brown of trying to deceive their people by organising conferences on Afghanistan like the one in London to win public support for a failed war, the statement reminded that such conferences did not work in the past and would not succeed this time as well.
Arguing that the only solution of the conflict was the withdrawal of foreign forces from Afghanistan, the Taliban statement also tried to reassure the West and rest of the world about their future plans in case they returned to power.

SRI LANKARajapaksa re-elected President
On January 27, 2010, Mahinda Rajapska emerged victorious in the bitterly-fought first post-LTTE era Presidential elections. He won fighting against former army chief Sarath Fonseka, securing nearly 60 per cent of the total votes polled.


On 59-year-old Fonseka's charges of poll rigging, the sources said it was "absolutely untrue" and pointed out that even former Prime Minister and opposition UNP chief Ranil Wicremasinghe had given a clean chit on the issue.

ENVIRONMENTBiodiversity protocol divides rich and developing world
An international protocol on biodiversity has become the new bone of contention between the developed and developing countries. The rich countries are opposing an international legal framework for use of biological resources.

The agreement will deal with the issue of bio-piracy, which is a cause of concern for countries like India. Negotiations are on to finalise the protocol that is expected to be adopted at Nagoya, Japan, in October 2010.

India and other developing countries are pushing for a protocol on access and benefit sharing (ABS). Bio-piracy is an important issue for India, which is keen on the adoption of the Nagoya Protocol.

The Convention on Biological Diversity, adopted at the Earth Summit in Rio de Janeiro in 1992, is the first comprehensive global agreement addressing all aspects of biodiversity. The convention reaffirms sovereign rights of nations over their biological resources. It has three main goals — the conservation of biological diversity, sustainable use of its components and fair and equitable sharing of the benefits from the use of genetic resources.

While an international legal framework appears to be a distant possibility, India has been taking steps at the national and bilateral level to protect its biodiversity. Besides the Biological Diversity Act, 2002, and the national Biodiversity Authority, India has also put in place a traditional knowledge database — the Traditional Knowledge Digital Library (TKDL). Managed by the CSIR, TKDL is a computerised database of documented information available in Indian texts, relating to Indian systems of medicine. Over 10 years, more than 2 lakh formulations of Ayurveda, Siddha, Unani and Yoga have been documented under the TKDL.

Natural disasters not linked to global warming
The United Nations climate science panel, Intergovernmental Panel on Climate Change (IPCC), faces a new controversy for wrongly linking global warming to a rise in natural disasters such as hurricanes and floods. It based the claims on an unpublished report that had not been subjected to routine scientific scrutiny and ignored warnings from scientific advisers. The report's author later withdrew the claim because the evidence was too weak.

The link was central to demands at Copenhagen climate summit by African nations for compensation of $100 billion from the rich nations blamed for creating the most emissions. According to The Sunday Times the IPCC knew in 2008 that the link could not be proved but did not alert world leaders.

The latest criticism came less than a week after IPCC was forced to retract claims that the Himalayan glaciers would be largely melted by 2035. It turned out the claim had been lifted from a news report published in 1999 by New Scientist magazine.

Two scientific reviewers who checked drafts of the IPCC report urged greater caution in proposing a link between climate change and disaster impacts, but were ignored.

The paper at the centre of the latest questions was written in 2006 by Robert Muir-Wood, head of research at Risk Management Solutions, a London consultancy, who became a contributing author on the IPCC report on climate change impacts. In the research, Muir-Wood looked at a wide range of hazards, including tropical cyclones, floods and hurricanes. He found from 1950 to 2005 there was no increase in the impact of disasters once growth was accounted for. For 1970 to 2005 he found a 2% annual increase that "corresponded with a period of rising global temperatures," but said almost all of it was due to strong hurricane seasons in 2004 and 2005. Despite such caveats, the IPCC report used the study in its section on disasters and hazards, but cited only the 1970-2005 results.

INTERNATIONAL RELATIONSGoogle, China face-off over Internet
On January 13, 2010, Google threatened to shut down its operations in China after uncovering “highly sophisticated” hacking attempts into e-mail accounts of Chinese human rights activists.

“These attacks and the surveillance they have uncovered, combined with the attempts over the past year to further limit free speech on the web, have led us to conclude that we should review the feasibility of our business operations in China,” David Drummond, senior V-P of corporate development and chief legal officer, said in a blog post.

“We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all,” he said.

Evidence indicated that the attackers were trying to get access to mail accounts of Chinese human rights activists, according to Drummond. At least 20 other large companies, including finance, Internet, media and technology were similarly attacked, according to Google.

INTERNATIONAL TERRORISMTaliban attack on match in tribal Pakistan
A northwest Pakistani village that tried to resist Taliban infiltration mourned on January 2, 2010 the victims of an apparent revenge suicide bombing that killed 96 residents during a volleyball game. The attack on the outskirts of Lakki Marwat city was one of the deadliest in recent Pakistani history and sent a bloody New Year’s message to Pakistanis who dare take on the armed Islamic extremists.

Lakki Marwat district is near South Waziristan, a tribal region where the army has been battling the Pakistani Taliban since October 2009.

Across Pakistan’s north-west, where the police force is thin, underpaid and under-equipped, various tribes have taken security into their own hands over the past two years by setting up citizen militias to fend off the Taliban. The government has encouraged such “lashkars”, and in some areas they have proven to be a key to reducing militant activity. Still, tribal leaders who face off with the militants do so at high personal risk. Several suicide attacks have targeted meetings of anti-Taliban elders, and militants also often go after individuals. One reason militancy has spread in Pakistan’s semi-autonomous tribal belt is because insurgents have slain dozens of tribal elders and filled a power vacuum.

Af-Pak strategy unveiled
In a candid assessment of the fragile relationship of USA with Pakistan, a US State department policy paper has admitted that there is a degree of mistrust between Washington and Islamabad, but democratic rule in Pakistan has created a window of opportunity. The report makes a point of noting that while the US military presence in the region is not open-ended, its non-military commitment would be a long-term one.

Secretary of State Hillary Clinton unveiled the Obama administration's strategy to stabilise Pakistan and Afghanistan, noting that the challenge in both countries is immense.

US officials have expressed concern over Pakistan's selective war on extremists within its borders, noting the Pakistani army's offensive ignores deadly terrorist groups such as the Haqqani network, responsible for attacks against US troops in Afghanistan.

The State department report outlines US objectives in Pakistan and Afghanistan. "While our combat mission in Afghanistan is not open-ended, we will remain politically, diplomatically and economically engaged in Afghanistan and Pakistan for the long-term to protect our enduring interests in the region," it says. On Pakistan, it lays out the intention of USA to lead the international community in helping Pakistan overcome the political, economic and security challenges that threaten its stability, and in turn undermine regional stability. "And we seek to build a long-term partnership with Pakistan based on common interests, including a recognition that we cannot tolerate, a safe haven for terrorists whose location is known and whose intentions are clear," it added.

"Achieving progress will require continued sacrifice not only by our military personnel, but also by more than the 1,500 US government civilians serving in Afghanistan and Pakistan," Clinton said, pointing out that for the first time since this conflict began, the US has a true whole-of-government approach. She said the Obama administration's policy, rather than being an exercise in nation-building, was aimed to achieve realistic progress in critical areas, and that Afghan and Pakistani governments had endorsed this strategy.

WORLD TRADEAsia free-trade zone
On January 1, 2010, China and 10 South-east Asian nations ushered in the world’s third-largest free-trade area. While many industries are eager for tariffs to fall on things as diverse as textiles, rubber, vegetable oils and steel, a few are nervously waiting to see whether the agreement will mean boom or bust for their businesses.

Trade between China and the 10 countries that make up the Association of Southeast Asian Nations, also known as ASEAN, has soared to $192.5 billion in 2008, from $59.6 billion in 2003. The new free-trade zone, which will remove tariffs on 90% of traded goods, is expected to increase that commerce still more.

The zone ranks behind only the European Economic Area and the North American Free Trade Area (NAFTA) in volume. It encompasses 1.9 billion people. The free-trade area is expected to help ASEAN countries increase exports, particularly those with commodities that resource-hungry China desperately wants.

The China-ASEAN free trade area has faced less vocal opposition than the European and North American zones, perhaps because tariffs were already low and because it was unlikely to alter commerce patterns radically. However, some manufacturers in Southeast Asia are concerned that cheap Chinese goods may flood their markets, once import taxes are removed, making it more difficult for them to retain or increase local market shares.


Decline in oilseeds production, appreciation of rupee against dollar and zero import duties during most of 2009 has made India the largest edible oil importer in 2009, a slot it took surpassing China. Import of crude edible oil to India saw a huge jump of 35% to a record 8.4 million tonne (mt) in 2009. India's edible oil imports comprise almost 80% of palm oil.

Reserve Bank of India, along with the Securities and Exchange Board of India (SEBI) has allowed recognised stock exchanges to launch futures currency trading in euro-rupee, pound sterling-rupee and yen-rupee. Futures trading in dollars-rupee was already allowed.

With an economic freedom score of 53.8, India has been rated the 124th freest economy in the world, according to the 16th Annual Index of Economic Freedom, released by The Heritage Foundation and The Wall Street Journal. Hong Kong and Singapore finished 1st and 2nd in the rankings for the 16th straight year. With Australia in 3rd place and New Zealand moving up to number 4, the Asia-Pacific region boasts a clean sweep at the top. Europe registered three top 10 placements: Ireland, Denmark and Switzerland. The United Kingdom dropped out of the top 10 for the first time in Index history. The United States also dropped significantly, to 8th place.

The fiscal deficit for 2009-10 was budgeted at a 16-year high of 6.8% of GDP. The high fiscal deficit is blamed on the measures the government took to address the demand slump that followed the global financial crisis. The high fiscal deficit is a concern as high government borrowing to meet the expenditure in excess of revenues creates competition for funds and interest rates going up due to this. High interest rates hurt rate sensitive sectors such as autos, real estate and consumer goods. Investment activity also then slows down, depressing the overall economy. At macro level, inflation goes up, currency weakens and growth is depressed. Increased interest payments leave less money with the government to make productive expenditure.

He Pingping of China, at 2 feet 5 inches is the world’s shortest man and Sultan Kosen of Turkey, at 8 feet 1 inches is the tallest man.

The International Lunar Geographic Society, a New York-based organization devoted to the study of the moon, has declared that a lunar crater in the moon's Sea of Tranquillity has been christened after Shah Rukh Khan. This has been approved by the International Astronomical Union, which has a final say with regard to the naming of craters on the moon. With a crater named after him, Shah Rukh now joins the ranks of eminent personalities like Nobel laureate C.V. Raman, father of the Indian space programme Vikram Sarabhai, father of the Indian nuclear programme Homi Bhabha and other luminaries like Meghnad Saha after whom craters have been named.

India and China rank 123rd and 121st in pollution control, respectively, reflecting the strain rapid economic growth imposes on the environment, according to the 2010 Environmental Performance Index (EPI). Iceland leads the world in addressing pollution control and natural resource management challenges, according to the index produced by a team of environmental experts at Yale University and Columbia University. The EPI ranks 163 countries on their performance across 25 metrics aggregated into ten categories including environmental health, air quality, water resource management, biodiversity and habitat, forestry, fisheries, agriculture, and climate change. Occupying the bottom five positions are Togo, Angola, Mauritania, the Central African Republic, and Sierra Leone—countries that lack basic environmental amenities and policy capacity. The US ranks 61st, significantly behind other industrialised nations like Britain (14th), Germany (17th), and Japan (20th).

President of South Korea Lee Myung-bak was the Chief Guest of the Republic Day, 2010.

The Pravas Bharatiya Divas was celebrated in New Delhi on January 6, 2010. The theme this year was: “Engaging the Diaspora: The way forward”.

Ashok Leyland has launched India’s first electric plug-in CNG hybrid bus, named Hybus.

Recovery from the global economic downturn is faster in India compared with other countries in the world as consumers here are more willing to spend, according to the Nielsen Global Consumer Confidence survey. India ranked second with 117 points in the fourth quarter of 2009, behind Indonesia, which has 119 points. Globally consumer confidence has remained stable at 87 per cent. Apart from India and Indonesia, Hong Kong, China, Singapore and Brazil are where recovery is accelerating. About 17 per cent Indians think that job prospects in the country would be 'excellent' and 66 per cent think that it would be 'good' in the next 12 months.

Jawaharlal Nehru National Solar mission has been set-up to create an enabling policy framework for the deployment of 20,000 MW of solar power in 2020. The other objectives are: (a) Promote programmes for off-grid applications, reaching 1000 MW by 2017 and 2000 MW by 2020; (b) to create favourable conditions for solar manufacturing capability for indigenous production and market leadership; (c) to achieve 15 million sq metres solar thermal collector area by 2017 and 20 million by 2022; (d) to deploy 20 million solar lighting systems for rural areas by 2022.

Army Day is celebrated on January 15.

India’s human and gender development record is improving, with the latest government report showing a significant increase in country’s position on human (HDI) and gender related development indices. India’s HDI, which was 0.530 in 1996, rose to 0.605 in 2006, while GDI score improved from 0.514 in 1996 to 0.590 a decade later. A concern, however, is the country’s Gender Empowerment Measure (GEM) score, which judges women’s participation in politics and decision-making, their representation in Parliament and legislatures and their control over economic resources. Gendering Human Development Index in India, released by Women and Child Development Ministry, claims GEM score of 0.497 in 2006 against 0.416 in 1996. Delhi has the highest GEM score and Nagaland the lowest. The highest GEM scorers in India are Andaman and Nicobar, Puducherry, Goa, Andhra and Himachal. The best performers on political participation of women are Punjab, Andaman and Nicobar, Himachal and Haryana. On economic empowerment of women, Chandigarh, Goa, Delhi and Punjab are the best, but in terms of control of economic resources, Meghalaya stands on top.

The Indian School of Business (ISB) is the only one from India to find a place on the list of top 20 B-schools in the world, published by the Financial Times. ISB has improved its position to bag the 12th spot on the list of top 100 B-Schools across the globe in 2010. The London School of Business topped the list, followed by the University of Pennsylvania and Harvard Business School. Stanford University GSB and Insead have been ranked at the fourth and fifth positions, respectively.

The revised estimates of the national income that took into account 2004-05 prices have calculated the per capita income of India at Rs 40,14,1 in 2008-09. The old method of income calculation had pegged per capita at 37,490 for 2008-09. On an annual basis the new per capita income rose 13.3 per cent compared to the previous year (2007-08). The new series of calculating the national income changed the base year to 2004-05 from 1999-2000 earlier.




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Current Affairs: December 2009

CURRENT NATIONAL AFFAIRS

DEFENCE
Army doctrine being reviewed
The Army’s military doctrine is being reviewed and it will now include an added thrust in five key areas that will propel the doctrine. This includes wars in faraway lands, besides strategy on how to face future challenges posed by China and Pakistan.

The key areas include preparation for a two-pronged war with China and Pakistan. Both countries will have to be looked at separately and also collectively. The nature of conflict, if ever, with both countries will vary greatly in terms of terrain and use of weapons and fire-power.

The Army, which is involved in fighting insurgency in J&K and the North-East, is also looking to optimise capabilities to fight asymmetric war waged by both State and non-State actors, such as terror attacks and proxy wars. This will include cyber and electronic warfare.

The doctrine will look at ways to enhance the strategic reach of the Army and joint operations with the Navy and the Air Force. Countries like the USA already have airborne division while China has capability of rapid induction of troops. The reviewed doctrine will also touch upon space-based capability and methods to achieve technological edge over the enemy. The doctrine is reviewed every five years by the Army’s Shimla-based Training Command.

PLANNING & ECONOMY13th Finance Commission Report
The 13th Finance Commission, which makes recommendations on sharing of tax revenues by the Centre and States, has suggested a new path for fiscal prudence in its report submitted to President Pratibha Devi Singh Patil on December 30, 2009.
 
The Commission was headed by Vijay Kelkar. Other members of the Commission were B.K. Chaturvedi, Indira Rajaraman, Atul Sarma and Sanjiv Misra.

The government had consigned the Fiscal Responsibility and Budget Management (FRBM), the self-imposed fiscal prudence guidelines, to the back-burner in 2008 when it stepped up official spending beyond its means in order to insulate the economy from the global financial meltdown. The country’s fiscal deficit, a reflection of government borrowings, is estimated to touch 6.8 per cent in 2009-10, up from 6.2 per cent in the previous fiscal, mainly on account of the stimulus measures.

The recommendations of the 13th Finance Commission, Finance Minister Pranab Mukherjee said “would get reflected in the 2010-11 Budget”.
The report, Kelkar said, dealt with the sharing of tax revenue between the Centre and States, distribution of funds among States and support to local bodies. The Finance Commission report assumes significance in view of the ongoing reforms in indirect and direct taxes, which will have a bearing on the tax collections.

Currently, the States and Union Territories get Rs 1.64 lakh crore in a year, or around 30 per cent of the shareable taxes collected by the Centre. The 12th Finance Commission had recommended that 30.5 per cent of the shareable Central taxes should be shared among the States and Union Territories. The shareable central taxes include corporation tax, income tax, wealth tax, customs, excise duty and service tax.

Among other things, the Commission has suggested steps to deal with the growing off-budget expenditure, especially, oil bonds. The report is based on the 2008-09 tax collections and does not talk on post-GST scenario. However, implementation of the new indirect tax regime in 2010 would not be a concern as suggestions are based on revenue neutral rates.

China’s iron ore find can hit India’s exports
China has found a one-billion tonne iron ore deposit, which is the biggest discovery of the mineral since 1980’s. This is bound to cause some worries in India as iron ore accounts for nearly half of Indian exports to China.
  
The latest discovery is a 6-km long deposit with thickness ranging between 41.43 and 108.95 meters. It lies 100 to 600 meters deep underground in Luannan County in the northern province of Hebei.

It will be some time before the new deposit will begin to yield iron ore, but the discovery will definitely enable China to make long-term plans on steel production and strengthen its hands in price negotiations. The discovery gives a new boost to China’s ongoing efforts to reduce its dependence on major world suppliers and avoid getting caught in price fluctuations of the spot market. Indian suppliers mostly deal in the spot market and refuse to enter into long-term supply contracts. 

EDUCATIONScholarship scheme for minority students
The Union government has launched the Maulana Abul Kalam Azad National Fellowship Scheme for minority students and another one to computerise State Wakf Boards.

Under the scheme, 756 fellowships (30 per cent to be reserved for women) will be offered per year to minority students wishing to pursue higher studies. The objective is to grant integrated five-year fellowships in form of financial assistance to students from minority communities as notified by the Central government to pursue MPhil and PhD.

The scheme will cover all universities or institutions recognised by the UGC under Section 2 (f) and Section 3 of the UGC Act and will be implemented by the Ministry of Minority Affairs through UGC for students belonging to minorities.

The fellowships will be on the pattern of UGC fellowships awarded to research students pursuing regular and full time MPhil and PhD courses. Holders of the new fellowship will be called MoMA scholars.

ELECTIONSSoren forms government in Jharkhand
Jharkhand Mukti Morcha chief Shibu Soren has been elected as the Chief Minister of Jharkhand after successful conclusion of the
Assembly pools in December 2009. The JMM, which won 18 seats, garnered the support of the BJP-JD(U), the All Jharkhand Students Union and Jharkhand Janadhikar Manch led by Bandhu Tirkey, taking up the tally to 44 MLAs in a house of 80.

The BJP won 18 seats and the JD(U) 2 seats, All Jharkhand Students Union has 5 MLAs and the Jharkhand Janadhikar Manch has one MLA.

The decision by JMM to enter into a coalition with the BJP-JD(U) combine brought to a close the hectic lobbying that marked the three days since the Jharkhand elections threw up a hung Assembly.
   
The Congress attacked the post-poll alliance between the BJP and the JMM as “the high point of unprincipled and unethical politics”. “Till yesterday, Arun Jaitley and BJP were crying hoarse about Shibu Soren’s criminal past but today they have no compunction about aligning with a man who is being tried in three murder cases, including one which is coming up for hearing as early as January 5, 2010,” party spokesman Manish Tewari said.

This is the third time the Mr Soren has occupied the post of Jharkhand Chief Minister. As per the ministry-sharing formula worked out among the alliance partners, JMM and BJP will have five ministers each in the team while AJSU will have a quota of two. BJP, which has also been allowed to have its own man as the Assembly Speaker, has decided to part with one ministerial berth from its share for its alliance partner JD(U).

Mr Soren, who was a Lok Sabha member before taking over as the Chief Minister, will have to become an MLA within six months. Wiser from the humiliation suffered in January 2009, when he had to quit the post after losing the by-election to the Tamar seat, the JMM chief is likely to enter the fray from his family backyard Dumka. His son Hemant, had won the constituency in the Assembly polls, is likely to vacate the seat in favour of his father, and retain the Rajya Sabha membership.
   
Jharkhand Assembly ‘Safe Haven’ For Criminals
The politician-criminal nexus in India is alive and kicking. Proof of this was provided by the profile of the newly elected MLAs in Jharkhand. As many as 31 of the 45 legislators backing the JMM-BJP-AJSU coalition government have criminal cases pending against them.

Its not just the ruling coalition which is afflicted with this malaise. The Opposition benches in the State too have several MLAs with criminal antecedents, making it clear that the process of criminalisation of politics is proceeding unhindered. Chief Minister Shibu Soren, who had to quit the Union Council of Ministers a few years ago after being convicted in a murder case, leads the contingent. Besides him, 16 of the 18 JMM MLAs have criminal cases against them. The only party MLA who starts with a clean slate is Sita Soren, daughter-in-law of Mr Shibu Soren and widow of the late Durga Soren.

BJP and AJSU have eight and four MLAs, respectively, with criminal cases against them. One JD(U) legislator and the lone JJM legislator Bandhu Tirkey also has criminal cases against him. Mr Tirkey, a former minister, in fact, is presently languishing in jail as he’s one of the key accused in the great Jharkhand loot undertaken by the Madhu Koda government.

