CA Final 2012 English

7/31/2019 CA Final 2012 English

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International

India and Nepal on 27 November 2011 signed a revised Double Taxation AvoidanceAgreement (DTAA). This will help prevent tax evasion and facilitate exchange of

information on banking between the two countries. DTAA, will allow Indian traders and

investors to enjoy tax relaxation in India once they pay taxes in Nepal. Kuwaits Prime Minister Sheikh Nasser Mohammad al-Ahmad al-Sabah and the Cabinet

resigned on 28 November 2011 amid accusations of corruption. Kuwaits emir, SheikhSabah Al Ahmed Al Sabah, accepted the resignation.

The Justice and Development Party (PJD) won the parliamentary elections in Moroccoaccording to the poll results announced on 27 November 2011. PJD won 107 seats out ofthe 395 seats, almost twice as many as the second place finisher. The Polls were held on

25 November 2011 and there was only a 45 percent turnout.

The Arab League on 27 November 2011 imposed a set of sanctions against Syria for itsfailure to comply with the League mediated peace plan to end violence in the country.

These include freezing of financial assets, a halt on dealing with Syrias central bank andstopping investments and a travel ban on high- ranking officials.

China on 29 December 2011 issued a white paper entitled Chinas Space Activities in2011. The white paper is on the development of space industry since 2006 and the majortasks for the next five years. It was the third white paper on Chinas space activities.

India and Pakistan concluded their Sixth Round of Expert Level Talks on NuclearConfidence Building Measures in Islamabad on 27 December 2011. In this meeting, boththe nations agreed to recommend to their foreign secretaries to extend the validity of the

agreement on reducing the risk from accidents relating to nuclear weapons. Pakistansuggested to India that heavy artillery should be removed from the Line of Control in

Jammu and Kashmir.

The Prime Minister of India visited Russia on 15-17 December 2011 to participate in the12th Indo-Russian annual summit. India and Russia signed five major agreements during

this summit, which includes licensed production of an additional 42 Sukhoi combatplanes and to manage fly ash residue at thermal plants in Siberia.

The United Nations (UN) and the Iraqi Government on 24 December 2011 signed anagreement to relocate Iranian exiles living in a camp in northeastern part of Iraq. UNHigh Commission for Refugees will monitor the relocation while Iraqi Government will

be responsible for their security. UNHCR would decide the refugee status for theresidents of Ashraf here.

The leaders of the CSTO (Collective Security Treaty Organisation) nations on 21December 2011 agreed that the deployment of foreign bases in their territory would bedone with the approval of all partners of the defence alliance. The CSTO summit washeld in Moscow.

As per the Charities Aid Foundations World Giving Index, India ranked as the mostuncharitable nation of South Asia in 2011. India is the worst performer in South Asia

with a global ranking of 91. India was ranked at 134 in 2010.

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Syria on 19 November 2011 agreed to allow the Arab League observers to monitor thesituation inside the country. The plan is aimed at ending the crackdown on pro

democracy protesters in Syria.

The USA government on 16 December 2011 lifted most of its sanctions on Libya,unfreezing some of Libya's assets held in the United States. The USA government freed

about 30 billion dollars in assets owned by the Libyan government and 2 Libyan banksthat had been blocked since February. But holdings of the late leader Muammar al-

Qadhafi and his family, as well as those of his aides, will be kept frozen.

India and Australia on 16 December 2011 signed an agreement to amend DTAA (DoubleTaxation Avoidance Agreement) with the objective of ensuring more effective exchange

of financial information between the two countries.

NATO ended its training mission in Iraq on 17 December 2011. The mission was aimedat assisting in the development of Iraqi security forces training structures and institutions.

It was comprised of 120 soldiers from 12 countries.

The Government of India and the Asian Development Bank (ADB) on 15 December2011 signed an agreement for the first tranche (113 million US dollars) under the 350

million US dollars Himachal Pradesh Clean Energy Transmission InvestmentProgramme, which is a multi-tranche financing facility.

The US military officially ended its mission in Iraq on 15 December 2011. As perPentagon statistics, approximately 4487 US soldiers lost their lives in Iraq war, withanother 32226 Americans wounded in action.

The Government of Canada following many other countries like Belgium, Netherlandse.tc , announced on 12 December 2011 that women who aspire for Canadian citizenship

cant wear burqa when they take oath of citizenship. The government receivedcomplaints from lawmakers and judges that they found it difficult to know whether

women who masked their faces were actually reciting the oath or not.

Japan announced on 9 December 2011 that it is imposing a fresh round of financialsanctions against Iran. Japan will freeze the assets of 106 organizations, one individualand three Iranian banks.

Greek Parliament on 7 December 2011 approved a budget for 2012 pledging tough fiscalgoals demanded by European Union partners in return for fresh loans. The austerity

budget projects a modest primary surplus excluding interest payments on debt.

Australias ruling Labour Party on 4 December 2011 in its annual policy conferenceapproved plans to open up uranium sales to India. The conference held in Sydney

overturned its own ban, which prohibits Australia to sell uranium to nations such as Indiathat have not signed Nuclear Non-Proliferation treaty.

The first Global Buddhist Congregation which was aimed to provide a joint platform toBuddhist communities across the world and also to impact geo-politics in Asia was

concluded in New Delhi on 30 November 2011. The four-day congregation decided to setup a new international Buddhist organization in India.

The United Kingdom shut down the Iranian embassy in London and expelled its entirestaff in retaliation to the storming of the British diplomatic compound by an angry mob.

They were asked to leave the UK within 48 hours. The British government also shut itsembassy in Iran and evacuated the staff.




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The Bangladeshi Parliament on 29 November 2011 passed a landmark bill, the VestedProperties Return (Amendment) Bill 2011 that will enable Hindus to reclaim their

property taken over by the government and individuals.

Tuareg rebels on 1 April 2012 tightened their grip on northern Mali. It seized control of akey city called Gao and encircled the historic desert town of Timbuktu. Earlier, Army

seized power in Mali because the government had not done enough to stem the Tuaregrebellion rekindled in January 2012. Mali is located in western part of Africa.

The European Union on 28 March 2012 called on North Korea to abandon its plannedrocket launch and dismantle its nuclear weapons programme. The EU stated that it wasdeeply concerned about North Korea's plan to launch a satellite into orbit next month.

Syria on 27 March 2012 accepted the 19-point UN peace plan to end violence in country.The 19-point plan was handed over by Kofi Annan to Syrian President during his recentvisit to the Syria.

Israel on 25 March 2012 snapped working relations with the United Nations HumanRights Council. The Council passed a resolution recently against Israel. The resolutioncondemned Jewish settlement construction in the West Bank and East Jerusalem and

decided to send a fact-finding mission to investigate such activity. Rebel troops in Mali ousted its President Amadou Toumani on 22 March 2012. The

rebels blamed the government for failing to control an ethnic Tuareg insurgency in the

Northern part of Mali. The Tuareg insurgency includes fighters who supported MummarGaddafi in Libya.

UN Human Rights Council on 21 March 2012 passed a resolution in Geneva calling for aprobe