JMM’s Dumri MLA Jagannath Mahato has been booked in 14 criminal cases while Mr Shibu Soren’s son Hemant has six cases against him.

BJP’s Jharkhand unit president Raghubar Das also has criminal cases against him while C.P. Singh, the fourth-term MLA from Ranchi, has nine cases against him.
   
As many as 11 of the 14 Congress MLAs also have cases against them, while eight JVM (P) and four RJD MLAs have cases lodged against them.

Gujarat Assembly passes mandatory voting Bill
The Gujarat Assembly has passed a landmark Bill which makes, for the first time in the country, voting mandatory in local body polls. The Gujarat Local Authorities Laws (Amendment) Bill, 2009, which also seeks to raise the reservation of seats for women in local self governance bodies from 33 to 50 per cent, was passed by voice vote. Under the Bill, if a voter fails to vote for the reasons other than prescribed in the rules, he may be declared a “defaulter voter” and would face consequences for which rules will be framed and placed before the Assembly for its approval later.

LEGISLATIONAuthors can now claim royalty
Authors of musical, cinematographic and literary works may now be entitled to royalty in case their works are used for commercial purposes, a benefit denied to them so far. This can be possible because of certain amendments in the Copyright Act of 1957, which has been approved by the Union Cabinet for introduction in Parliament.

The amendment is proposed to give independent rights to authors of literary and musical works in cinematography of films, which were hitherto denied and wrongfully exploited by producers and music companies.

Another amendment ensures that the authors of the works, particularly songs included in the cinematography of films or sound recordings, receive royalty for commercial exploitation of such work.

The News Broadcasters Association had been apprehensive about the amendments and asked the government to ensure that nothing was done to hurt the “well-established and understood rights of broadcasters to fair use of material, including broadcast reproduction rights”.

POLITICALAdvani steps down as Leader of Opposition
The curtain came down on L.K. Advani’s tenure as Leader of Opposition in Lok Sabha on December 18, 2009. And while he made way for Sushma Swaraj, the 82-year-old veteran BJP leader said he saw a new chapter opening in his political career.
   
After a meeting of BJP parliamentary party amended its constitution, Advani was elected chairman, a post that has been created for him. The assembled party MPs then elected Swaraj as leader of the party in LS, the first woman to hold the post in BJP.

The next act in the generational change was played out on December 19, when Rajnath Singh stepped down as BJP President and Maharashtra unit chief Nitin Gadkari took charge. The change of guard completed a process that had been in the works since the party lost its bid for power in 2009 national elections.
   
Sushma Swaraj, at 57, clearly marks a generational change as does 52-year-old Gadkari. Advani is expected to play a role as mentor and the amended constitution says he will appoint the two leaders of Opposition.

Nitin Gadkari is the youngest BJP president. His elevation marks the culmination of the exercise to effect a generational shift at the top in the party hierarchy—both in its organisational and parliamentary wings.

Mr Gadkari assumes his new responsibility at a very crucial time. After tasting defeat in a series of electoral battles, cadre morale is low. The party was also bogged down by a debilitating infighting among the so-called second generation leaders. The BJP has also failed to keep pace with the changing times, and lost the trust of the youth and the burgeoning urban middle class in the process.
   
Mr Gadkari, who hails from Nagpur and over the years cultivated the image of an honest, hard-working leader who has toiled his way to the top, thus has task cut out.

FOREIGN RELATIONSIndia-Bangladesh pacts to tackle terrorism
On December 2, 2009, India expressed its gratitude to Bangladesh for taking speedy action to foil a conspiracy by the LeT to attack the Indian mission in Dhaka recently as the two countries finalised three key agreements to combat terrorism. The agreements were signed during the visit of Bangladesh Prime Minister Sheikh Hasina to New Delhi.

The two sides arrived at an agreement on: Mutual legal assistance in criminal matters, combating international terrorism, organised crime and illicit drug trafficking; and agreement on transfer of sentenced persons. However, the two sides have not yet been able to resolve differences over a bilateral extradition treaty.

The finalisation of the three accords marks a major confidence-building measure (CBM) to address the issue of Indian insurgents taking shelter in Bangladesh, which had marred ties between the two nations in recent years. New Delhi, however, is quite happy over the manner in which the Sheikh Hasina government has been cooperating with it in checking the activities of these insurgents.

Visit of Bhutanese King
Increasing the pace of cooperation in the hydro-power sector, India and Bhutan have signed four agreements to conduct technical surveys for hydro-power projects. The four MoUs related to the hydro-power sector were part of 12 agreements that were signed after discussions between Prime Minister Manmohan Singh and visiting Bhutanese King Jigme Khesar Namgyel Wangchuck, who was on his first foreign visit in December 2009, since his coronation in 2008.
   
India and Bhutan have decided to prepare detailed project reports for the Kuri Gongri, Chamkharchhu-1 and Kholongchhu hydro-power projects and Amochu reservoir project. The Kuri Gongri project is proposed to generate 1,800-mw power, the Chamkharchhu-1 670 mw and the Kholongchhu 670 mw. Further, the two sides have also agreed to conclude implementation agreements for Punatsangchhu-2 project
   
Bhutan uses 400 mw and has an installed capacity of 1,500 mw of power. The entire surplus comes to India which is helping Bhutan increase its capacity to 10,000 mw till 2020.

Apart from the MoUs on the hydro-power projects, the two sides also signed eight other agreements in areas ranging from agriculture to health to civil aviation. The two sides also signed an agreement to set up the Bhutan Institute of Medical Sciences in Thimphu and an agreement on an IT project, which plans to make nearly half of Bhutan’s population e-literate.

Visit of Japanese Prime Minister
Prime Minister Yokio Hatoyama of Japan visited New Delhi in end-December 2009. During the high-level talks, Japan urged India to sign the Comprehensive Test Ban Treaty (CTBT), but Prime Minister Manmohan Singh put the onus for its ratification on China and the US.

The issues of nuclear disarmament and non-proliferation were discussed with both sides agreeing to the need for an early start to the Fissile Material Cut-off Treaty negotiations. But on the issue of the non-proliferation treaty both sides agreed that there was a difference of perception. Mr Singh reiterated that India is “deeply interested in working with Japan and other like-minded countries to promote the cause of universal, verifiable and non-discriminatory disarmament”.
   
Even though Mr Singh highlighted India’s “impeccable record” in non-proliferation and explained the country’s nuclear history, the Japanese Prime Minister remained non-committal on civilian nuclear cooperation between India and Japan. Keeping the matter pending, Mr Hatoyama said nuclear energy would be an item on the agenda for future discussions.
   
In the absence of an agreement on nuclear cooperation, the Japanese Prime Minister, however, indicated that Japan is willing to relax restrictions on hi-tech trade and said there was a “positive conclusion” on the issue of hi-tech trade. During talks, Mr Singh assured his Japanese counterpart that Indian companies would not divert hi-tech imports from Japan for weapon’s purposes or to a third country and sought liberalisation in this area.

The economic partnership, however, remained the “bedrock” of relationship, with both sides discussing a range of economic issues, including Japanese investment and trade agreement. The two Prime Ministers have decided to push their negotiators to expedite negotiations into the comprehensive economic partnership agreement.
Mr Hatoyama pointed out that bilateral trade between India and Japan is far less than that between Japan and China. Mr Singh, however, said he had conveyed to the Japanese Prime Minister that India welcomes Japanese investments into the country and pointed out that India’s growing economy offers huge opportunities for Japan.

The two sides also discussed the liberalisation of visa regime on both sides, with the Japanese Prime Minister raising the issue saying that it was important as there were several major projects being undertaken in India for the benefit of both countries.

The two leaders also vowed to push for an early conclusion of an economic partnership agreement to scale up trade and investment and cooperate on a range of global issues, including the UN reforms, climate change and nuclear disarmament

India, Japan sign agreements on Rs 360-kcr DMIC project: India and Japan signed two agreements on December 28, 2009 for implementing the ambitious Rs 3,60,000-crore Delhi-Mumbai Industrial Corridor (DMIC) project that seeks to create integrated investment regions and industrial areas across six States. The agreements include collaborating in the development of eco-cities, that is cities that are environmentally and ecologically sustainable, along the corridor and setting up of a project development fund to undertake activities like master planning and feasibility studies, preparing project reports and obtaining approvals and bid process management for projects.

The Delhi-Mumbai Industrial Corridor Development Cooperation has signed the memorandum of understanding with Jetro (in cooperation with Japan Bank for International Cooperation) for facilitating collaboration between Japanese and Indian companies from environment-related sectors and providing expertise in development and promotion of DMIC projects.
   
The DMIC project development fund will be set up with equal contribution from the governments of India and Japan. India has approved a grant of Rs 330 crore (approximately $75 million) as the country’s contribution. The Japanese component of $75 million is being provided in the form of untied loan from JBIC.

Visit of Prime Minister Manmohan Singh to Russia
On December 7, 2009, during the visit of Prime Minister Manmohan singh to Moscow, relations between India and Russia experienced more than a thaw on a range of interests encompassing N-trade, shared Af-Pak perceptions and a plan to boost commerce to $20 billion by 2015.
 
The discussions between Prime Minister Manmohan Singh and Russian President Dmitri Medvedev yielded a rich cache of agreements which included establishing a credit line of $100 million and a nuclear agreement that allows India to reprocess fuel and virtually guarantees unhindered supply of nuclear fuel.

Prime Minister Manmohan Singh, after signing a crucial nuclear deal with Russia, said there would be an addition to the two reactors being developed at Kudankulam in Tamil Nadu, while a site was being considered at Haripur in West Bengal.
   
Meanwhile, Russian President Medvedev stressed that Moscow did not support any addition to the club of N-weapon States, which has implications on the country’s position in Iran, and that N-weapons should not be "held hostage to terror", in a fairly direct reference to Pakistan.
   
Medvedev also made it clear that the G-8 statement at La Aquila did not impact on ENR (enrichment and nuclear reprocessing) related agreements with India.
   
The continuing global slowdown and a decline in oil prices have made Russia more open to reaching out to an old friend while the change of guard in US has seen India reaffirm ties, with Singh describing Russia as a “global world power”. The two nations also share concerns over the rise of China.

With the meeting with Medvedev having set the mood, Manmohan Singh’s interaction with Prime Minister Putin, still very much the “real” power centre in Moscow, saw a detailed exchange of assessments.

The two sides signed a total of six agreements but the Russians were clearly pleased with the civil nuclear cooperation pact. The reactors, which cost about $1.5 billion each, will certainly be welcome for a Russian economy that is simply not doing too well.

India and Russia signed a path-breaking broad-based agreement in civil nuclear field that will ensure transfer of technology and uninterrupted uranium fuel supplies to its nuclear reactors and inked three pacts in the defence sector.

The Indo-Russian pact on atomic cooperation is a significant document and goes much further than the 123 agreement between India and the US. The pact also has provisions for transfer of enrichment and nuclear technology, which is denied in the 123 agreement with the US.

The two countries also reviewed their cooperation in the United Nations and in multilateral fora and their role towards successful conclusion of the Copenhagen Summit on climate change.

RESERVATIONSRanganath Commission report on Religious and Linguistic Minorities
Two years after it was submitted to the government, report of the National Commission on Religious and Linguistic Minorities is ready to be tabled in the Parliament.

Constituted to assess the status of minorities and suggest ways of improving their lot, the Commission, headed by Justice Ranganath Misra, has recommended 15 per cent reservation in non-minority educational institutions and Central and State government jobs for all religious and linguistic minorities.

Out of the 15 per cent earmarked seats in education institutions, Muslims should be given 10 per cent reservation (commensurate with their 73 per cent share in the total minority population in India) and the remaining 5 per cent to other minorities, states the report.

It adds that if Muslim candidates are not available to fill 10 per cent seats, the remaining vacancies should go to other minorities and in “no case to the majority community.”On employment front, the report argues that since the minorities, especially Muslims, are much under-represented in government jobs, “we recommend they should be regarded as backward in this respect within the meaning of that term as used in Article 16 (4) of the Constitution.”

Accordingly, the recommendation is to reserve 15 per cent of posts in all cadres and grades under the Central and State governments for the religious and linguistic minorities. Of this, 10 per cent quota is recommended for Muslims and the rest for other minorities.

The report, co-authored by Tahir Mahmood, also recommends the inclusion of Muslim and Christian Dalits in SC list, something the National Commission for Minorities has also been supporting.

TERRORISM; LAW & ORDERULFA chief held in Bangladesh
In the most serious setback that has been suffered by the banned United Liberation Front of Assam (ULFA) in recent times, its chairman Arabinda Rajkhowa was arrested by Bangladeshi agencies somewhere near Dhaka in Bangladesh on December 2, 2009.

The arrest which came close on the heels of November 5 arrest of another two top leaders of the outfit, Sashadhar Choudhury and Chitrabon Hazarika, in Dhaka indicated that the outfit’s sanctuary in Bangladesh was in serious danger.

With Rajkhowa’s arrest, only two major leaders of the outfit, self-styled commander-in-chief Paresh Barua and deputy commander in chief Raju Baruah, are now at large. Another top leader, general secretary Anup Chetia, alias Golap Barua, is lodged in a jail in Bangladesh.

Arabinda Rajkhowa (53) whose real name is Rajib Rajkonwar, has been the chairman of the ULFA since early 1980s and was one of the founder leaders of the ULFA. He studied up to Class XII, and is the second of three sons of freedom fighter Umakanta Rajkonwar who passed away three years ago at the age of 101 years. He hails from Lakwa in Sivasagar district of Upper Assam.

Rajkhowa also has an Interpol red corner notice against him, issued on June 4, 1997 for his involvement in several heinous crimes. Out of India since 1992, Rajkhowa is known to keep travelling to Myanmar, Bhutan, Thailand, Bhutan, Pakistan and other countries on fake identity and fake passports.

He was trained under Kachin Independence Army in Myanmar and National Socialist Council of Nagaland (NSCN). He can handle all types of arms. He is also the vice-president of the Indo-Burma Revolutionary Front (IBRF).


CURRENT INTERNATIONAL AFFAIRS

PAKISTAN
Law catches up with leadership
On December 16, 2009, the Supreme Court of Pakistan declared the National Reconciliation Order (NRO) null and void. Lawyers termed the decision as a landmark judgement and demanded that President Asif Ali Zardari step down from his post. The Court ruled that the decree protecting Zardari and his allies against charges of corruption was illegal and against the constitution.

The Supreme Court further ruled that all cases under investigation or pending enquiries and which had either been withdrawn or where the investigations or enquiries had been terminated on account of the NRO shall also stand revived and the relevant and competent authorities shall proceed in the matter in accordance with law.

The NRO, issued by former President Pervez Musharraf, had scrapped all corruption cases against politicians and bureaucrats filed between January 1986 and October 1999, on the grounds that they may have been politically motivated. The ordinance had allowed Benazir Bhutto and her husband Zardari to return to Pakistan.

In the first fallout of the Supreme Court ruling arrest warrants were issued against Pakistan Interior Minister Rehman Malik and Defence Minister Chaudhry Ahmed Mukhtar on December 18, 2009. Both were also barred from going abroad on an official visit.
   
The National Accountability Bureau, Pakistan’s main anti-corruption agency, also banned 250 other officials from going abroad following the order.
 
INTERNATIONAL ECONOMYJapan unveils new $81 billion stimulus plan
Japan’s government has unveiled $81 billion of new stimulus spending to keep the world’s second-biggest economy from lurching back into recession.

Despite shrinking tax revenue, Prime Minister Yukio Hatoyama and his Cabinet agreed to 7.2 trillion yen ($80.6 billion) in new spending after days of negotiations with coalition partners.

The largesse underlines that the world’s biggest economies are still too fragile to get by without government life support even as a recovery from the global recession takes shape. In export-reliant Asia that’s partly because demand from Europe and the US is improving only tepidly and efforts to reduce dependence on trade by boosting consumer spending will take several years to fully bear fruit.

Japan also faces falling prices while brand-name exporters like Toyota Motor and Sony are losing record amounts of money as a galloping yen adds to their woes.

ENVIRONMENTA face-saver in Copenhagen
The Copenhagen Accord, the first global agreement of the 21st century to comprehensively influence the flow and share of natural resources, was agreed upon by 26 most influential countries in the wee hours of December 19, 2009, in the capital of Denmark. The US led the pack of architects with the BASIC four—China, India, Brazil and South Africa (in that order)—working as sometimes reluctant and sometimes willing, but always key partners in framing the agreement.

The accord demands that increase in global temperatures be kept below 2 degrees on the basis of equity. It requires global emissions as well as all national emissions to peak at a certain time but is mindful of concerns of economic development. It asks industrialized countries, except the US, to take emission cuts in future, but not necessarily under the Kyoto Protocol. It lays out up to $30 billion of quick-start finance and $100 billion starting 2020, using all the routes of transfer possible. It requires mitigation actions from developing countries for the first time to be listed in an international agreement.

The rules of multilateral engagement got re-written as new alignments created a coterie of the powerful that brokered deals in closed rooms: each working at the end to preserve, if not improve its immediate economic status.
   
The pact they forged did cause heartburn as less powerful economies felt left out. Tuvalu and Sudan said it was too weak, while Venezuela and Bolivia were upset because it had not been negotiated in the open by all the 192 countries attending the UN Framework Convention on Climate Change (UNFCCC) conference. The low-ambition deal was seen as a triumph of the US which defied estimates to influence the outcome. But the negotiations also saw the Chinese leveraging their clout in the resource-rich African continent, at a multilateral forum.

For India though, the Accord came out of hard bargaining lasting almost 20 hours among Heads of governments of some of the most influential countries in the world. At the end of the day, when the battle was over, India appeared to have ceded ground on some issues but blocked intrusion on other red lines.
 
With stakes too high and the rich countries making abjectly clear that they were not playing to the rules, but to change the rules altogether, the four emerging economies decided to instead scratch up a low-ambition deal—a pact that would lower the pressure on them by lowering the demands off the rich countries in parallel.

Finally the Copenhagen Accord take a morphed form of the US-backed schedules approach of ‘pledge and review’. The Copenhagen Accord is not what the US or Europe would have wanted it to be, but it still contains some elements India would have to, at best, fight to defend again in coming years or those that could be titled a lost battle by the end of the talks.

India, along with the other three emerging countries, fought hard and won the battle to retain the reference principle of common but differentiated responsibility which creates the firewall between the commitments of the rich countries and the actions of rest. India was also able to wrest the creation of a green climate fund as well as fight back the attempt to force emission cuts through the back-door.

But fighting a defensive battle, evidently wanting not to be labelled obstructionist by the US, India, along with the other three partners loosened up its stance on some key issues. This loosening of stance may not hit home immediately but it left the window open for growing inequitable burden falling on India’s head to prevent climate change.

Major Highlights


  • The final draft after the Copenhagen summit has agreed to cuts in emissions and hold increase in global temp below 2°C.
  • A proposal attached to the accord calls for a legally binding treaty by the end-2010.
  • Developed countries to provide adequate financial resources and technology to support developing countries. A goal of mobilizing $100 billion a year by 2020 to address the needs of developing countries has been set.
  • Details of mitigation plans are included in separate annexure, one for developed countries and one for voluntary pledges from developing countries. These are not binding, and describe the current status of pledges—ranging from ‘under consideration’ for the United States to ‘adopted by legislation’ for the European Union.
  • Emerging economies have been asked to monitor their efforts and report the results to the United Nations every two years, with some international checks to meet transparency concerns of West but ‘ensure that national sovereignty is respected’.
  • The accord agrees to provide positive incentives to fund afforestation with financial resources from developed world
  • Carbon Markets are mentioned in the accord, but not in detail. The deal promises to pursue various approaches, including opportunities to use markets to enhance the cost-effectiveness and promote mitigations actions.
US takes giant leap on climate
The US Environmental Protection Agency has cleared the way for regulation of greenhouse gases without any new laws being passed by Congress, reflecting President Barack Obama’s commitment to act on climate change. The agency can now begin to make rules to regulate emissions from vehicle tailpipes, power utilities and heavy industry under existing laws.

The EPA ruling applies to six gases scientists say contribute to global warming, including the main one, carbon dioxide.

The UN climate summit finally passed the Copenhagen accord Saturday after two days of intense negotiations and back-room manoeuvres. The accord, proposed by India and four other countries, is now “operational”, a relieved UN chief, Ban Ki-Moon, said. The accord that is meant to be a first step towards fighting the climate change that is affecting millions worldwide was still held up for hours by four countries.

INTERNATIONAL RELATIONSSiberia pipeline to reach APAC markets
Russian Prime Minister Vladimir Putin inaugurated the East-Siberia-Pacific Ocean oil pipeline on December 28, 2009, which will enable Moscow to enter markets in Asia- Pacific region and reduce dependency on European customers.

The project is designed to pump up to 1.6 million barrels (220,000 tonnes) of crude per day from Siberia to Russia’s far east and then on to China and the Asia-Pacific region. The project’s first leg envisages the construction of a 2,757-kilometre section with annual capacity of 220.5 million barrels of crude. It will link Taishet, in East Siberia’s Irkutsk Region, to Skovorodino, in the Amur Region, in Russia’s far east. The second stretch will run 2,100 kilometres from Skovorodino to the Pacific Ocean.

Currently the crude beyond Skovorodino goes by rail to China and the Pacific coast.

India moots trans-SAARC container train
India has floated a concept paper among the SAARC countries to start a container train on a pilot basis, running from Bangladesh to Pakistan via India and Nepal, in a bid to give a big boost intra-regional trade. The possible corridor for running the train is from Chittagong Port in Bangladesh to Katihar in India, Birgunj in Nepal and to Lahore in Pakistan.

The proposal being considered could unify the entire region and will lead to a seamless, border-less trade.

At present, India operates one passenger train each to Pakistan and Bangladesh for the benefit of the citizens on the either side of the border. While the train to Pakistan operates between Delhi and Lahore, the other to Bangladesh operates between Kolkata and Dhaka.

INTERNATIONAL TERRORISMFBI indicts Headley for 26/11
David Coleman Headley aka Daood Gilani, has been formally charged for conspiracy in the 26/11 terror attacks in Mumbai in 2008. After an intensive probe, the FBI has said that Headley delivered, placed, discharged and detonated explosives and other lethal devices in, into, and against places of public use in India.
   
The FBI has indicted Headley on six counts. Significantly, the FBI has also formally charged a retired Major of the Pakistan army, Abdur Rehman Hashim Syed, for the plot against a Danish newspaper that Headley wanted to attack for the publication of cartoons of Prophet Mohammad. Indian officials said Rehman was closely linked to the ISI. He has been arrested by Pakistan; if the charges are upheld during the trial, it would be the first smoking gun that the ISI is involved in exporting terror.

New Af-Pak policy of USA
US President Barack Obama, who unveiled his administration’s Af-Pak policy on December 2, 2009, ordered a surge of 30,000 US troops in Afghanistan and a “transfer of forces out” to begin in July, 2011.
 
The strategic and security communities are uneasy over the President’s withdrawal plans. While The Washington Post called it a “surge, then leave” policy, security experts are of the view that withdrawal decisions must be determined by the conditions on the ground and not by arbitrary deadlines. “The Obama administration has no exit strategy, it has only exit timeline,” said Republican opponents.

As the speech clearly rejected the counter-insurgency principle of “clear, hold and build,” there are fears that any setback would only invigorate the jihadist cause and put untenable pressure on Pakistan and India. But President Obama appears to be keen on winding down the war when he enters the political build up to the 2012 Presidential election.
 
In his address, President Obama described Pak-Afghan border as the epicentre of the violent extremism practised by Al-Qaeda. “It is from here that we were attacked on 9/11, and it is from here that new attacks are being plotted as I speak. “The people and governments of both Afghanistan and Pakistan are endangered. And the stakes are even higher within a nuclear-armed Pakistan, because we know that Al Qaeda and other extremists seek nuclear weapons, and we have every reason to believe that they would use them.”
   
In his address, President Obama said the US will deny Al Qaeda a safe haven and will reverse the Taliban’s momentum and crush its ability to overthrow the government. “We’re in Afghanistan to prevent a cancer from once again spreading through that country. But this same cancer has also taken root in the border region of Pakistan. That’s why we need a strategy that works on both sides of the border,” he said justifying inclusion of Pakistan in his Afghan policy.
 
Stating that this was an international effort, President Obama sought the same war escalation measures from his allies. “Some have already provided additional troops, and we are confident that there will be further contributions in the days and weeks ahead. Our friends have fought and bled and died alongside us in Afghanistan. Now, we must come together to end this war successfully. For what’s at stake is not simply a test of NATO’s credibility; what’s at stake is the security of our allies, and the common security of the world,” he said.

Scare aboard Delta Airliner
On December 27, 2009, US Federal officials brought criminal charges  against a Nigerian man suspected of trying to destroy a Northwest Airlines aircraft on December 25, 2009 as it approached the airport in Detroit, Michigan.

The US Department of Justice said that Umar Farouk Abdulmutallab, 23, had boarded the plane in Amsterdam, Netherlands, and tried near the end of the nine-hour-flight to set off an explosion using PETN, also known as pentaerythritol, a high explosive.

Fellow passengers rushed to subdue the terror suspect after they heard popping sounds and saw smoke and fire coming from Abdulmutallab's seat. 

Even though the US authorities are yet to confirm the Yemen connection of the 23-year-old Nigerian man's plot to blow up a Detroit-bound airliner on Christmas Day, they see Umar Farouk Abdulmutallab's account that Al-Qaida had supplied explosive powder to him in Yemen "highly plausible."
 
The suspect, reportedly, told US investigators that he had obtained explosive chemicals and a syringe that were sewn into his underwear from a bomb expert in Yemen associated with Al-Qaida, as part of a "mission to bring down a jet on US soil".

London: Terror capital of the West?
Britain has now emerged as the "terror capital of the West" as whenever a major terrorist attack is attempted, suspicion swings on this country, according to a media report.

“It comes as no surprise to learn that the Nigerian accused of blowing up the US airliner is said to have been living here. We have become the number one source of terrorism in the Western world. We shelter foreign jihadis, and even grow our own… For years now, Islamic extremists wanted on terror charges in their own country have taken sanctuary in Britain… Our judges (not our politicians) say it would be cruel to send them back to their own countries, in case they're tortured,” the 'News of the World' quoted the Editor of Spectacle, Fraser Nelson, as saying.

Years ago, the CIA had a name for it: "Londonistan".


India’s total external debt rose by 8.1% to $242.8 billion at the end of September 2009, from $224.6 billion at March-end 2009. The long-term debt increased by 10.6% to $200.4 billion, while short-term debt declined by 2.3% to $42.4 billion. Most of the increase in the debt ($8.3 billion or 45.6%) is due to depreciation of dollar against major global currencies, out of total increase of $18.2 billion, according to a Finance Ministry statement.

There are 12 full moons most years but every two or three years there is an extra full moon which is called a “Blue moon”.

Year 2009 was designated by UN as the International Year of Astronomy, to commemorate 400 years of Galileo’s theory about the solar system.

Government of India has introduced for the first time ‘visa on arrival’ scheme for tourists from five countries—Singapore, Finland, New Zealand, Luxembourg and Japan.

The Clementiny is the world’s smallest citrus fruit with size of 4 cm wide and 2 cm high.

East and South-East Asian countries have decided to launch a $120-billion emergency fund in March, 2010, the first such alliance in the region, to shield themselves from a financial crisis. Under the scheme— known as the Chiang Mai Initiative Multilateralization (CMIM)—Japan, China, South Korea, Hong Kong and the 10 members of the Association of Southeast Asian Nations (ASEAN) can swap their own currency into US dollars in case of a liquidity crunch.

India’s share in the global flow of FDI almost doubled to 2.45% in 2008 compared to the previous year, according to Union Commerce Minister Anand Sharma. Among developing countries, India ranked fourth in terms of FDI inflows in 2008 as per figures published in UNCTAD World Investment Report (WIR) 2009. During 2008-09, India attracted FDI inflows worth $35.17 billion.

Financial Action Task Force (FATF) was founded by the G-7 countries in 1989 to develop and promote national and international policies to combat money laundering and terror financing. The membership of the FATF is limited to 35 countries at present. India has an observer status. India is a member of the Asia-Pacific Group, a FATF-style regional body. Membership of FATF will allow India easy access to real-time information on money laundering and terror financing and help to raise the diplomatic pitch against perpetrators. It will also make India more attractive in the eyes of global investors.

Every third Indian is living below poverty line, says an expert group headed by Suresh Tendulkar, former chairman of PM’s Economic Advisory Council. The report puts the incidence of poverty in India at a high 37% of population, 10 percentage points more than estimated earlier. Among the States, Orissa and Bihar are at the bottom, while Nagaland, Delhi and J&K have the least number of poor. As much as 41.8% of the rural population survives on a monthly per-capita consumption expenditure of Rs 447, spending only so much on bare necessities such as food, fuel, light, clothing and footwear. Among urban population, 25.7% are poor, who spend only Rs 578.8 on essential needs. The expert group was set up following criticism of the existing official estimates of poverty released by the Planning Commission in 2007.

India's Nobel Peace Prize winner Mother Teresa will be honoured on a US postage stamp on her birth centenary. The postage stamp honouring Mother Teresa is scheduled to go on sale on August 26, 2010, on the occasion of her 100th birthday.

With a sale of 107 million newspapers daily, India is the biggest newspaper market in the world. Together with China and Japan, it accounts for over 60 per cent of the global newspaper sales. Interestingly, the USA accounts for only 14 per cent of the total newspaper sales. Globally, 1.9 billion people read newspaper every day, which is 34 per cent of the world population, while 24 per cent use the Internet. The WAN-IFRA survey showed that newspaper circulation grew, on a global scale, by 1.3 per cent in 2008 and almost 9 per cent over five years. The data shows consistent newspaper growth in Africa, Asia and South America, and a long-term slowdown in the US and European markets.

  November 2009

CURRENT NATIONAL AFFAIRS

BANKING & FINANCEE-payments to be credited directly to merchants
In what would make online commerce faster for customers, the Reserve Bank of India (RBI) has mandated that all payments for such transactions be credited directly to merchants, instead of getting cleared by intermediaries such as CC Avenue and Paypal.
   
Currently, until a payment is authorised and processed by intermediaries, a transaction is not completed. For instance, online retailers such as eBay do not ship goods purchased online unless funds are credited to their account, after being routed through an intermediary. CC Avenue, BillDesk, Direc-Pay, ICICI PaySeal and Paypal are among major payment gateways in India.

Under the new system, all payments to merchants shall be effected within a maximum of three days from the date of transaction. From now on, no payment other than the commissions at the pre-determined rates/frequency shall be payable to the intermediaries. The existing system has some pitfalls. Often, there is a delay in transferring money to the merchant; at times it is more than seven days.

SEBI allows auction of shares in follow-on offer
SEBI has allowed companies to go for pure auction of shares (offered at bid price) in a follow on public offer for pricing of issues for institutional investors. However, the companies will have to offer shares to retail investors, including employees, at the floor price, fixed before start of the auction process and the existing system of public offerings of shares at an uniform price in a band through book-build method will also continue.

To encourage small and medium firms to come out with public issues, SEBI has also allowed existing stock exchanges to set up a separate trading platform and relax the criteria like track record on profitability for listings. On the issue of trading hours, the board has left it on exchanges to decide between 9 am and 5 pm.
   
Giving more choices to listed companies in pricing shares via book-build route, SEBI introduced an additional method, called Dutch auction, in which the companies making public issues will fix only floor prices. Institutional bidders will have to submit bids above the floor prices. The bidders will be allotted shares on the basis of their bid prices. The highest bidder will be offered shares first, followed by the second-highest.
 
If the demand for the highest bidder is equal to the total issue size, second-highest bidder will get nothing. However, if the issuer wants to put a cap on allotting shares to a single bidder, it can do so.
   
Under the present system, known as French auction, companies fix a band of prices for public offers. The maximum difference between floor and ceiling prices in the band is 10%. A bidder has to bid in the given band only. On the basis of demand at various price points, the offer price is fixed and applied uniformly to all investors. The new methodology of pricing is likely to be used by government while divesting its stake in REC and NTPC.

COMMISSIONLiberhan inquiry commission
It took 17 years and 48 extensions for the Liberhan Commission, probing the 1992 demolition of the Babri Masjid in Ayodhya, to submit its report to Prime Minister Manmohan Singh in June 2009. One of the country’s longest running inquiry commissions, it has cost the government nearly Rs 7 crore.

During the entire tenure, the one-judge probe was dogged by procedural delays, non-cooperation from key witnesses and even constant transfers during the early days of the commission’s functioning. The commission’s lawyer, Anupam Gupta, dissociated himself from the one-man panel after eight years because of differences with Justice Liberhan.

The commission recorded statements of scores of politicians from the Bharatiya Janata Party (BJP), including senior leaders Advani, Murli Manohar Joshi, then Chief Minister of Uttar Pradesh Kalyan Singh and now Bharatiya Jan Shakti party chief Uma Bharati. Several members of the Congress and the Rashtriya Swayamsevak Sangh (RSS) were also questioned.

Former Prime Minister Atal Behari Vajpayee, senior BJP leaders LK Advani, Murli Manohar Joshi and ex-UP Chief Minister Kalyan Singh are among the 68 persons severely indicted by Justice M.S. Liberhan Commission for their role in the Babri Masjid demolition 17 years ago, which led the country to a “brink of communal discord.”

The commission, surprisingly, is soft on Congressman and the then Prime Minister P.V. Narsimha Rao for his perceived ‘inaction’ in deploying Central forces or imposing President’s Rule in then BJP-ruled Uttar Pradesh to protect the 16th century structure, purported to have been built during the reign of Mughal emperor Babar. The commission refers to it as the Ram Janam Bhoomi-Babri Masjid structure (RJBM) and has clarified that its role was not to study if the structure was a mosque or a temple or even its history.

In his 1,029-page report, Justice Liberhan, a former Chief Justice of Madras High Court, indicts the perpetrators for having reduced “the oldest civilisation to stark intolerance and barbarianism, all for petty political gains.”

Coming down heavily on the troika of Advani, Vajpayee and Joshi, Justice Liberhan calls them “pseudo-moderates" and refers to them as “icons” of the movement. The commission also indicts Uma Bharti, RSS ideologue K. Govindacharya and Shankar Singh Vaghela, along with Kalyan Singh, who are no more connected with the BJP or the RSS.

Silent on punitive action against those indicted for the 1992 Babri Masjid demolition, government’s Action Taken Report (ATR) on the much-delayed Liberhan Commission findings agrees to enact the Prevention of Communal Violence Bill to punish those who misuse religion for politics, and set up special tribunals to prosecute related offences.

In the name of action against perpetrators of the demolition, all the ATR promises is expediting the hearing of cases registered 17 years ago. These include the case at Lucknow special court against lakhs of unknown karsewaks; case against eight accused (politicians also named by Liberhan) in Rae Bareli special court and 47 other cases in the Lucknow special court.

The ATR, however, is non-condescending to Liberhan’s major recommendation of a statutory national commission of cultural experts to determine the historical legacy of monuments, like those in question. The government plainly rejected this proposal saying the ASI could handle the job. It also declined Liberhan’s idea to confer statutory status on the National Integration Council, though it accepted in part his recommendation that political leaders and holders of public offices should not simultaneously hold positions in religions organisations.

ECONOMYIndia climbs to tenth slot among top gold holders
India is the world’s largest private gold consumer, but the government’s holding of gold as an asset is modest. Even so, the latest purchase of 200 metric tonne from IMF puts it at number ten among the list of top 10 gold-holders in the world.

For India, the purchase, apart from signalling that its economy has come full circle, is a way of spreading its assets which are said to be currently over-weighted with foreign currency, mainly in the form of sovereign US Treasury bonds. In other words, it is a hedge against a falling dollar.

Of India’s current foreign exchange reserves of nearly $285 billion, foreign currency assets account for more than 90% ($268.3 billion), followed by gold ($10.3 billion), IMF’s Special Drawing Rights ($5.2 billion) and a reserve position in the IMF of $1.59 billion.
   
While India’s current gold holdings are said to be historically low, buying 200 tons in addition to the 358 tons it already holds is expected to bump up the gold reserves to more than 6%.

India’s gold trauma occurred in the summer of 1991, when faced with dwindling foreign exchange reserves and a possibility of a default on payments, the government mortgaged 47 tons of gold to the Bank of England and 20 tons of gold to the Union Bank of Switzerland to raise $ 600 million. The move helped tide over the balance of payment crisis, and also kick-started the reforms process.

Food prices biting buyers
Even as the overall inflation rate remains at around 1.5%, prices of food articles have gone up 13.4% in the last one year. That statistic  is bad news for the common man, but details of specific commodities like potatoes, onions and pulses are even more disconcerting.
   
According to the latest data, prices of potatoes have doubled over the last 12 months; onions are 50% more expensive and the prices of pulses have gone up by over 23% on average. It’s another matter that the price of some specific pulses like arhar and moong have risen to all-time highs of around Rs 90 per kg.
 
Contributing to the spike in food prices has been a weak monsoon in 2009, which is expected to lead to foodgrain production falling by around 21 million tonnes in the current kharif season compared to kharif 2008. Rice production is estimated to fall by over 15 million tonnes and the output of coarse cereals by 5.5 million tonnes.
   
All-weather roads jack up rural income by 100%
All-weather roads in the villages of the country has doubled the income of rural households, raised literacy rate by 10%, and appreciated land prices by up to 80%, says the World Bank. “In 2000, about 40% of India’s 825,000 villages lacked all-weather roads ... With access to roads, incomes have soared. Household incomes rose by 50% to 100% on average.”

World Bank has been supporting India’s rural connectivity programme--Pradhan Mantri Gram Sadak Yojana (PMGSY). It aids projects in several places like Himachal Pradesh, Rajasthan, Jharkhand and Uttar Pradesh. Over the years, World Bank’s concessionary lending arm International Development Association (IDA) has supported many rural roads projects, both standalone and components of larger projects. The year-round connectivity has narrowed gender gap with access to education for girls and raised job opportunities, IDA said adding every Rs 10 lakh spent on rural roads has helped lift 163 people out of poverty.

The World Bank has said "a second project of $1 billion is under preparation". It would aim to improve maintenance, weak capacity, governance and accountability, and would introduce several efficiency measures. Meanwhile, for two-laning of 6,372-km of the total of 19,702 km single lane highways in the country, the finance ministry has requested the World Bank for a loan of $3 billion.

India’s GDP beats all forecasts
India's economy gave yet another indication of its rapidly improving health, prompting greater ambition from policy-makers still chary of withdrawing the stimulus medicine responsible for the recovery. Gross Domestic Product (GDP) expanded by a surprisingly strong 7.9% during the July-September second quarter, its fastest pace in a year and a half. The growth was driven largely by a pick-up in manufacturing, increased government expenditure, robust investments and modest growth in farm output despite the drought.

The growth in the first half of the year is now a respectable 7% as against 7.8% during the same period a year ago. In the fiscal year ended March 2009, the economy grew by 6.7%, its weakest in six years and way below rates of 9% or more in the previous three years.

The strong growth may put pressure on RBI to hike policy rates sooner than March 2010 as worries about inflation grow. Bond yields firmed up to 7.25%, six basis points up, as traders see a 25-basis-point hike in key policy rates by January 2010.
   
There will also be pressure on the government to cut expenditure and roll back stimulus measures such as the cut in indirect rates. The fiscal deficit between April and October 2009 was 61% of the target for the year, but slower-than-expected tax collections suggest the government could overshoot the target of 6.8% of the GDP for the year.
 
ENVIRONMENTTougher air quality norms unveiled
India has revised its National Ambient Air Quality Standards (NAAQS), discontinuing the old practice of different air quality standards for different land-use classes like residential and industrial areas. The country will now have uniform health-based NAAQS with uniform standards for all areas, whether residential or industrial.

Revised after a gap of 15 years, new air quality standards also provide legal framework for controlling air pollution and protecting public health, meaning that any citizen can now approach the court demanding better air quality. The revised standards include initiatives that had been developed in consonance with globally best practices and in keeping with latest advancements in technology and research.

The big question, however, is of enforcement, which could prove to be a difficult task.

The standards have brought two new deadly pollutants, PM 2.5 and ozone, within the ambit of regulation. The standard for nitrogen oxide has been made more stringent, from the existing 60 micro-gm per cubic metre, it has been tightened down to 40 micro-gm per cubic metre. Suspended particulate matter (SPM) as parameter has been replaced by fine particulate matter (PM 2.5), which is more relevant for public health.

HEALTHIndia's children stunted, undernourished, wasted: UN
India has the largest number of stunted children below the age of five in the world, according to the latest United Nations Children's Fund report.

Approximately 200 million children, under the age of five, suffer from stunted growth in the developing world. The report 'Tracking Progress on Child and Maternal Nutrition' found that stunting is primarily caused due to childhood under-nutrition, which contributes to more than a third of all deaths in children under five.
 
India also has one of the highest numbers of underweight children, below the age of five, and one third of 'wasted children'—those facing a greater chance of death—in the world.

Out of a total of 19 million new-borns per year in the developing world that are born with low birth-weight, India has 7.4 million low birth-weight babies per year—the highest in the world. The report finds that 80 per cent of the developing world's stunted children live in 24 countries.

India, however, does not have the highest prevalence of stunted children as the high numbers was due to its large population. In terms of prevalence, Afghanistan was first while India was 12th. In 17 countries, underweight prevalence among children under 5 years old is greater than 30 per cent. The rates were highest in Bangladesh, India, Timor-Leste and Yemen,` with more than 40 per cent of children being underweight.

The study also found that 13 per cent of children, under 5 years old, in the developing world were wasted, and 5 per cent were severely wasted (an estimated 26 million children).

A number of African and Asian countries have wasting rates that exceed 15 per cent, including India (20 per cent) Bangladesh (17 per cent), and Sudan (16 per cent). The country with the highest prevalence of wasting in the world is Timor-Leste, where 25 per cent of children under 5 years old are wasted.
 
In Asia, the prevalence of stunting dropped from approximately 44 per cent in 1990 to an estimated 30 per cent in 2008, while in Africa it fell from approximately 38 per cent in 1990 to an estimated 34 per cent in 2008. Unless attention is paid to addressing the causes of child and maternal under-nutrition today, the costs will be considerably higher tomorrow.

JUDICIARYFinally, SC judges declare assets
In a move that will enhance the image of the judiciary, 21 out of the 22 Supreme Court judges—including Chief Justice K.G. Balakrishnan—have declared their assets and of their wives by posting the details on the court’s website—supremecourtofindia.nic.in.

The step is expected to end months of controversy over the apex court's refusal to place in public domain such details, maintaining that it was not bound to part with these under the Right to Information Act (RTI).

The details, provided under the heading “Assets of Judges,” however, did not have the total assets of each judge and his wife. Also, the value of a number of properties owned by them is not given. Most of the judges had provided such details to the CJI at the time of their elevation to the apex court, but these were not placed in public domain.

FOREIGN RELATIONSVisit of Australian PM to India
Australian Prime Minister Kevin Rudd visited India in November 2009 with a message to India that Australia remained a safe destination for Indian students. Mr Rudd said his government was committed to using the “full force” of law to protect Indian students.

During his visit, in an attempt to upgrade bilateral ties, both countries agreed to elevate the relationship to a strategic partnership. Discussions between Mr Rudd and Mr Singh covered all aspects of the bilateral relationship—from trade to climate change. On climate change, Mr Rudd said: “Indian Prime Minister and I discussed the great challenge of climate change. We must have a good ambition for Copenhagen.” The two sides agreed that it is an issue of concern for both countries, with the Indian side reiterating its position on climate change.
   
The two sides have also decided to expedite the feasibility study to look into the impact of an FTA between the two countries. In fact, the Australian side has made no secret of its interest in an FTA, with Mr Rudd saying that he expects the study to recommend an FTA.

Iran seeks help to combat terror
Notwithstanding the US pressure, India has unequivocally conveyed to Iran its commitment to participating in the 7.4 billion dollar Iran-Pakistan-India (IPI) gas pipeline project. This reassurance was given by both Prime Minister Manmohan Singh and External Affairs Minister S.M. Krishna at separate meetings with visiting Iranian Foreign Minister Manouchehr Mottaki in New Delhi.
 
At the delegation-level talks between the two foreign ministers, Iran sought greater cooperation with New Delhi in fighting terrorism emanating from Pakistan. Like India, Iran has also been affected by terrorism sponsored from the Pakistani soil. A horrific suicide attack in south-east Iran in October 2009 targeted the country's Revolutionary Guards and was blamed on Pakistan-based Jundallah, a Sunni extremist outfit.

This was the first high-level contact between the two countries since the UPA government returned to power in New Delhi and Mahmoud Ahmedinejad was re-elected as the President of Iran in June 2009.

Mottaki renewed an invitation to Manmohan Singh to visit Iran. The invitation was accepted and dates of the visit would be finalised in consultations through diplomatic channels.

The two sides also agreed to convene an early meeting of the joint working group (JWG) on energy cooperation between them to resolve issues connected with the pipeline project. An Iranian team would be visiting India soon for the purpose. As Iran and India share common interests in Afghanistan, they also discussed joint infrastructure projects like the deep sea port of Chabahar and a rail link to provide better connectivity for Afghanistan to Central Asia.

Visit of Prime Minister Manmohan Singh to USA
Prime Minister Manmohan Singh’s deliberations with US President Barack Obama in end-November 2009, as his first State guest, did not result in any dramatic announcements but New Delhi was satisfied that it was able to persuade Washington to acknowledge that India was being inflicted by terrorism from neighbouring Pakistan.

Washington went a step further by calling for the defeat of terrorist “safe havens” in Pakistan and Afghanistan and agreed to enhance collaboration in this effort.

The joint statement was prefaced with a commitment by both leaders to expand and deepen their relations. President Obama described India as a “rising and responsible global power” to assure India that it was very much on the US radar and that any impression to the contrary was incorrect.

The two countries signed a new memorandum of understanding on counter-terrorism cooperation to help each other in information and intelligence sharing related to terrorism, which institutionalised an arrangement which has been in place since the 26/11 Mumbai terror attacks.

President Obama’s commitment on the implementation of the Indo-US civil nuclear agreement during his press conference also found mention in the joint statement, which also acknowledges India as a responsible nuclear power. Taking note of the Obama administration’s sensitivities on non-proliferation, India was quick to reaffirm its unilateral and voluntary moratorium on nuclear testing and agreed with US to start early negotiations on a multilateral, non-discriminatory and internationally verifiable Fissile Material Cut-off Treaty. On its part, the US committed to ratify the Comprehensive Test Ban Treaty (CTBT) at an early date. There are fears that such a development would encourage the US to pressurise India to sign the CTBT, which has not been accepted by New Delhi.

President Barack Obama assured Prime Minister Manmohan Singh that the US-China joint statement issued on his visit to Beijing earlier in November was not an endorsement of Chinese mediation in the India-Pakistan dispute. Mr Singh said Obama told him that the intention of that statement was not to support any “third-party intervention in issues in South Asia.” He said he was “very satisfied” with Obama’s assurance on an issue that caused much heart-burn in New Delhi. India opposes third-party mediation in the dispute with Pakistan over Kashmir.

On Afghanistan, Prime Minister Singh said Obama told him that the US “highly values” India's role in reconstruction and development of the war-ravaged country. Manmohan, who met several Republican Democratic as well as Republican lawmakers while in Washington, said there was bipartisan support for India’s role in Afghanistan. This role is viewed with suspicion by Pakistan.

Visit of Canadian PM to India
India and Canada have entered into an agreement for enhancing energy security. Yet another deal has been inked between the two nations to kick off negotiations between the two with respect to free trade area. This happened during the meeting of Prime Minister Manmohan Singh with visiting Canadian Prime Minister Stephen Harper, in November 2009, on a range of bilateral issues, including trade and investment, civil nuclear cooperation, the global financial crisis, terrorism and climate change.
 
The energy security pact will enable better cooperation between the nations in areas of renewable energy and energy efficiency, oil and natural gas, power generation, transmission, distribution and end-use, energy research and development.
 
The FTA deal will enable the formation of a joint study group for exploring the chances for developing a Comprehensive Economic Partnership Agreement, with the first meeting slated to be held in December.
 
The two nations have also decided to cooperate for tackling global terrorism.

India reaches nuke agreement with Canada
On November 28, 2009, India reached a civil nuclear agreement with Canada. The agreement was firmed up during a meeting between Prime Minister Manmohan Singh and his counterpart Stephen Harper on the sidelines of the Commonwealth Summit.

Canada has become the eighth country with which India has reached civil nuclear agreement since the NSG lifted a 34-year-old ban on India to join global nuclear trade in September last year. The other countries with which India has already signed the civil nuclear deal are the US, France, Russia, Mongolia, Kazakhstan, Argentina and Namibia.

China protests against Dalai Lama’s Tawang visit
The Chinese rhetoric against India for the Dalai Lama’s visit to Arunachal Pradesh in November 2009 picked up again with a State-run newspaper running a report that said the Tibetan spiritual leader undertook the Arunachal visit under pressure from New Delhi. India rubbished the assessment and took the opportunity to remind China that the Dalai Lama was free to travel anywhere in the country.

Though the Chinese government has refrained from directly attacking India since the meeting between Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao, it is significant that China’s state-run media ran a report attacking India over the visit of the Dalai Lama.

“India may make use of the Dalai Lama to solve the decades-long territorial conflict by encouraging his visit to southern Tibet (Arunachal Pradesh),” Hu Shisheng, a researcher of southern Asian studies at the China Institutes of Contemporary International Relations, was quoted as saying. China calls Arunachal Pradesh southern Tibet.

“The Dalai Lama went to southern Tibet at this critical moment probably because of pressure from India... By doing so, he can please the country that has hosted him for years,” Mr Hu said. He added: “India may have forgotten the lesson of 1962, when its repeated provocation resulted in military clashes. India is on this wrong track again...When the conflict gets sharper and sharper, the Chinese government will have to face it and solve it in a way India has designed,” Mr Hu said.
 
China had protested against the visit of the Dalai Lama to Tawang monastery in Arunachal Pradesh, but India had dismissed the protests by pointing out that the Dalai Lama continues to be a guest in India.

Responding to that attack, the Dalai Lama dismissed China’s claim that his visit was anti-China and had said that Arunachal was an integral part of India.

Genisis of the dispute: In 1913-14, China, Tibet and Britain tried to hammer out the Shimla Accord—a deal defining borders between Inner and Outer Tibet, and between Outer Tibet and British India. Henry McMahon, a British administrator, drew up 550 miles of the boundary demarcating British India and Outer Tibet. China walked out of the talks, rejecting the line between Inner and Outer Tibet, but the Accord nonetheless ceded Tawang and other Tibetan areas to the British Empire. Since then, China has declared the line invalid, citing the absence of its signature on the Shimla Accord. After the collapse of Chinese power in Tibet, the McMahon line was, de facto, accepted as official, and Britain established administrations in the area. However, Tibet and later the People’s Republic of China claimed Tawang district after India's independence. With China all set to take over Tibet, India declared the McMahon line the official boundary in 1950.
   
The North East Frontier Agency was created in 1954. The Tibetan uprising was suppressed by China and its self-ruling government abolished in 1959. The Dalai Lama fled to Dharamsala, and maps published by the Tibetan government-in-exile now show McMahon Line as the southern border of Tibet.
   
During the 1962 war, China acquired large parts of NEFA but voluntarily withdrew to the McMahon line. It was only in 1985 that China declared its ownership claims on the eastern tract roughly corresponding to Arunachal Pradesh. Until then, it was prepared to cede this land to India if it was given the cold western desert of Aksai Chin in Ladakh, of strategic importance to China. India rejects China’s claims over both, and post-1985 China has insisted that Arunachal Pradesh is theirs.

India, EU ink atomic energy pact
On November 6, 2009, India and the European Union (EU) signed a major accord for cooperation in the civil atomic energy field and pledged to conclude an ambitious free trade agreement (FTA) between them within a year. The atomic energy agreement is aimed at facilitating India’s participation in the international thermonuclear experimental reactor (ITER) project for fusion research.

Prime Minister Manmohan Singh led the Indian side at the 10th India-EU summit while the EU was represented by Swedish Prime Minister Fredrik Reinfeldt, in his capacity as chairman of the EU Council and EU President Jose Manuel Barroso.

The ITER project on fusion energy is said to be the costliest experiment of its kind that will cost some 10 billion euros. The first fusion reactor is expected to be operational in Cadarche in southern France by 2016.

India and the EU have been negotiating an FTA since 2007 but have not been able to firm up the accord due to differences over EU’s attempts to link trade with climate and other extraneous issues. Both sides are of the view that a political push was need for the agreement to be wrapped up by 2010.

In a joint statement the two sides shared the understanding that the development of nuclear energy for peaceful purposes should take place in conformity with the highest standards of safety, security and non-proliferation. The joint statement further said India and the EU welcomed the renewed momentum in global disarmament talks while reaffirming their shared interest in working together for disarmament and for countering the proliferation of weapons of mass destruction and their delivery systems. In this context, they stressed the importance of strengthening national export control laws.

On terrorism, the EU condemned the terrorist attacks in Mumbai in November 2008 and reiterated the need for intensifying global cooperation in combating international terrorism. Without any reference to Pakistan, the two sides emphasised the utmost importance of bringing the perpetrators of the crime to justice.

On international financial crisis and global economy, the two sides reiterated their commitment to continue to sustain a strong policy response until the recovery was secured, to prepare internationally coordinated and cooperative exit strategies to be implemented once the recovery has taken hold, to strengthen and reform financial regulatory and supervisory systems to ensure global financial stability and prevent further crises, and to ensure that the international financial institutions reflect contemporary economic realities.

French Parliament ratifies N-deal with India
Even as India and the United States iron out their differences over the reprocessing of the spent nuclear fuel under the 123 agreement, the French Parliament has ratified the India-France nuclear accord, paving the way for French nuclear giants to build nuclear plants in India.

The French National Assembly adopted a law authorising the ratification of the agreement signed between the two countries on September 30, 2008, during Prime Minister Manmohan Singh’s visit to Paris. This is subsequent to the adoption of the same law by the Senate on October 15, 2009.

It will enable the early entry into force of the agreement. It now paves the way for strengthening relations between French and Indian partners and for more concrete developments in the industrial field.
 
France was the first country to sign a civil nuclear cooperation agreement with New Delhi days after India secured a waiver from the nuclear suppliers’ group (NSG) to undertake nuclear commerce in 2008. Since then, India has signed nuclear deals with the US, Russia, Namibia, Kazakhstan, Mongolia and Argentina.

French nuclear supplier Areva has been allocated the nuclear project site at Jaitapur in Maharashtra to initially build two power plants.
 
The Indo-French nuclear agreement allows reprocessing of the spent nuclear fuel from French nuclear reactors under safeguards, and gives an assurance of lifetime supply of nuclear fuel for these reactors. It does not bar the transfer of enrichment and reprocessing technologies. With the ratification of the agreement by the French Parliament, France becomes the second country after Russia to give unconditional rights to reprocess spent nuclear fuel to India.

The agreement makes it mandatory that reprocessing be done under the safeguards of the International Atomic Energy Agency.

SCANDALSCBI pegs Satyam fraud at Rs 14,000 cr
Seven months after its first charge sheet in the Satyam scam, CBI on November 24, 2009, filed a supplementary charge sheet against disgraced Satyam founder B. Ramalinga Raju and nine others, pegging the Satyam fraud at Rs 14,000 crore instead of the Rs 7800 crore that Raju had owned up to in January 2009.

The additional charge-sheet, however, fails to nail Raju and aides on siphoning of funds from Satyam Computer, instead saying that the investigating agency was planning to file a separate chargesheet on the allegations of funds diversion and income-tax frauds within the next few days.

The 200-page charge-sheet filed in the CBI court charged the accused of forging board resolutions and unauthorisedly obtaining loans worth Rs 1220 crore from banks as well as inflating Satyam revenues to the tune of Rs 430 crore by creating fake customers and generating fake invoices.
   
The charge-sheet also identifies 1065 properties with a documented value of Rs 350 crore that were acquired by the Rajus with the spoils of the fraud. These include 6,000 acres of land, 40,000 sq yd of housing plots and 90,000 sq ft of built-up property.

CBI has also slapped charges of criminal breach of trust and falsifying accounts by inflating the acquisition price of Nipuna Services Ltd, the ITeS arm of Satyam. It also slapped a criminal breach of trust on them in the declaration and disbursal of dividends of Satyam Computers.
 
Meanwhile, the Rs 1,220 crore unauthorized loans detailed by CBI in the charge-sheet are not reflected in the company's books and are over and above the Rs 1,230 crore that Raju confessed to Satyam having received from various Raju family owned companies including Maytas Infra and Maytas Properties.

Madhu Koda arrested for mining and money laundering
The Jharkhand Vigilance Bureau has arrested former Chief Minister Madhu Koda in the multi-crore mining and money laundering case. A joint team of Jharkhand Police and State vigilance bureau arrested Mr Koda after he repeatedly refused to respond to summons from the Enforcement Directorate for questioning. Mr Koda described his arrest as part of Congress’ conspiracy to keep him away from election campaigning.

Mr Koda is alleged to have laundered thousands of crores during his stint as the Chief Minister between 2006 and 2008. ED’s probe into the money laundering operation, which is spread from Singapore to Thailand and from Dubai to Liberia, is set to balloon into one of the biggest bribery and corruption scandals in the country.
   
NAGALANDAssembly hails rebel groups
The Nagaland State Legislative Assembly has extended ‘recognition’ to the Naga undergrounds for having “selflessly worked, fought and sacrificed” for the aspirations and rights of the Naga people. This ‘recognition’ as a resolution was adopted in the State Assembly on November 29, 2009, even as talks between the government of India and the NSCN(IM) have yet to reach a conclusive stage. The resolution was passed unanimously with members cutting across party lines to support it.

The State Assembly also reiterated its earlier stand on integration of all Naga-inhabited areas in the region, an issue that also figures prominently on the NSCN agenda.

The Nagaland Assembly has so far passed four resolutions in favour of integration of Naga areas—first on December 12, 1964, followed by August 28, 1970, September 16, 1994 and December 18, 2003. The 60-member House in the resolution also appealed the negotiating parties of the Naga political dialogue to expedite the political process and bring about an early resolution through a negotiated settlement which was honourable and acceptable to the Naga people.

The State Assembly, through its resolution, also appreciated the government of India, particularly Prime Minister Manmohan Singh and Union Home Minister P. Chidambaram for their “renewed sincerity” towards finding a permanent solution to the decades-old “Indo-Naga” political problem.

The resolution also appreciated the civil society, churches, NGOs and the Forum for Naga Reconciliation (FNR) for their all out efforts towards reconciliation, understanding and oneness of all sections of Naga society. The resolution also hailed the sincerity of the underground groups, especially their commitment towards peace and understanding by signing the “Covenant of Reconciliation” earlier at Chiangmai in Thailand on September 23, 2009.
 
The resolution further decided to constitute a Joint Parliamentary Committee on the Naga political issue comprising members from all political parties. This committee would carry the voice of the House to all concerned sections including the Centre and the Naga rebel groups.

TERRORISM; LAW & ORDERCentre ready with anti-Naxal plan
Home Minister P. Chidambaram announced on November 1, 2009 that the Union government is a ready to launch the much-awaited full-fledged anti-Naxal operations in three different areas, considered tri-junctions of Maoist violence.

The tri-junctions, which have been identified for the offensive against the ‘Red Rebels’, are: Andhra Pradesh-Maharashtra-Chhattisgarh; Orissa-Jharkhand-Chhattisgarh and West Bengal-Jharkhand-Orissa.

Around 40,000 paramilitary personnel would assist the respective State police forces during the operations. Almost 7,000 specially trained troops in jungle warfare are also part of the total strength of the Central forces to be deployed for the task.

The anti-Naxal plan also includes Rs 7,300 crore package for unleashing developmental works in areas cleared off the Left-wing extremists. Officials feel that the Naxal menace, which has now spread to 40,000 sq km area across the country, can be wiped out in a period of 12 to 30 months.

Around 25 lakh people live in areas where Maoists are now having a free run. The Naxalites have killed more than 2,600 people, including civilians, in 5,800 incidents in last three years.


CURRENT INTERNATIONAL AFFAIRS

AFGHANISTANKarzai elected President
On November 1, 2009, Afghanistan's Presidential challenger announced he would not participate in the run-off election because his demands for measures to prevent fraud were rejected. He stopped short of calling on his supporters to boycott the balloting.

Abdullah made no mention of agreeing to take part in any future unity government with President Hamid Karzai, which the US and its international partners believe is the best hope for curbing the Taliban insurgency.

In an emotional speech, Abdullah said he did not believe a free and fair election was possible without changes in the leadership of the electoral commission, which ran the fraud-marred first-round ballot on August 20, 2009. Abdullah said the Afghan people should not accept results of a ballot run by the current group.

A run-off was ordered after the UN auditors threw out nearly a third of Karzai's votes in the first round ballot, dropping him below the 50 per cent threshold for victory in the 36-candidate field.

Afghanistan's election commission declared Hamid Karzai elected as President on November 2, 2009 after it called off a run-off following the withdrawal of his only rival, Abdullah Abdullah. With this move the political uncertainty in Kabul came to an end.

US officials hope to help restore legitimacy to Karzai's government by encouraging him to build a reform-minded government that is ethnically representative and includes Abdullah's followers. US Secretary of State Hillary Rodham Clinton released a statement that hinted at Abdullah's group having some voice in the government. She praised Abdullah for running a "dignified and constructive campaign that drew the support of Afghan people across the nation. We hope that he will continue to stay engaged in the national dialogue and work on behalf of the security and prosperity of the people of Afghanistan."

Hamid Karzai was sworn in for a second term as Afghan President on November 19, 2009. The 51-year-old has pledged to fight corruption and take control of his country's security before his five-year term ends.

His inauguration came against the backdrop of an ever more deadly Taliban insurgency, doubts over his legitimacy after the tainted election, and demands from Western donors that he address rampant corruption and mismanagement.

BANGLADESHHindu property confiscated during 1965 war to be returned
On November 2, 2009, the Bangladesh cabinet approved a proposed law to return Hindu property, which were confiscated during the 1965 Indo-Pak war, when the country was eastern wing of Pakistan, ending a major violation of the rights of minorities in the country.

The proposed law is meant to redress the long-disputed law of the Pakistani era, which was widely criticised as a major violation of the minority rights. During the Pakistan period, the law was called as the Enemy Property Act.

The then Pakistani regime enacted the law to confiscate the property of the Hindu families who fled the country when the India-Pakistan war broke out in 1965 while the post-independent Bangladesh government renamed it as the Vested Property Act 1974.

Officials familiar with the process said under the amended proposal, the government would publish lists of “returnable and non-returnable vested property” within a certain period of times while the claimants could also seek review about “non-returnable” property. Under the law, government committees at district and upzila or sub-district levels would settle disputes regarding the disputed property.

The Awami League had enacted the law to return the minority property at the fag end of its previous 1996-2001 tenure setting a two-year implementation deadline but the subsequent Bangladesh Nationalist Party (BNP) sat on it exposing it to a natural death. The 2001 law stipulated that land that was seized be returned to its original owners, provided that the original owners or their heirs remained resident citizens.

Mujib’s murderers convicted after 34 years
On November 19, 2009, Bangladesh's Supreme Court rejected the appeals of five former army officers and confirmed death sentence on seven others, who are living abroad, for killing the country's founding father Sheikh Mujibur Rahman and his family members 34 years ago.

A five-judge bench of the apex court delivered the judgement amid tight security on the court premises and key establishments across the country, bringing to an end a long court battle on an emotive issue.

Sheikh Mujib, officially referred to with the honorific Bangabandhu, who was then the country's President, was killed in a coup on the morning of August 15, 1975, less than four years after he led a movement that culminated in the emergence of Bangladesh after its violent separation from Pakistan.

In its judgement, the apex court ruled that the incidents of August 15, 1975, were “a simple murder and it was not a result of mutiny”. Also gunned down or bludgeoned in three separate attacks were most of Mujib's family members, close relatives, political associates, Mujib's security chief and personal staff.

Referred to as “killer majors”, since most of them were junior officers, the condemned men had later openly claimed to have carried out the killings in what they described as national interest.

Prime Minister Sheikh Hasina, Mujib's elder daughter and one of the two survivors, revived the court trial after she returned to power in January 2009. Sheikh Rehana, the other surviving daughter of Sheikh Mujibur Rahman, in her reaction, said it was important that the verdict had been upheld by the Supreme Court.

EUROPEAN UNIONBelgian PM chosen first President
On November 19, 2009, European Union leaders have named Belgian Prime Minister Herman Van Rompuy as the bloc’s first President and appointed Briton Catherine Ashton as its foreign affairs chief.
 
A consensus was reached at a summit in Brussels after Britain dropped its insistence that former British Prime Minister Tony Blair should become President, ending weeks of deadlock and opening the way to agreement on Van Rompuy.
 
The appointments are intended to bolster the EU’s standing and help it match the rise of emerging powers such as China following the global economic crisis.
 
Van Rompuy, 62, and Ashton, 53, are low-profile compromise candidates little known outside the EU and at least initially will not have the clout in foreign capitals that an established statesmen such as Blair would have had.
   
PAKISTANZardari hands over ‘nuke button’ to Gilani
Pakistan's embattled President Asif Ali Zardari has transferred control of the country’s nuclear arsenal to Premier Yousuf Raza Gilani and said he intended to strip the Presidency of more powers soon.
   
The President gave up his control over the nuclear arsenal by re-promulgating the National Command Authority Ordinance and amending it, a move described as a “giant leap forward to empower the elected Parliament and the Prime Minister.”

Zardari also said in an interview with a TV news channel that the 17th Constitutional amendment which gives President sweeping powers to dismiss the Premier and dissolve Parliament will also be done away with soon.

Meanwhile, a controversial law which scrapped graft cases against Asif Ali Zardari and his key allies expired on November 28, 2009, but the Pakistan President felt it will not affect him as the Constitution provides “indemnity” to the person holding the top post in the country.
 
PHILIPPINESEmergency imposed after massacre
On November 24, 2009, Philippines President Gloria Macapagal Arroyo placed two southern provinces and a city under emergency rule after 24 people were killed in the worst-ever election related violence in the country.

The orders were issued as troops, using shovels and bare hands, dug up hastily covered graves on a grassy hillside in Maguindanao to recover the victims of the massacre. Some of the dead men had their hands tied behind their back and one of the women was pregnant. Eight of those found dead were local journalists. They were part of a group of 40 people abducted by gunmen when on their way to file a candidate's nomination to contest the governorship in elections May 2010.
 
Elections in the Philippines are usually marred by violence, especially in the south, where security forces are battling communist rebels, Islamic radicals and clan rivalries.

SWITZERLANDVoters approve ban on minarets
Swiss voters approved a ban on construction of new minarets on November 29, 2009, a surprise result that is certain to embarrass Switzerland’s neutral government and could also damage its economic ties with Muslim States.

About 57.5% of voters and all but four of the 26 cantons approved the proposal in the nationwide referendum, which was backed by the right-wing Swiss People’s Party (SVP). The government said it would respect the people’s decision and declared construction of new minarets would no longer be permitted. “Muslims in Switzerland are able to practise their religion alone or in community with others and live according to their beliefs just as before,” it said in a statement. Justice Minister Eveline Widmer-Schlumpf said the outcome of the vote reflected a fear of Islamic fundamentalism, but the ban was “not a feasible means of countering extremist tendencies”.

Both the government and Parliament had rejected the initiative as violating the Swiss constitution, freedom of religion and the nation’s cherished tradition of tolerance. The UN human rights watchdog had also voiced concerns.

The SVP, Switzerland’s biggest party, and Federal Democratic Union gathered enough signatures to force the vote on the initiative opposing the “Islamisation of Switzerland”. The move has stirred fears of violent reactions in Muslim countries and an economically disastrous boycott by wealthy Muslims who bank and vacation in Switzerland.

The right-wing campaign to outlaw minarets on mosques has received an unlikely boost from radical feminists arguing that the tower-like structures are “male power symbols” and reminders of Islam’s oppression of women. Julia Onken, a prominent feminist, warned that failure to ban minarets would be “a signal of the State’s acceptance of the oppression of women”.

WORLD ECONOMYG-20 launches framework to boost global economy
The finance ministers of G-20 nations have agreed on a timetable for the new framework for balanced and sustainable growth of the global economy, but made a little progress on financing efforts to reduce global warming.

The world’s leading developed and emerging economies committed to have peer review and “more specific policy recommendations” in place by  November 2010. The Finance Ministers, during the two-day meeting at St Andrews in Scotland, on November 8, 2009, hoped that if all countries put political weight behind the negotiations over the next year, the world can recover without developing the huge trade and financial imbalances of the past decade.
   
But there was no agreement on a specific set of common objectives, nor a mechanism to resolve disputes. On the climate change issue, the Finance Ministers agreed only to keep working for an ambitious outcome at meeting in Copenhagen but could not agree on the amount of money developed countries will offer to poorer countries to help them reduce their carbon dioxide emissions.

The meeting was also overshadowed by a dispute about the possibility of a global tax on financial transactions. Addressing the meeting, British Prime Minister Gordon Brown floated the idea of such a tax would help banks to pay for the insurance they receive from taxpayers. Within hours of the suggestion, the idea appeared still-born when US Treasury Secretary Tim Geithner said: “A day-to-day financial transaction tax is not something we are prepared to support.” But some of the other measures mentioned by Brown—an insurance fee to reflect the risk of some banks, a pre-funded pool of money to support orderly bank bankruptcies and contingent capital arrangements-have more international support. The US is supportive of efforts to ensure banks cannot rely on taxpayers to bail them out in future.
 
Eurozone pulls out of recession
Europe's deepest recession since the second world war has officially ended after the world's biggest single trading bloc joined Japan and the United States in returning to growth. Both the 16-nation eurozone, and the 27-nation European Union as a whole, expanded their economies in the third quarter, with a 0.4 per cent increase in the single currency area and a 0.2 per cent rise across the bloc as a whole.

But despite exiting five quarters running of economic retreat, analysts said that the improvement is unlikely to be robust enough to allow governments to end State support measures, particularly with unemployment continuing to rise.

The eurozone economy had shrunk by 0.2 per cent between April and June after a record collapse of 2.5 per cent in the first three months of 2009. But growth of 0.7 per cent in Germany, Europe's most powerful economy, and 0.3 per cent in France, in the third quarter lay behind the improvement.

Britain, with a 0.4 per cent contraction and Spain, with a 0.3 per cent decline, contributed to the lower figure for the EU as a whole.

The European figures compare with a 0.9 per cent improvement in third-quarter economic output in the United States, with Japan having already exited from recession in the second quarter with 0.6 per cent growth.

Hoarwd Archer, the chief economist at IHS Global Insight, poured some cold water on the news when he said the the emergence into daylight  came "at a trot rather than a canter". Cautioning that "consumer spending likely saw little or no growth," Archer warned that the recovery "could well lose momentum for a time in 2010 before growth starts to gradually pick up again".

But he forecast overall eurozone growth of one per cent in 2010. Clemente De Lucia of BNP-Paribas, a French bank, said the rebound was due mainly to the industrial sector and warned that the recovery "might fade in 2010" once the impact of schemes, such as help for boosting new car sales, was fully withdrawn. He also pointed to high unemployment, running at more than 22 million at the last count across the EU, acting as a brake on expansion for some time yet.

OECD doubles 2010 forecast
The Organisation for Economic Cooperation and Development has doubled its growth forecast for the leading developed economies in 2010 and predicted a further acceleration in 2011 as China powers a global recovery.

The economy of the group’s 30 member countries will expand 1.9% in 2010 and 2.5% in 2011, the Paris-based organisation said in a report. Output will contract 3.5% in 2009. The OECD, which advises members on economic policy, forecast 2010 growth of 0.7% in June.
 
But the recovery will be marred by high unemployment and huge government debt across the industrialised countries, the OECD said. Central banks and governments in major Western economies should prepare for a gradual upwards shift in ultra-low interest rates and for fiscal consolidation once recovery is stronger, but they will only need to move in late 2010 at the earliest given that inflation is so low.

Output in the OECD economies will only return to the level achieved in the first three months of 2008 in the third quarter of 2011, underlining the damage done by the banking crisis.

The OECD gave 2011 growth forecasts for the first time. The US will grow 2.8%, the euro area 1.7% and Japan 2%. The Chinese economy will expand 9.3%, it said. The global growth forecast includes emerging giants China, Brazil, India and Russia with the mostly industrialized economies of its own 30-country membership and in all covers some 80% of world output.

The OECD said it expected world trade to grow 6.0% in 2010 and 7.7% in 2011 after a plunge of 12.5% in 2009. China and India are poised to accelerate due to strong stimulus measures, the OECD projected.

The Paris-based group hiked its growth forecast for China to 9.3% in 2009 and 10.2% in 2010. In March, it projected China's growth at 6-7% in 2009. For India, the OECD boosted its growth forecast to 6.1% in 2009 and 7.3% in 2010, rising to 7.6% the following year. The OECD, in March, projected 4.3% expansion for India in 2009. India's recovery appeared to be only “modestly hampered” by the driest monsoon in nearly four decades and economic data suggested the growth “momentum is strengthening,” the OECD said. But a resurgence of inflationary pressures pose a “key challenge” to Indian policymakers in deciding when to withdraw stimulus in order to tackle the large public deficit, it said.

Dubai rattles global scrips with its woes
Global markets from Sydney to Sao Paulo trembled on November 26, 2009, on fears that Dubai’s attempts to reschedule loans might trigger a fresh round of financial troubles in a world just emerging from the worst economic crisis since the 1930s and which may be amplified in India as thousands of expats stare at job losses and reduced trade.
 
India, which gets nearly a quarter of its remittances from the United Arab Emirates and has lakhs of labourers working in the region, may be worse off than most other nations if the crisis escalates into a full-blown one like the Russian or Argentinian crises of the past.
 
Indian shares and the rupee fell in sync with the rest of the global markets where investors are fleeing for safety after Dubai World, the government investment company with $59 billion of liabilities, sought to delay repayment on much of its debt. Investors believe that there could be more trouble spots in emerging markets after Vietnam devalued its currency and raised rates. The Bombay Stock Exchange’s Sensex fell 2% to 16,854.95, and the rupee fell 24 paisa to 46.55 against the dollar. The MSCI Emerging Markets Index lost 1.4%.

Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the global recession. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG. Banks around the world have written off more than $1.7 trillion as the credit crisis trashed the value of their assets.
   
Dubai World’s lenders include Credit Suisse Group AG, HSBC Holdings, Barclays, Lloyds Banking Group and Royal Bank of Scotland Group.

ENVIRONMENTChina announces ambitious emission caps
Green NGOs were elated after China announced ambitious cuts in the carbon intensity of its economy by 2020 in a major boost to the global effort to tackle climate change. China announced a 40-45 percent reduction in the carbon intensity from the business-as-usual scenario by 2020. Carbon intensity measures the amount of carbon dioxide—the main greenhouse gas that is causing global warming—emitted per unit of industrial output. India's carbon intensity is one of the lowest among emerging economies.

International NGO Greenpeace also welcomed China's announcement but said it was not enough. "Given the urgency and magnitude of the climate change crisis, China needs stronger measures to tackle climate change," said Ailun Yang of Greenpeace China. "This is a significant announcement at a very important point in time. But China could do more."

Since 2007, China is the world's largest emitter of greenhouse gases, though almost all the carbon dioxide in the atmosphere now has been put there by developed countries since the start of the Industrial Age.

Yang noted that the announcement by China is yet another commitment for the climate coming from a major developing country ahead of the UN Copenhagen Climate Summit. "This is another challenge to the industrialised world, particularly the US, which has just announced an inadequate emissions reduction target of only 4-5 percent by 2020."

The Intergovernmental Panel on Climate Change—a grouping of over 2,500 scientists from around the world—has said the developed world should cut emissions by at least 25-40 percent below 1990 levels by 2020 and reduce 80-95 percent by 2050.

For China, a low carbon path is a national priority and a sure way to keep up its economic tempo. China can ill-afford to let ‘invisible’ carbon denominated process and production methods (PPMs) standards shackle its export offensive.

More than India, it is China that should be worried about the current efforts to re-interpret Article XX (e) of GATT to keep out ‘goods based on carbon intensive processes’. In reality, China has been under greater pressure to stave off the ‘climate related threat’ from the WTO window. By sending a ‘concrete’ signal of commitment to emission intensity reduction, the People’s Republic is doing its best to keep the trade dragon from getting into the FCCC fold.

There could be an interpretation that the Chinese concession is an implicit acceptance of NAMA. Given the fact that China is still coal dependent and looks towards safe and cost-effective carbon capture and storage (CCS) technologies, it does not make sense for it to accept NAMA commitments without quid pro commitments on the technology transfer front. It is important that India and China have a concerted position on this issue.
   
Earlier in the month of November, Brazil had offered to reduce its emissions if it was provided international funding to control deforestation of the Amazonian forests. The move was interpreted by some as a sell-out to industrialised countries. And, now India faces the challenge of how to escape being seen as a global hurdle.

The Chinese move came a day after the US administration, that held out for long, announced that it would offer a target of reducing its greenhouse gas emissions "in the range of" 17% by 2020 as compared to 2005 levels. When converted to benchmarks set under Kyoto Protocol, this works out to 4% reduction below 1990 levels—almost seven times less than what the EU has offered and less than 1/10th of what the UN IPCC requires industrialised countries to do to check catastrophic climate change.

One senior official said: "China’s offer are not absolute reductions, please note, and they are purely voluntary, China has not offered them as a commitment towards international compact. This is along lines that China had informed us of. But they leave a positive impression internationally." In fact, the Chinese are aiming to earn goodwill without doing much. The industrialized countries are obliged under the existing UN treaty to reduce their emissions by absolute levels below a fixed benchmarked year. China, in comparison has offered a purely voluntary reduction in its carbon intensity. The carbon intensity target also provides enough leverage for ‘creative accounting’ in measuring success of targets.
   
NUCLEAR PROLIFERATION
Chinese N-shopping mall helped Pakistan
China supplied Pakistan with enough weapons-grade uranium for two atomic bombs in 1982 and continued to help Islamabad out with its nuclear programme, according to a report in The Washington Post.

Outing China as a nuclear proliferator, the report, which sourced the narrative from accounts written by disgraced Pakistani nuclear scientist A.Q. Khan, said that a Pakistani military C-130 left the western Chinese city of Urumqi with the “highly unusual cargo" in 1982.
 
That China supplied Pakistan with nuclear know-how has always been suspected, but this is the first time that a detailed account of how it took place has come out and that too straight from the accounts of A.Q. Khan. The uranium transfer was reportedly part of a secret nuclear deal approved years earlier by Mao Zedong and Prime Minister Zulfiqar Ali Bhutto in the 1976, four years after India tested its first nuclear weapon.
   
But it was realised only during the time of Zia ul-Haq, who after taking power and hanging Bhutto was struggling under rumours of a pre-emptive strike by India. So Khan and a Pakistani general were sent to Beijing "to borrow enough bomb-grade uranium for a few weapons." Chinese leader Deng Xiaoping gave the approval and Khan and his team flew aboard a Pakistani C-130 to Urumqi where Khan says they enjoyed barbecued lamb while waiting for the Chinese military to pack the small uranium bricks into lead-lined boxes to be flown to Islamabad.
 
“Upon my personal request, the Chinese Minister . . . had gifted us 50 kg [kilograms] of weapon-grade enriched uranium, enough for two weapons,” Khan wrote in an 11-page narrative of the Pakistani bomb programme that he prepared after his January 2004 detention. “The Chinese gave us drawings of the nuclear weapon, gave us 50 kg enriched uranium,” he said in a separate account sent to his wife several months earlier. China in effect supplied a "virtual do-it-yourself kit that significantly speeded Pakistan’s bomb effort."
 
Even before that, China sent Pakistan 15 tons of uranium hexafluoride (UF6), a feedstock for Pakistan’s centrifuges, whose designs Khan has stolen. But it was also a give and take with Khan sharing Europe’s best centrifuge technology in the 1980s with the Chinese in an effort to help China’s uranium-enrichment programme.

India votes against Iran on IAEA resolution

On November 27, 2009, India joined 24 other countries at the Vienna-based International Atomic Energy Agency (IAEA) to vote against Iran on its nuclear programme. India’s censure was based on IAEA director-general Mohammed El Baradei’s report on Implementation of the NPT safeguards agreement in Iran which said all efforts to negotiate with Iran to address the international community’s concern over its ‘clandestine enrichment programme’ has reached a “dead-end.”

This was the third time that India has voted against Iran’s alleged clandestine nuclear weapons programme at the IAEA, the last two occasions being in September 2005 and February 2006. This decision had kicked off a massive political storm in the country. The Left parties, which were offering critical outside support to the UPA government at that time, had come down heavily on the ruling combine and accused it of being arm-twisted by the US into voting against Iran.

The vote had also raised serious concerns within the ruling Congress, which feared that this vote would erode its minority support base. Explaining New Delhi’s third vote on the governing body resolution Vienna, External Affairs Ministry spokesperson said: “Our support for the resolution was based on the key points contained in the Report of the Director General.”

The IAEA has come to the conclusion that Iran was not transparent about its nuclear programmes and concluded that it was pursuing clandestine nuclear weapons programme. In September, Iran confirmed the doubts about its weapons programme when it disclosed the existence of a second uranium enrichment plant in Fordo, not very far from Tehran.

India, on its part, has been doing a tightrope walk on the sensitive issue. It has consistently opposed Tehran on this issue in multi-lateral forums but continued to engage with Tehran bilaterally. The reasons for this were explained by Prime Minister Manmohan Singh when he pointed to the ancient civilization links between the two countries, New Delhi’s dependence on Iran for energy and the presence of five million Indians living in Iran.
 
Continuing with its balancing act, India was quick to strike a conciliatory note after its censure of Iran at Vienna. It pointed out that this resolution should not be used to renew punitive action or new sanctions against Iran.

The latest resolution was backed by all five permanent members of the UN Security Council. The three countries that opposed the anti-Iran IAEA resolution were Cuba, Venezuela and Malaysia, while Pakistan, Afghanistan, Egypt, Turkey, South Africa and Brazil abstained from voting.

Iran to build 10 new enrichment plants
On November 29, 2009, Iran announced plans to build 10 new uranium enrichment plants in a major expansion of its nuclear programme—a clear show of defiance after the UN nuclear watchdog rebuked Tehran over secret such work. The decision by hardline President Mahmoud Ahmadinejad's government will further aggravate tensions between the Islamic Republic and major powers seeking a diplomatic solution to a long-running dispute over Iranian nuclear activities.

It may speed up discussions in the West about possible new sanctions on Iran over its repeated refusal to halt uranium enrichment, which the US and its allies suspect is part of a covert bid to develop nuclear bombs. Iran denies this.

The new enrichment facilities would be the same size as Iran's main enrichment complex at Natanz.

INTERNATIONAL RELATIONSVisit of US President to China
On November 17, 2009, in a delicate balancing act during his visit to China, US President Barack Obama supported early resumption of talks between China and the Dalai Lama’s representatives while describing Tibet as part of this country. Taking note of the sensitivities of China and the exiled Tibetan leader, Obama, during his maiden visit to China as President, said: “We did note that while we recognise that Tibet is part of the People’s Republic of China, the US supports the early resumption of dialogue” between the Dalai Lama’s representatives and Beijing.

Obama’s remarks came after his meeting with his Chinese counterpart Hu Jintao during which the two sides discussed a host of issues including India-Pakistan relations, Iran’s controversial nuclear programme, Afghanistan, terrorism and climate change.

The US and China agreed to work together to bring about stable and peaceful relations in all of South Asia, Obama said during his joint briefing with Chinese president Hu Jintao in Beijing. Hu, who spoke first, didn’t mention Pakistan or South Asia. This was a rare occasion when a US president acknowledged that Beijing has a role to play in the India-Pakistan relationship. The move, if serious, runs counter to predictions of US foreign policy experts that the US would not acquiesce in a future Chinese hegemony in the region.
 
While the joint statement was met with silence by New Delhi, it infuriated officials in the foreign office because it brought back nasty memories of another US-China joint statement by Bill Clinton and Jiang Zemin on June 29, 1998. Then too, it was Clinton and Jiang, in what India considered “offensive” language, scolding India and Pakistan for their nuclear tests. India had reacted sharply then, buffetted by general international condemnation after the tests.

But latest statement cut at the heart of an Indian effort to build a relationship with the US without China complicating the issue. The reality is perhaps that the joint statement was drafted by Obama’s China officials who don’t read India’s sensitivities. But that it was allowed to go through signals to many Indian strategists that Obama may be more than pliant to China, giving it a role in a region where it’s bound to come into conflict with a country Obama says is a strategic US partner, India.

SUMMITS
CHOGM
Commonwealth Heads of Government Meeting (CHOGM) was hosted in the city of Port of Spain in the Republic of Trinidad and Tobago on November 27-29, 2009. The Opening Ceremony of the Meeting included an address by Her Majesty Queen Elizabeth II, Head of the Commonwealth.

The CHOGM is the supreme body of the Commonwealth. It is convened every two years to review global, political and economic developments and to conduct a strategic overview of the Commonwealth’s work in support of the interests of member countries.

The objective of this Summit was to engage leaders of the Commonwealth in discussing global and Commonwealth issues and to agree upon collective policies and initiatives.

The leaders agreed to admit Republic of Rwanda as the 54th member of Commonwealth.

Climate change was a major topic of discussion at 2009 CHOGM, due to the proximity of the meeting to the Copenhagen climate change summit, but also because many Commonwealth States are particularly vulnerable to the effects of global warming.

The 53 member States of the Commonwealth called for an “internationally legally binding agreement” on climate change to be agreed at the Copenhagen conference in December 2009. Leaders also pledged support for a fund to help poorer countries tackle climate change.

Heads of government endorsed the Report of the Commonwealth Ministerial Action Group (CMAG), covering the Group's deliberations in the period since last meeting in Kampala in November 2007. They commended CMAG's work, which has contributed significantly to the protection and promotion of the Commonwealth's fundamental political values in member countries.

Heads of government also welcomed the reinstatement of Pakistan in the Councils of the Commonwealth following the conduct of credible elections in the country in February 2008 and the assumption of office by an elected, civilian government in April 2008. However, they expressed deep concern at the further deterioration of the situation in Fiji Islands with regard to its adherence to fundamental Commonwealth values, including the abrogation of the Constitution in April 2009, ongoing restrictions on human rights, including freedom of speech and assembly, and the Interim government’s decision to further delay elections until 2014. They noted that these actions had led to the full suspension of Fiji from the Commonwealth on September 1, 2009.

Heads of government once again acknowledged the threats posed by weapons of mass destruction, especially nuclear weapons, and reaffirmed their commitment towards ridding the world of these weapons. Recognising that the ultimate objective is general and complete disarmament under strict and effective international control, Heads reaffirmed their commitment to the non-proliferation of weapons of mass destruction, which should be achieved in accordance with the United Nations Charter. Heads reaffirmed the rights of States to nuclear energy for peaceful uses in conformity with their international obligations. They also noted the ongoing efforts towards the negotiation of a comprehensive Arms Trade Treaty (ATT) in respect of conventional weapons, and the proposed ATT conference to be held in 2012. They called for the finalisation of a robust and comprehensive ATT based on consensus.

CHOGM reaffirmed unequivocal condemnation of terrorism in all its forms and manifestations, committed by whomever, wherever and for whatever purposes, as criminal and unjustifiable. They reiterated that acts of terrorism cannot be justified or legitimised by any cause or grievance whatsoever.

Continuing need for comprehensive efforts at all national and international levels to counter terrorism, including efforts to build respect and understanding among peoples was stressed. The Heads also emphasised the need to conclude negotiations on a Comprehensive Convention on International Terrorism on a priority basis, preferably during the Sixty-Fourth Session of the UN General Assembly and called upon all member States to accede to the UN Counter-Terrorism Conventions and Protocols, and to effectively implement these as well as the UN Global Counter-Terrorism Strategy and relevant Security Council Resolutions, and to prevent the use of their territories for the support, incitement or commission of terrorist acts in other States.

Recognising that corruption in its various forms undermines good governance, public security, respect for human rights and economic development, CHOGM urged member States which had not already done so to consider becoming parties to the UN Convention against Corruption (UNCAC), and to implement its provisions, including those addressing asset recovery, to help them combat systemic corruption at both national and international levels.

Heads expressed their support for the commitment to avoid protectionism, and to strengthen financial supervision and regulation. They emphasised the importance of renewing the contract between financial institutions and the society they serve, and the need to ensure the sector bears the full cost of the risk associated with their activities. They encouraged the IMF to consider the full range of options in their review and welcomed the steps taken by many countries to mitigate the impact of the economic crisis, and the fragile signs of growth in the global economy. They expressed concern, however, that the social and economic impact of the crisis would continue to affect a vast majority of the developing countries, particularly the smallest and most economically vulnerable members of the Commonwealth, including LDCs and SIDS.

Australia will host the 2011 CHOGM. Sri Lanka and Mauritius will host the 2013 and 2015 CHOGMs, respectively.

INTERNATIONAL TERRORISMItaly arrests two for aiding 26/11 attacks on Mumbai
Tracing new links to the Mumbai carnage, a Pakistani father-son duo were arrested from Italy for allegedly managing money transfer to finance phone communications of the attackers following leads from Indian and US investigators.

The two men, who ran a money transfer agency, were arrested in an early morning raid from the northern Italian city of Brescia, police said. The duo have been identified by the police as Mohammad Yaqub Janjua, 60, and Aamer Yaqub Janjua, 31. They have been accused of aiding and abetting international terrorism as well as illegal financial activity.

On November 25, 2008, a day before the attacks, they transferred $ 229 to activate an internet phone account that was used by the attackers and their accomplices, said Stefano Fonzi, the head of anti-terror police in Brescia.

The funds that enabled the terrorists to be in touch with their handlers in Pakistan were transferred under the identity of another Pakistani man who had never been to Italy and was not involved in the attacks, reports from Italy said. The two managed a money transfer agency where it is reported to be a common practice to transfer funds using false identities. The Italian police arrested the two men in an early morning raid in Brescia, the police said in a statement.

Italian police started their investigation the following month after being alerted by Indian authorities and the FBI that funds had been transferred from Italy.

Pak court names Zaki-ur-Rehman Lakhvi as 26/11 mastermind
In what is being seen as a clever move by Islamabad to bury LeT founder and Jamaat-ud-Dawa chief Hafiz Saeed’s role as the prime strategist behind the 26/11 attacks, a Pakistani trial court, while framing charges against seven accused on its soil, has instead named Zaki-ur-Rehman Lakhvi as the mastermind.
   
Exactly a year after the Mumbai assault, on November 25, 2009, the special anti-terror court set up in Adiala jail in Rawalpindi framed charges against all the seven accused in Pakistan’s custody, reportedly confirming Lakhvi as the mastermind and Zarar Shah, Abu al-Qama, Hamad Amin Sadiq, Shahid Jamil Riaz, Jamil Ahmed and Younas Anjum as handlers/facilitators. All seven had pleaded not guilty. They have been reportedly charged under the anti-terrorism act and the Pakistani penal law. The charges include providing training, financial support, accommodation, equipment and communication gear to the 10 terrorists who had attacked Mumbai, including the lone survivor Ajmal Amir Kasab, who is now in India’s custody.

Interestingly, the dossier submitted by India on the 26/11 investigations to Pakistani names JuD chief Hafiz Saeed as the mastermind behind the Mumbai plot. Zaki-ur-Rehman, Zarar Shah, Abu Qama and others, now facing trial in Pakistan for their involvement in the 26/11 attacks, were only acting under the instructions of Saeed. Saeed is alleged to have personally overseen the preparations and events leading up to the major assault on India’s financial capital. Senior officials of the security establishment are obviously disappointed over the absence of any reference by the Pakistani court to Saeed’s role in the 26/11 conspiracy. The assessment in India is that the Pakistani court’s move, timed to coincide with the eve of the 26/11 anniversary, was essentially to exhibit to the world its “commitment” to punish the attacks’ perpetrators on its soil while ensuring a complete cover-up of Hafiz Saeed’s role as the key conspirator.
   
INTERNATIONAL TREATYArms Trade and Transfer Treaty
On November 1, 2009, even as the crucial global Arms Trade and Transfers (ATT) treaty, which seeks to regulate the $55 billion arms trade and promote democracy, found overwhelming support from 153 member countries at the UN. India was among the 19 who abstained from the meet. These 153 countries—including top arms suppliers like US, Britain, Germany and France—supported a UN disarmament committee resolution which will lead into negotiations for the treaty starting 2010.

While India may still take part in negotiations, the treaty in its present form was not in India’s interest. Certain binding clauses on social issues like violation of human rights and restrictions on arms sale expanding into controls on export of advanced technologies could work against India.
   
The US under George Bush in 2006 had opposed the treaty but it came round to supporting it under Barack Obama. The fate of the UN sponsored treaty still hangs in the balance as the list of 19 who abstained includes China and Russia, as also Pakistan.

The proposed treaty calls upon States involved in arms trade to not violate human rights, promote democracy and refrain from getting into any armed conflict. It also calls for ban on sale of arms to countries which promote terrorism.
 
The fact that India is still dependent on conventional weapons and imports a large number of these is another major concern. The proposed treaty will seek to set up export controls on transfers of advanced weapons, thereby extending the present Western-inspired controls on export of advanced technologies. This could impinge on the interests of India.


  October 2009

CURRENT NATIONAL AFFAIRS

BANKING & FINANCERBI monetary policy
As part of its second quarterly review of the monetary policy for 2009-10, the RBI, on October 27, 2009, hiked the Statutory Liquidity Ratio (SLR) for scheduled commercial banks to 25 per cent from 24 per cent of their net demand and time liabilities (NDTL), with effect from November 7, 2009, even as other key rates were left untouched.

RBI Governor D. Subbarao noted that the Indian economy was awash with liquidity and there was possibility of considerable strain in the future from inflationary pressures. However, to keep growth on track, the apex bank left the Bank Rate untouched at 6 per cent while the repo rate under the liquidity adjustment facility (LAF) stay at 4.75 per cent. The reverse repo rate under the LAF, too, remains the same at 3.25 per cent. The cash reserve ratio (CRR) of scheduled banks also has been retained at 5 per cent of their net demand and time liabilities (NDTL).

Mr Subbarao pointed out that the global economy has shown signs of major improvement since the last review in July 2009. However, concerns remained of the recovery being fragile. "Even as output is reviving, unemployment is expected to increase to over 10 per cent. Investment is also expected to remain weak due to ruptured balance sheets, excess capacity and financing constraints. Bank collapses are continuing. World trade still remains below its level a year ago. On balance, while global economic prospects have improved, uncertainties remain about the pace and sustainability of economic recovery," Subbarao said.

The RBI chief also noted that there were concerns of large government market borrowings. "During 2009-10 so far, the Central Government has already completed over 80 per cent (Rs 3,19,911 crore) of its net market borrowing and State governments have mobilised Rs 58,683 crore (net) through the market borrowing programme," he stated.

Highlights  


  • Repo rate retained at 4.75 pc
  • Reverse repo rate at 3.25 pc
  • Cash Reserve Ratio kept at 5 pc
  • Bank rates same at 6 pc
  • Provisioning requirement for realty up at 1 pc from 0.40 pc
  • Retains GDP growth projection for FY'10 at 6 pc
  • Industrial production may revive further in coming months
  • Ups inflation projection to 6.5 pc by March-end, from 5 pc
  • Third quarterly review in January.
PLANNING & ECONOMYRBI survey
The Reserve Bank of India has acknowledged the resurgence of the feel good factor in the Indian economy but has said that growth and inflation continue to be a concern.
   
Maintaining a hawkish stance on inflation, the central bank has highlighted its concern over slowdown in credit off-take and surplus liquidity in the system, giving no clear indication on its rate stance. In its report on Macro and Monetary Developments in Q2 of 2009-10, the Reserve Bank has noted that "The combination of a weak recovery and elevated CPI (consumer price index) inflation has already magnified the complexity of policy challenges, notwithstanding the subdued nature of headline WPI inflation so far."
   
While premature reversal of the monetary policy stance entails the risk of stifling recovery, persistence of accommodative stance could adversely impact inflation expectations.
   
However, the results of its survey, based on “assessment for July- September 2009” and “expectations for October-December 2009”, point to a strong momentum in industrial recovery. Both the indices remained above 100 for the second consecutive quarter (100 is the threshold that separates contraction from expansion). According to the RBI analysis, this suggests that the industrial recovery already seen up to August 2009 in terms of trends in IIP growth could gain further momentum.
   
The outlook for employment is also improving and firms are expected to increase their workforce on the back of expected increase in demand.
   
Among the positive pointers to the economic recovery include improved financial conditions as reflected in return of capital flows, significant recovery in the stock markets, and better transmission from low policy rates to declining lending rates. The RBI has also said that there should not be any concerns about private credit getting crowded out since over 80.4% of the government borrowing programme has been completed so far as there is adequate liquidity in the system.
   
But RBI is concerned about the deceleration in private consumption and investment demand that it says needs to be reversed from the low levels seen in the first quarter of 2009-10 for ensuring a sustainable recovery.

Indian economy seen cruising at 6.5% in 2010
A key economic think-tank has made the most optimistic official projection yet for growth in the fiscal to March 2010, flagged rising food prices as a major concern, and suggested that tighter monetary and fiscal policies are unlikely in the coming months.

The Prime Minister’s Economic Advisory Council, headed by former RBI governor C. Rangarajan, said it sees the gross domestic product (GDP) expanding by 6.5% in 2009-10.

In its July 2009 forecast, the RBI had forecast that India’s economy in 2009-10 would grow by 6%, with an upward bias, and the Planning Commission had said in early September that it sees GDP growth at 6.3%. India’s economy expanded by 6.7% in 2008-09 after growing at over 9% for three years.

The improving trend is unlikely to prompt any immediate withdrawal of stimulus measures or a tightening of monetary policy, even though the panel made clear its concern about inflation and fiscal deterioration. It expects the consolidated fiscal deficit of the Centre and States at 10.09% for 2009-10 and sees inflation, imported and local food inflation, as a significant risk for the Indian economy.

EDUCATIONIIMs can now set up campuses abroad
Directors of the prestigious Indian Institutes of Management (IIMs) and members of their boards will eventually be appointed through an independent collegium of industrialists and academics. Also, IIMs can set up campuses abroad, provided they come up with “workable proposals and preferably function together instead of individually”.

"We want to globalise the IIM brand,” said HRD Minister Kapil Sibal. In another major move, the government agreed that a collegium, as mooted for the appointment of vice-chancellors of central universities, would also apply to IIMs, where majority appointments so far are cleared by the HRD ministry, which advertises the positions before short-listing and selecting candidates.

But that is set to change to advance the cause of transparency in appointments to top institutes. IIM boards are also proposed to be restricted in size, with HRD ministry describing them as “unwieldy and huge”. The membership will be limited to 13 (currently over 20 or so.

The boards are proposed to be reconstituted post January 2010, the deadline which the government has given to IIM directors to present their views on the constitution of the collegium, which will be empowered to recommend names of board members and directors to the government for final selection.

For the institutes to beat competition, autonomy is the key, feel the directors. Sibal agrees, but with a rider: “We are for IIM autonomy, for letting go, but let’s not forget that the primary responsibility of all education systems is national.”

ELECTIONSCongress wins in Haryana, Maharashtra and Arunachal
With a stunning result in the latest political super-bowl, the Congress has fortified its "top dog" status, while pushing the main opposition party, BJP, into its gravest political crisis in over two decades.

Congress survived a scare in Haryana and retained power in the State with the help of independents as well as five Haryana Janhit Congress MLAs, who decided to join the Congress. Congress sailed back in style in Maharashtra and Arunachal Pradesh. All three CMs—Ashok Chavan in Maharashtra, B.S. Hooda in Haryana and Dorjee Khandu in Arunachal—have been renominated by the party leadership.
 
If the Lok Sabha polls settled the Number One slot for Congress party, the altest verdict confirmed that the gap between Sonia Gandhi’s outfit and BJP is growing. In fact, some political pundits feel Congress could well be on the way to regaining its pre-1996 status when, as the key player in most States, it could be fought only by a united opposition.
 
Some riders are, however, in order. The win in Maharashtra has been facilitated by Raj Thackeray playing spoiler again—on a bigger scale. In Haryana, the party failed to get a majority despite a three-way split of anti-Congress votes. The resurrection of Chautala shows the resilience of old-fashioned politics and should be sobering for those who feel traditional political tools—caste/community—have lost salience.
   
Haryana: In Haryana, the Congress vote share fell by a huge 7.4%, from 42.5% to 35.1%. Normally such a big swing away results in the decimation of a party. But Hooda has managed to keep his head above the water, thanks largely to a fractured opposition.

Chautala, too, lost his vote share, but by just 0.7%, while BJP’s share fell by 1.4%. The new political outfit, Kuldip Singh Bishnoi’s HJC, accounted for 7.4% votes.

Maharashtra: In the the lead-up to the Maharashtra polls, many had wondered whether Raj Thackeray would help Congress-NCP in as big a way as he did in the LS polls by eating into the Sena votebank yet again. Indeed, Congress-NCP cruised back to power as Shiv Sena citadels in Mumbai and Thane crumbled under Raj’s assault. In a result, the loser’s story is almost as important as the winner’s. If the ruling combine beat the incumbency blues, the 144-90 scoreline was the clap of doom for the Sena-BJP camp. To add to Sena’s woes, BJP crept ahead with 46 seats to its 44.
 
The revenge drama saw Raj Thackeray’s Maharashtra Navnirman Sena demolish Sena’s prospects by not only splitting the “Marathi” vote but emerging as the second largest party in Mumbai with six seats and a staggering 23.35% of the city vote.
 
MNS polled 5.7% of the State’s vote, eating into Sena and possibly NCP bases. While Sena was the worst hit, losing 3.7% of its support since May 2009, the Raj effect may have dented others, particularly NCP, which lost 2.4% of its vote.

Congress may have raised its tally of seats in the 288-member Maharashtra Assembly from 69 in 2004 to 82 this time round, but the party’s vote share has never been lower in any Vidhan Sabha election in the State, except in 1978. Yet with 21% of votes, Congress has a distinct edge over the other big parties, NCP having won just 16.4%, Shiv Sena 16.3% and BJP 14%. That also means that the combined vote shares of the big four is down by 5.9% from five years ago. This almost exactly matches the 5.7% won by MNS in these elections.

Independents have won 15.5% votes. In other words, despite the existence of two long-standing coalitions in the fray, roughly one in every three Maharashtra voters did not vote for either of them. That is perhaps the clearest indication that this verdict is not so much a positive one for UPA as one it has got by default because of the absence of credible alternatives.

Arunachal Pradesh: The electorate in Arunachal Pradesh returned Congress to power with an overwhelming majority but rejected the man, Gegong Apang, who not only nurtured the party but also ruled the State for over 22 years.

The Congress romped home with 42 of the 60 Assembly seats even as Apang (60) bit the dust at the hands of Alo Libang, a political greenhorn from NCP.

Dorji Khandu had come to power in April 2007 after Congress dissidents revolted against Apang. Like in the last two elections, Khandu has again won from Mukto in Tawang unopposed.

With five seats each, NCP and Trinamool Congress emerged as the main Opposition, followed by People’s Party of Arunachal (four) and BJP (three). In 2004, the BJP had won nine seats against Congress’s 34.

EC announces five-phase polls in Jharkhand from Nov 27
Election Commission has announced five-phase Assembly polls in Jharkhand, spread over November-December 2009. Faced with a serious threat of Maoist violence, five-phase election for 81 assembly constituencies will take place on November 27, December 2, 8, 12 and 18. Results will be announced on December 23.

Jharkhand has 1.8 crore voters and 23,944 polling stations. While photo electoral rolls have been prepared in the case of 74.19% voters, 77.63% voters have electoral photo identity cards.

Admitting that conducting election in Jharkhand could be a problem due to the Maoist menace, Chief Election Commissioner Navin Chawla said home ministry has agreed to provide sufficient central paramilitary forces.

Jharkhand, which has seen four Chief Ministers and six governments in the nine years of its short existence, will be looking for political stability at the end of the Assembly election.

The State was placed under President’s Rule in January 2009 but the then Governor, Syed Sibte Razi, was shifted out following allegations of misuse and corruption. A hung House following the last Assembly election—the State’s first—in 2005 had led to a string of unholy alliances in which Independent MLAs and fringe political parties with one or two members in the Assembly called the shots. The period had also seen an Independent MLA, Madhu Koda, becoming the Chief Minister.

Since then, two former ministers of the State have been arrested and sent to jail in disproportionate assets cases, while the Enforcement Directorate has instituted an adverse preliminary report against Koda and two other former ministers in the State for alleged violation of foreign exchange rules and hawala transactions.

As many as seven MLAs in the 81-member House were disqualified in August under the Anti-Defection Act while three members chose to quit the House, which had been kept under suspended animation.

The election will put the Bharatiya Janata Party to yet another severe test. BJP had emerged as the single largest party in the House with 30 seats after the last Assembly election, though the majority eluded it. It also bagged eight out of the 14 Lok Sabha seats from the State in May 2009. But with most of the party stalwarts in the Lok Sabha and the party riven by factionalism, it faces an uphill task to put its act together.

Congress is trying to revive its fortune in the State where it was virtually marginalised, managing to secure just nine seats in the Assembly in 2005. Even in the general election held in May 2009, the party had managed to win only one of the 14 Lok Sabha seats. A weak organisation and absence of leaders with acceptability throughout the State are handicaps which the party hopes to overcome through campaigning by Rahul Gandhi and others.

The election is also crucial for the Jharkhand Mukti Morcha, which campaigned for separate Statehood but which never managed to get anywhere close to securing the majority in the State Assembly. The virtually one-man party is still a force to reckon with in Santhal Pargana region and the party chief, Shibu Soren, is still a big draw among Santhals. But the JMM, which has declared its intention to contest the election alone, may find the going tough in other parts of the State without the support of its old ally, the Congress.

ENVIRONMENTGanga clean-up
Twenty two years and Rs 960 crore later, the government plans to spend another Rs 15,000 crore over the next 10 years to make the Ganga river pollution free. This decision was taken at the meeting of the first National Ganga River Basin Authority, chaired by Prime Minister Manmohan Singh, on October 5, 2009.

It has been decided to take up the cleaning of the Ganga river on a mission mode. Mission Clean Ganga will ensure that by 2020 no untreated municipal sewage and industrial effluents flows into Ganga. At present, the sewage treatment capacity is about 1,000 mld, against 3,000 mld sewage being generated in the towns along Ganga. Nearly 75% of the pollution in the Ganga is on account of municipal waste.

The costs will be borne by both the Centre and the States. There were disagreements over the sharing, with States asking for 100% central funding. An alternate funding pattern of 70% by the Centre and 30% by the States has been suggested. A final decision on the sharing ratio will be worked out by the Planning Commission, in consultation with the States and Central government.

In the meantime, the World Bank has offered a loan of $1 billion for the mission.

JUDICIARYVision Statement to cut delays
The Union government has suggested a drastic dilution of the judiciary's role in the appointment of Judges in the "Vision Statement" for cutting down delays and banishing cases pending for more than three years.

"The Executive and the Legislature must take initiative in recommending the best possible talent for selection to the judiciary," Law Minister V. Moily said in the 32-page document presented to Chief Justice K.G. Balakrishnan. The "government should also be given the power to suggest outstanding lawyers and jurists as Judges," the Minister said in the statement, which was discussed threadbare at a conference aimed at "strengthening the judiciary towards reducing pendency and delays."
 
Moily's proposals have come in the wake of the crisis-like situation that has arisen following allegations of judicial misconduct against a number of Judges—Karnataka High Court Chief Justice P.D. Dinakaran and Judges Soumitra Sen of Calcutta High Court and Nirmal Yadav of Punjab and Haryana High Court. The custodial death of Ashutosh Asthana, the prime accused in the Uttar Pradesh PF scam, which reportedly involves several Judges, has cast a further shadow on the judiciary.

Styled as "National Consultation," the conference was attended by Supreme Court Judges and Chief Justices of High Courts, including Justice Dinakaran, and top judicial luminaries from across the country.

Both the Law Commission, headed by Justice A.R. Lakshmanan, and the Parliamentary Standing Committee report have recommended reverting to the pre-1993 system which involved appointment of High Court and Supreme Court Judges through consultation between the Chief Justice of India and the government-primarily the Prime Minister and the Law Minister.

In all, Moily has suggested five "improvements" in the present system of appointment. The other three are: There should be lucid and comprehensive guidelines which the Collegium should follow in the matter of selection of judges. The Collegium should be given a timeline to clear the backlog in vacancies. The government and the Collegium should work "hand in hand while appointing Judges."

NUCLEAR ENERGYIndia notifies N-separation plan
India has notified its separation plan in the IAEA, which formally separates India’s civilian and military nuclear establishments. The plan, which was announced in March 2006, has passed muster at IAEA and India’s safeguards agreement is now officially operational.
 
This is likely to help in the negotiations for the reprocessing agreement that is currently under way between India and US. But more than that, this will silence many non-proliferation critics in the new Obama-led US administration who had been looking at the delay in notifying the safeguards agreement as an example of Indian dithering.
 
FOREIGN RELATIONSIndia slams OIC over J&K envoy
Pakistan has succeeded in its efforts to compel the Organisation of Islamic Conference (OIC) to appoint a special envoy for Jammu and Kashmir. At its meeting in New York earlier in first week of October 2009, the OIC also stated that it supported people of Jammu and Kashmir in realisation of their legitimate right to self-determination in accordance with relevant UN resolutions and aspirations of the Kashmiri people.

A fuming India reacted sharply to the OIC action, dubbing it as interference in the internal affairs of this country. “Jammu and Kashmir is an integral part of India and it is our firm position that the OIC has no locus standi in matters concerning India’s internal affairs,” the External Affairs Ministry said in a statement.

Condemning the OIC move, New Delhi said inherent in its statements and actions on the issue of Jammu and Kashmir was a complete inability to understand India’s position.

The appointment of a Saudi national, Abdullah Bin Adbul Rahman Al Bakr, by the OIC as its envoy on Kashmir is being seen as a move initiated by Pakistan as part of its attempts to internationalise the Kashmir issue.

India has time and again told the international community, including major world powers, that Jammu and Kashmir is a bilateral issue between India and Pakistan and there is no room for third party intervention.

Under pressure from Pakistan, the OIC has at all its meetings adopted resolutions on Jammu and Kashmir, prompting New Delhi to condemn 57-member body’s action every time. Privately, however, many of the Islamic nations have repeatedly assured India that they are not in agreement with OIC resolutions on Kashmir but had to support them for the sake of unanimity and to keep Pakistan in good humour.

Well aware that its action would draw a strong response from India, the OIC is now trying to play down the appointment of the special envoy.
OIC Secretary General Ekmeleddin Ihsanoglu was quoted as saying that the appointment would help bridge the gap between India and Pakistan and address the issue of minorities in India.

India, Argentina sign N-accord
On October 14, 2009, India signed an agreement for civil nuclear cooperation with Argentina, making it the seventh nation to ink such an accord with this country after New Delhi secured a waiver from the nuclear suppliers’ group (NSG) to undertake nuclear commerce.

The agreement for cooperation in the peaceful uses of nuclear energy was among the 10 accords signed by the two countries following wide-ranging talks between Prime Minister Manmohan Singh and visiting Argentine President Cristina Fernandez de Kichner, during which they desired to establish strategic partnership between their two nations. The two leaders discussed a wide range of bilateral, regional and global issues of mutual interest.

A joint statement issued by India and Argentina after the visiting dignitary concluded her talks with Indian leaders said the two sides shared the view that civil nuclear energy could play an important role as a safe, sustainable and non-polluting source of energy in meeting rising global demands for energy.

The other nine accords signed between the two sides include: exchange of letters for business visa providing for five years multiple entry gratis visa for a single stay of 90 days; programme of cooperation in science and technology for 2009-11; MOU between ONGC Videsh Limited and ENARSA; MOU on sports cooperation; MoU on cooperation in the field of trade promotion and technology transfer in international trade; and agreement on outer space.

The two sides also agreed on the need to give a new impulse to multilateral negotiations in the area of disarmament, especially weapons of mass destruction.

India-China talks
Without getting into the recent spat over Arunachal Pradesh, Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao talked peace and harmony on October 24, 2009, in a meeting on the sidelines of the India-ASEAN summit in Thailand.

The visit of the Dalai Lama to Arunachal also did not figure in the discussions between the two leaders who instead focused on the positives in the relationship and agreed that "differences" should not impede cooperation between the two countries.

In an effort to ameliorate the recent strain on the bilateral relationship, Prime Minister Manmohan Singh even proposed that the two countries observe the 60th anniversary of the establishment of diplomatic ties in a "fitting manner". He also put stress on the trade and economic relations, calling it a "vital pillar" in the bilateral relationship.

This exchange at the highest political level came after an escalation in the rhetoric between the two sides over the border issue. China had objected to Mr Singh’s trip to Arunachal Pradesh for the Assembly elections. This had elicited a strong reaction from New Delhi which had reminded Beijing that Arunachal remained an integral part of the country. New Delhi had further pointed out that in the democratic system leaders visited States where elections are taking place. This was further followed by India protesting against China’s involvement in projects in Pakistan Occupied Kashmir, which New Delhi pointed out was also disputed territory. New Delhi had earlier also objected to Beijing’s practice of issuing visas to people from Jammu and Kashmir on loose sheets.

Chinese Prime Minister Wen  recalled Mr Singh’s remark about both sides having enough space to develop and cooperate and added that there are sufficient areas in the world for India and China to enhance such cooperation. The Chinese premier further suggested that the Joint Economic Group should hold early consultations and that China would work with India to handle the matter of the growing trade deficit.

India also rejected China’s objections to Dalai Lama’s Arunachal visit in November while making it clear that the Tibetan spiritual leader was not allowed to indulge in political activities on the Indian soil. The issue figured when Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao were seated next to each other at a gala dinner hosted by the Thailand Prime Minister for leaders attending the ASEAN and East Asia summits.

India, China ink pact on climate change
Amidst tension over political issues, India and China have signed an agreement to cooperate on ways to fight climate change. Moving closer, at least on an issue concerning the entire world, the two neighbours announced setting up of a Joint Working Group (JWG) to exchange views concerning international negotiations on global warming. The memorandum of agreement (MoA) assumes significance in the run-up to the Copenhagen climate summit. Developed and developing countries are at loggerheads over who should reduce emissions of greenhouse gases that are causing climate change.

India and China are in the same bloc as the Group of 77 countries in climate negotiations.

The MOA acknowledges that climate change and its adverse effects are a common concern of mankind and need to be addressed through international co-operation. It emphasises that the UNFCC and its Kyoto Protocol were the most appropriate framework for addressing climate change.

The agreement also reaffirms the principle of common but differentiated responsibilities, in particular that developed countries should take the lead in reducing their greenhouse gases and providing financial resources, technology transfer and capacity building support to developing countries.

Egypt offers special industrial zone to India
Egypt has invited India to build a ‘India industrial zone’ in the Suez development area for setting up joint ventures with Egyptian companies. Egypt’s Prime Minister Ahmed Nazif, in his meeting with commerce and industry minister Anand Sharma in Cairo, offered to designate an area for setting up of the zone exclusively for Indian companies.

India could gain significantly from the offer as it would give it easier entry to the European and African markets, since Egypt has preferential access to both.

The Suez development area, located on the north-west coast of the Gulf of Suez, has lower bureaucratic barriers to business formation and provides tax incentives. The law gives more incentives for priority areas, such as infrastructure, auto parts, software, oil field services, tourism and manufacturing. The terms and conditions of investing in the proposed India zones and the tax benefits to industry are to be worked out.

Indian companies have, till now, invested about $750 million in 40 projects in Egypt. India has a significant presence in the IT and automobile sector with companies like Wipro, Satyam, Mahindra and Tatas having invested in the country.

Olive branch to Pak with rider
In a speech delivered at the inauguration of the Anantnag-Qazigund rail link in Anantnag, Prime Minister Manmohan Singh focused largely on ties with Pakistan and the earlier success of cross-LoC initiatives. Targeting domestic audience and also sending out a message to Pakistan, Mr Singh prefixed his offer of peace with the rider that Islamabad must bring perpetrators of terror attacks to justice and destroy terror camps. "For a productive dialogue it is essential that terrorism must be brought under control," he said.

Mr Singh said India would put pressure on Pakistan to curb the activities of the elements engaged in terrorism against India. "If they are non-State actors, it is the solemn duty of the government of Pakistan to bring them to book, to destroy their camps and to eliminate their infrastructure. The perpetrators of the acts of terror must pay the heaviest penalty for their barbaric crimes against humanity," he said.

With Pakistan now being targeted by terrorism, Mr Singh said there could be no compromise with the ideology of terror. "It is a misplaced idea that one can reach a compromise with the ideology of the terrorists or that they can be used for one’s own political purpose. Eventually, they turn against you and bring only death and destruction. The real face of the terrorists is clear for the people of Pakistan to see with their own eyes," he said.

He maintained that India was ready to discuss humanitarian issues whose “resolution requires the cooperation of Pakistan”. "We are ready to discuss these and other issues with Pakistan. I hope that, as a result, things will be made easier for our traders, divided families, prisoners and travelers," he said.

President Pratibha Patil’s visit to UK and Cyprus
President Pratibha Patil visited UK and Cyprus from October 27 to 31, 2009. During her visit to UK she received the Baton of the Commonwealth Games from the Queen of England at a ceremony in the Buckingham Palace in London on October 29.

This was the third State visit by an Indian President to the UK. The first was by President S. Radhakrishnan in 1963 and the second by President R. Venkataraman in 1990. This was also the first State visit after the commencement of the strategic partnership between India and the UK in 2009.

During her visit, President Patil interacted with Queen Elizabeth of England as also met Prime Minister Gordon Brown, leader of the opposition David Cameron and leader of the Liberal Democratic Party Nick Clegg.

She also addressed in London a business meeting organised by the UK India Business Council.

Gandhi letters handed By UK to President Patil: Mahatma Gandhi won’t receive letters not bearing stamps as a matter of principle. But he chose to write back and inform sender Hamdiullah Afsar, a contemporary poet of those times, of his decision. These and many such aspects of Gandhi’s personality come out in a set of letters presented by Curry King Ghulam Noon and NRI from London Nat Purie, who bought some of the memorabilia associated with Mahatma Gandhi in an auction in London and presented them to President Pratibha Patil at the India House.

The memorabilia, consisting of a piece of khadi cloth, ostensibly spun by Gandhi bearing his signatures along with those of Sarojini Naidu, Gandhi’s disciple Meerabai, secretary Pyare Lal and some other blurred signs are part of the package bought by the NRI duo that was handed over to the President.

Gandhi’s letters written in Urdu to his disciple Maulana Abdul Bari and a lesser known Urdu poet of those times, Hamidullah Afsar, are a study in contrast. These letters bring out the difference between those who were close Gandhi’s freedom movement and those who tried to intrude upon his privacy.

The President visited Cyprus on an invitation of the then President of Cyprus Papadopoulus who visited India in April 2006. The last time an Indian President visited Cyprus was 21 years ago, again R. Venkataraman, whereas all former Cyprian Presidents have visited India during their term of office.

Cyprus has always supported India on all crucial issues and expressed its understanding on our nuclear tests in 1998 and supported Indian position during Kargil war, too.

India is planning a major headway in generating energy through solar sources. It has approached Cyprus which has made considerable headway in that direction to develop solar power plants ranging between one MW and 50 MW. An MoU was signed in the presence of visiting Indian President Pratibha Patil for providing solar power to India.

The MoU states that NORASCO, UPTURN of DALCO company and CASE NEUBERG of the CASE group of companies will supply solar photovoltaic systems, kits and technology for solar energy projects in India. It also states that CASE will be Indian technology and engineering partners for setting up turnkey solar energy plants in India and NORASCO will provide project finance and investments of EURO 50 million in solar energy sector in India between 2010 and 2015. The Photovoltaic Technology Group of University of Cyprus (PVT Group) also signed an MoU with NORASCO whereby PVT Group will act as a technology consulting partner for developing solar energy projects and solar energy education in India.

RESERVATIONSCabinet OKs 50% quota for women in civic bodies
Women will soon occupy half the seats in urban local bodies with the Union cabinet on Thursday clearing a proposal for raising reservation for them in municipalities from 33% at present. This provision will apply to the total number of seats to be filled by direct election, offices of chairpersons and seats and offices of chairpersons reserved for SCs and STs.

The increased representation of women is likely to have significant benefits in terms of higher priority to women’s issues in critical areas of urban governance and service delivery such as water supply, sanitation, education and health.

SCANDALSFormer Jharkhand CM Koda booked for graft
Jharkhand presents an example where lack of political stability was allegedly exploited by a group of legislators led by former Chief Minister Madhu Koda to fatten themselves. The Enforcement Directorate, on October 9, 2009, slapped charges under Prevention of Money Laundering Act (PMLA) on the former Jharkhand CM and three of his former Cabinet colleagues for allegedly amassing assets running into several hundred crores—between Rs 700 and 800 crore according to the preliminary estimate.

Koda, the first Independent to become Chief Minister and now a member of Lok Sabha supporting UPA government, has been charged with having business interests of diverse kinds—cement, steel, auto, power, agro and tourism. His alleged investments, estimated at Rs 300-400 crore, are just as widely spread—from Singapore to Thailand to Dubai to Liberia.

His former colleagues who have also been booked under PMLA include Bhanu Pratap Shahi, Bandhu Tirkey and Kamlesh Singh. Though they did not prosper as much as Koda, the trio, according to ED, made personal fortunes ranging from Rs 20 crore to Rs 50 crore.

Koda and his associates milked their success in 2005 Jharkhand polls. The election threw up a hung House, enabling them to play kingmaker with remorseless agility. Shibu Soren, who was sworn in as Chief Minister of Jharkhand when he lacked majority support, had to resign when the group refused to rescue his aspirations. They helped Arjun Munda of BJP become the Chief Minister and were rewarded with 'plum' portfolios as part of deal. The arrangement, however, did not last long. The group ditched BJP after UPA agreed to propel Koda to Chief Ministership. Others in the group, naturally, held on to their portfolios.

The tenure was marked by allegations of corruption, particularly allegedly dubious decisions on mining leases to big industrial houses. Later on, with the stink rising to embarrassing levels, Congress wanted to dissociate itself from the arrangement, but allies RJD and Jharkhand Mukti Morcha prevailed. The import of allegations of the ED begin to sink in deeper when two other factors are considered. First, the last five years have seen Maoists rapidly expanding their influence in Jharkhand, turning huge swathes into "liberated Red zones". Also, the office of the Governor also came under a cloud, with CBI raiding two close aides of Governor Syed Sibte Razi.

TERRORISM; LAW & ORDERNew anti-Naxal policy
The Centre’s plans to take the battle to Naxalites hinge on a strategy that will see Central and State forces acting in concert to first wrest control of areas long considered “Red” zones and then facilitate expeditious restoration of civil administration. The Cabinet Committee on Security (CCS) has okayed a comprehensive approach to Maoist extremism with a "clear and hold" doctrine at the centre of the anti-Naxal "action plan". Moving from the current largely reactive stance which saw occasional jabs into Maoist hinterland, forces will pro-actively engage the ultras.

Recognising that draining Maoist swamps would also require restoration of rule of law and demonstrable development, the government has decided that the forces used in anti-naxal operations will not pull out after an operation. Rather, reinforcements will beef up security and set the stage for the civil bureaucracy to get to work. The developmental aspect of the plan is crucial to denying Maoist ranks of fresh recruits and addressing the argument that exploitation and abysmal conditions in tribal areas in far-flung areas has led to "popular" support for the Red insurgency. Fixing things and making them work was important in showing the state could deliver.

The view in government is that the offensive cannot be delayed much further. With alarming signs of an emboldened Maoist leadership targetting urban areas beyond their known forest hideouts—arrested politburo member Kobad Gandhy was incharge of operations in cities like Delhi, Mumbai and Pune—the government is gearing for action and bracing for casualties.

The strategy for acting on intelligence tip-offs and hitting at naxal bases deep in Red "liberated" zones was put to trial in September 2009 in Chhattisgarh’s Dantewada. The Maoists were routed but the hazardous forests and complete lack of infrastructure underlined how difficult it would be for a force to operate "behind the lines". It is felt that the surge in Central and State forces after the Assembly elections in Haryana, Arunachal Pradesh and Maharashtra can be sustained if the local population is convinced that Maoists can be defeated and that the forces will not leave in a hurry. This would strengthen intelligence collection and provide the administration with valuable allies as even fence sitters opt for the winning side.

The Centre plans to deploy 70,000 paramilitary personnel—drawn from CRPF, ITBP, BSF, SSB, CoBRA and Nagaland Armed Police—in States like Jharkhand, Chhattisgarh, Orissa, Bengal, Bihar, Maharashtra and Andhra.

Maoists step up the gore, behead police officer
On October 5, 2009, in a barbaric, Taliban-style execution, Maoists beheaded special branch inspector Francis Indwar and threw his body on a slip road leading to National Highway 33 that connects Patna to Jamshedpur. The officer was abducted and held hostage by Naxalites demanding a swap for arrested Maoist ideologues Kobad Ghandy in New Delhi, Chhatradhar Mahato in Kolkata and another captured leader Chandrabhushan Yadav.


CURRENT INTERNATIONAL AFFAIRS

EUROPEAN UNION
Ireland endorses Lisbon treaty
On October 3, 2009, Irish voters strongly endorsed the European Union's Lisbon Treaty-16 months after their first vote rejecting it plunged EU reforms into deadlock.

About 67% voted "Yes". Irish Prime Minister Brian Cowen hailed a "clear and resounding" endorsement. Political leaders across the EU have also welcomed the result. The President of the European Commission, Jose Manuel Barroso, said it was a great day for Europe. He urged the leaders of Poland and the Czech Republic-the only other countries yet to ratify Lisbon Treaty-to sign the treaty as soon as possible.

The treaty-which is aimed at streamlining decision-making in the 27-nation bloc-cannot take effect until all 27 member States ratify it.

Ireland was the only EU member State to hold a referendum on Lisbon Treaty, though there have been calls for referendums in several countries. 

Irish opinion is thought to have swung behind the "Yes" vote this time because of the severity of the economic downturn, as well as the legal "guarantees" on Irish sovereignty that the EU pledged after the first referendum.

The legally binding "guarantees" state that Lisbon Treaty will not affect key areas of Irish sovereignty, such as taxation, military neutrality and family matters such as abortion-significant issues in 2008's campaign in Ireland. But they have not yet been attached to the treaty.

The treaty is intended to make EU institutions better suited to the enlarged bloc of 27. But opponents see it as part of a federalist agenda that threatens national sovereignty.

PAKISTANMulti-terror attacks on cops, 40 dead
Teams of terrorists unleashed attacks on three law enforcement facilities in Lahore on October 15, 2009, even as car bombs exploded in two cities near the Afghan border, killing 39 persons in an escalating wave of anti-government violence in Pakistan.

No group claimed responsibility, though suspicion fell on Pakistan’s umbrella Tehreek-e-Taliban movement, Al Qaeda and home-grown Islamist groups Lashkar-e-Jhangvi and Jaish-e-Muhammad.

The co-ordinated assaults underscored the power of armed radicals to strike in the heart of Pakistan, and the weakness of poorly equipped security forces, despite promises of a new offensive against the Taliban. Nuclear-armed Pakistan, a key ally in the US-led fight against terrorism, is reeling from two years of Taliban-linked attacks that have escalated such that over 160 people have been killed since October 5. Pakistan's weak civilian government said the country faced a new war after the slew of militant attacks away from the insurgent hotbed of the north-west tribal region.

WORLD ECONOMYHuman Development Index
While China figures among the only five countries across the world that improved their Human Development Index (HDI) rankings, 2009, by three or more points, India continues to cut a sorry figure, slipping six points (from the last compilation) in the latest UNDP Human Development Index. Overall, however, India made progress on HDI, improving its value from 0.556 in 2000 to 0.612 in 2007.

As against a standing of 128 in the 2008 UN Human Development Report, India has been ranked 134th among the 182 nations surveyed. The slip represents poor progress on some indicators of people’s well-being, including life expectancy, literacy, school enrolment and GDP per capita.

In China (ranked 92), along with Colombia, France, Peru and Venezuela, which improved their rankings by at least three points, the fillip has been attributed to increase in incomes and life expectancy. China, Colombia and Venezuela’s progress has also been driven by improvement in education. The report concludes that disparities in life expectancy in the world can range up to 30 years. Despite progress in the last 25 years, disparities in people’s well-being in rich and poor countries continue to be unacceptably wide.

2009 report represents the most extensive coverage ever of 182 countries. As for rankings, the top three ranked countries in the HDI are: Norway, Australia and Iceland. France rejoined the top 10 countries after dropping down for one year, while Luxembourg fell from the top 10.

US exits recession
The world's largest economy, USA, has climbed out of recession as it grew by 3.5 per cent in the third quarter ending September 30, 2009, the first quarterly expansion in a year, thanks to higher consumer and government spending among others.

The economy, which was battered by the worst financial turmoil since the 1930s Great Depression, expanded last in the second quarter of 2008, when GDP rose 1.5 per cent.

The advanced estimates from the US Bureau of Economic Analysis (BEA) showed that American GDP expanded 3.5 per cent in the third quarter.
Consumer spending, which accounts for two-thirds of the GDP, grew 3.4 per cent in the quarter under review, compared to 0.9 per cent fall in the previous quarter.

USA is the latest advanced economy to shrug off recession and joins the likes of Germany, France, Japan and Singapore. However, the country would be officially out of recession only after the National Bureau of Economic Research (NBER) declares so. A country is said to be in recession if its economy contracts for two straight quarters.

The third quarter growth was primarily due to rising personal consumption expenditures (PCE), higher federal government spending and exports.

One of the main factors for the upturn in economic activities in the third quarter is the government's 'Cash for Clunkers' programme for the auto industry, which resulted in increased car sales. The initiative which ended in August had offered rebate of about $4,500 for consumers to purchase new cars and sell their old models.

ENVIRONMENTUN climate talks end without any consensus
As the Bangkok round of talks on climate change in October 2009 came to an end, the rift between the developed and developing countries appeared to have deepened and widened. The developed countries would like to abandon the Kyoto Protocol, in favour of a new agreement, while the developing countries would like an extension of the Protocol. There has been virtually no progress on the issue of finance and mid-term emission reduction targets for industrialised countries.

Developing countries have opposed scrapping the Kyoto Protocol as it clearly places an obligation on developed world to deepen emission cuts and to provide finance to help developing countries to adapt to and mitigate climate change. The United States and Australia were among the 42 countries that sought to junk the Protocol. They argued that the world had changed since the 1990s, and keeping in mind the ground realities a new agreement needs to be crafted. This agreement would require all countries to take on emission cuts. This move was resisted at Bangkok, with the developing countries under the G-77 umbrella argued that such a proposal would violate the Kyoto Protocol and the Bali Action Plan.

The bright spot in Bangkok was the unveiling of an aggressive emission reduction plan by Norway. The Scandinavian country had previously committed unconditionally to slashing emissions 30 per cent below 1990 levels by 2020. Its new pledge is to cut greenhouse gas output by 40 per cent if an international agreement is reached in Copenhagen in December 2009.

Lawmakers join hands to fast-track carbon cut
The time to act is now, whether or not there is an international consensus on climate change at the UN Copenhagen talks in December, say the 100-odd legislators from major economies representing major political parties—including US, UK, France, China, Brazil, Mexico and India.

The lawmakers converged at the Danish capital at a GLOBE International and COM+ meeting held over two days from October 24-25, 2009 at the Folketing, the Danish Parliament, in preparation to the UNFCCC meeting in December that is expected to find an alternative to the Kyoto Protocol that is to conclude in 2012.

The legislators have signed key guiding principles set out by Chinese Congressman Wang Guangtao, chairman of the steering committee on environment and resources protection, National People’s Conference, China and US Congressman Edward Markey to enable enacting of climate change laws in their respective countries.

The Wang-Markey principles outline energy standards, forestry preservation, and renewable energy that could see 70% of the emissions cuts needed by 2020 if the global average temperature rise is to be limited to 2°C.

They include standardized action on building and appliance standards; renewable energy; vehicle fuel and efficiency standards; and forestry. Such coordinated action—especially in areas like domestic, transportation and industrial energy efficiency—will result in cost savings and more competitiveness.
   
The overriding theme has been to stress the need to accelerate domestic legislation that bind national governments to short, medium and long-term targets for emissions; a commitment to "climate compatibility assessments" for major government policies; a duty on governments to report to parliament regularly on their progress in meeting targets; and a commitment to a regular review to ensure that policies are consistent with the latest science.

India joins rich nations to protect forests
India, along with five other developing countries, has joined a group of five rich nations to work on a $350-million project to fight climate change through forest management.

The six developing nations, which also include Brazil, Congo, Morocco, Nepal and Romania, have joined the group of five contributing countries-the US, Australia, Britain, Denmark and Norway-under the governing body of the Forest Investment Programme (FIP).

The FIP Trust Fund Sub-Committee met in Washington for the first time on October 29, 2009, to begin implementation of the Program, including consideration of criteria for how to select pilot countries and regions.

The FIP governance structure is among the first in a new generation of partnerships among developing and developed countries and other stakeholders which takes account of the need for a level playing field in addressing climate action.

INTERNATIONAL RELATIONSRIC meeting in New Delhi
Global terrorism with special focus on Afghanistan dominated the ninth trilateral meeting of the foreign ministers of Russia, India and China (RIC) that concluded in Bangalore on October 27, 2009.
   
The ministers emphasised the need for the three countries to assist Afghanistan in fighting terrorism, ensuring security, restoring peace and stability and building a democratic and pluralistic Afghanistan.

The meeting was held in the backdrop of two significant bilateral issues—meeting between Prime Minister Manmohan Singh and China’s Premier Wen Jiabao at Hua Hin, Thailand and trade, economy, scientific and climate meeting with Russia in Moscow on October 21—and resolved to jointly fight terrorism and narcotic trafficking with mention also being made on diplomatic settlement of Iran nuclear issue and denuclearization of the Korean peninsula.

The demand for a greater role for India in the United Nation affairs has gained momentum once again. Russia and China made a strong bid for India’s status in international affairs be accorded importance. "There is a need for a comprehensive reform of the United Nations with a view to make it more efficient so that it can deal with the current global challenges more effectively. Russia and China attach importance to the status of India in international affairs. We urge the world communities to understand and support India’s aspirations to play a greater role in the United Nations," Russian and China’s foreign ministers Sergei Lavrov and Yang Jie Chie, jointly stated.

Obama signs into law Pak Aid Bill
US President Barack Obama has signed into law legislation that will provide $7.5 billion in US aid to Pakistan over the next five years. 
"This law is the tangible manifestation of broad support for Pakistan in the US, as evidenced by its bipartisan, bicameral, unanimous passage in Congress," the White House said in a statement.

Obama signed the legislation after hectic jockeying by Pakistan's Foreign Minister Shah Mahmood Qureshi to secure assurances from Congress that the Bill does not trample on Pakistan's sovereignty.

The United States Congress sought to allay Pakistani concerns. Lawmakers released an explanatory statement assuring critics of the legislation that the Bill in no way impinges on Pakistani sovereignty.

"This Act formalises that partnership, based on a shared commitment to improving the living conditions of the people of Pakistan through sustainable economic development, strengthening democracy and the rule of law, and combating the extremism that threatens Pakistan and the United States," the White House statement said.

Sen John Kerry, a co-author of the legislation, said the statement was issued "to set the record straight". He emphasised that the legislation in no way sought to “compromise Pakistan's sovereignty, impinge on Pakistan's national security interests, or micromanage any aspect of Pakistani military or civilian operations". House Foreign Affairs Committee chairman Howard Berman, an author of the legislation, said the statement was "a reflection of our desire to be long-term partners with the Pakistani people".

Visit of Chinese PM to N-Korea
North Korea’s leader Kim Jong-il made a rare appearance to personally greet visiting Chinese premier Wen Jiabao at the start of a trip to North Korea in the month of October 2009.
   
Kim Jong-il’s unusual outing followed by Wen’s talks with the premier was a show of how serious North Korea is about shoring up ties with Beijing, which gives its poor neighbour crucial economic help and diplomatic backing.

Kim Jong-il is widely believed to have suffered a serious illness in 2008, and it is rare for him to personally greet an arriving visitor. Even audiences are uncommon.

North Korea told Jiabao that it was open to bilateral and multilateral talks on its nuclear programmes. The comments appeared to be the latest indication of Pyongyang’s apparent willingness to return to six-nation disarmament talks that it broke off in early 2009.
   
China termed Wen’s visit a "goodwill" trip to mark the 60th anniversary of diplomatic relations, but nuclear issues figured to be high on the agenda.

Hillary Clinton's visit to Pakistan
Stating that Pakistan was at a "critical point" of history, the US has offered to stand soldier-to-soldier with the country in its fight against "tenacious and brutal terror groups". "This is not Pakistan's fight alone," US Secretary of State Hillary Clinton said during her visit to the country in October 2009.

During her maiden visit to Pakistan after assuming office, Clinton  met President Asif Ali Zardari, Prime Minister Yousuf Raza Gilani and Army Chief Gen Ashfaq Parvez Kayani.

She refused to be drawn into the debate on whether there are "good Taliban" and made no reference to contentious issues like differences between the US and Pakistan on conditions attached to economic aid.

SUMMITSASEAN Summit
The 15th ASEAN Summit and the related summits, including the 12th ASEAN-China Summit, the 12th ASEAN-Japan Summit, the 12th ASEAN-Republic of Korea Summit, the Seventh ASEAN-India Summit, the 12th ASEAN Plus Three Summit and the Fourth East Asia Summit,  were held on October 23-25, 2009 in Cha-am Hua Hin, Thailand. ASEAN Leaders discussed among themselves and with relevant Dialogue Partners on how to realise an ASEAN Community by 2015.

Highlights for the Summits include the inauguration of the ASEAN Intergovernmental Commission on Human Rights, the adoption of a declaration on climate change to reaffirm ASEAN position in the negotiation under the UN Frameworks Convention on Climate Change (UNFCCC), as well as the adoption of a declaration on education cooperation to achieve an ASEAN Community. Other issues affecting the well-being of the peoples, including food and energy security, financial stability, pandemics as well as disaster management, were also discussed.

During the Summits, ASEAN Leaders also met with representatives from the ASEAN Inter-Parliamentary Assembly (AIPA), ASEAN Youth and ASEAN Civil Society Organisations which reflected Thailand’s will to promote people’s participation in ASEAN Community-building process.

The 15th ASEAN (Association of Southeast Asian Nations) Summit and the related summits were concluded Sunday afternoon, with a series of documents being adopted by the participating national leaders.

Key documents, such as the Cha-am Hua Hin Declaration on the Inauguration of the ASEAN Intergovernmental Commission on Human Rights (AICHR), Cha-am Hua Hin Declaration on Strengthening Cooperation on Education to Achieve an ASEAN Caring and Sharing Community, Draft ASEAN Joint Statement on Climate Change, and ASEAN Leaders' Statement on ASEAN Connectivity were adopted by ASEAN leaders and other participating national leaders.

The next ASEAN summit and related summits will be held in Vietnam.

East Asia Summit
The Fourth East Asia Summit was rescheduled several times, had its venue changed and one attempt to hold it was cancelled due to the 2008–2009 Thai political crisis. It was ultimately held on October 25, 2009 in Cha-am and Hua Hin, Thailand. ASEAN (Association of Southeast Asian Nations) countries, China, Japan, South Korea, India, Australia, and New Zealand attended the Summit.

The Summit adopted two documents. The first was a statement on disaster management. The second related to the re-establishment of Nalanda University by India.

The Chairman's Statement noted: We acknowledged the importance of regional discussions to examine ways to advance the stability and prosperity of the Asia Pacific region. In this connection, we noted with appreciation the following:
(a) the Philippines’s proposal to invite the heads of other regional fora and organizations in Asia-Pacific to future EAS meetings to discuss measures that will protect the region from future economic and financial crisis and strengthen Asia economic cooperation, including through the possible establishment of an economic community of Asia.
(b) Japan’s new proposal to reinvigorate the discussion towards building, in the long run, an East Asian community based on the principle of openness, transparency and inclusiveness and functional cooperation.
(c) Australia’s proposal on the Asia Pacific community in which ASEAN will be at its core, will be further discussed at a 1.5 track conference to be organized by Australia in December 2009.

The East Asia Summit is a forum for dialogue on broad strategic, political and economic issues of common interest and concern with the aim of promoting peace, stability and economic prosperity in East Asia. It is an open, inclusive, transparent and outward-looking forum, which strives to strengthen global norms and universally recognised values with ASEAN as the driving force working in partnership with the other participants of the East Asia Summit.

INTERNATIONAL TERRORISMPak’s Saeed farce continues
Hafiz Saeed, who has shown to be the mastermind behind the 26/11 terror assault on Mumbai, has been allowed to go scot-free yet again. In a development which lays bare Pakistan’s game of deceit in acting against perpetrators of the attack, the Lahore High Court, in October 2009, dismissed two cases registered against him on the ground that the Jamaat-ud-Dawa, the organisation headed by him, was not 'proscribed' in Pakistan. JuD is the new avatar of the banned Lashkar-e-Taiba.

Describing the case against Saeed as arising out of a 'mala fide intention' by the Punjab provincial government, the court quashed the cases, which were registered at police stations in Faisalabad for allegedly inciting people to wage 'jihad' (holy war) against 'infidels'.
   
The first FIR was based on his preaching session at Royalton Hotel in Faisalabad’s Canal Road on August 27, 2009, in which Saeed urged people to retaliate against those who’ve suppressed their rights. He explained away the problems of the American economy as God’s way of retaliation.
 
The second FIR was lodged over his speech at an Iftar dinner at Peoples Colony, Jaranwala Road Faisalabad on August 26. In this tirade, Saeed accused India of stage-managing the 26/11 attacks and conspiring against Pakistan—a clear attempt to invoke anti-India sentiments.
 
Car Bomb Targets India’s Kabul Mission
In yet another reminder of the desperation of terror groups and their sponsors to get India out of Afghanistan, Taliban terrorists executed a suicide car bomb attack on the Indian embassy in Kabul on October 8, 2009, killing 12 people and injuring more than 80 others. The attack came 15 months after the deadly strike near the embassy in 2008, which left more than 60 dead, including an IFS officer and the Indian defence attache.
   
The damage could have been much more but for the security arrangements put in place after 2008’s attack that was traced to ISI-affiliate Sirajuddin Haqqani.

Taliban spokesman Zabiullah Mujahid took responsibility for the attack. In a statement posted on a website, he claimed the attacker was an Afghan who blew up his SUV stuffed with explosives outside the embassy. Indian security agencies, however, said this could be a smokescreen to keep the ISI out of scrutiny.

Clearly suggesting a Pakistani link to the suicide bomb attack, India said the terrorist act was the handiwork of forces which had their patrons residing across the border. Undeterred by the suicide attack, India also reiterated its "unwavering commitment" to the reconstruction of Afghanistan and its assistance to the Afghan people "in realising a democratic, peaceful and prosperous" country.

Top military brass among 50 killed in Iran suicide blast
A suicide bomber killed seven commanders of Iran’s elite Revolutionary Guards and up to 42 others on October 17, 2009, in an attack that President Mahmoud Ahmadinejad charged had been plotted from neighbouring Pakistan.

The foreign ministry of Iran called in Pakistan’s charge d’affaires over the bombing, which targeted one of the Islamic republic’s most prestigious institutions in a region that has been a hotbed of Sunni insurgency against the Shi’ite Muslim regime.

Several tribal leaders in the majority ethnic Baloch Sistan-Baluchestan province also died in the bombing which left many others wounded.

The chief prosecutor in Sistan-Baluchestan, Mohammad Marziah, said Abdolmalek Rigi, the head of the shadowy Sunni rebel group, Jundallah (Soldiers of God) had "accepted the responsibility" for the attack.
The Iranian president hit out at Pakistan over the bombing, accusing it of sheltering Jundallah militants.

The Revolutionary Guards accused the United States of involvement. "Surely foreign elements, particularly those linked to the global arrogance, were involved in this attack," a Guards statement quoted by television said. Iran often uses the term "global arrogance" to refer to the United States, its old foe.

FBI foils LeT plan to attack India
Pakistan-based terror group Lashkar-e-Taiba (LeT), blamed for the 26/11 Mumbai terrorist attack, was planning to use an American national to carry out another major terrorist attack in India, according to the Federal Bureau of Investigation (FBI) of USA.
 
The man, identified as David Coleman Headley, was arrested in early October 2009, by FBI Joint Terrorism Task Force at O’Hare International Airport.

Headley, 49, along with a Canadian citizen of Pakistani origin, Tahawwur Hussain Rana, have been arrested on charges of plotting a terror attack against the facilities and employees of a Danish newspaper which had published cartoons of the Prophet Mohammed in 2005.

Rana is the owner of several businesses, including First World Immigration Services, which has offices on Devon Avenue in Chicago, as well as in New York and Toronto.

According to the FBI affidavit filed in a Chicago court, Headley was in close contact with Ilyas Kashmiri and several unidentified leaders of LeT.

Kashmiri is the operational chief of Pakistan-occupied Kashmir section of Harakat-ul Jihad Islami (HUJI), a Pakistani-based terrorist organisation with links to Al-Qaida.

WORLD TRADESAARC Ministers promise to free services sector
Trade Ministers from SAARC countries have decided to fast-track negotiations on liberalising the services market within the region, a move that will enable freer movement of people within the region and give a boost to investments in areas like tourism, financial services and telecom.

Services could be incorporated into the South Asia Free Trade Agreement (SAFTA) soon.

SAARC Ministers, who met in Kathmandu in October 2009, also decided to work on reducing the negative list of items that are not covered under SAFTA to make the free trade agreement more "meaningful". SAFTA is an agreement for elimination of tariffs on goods traded within the SAARC region, and was signed in January 2004.

Indian Commerce and Industry Minister Anand Sharma pointed out that India had unilaterally reduced its negative list for LDCs in the SAARC region, from 744 items to below 500 items. "We are also working towards reduction on negative list with reference to non-LDCs of SAARC (which include Pakistan and Sri Lanka)," the Minister said. The minister urged the non-LDC members to consider reviewing their respective negative lists in respect of both LDCs and non-LDCs, so that intra-SAARC trade could be further expanded.

Interestingly, Pakistan continues to trade with India based on a positive list of items it allows from India. The SAFTA, however, requires all members to trade with each other on the basis of a negative list, which means that all goods would be allowed to be traded except the ones included in the negative list.


The Union government, acting on a proposal made by Bihar Chief Minister Nitish Kumar, has declared dolphin as a national aquatic animal. The animal has been declared as a ‘highly endangered’ under the ICUN and Schedule I of Wildlife Protection Act (1972), Government of India.

United Arab Emirates (UAE) has become the top destination for Indian exports in 2008-09, displacing the US from the number one rank. India’s exports to UAE grew by phenomenal 53% to $23.92 billion primarily due to sharp increase in gems and jewellery export.

Cloud-based services are those services in which software is accessed over internet by a company, and maintained at data centres of the service provider, instead of a company’s computers.

Michael Jackson’s new single “This Is It” features backing vocals by Jackson’s brothers, opens with a soft, soulful introduction and the lines: “This is it, here I stand/I’m the light of the world, I feel grand.”

Delhi, a city people love to hate for its traffic, lack of civic services, civility and now its inability to appear trussed and ready for the Commonwealth Games, has found a place of honour in the National Geographic Traveller magazine’s "50 Places of a Lifetime." The Capital and Fatehpur Sikri are the only two Indian destinations to make it to the prestigious list that is part of the travel magazine’s compilation that comes after a decade-long gap. In fact, the first list published in 1999 featured the Taj Mahal and put Kerala on the international map after it was described as ‘Paradise Found’.  The 25th anniversary special October issue also includes cities like Berlin, St Petersburg and Mexico City while short-listing Aleutian Islands in Alaska in its section on wild places and the Hawaiian island of Molokai as paradise found.

India-born Nobel laureates: Ronald Ross (Medicine, 1902); Born in Almora. Rudyard Kipling (Literature, 1907); Born in Bombay. Rabindranath Tagore (Literature, 1913) C.V. Raman (Physics, 1930) Hargobind Khorana (Medicine, 1968) S. Chandrashekhar (Physics, 1983) Amartya Sen (Economics, 1998), Venkatraman Ramakrishnan (Chemistry, 2009).

Yudh Abhyas was the largest-ever ground combat exercise held jointly between India and US armed forces at Babina, near Jhansi.

Kerala High Court has become the first in India to post details of the assets and liabilities of all its judges on the Court’s official website.

Orissa has been renamed as Odisha and Oriya language has been renamed as Odia. The proposed change will require amendment to the First and Eighth Schedule of the Constitution to be officially accepted.

Major cities of India that have been renamed after independence include: Kanpur (Cawnpore), Thiruvananthapuram (Trivandrum), Mumbai (Bombay), Chennai (Madras), Kolkata (Calcutta), Pune (Poona) and Kochi (Cochin).

The world’s largest cruise liner, Oasis of the Seas, began its maiden voyage to Florida on October 30, 2009, gliding out of a shipyard in Finland. With an amphitheatre, basketball courts and an ice rink on board, the 16-deck liner spans 1,200 feet from bow to stern. Its 2,700 cabins can accommodate 6,300 passengers and 2,100 crew. The ship cost $1.5 billion and took two and a half years to build. It boasts of four swimming pools, volleyball and basketball courts, and a youth zone with theme parks and nurseries for children.

World Sight Day is observed on October 8.

World Standards Day is celebrated on October 14.

Global Iodine Deficiency Disorders Day is observed on October 21.

India has signed agreements with the World Bank for $4.2 billion (around Rs 20,000 crore) credit to support the country's infrastructure projects and also for recapitalising the public sector banks. State-run PowerGrid Corp of India, India Infrastructure Finance Company Ltd (IIFCL) signed pacts for $1 billion and $1.195 billion, respectively. The Centre signed the agreement for $2 billion to recapitalise the state-run banks. The funding to IIFCL has two components, IBRD loan of $1.195 billion long-term finance to infrastructure projects and a grant of $5 million for capacity building of IIFCL, which finances infrastructure projects. The loan will be utilised for strengthening transmission systems for Sasan, Mundra and Krishnapatnam Ultra Mega Power Projects and South-West interconnection.

The 150th birth anniversary of Rabindranath Tagore will be celebrated internationally by the UNESCO in 2010 as a mark of respect to the Nobel Laureate whose literary work blends universal humanistic values and sympathy for the poor. The agency will also celebrate the 100th birth anniversary of Chilean poet Pablo Neruda and 100th birth anniversary of Afro-Martinican littérateur Aime Cesaire. The UNESCO will establish prizes and medals in the name of these literary giants. It will also organise a series of seminars and conferences across the world to spread awareness about their literary works.

Larsen and Toubro (L&T) has built India’s largest ship-building yard near Chennai.

India has announced sites for setting up light water reactor-based nuclear plants in cooperation with the United States, France and Russia. Power plants would be set up in cooperation with the US at Chhayamithi Virdi in Gujarat and Kovvada in Andhra Pradesh, while Jaitapaur in Maharashtra has been designated as the site for the plant to be set up with France’s assistance. Kudankulam in Tamil Nadu and Haripur in West Bengal have been chosen as the sites for power plants to be set up in cooperation with Russia.

The new series of Index of Industrial Production (IIP) will have base year as 2004-05 for calculating factory production.

Cope-India 09 was joint air exercise that Indian Air Force held with US Air Forece at Babina, near Agra.

Four-time world champion and Khel Ratna awardee woman boxer M.C. Mary Kom was India’s flag-bearer in the third Indoor Asian Games held at Hanoi.
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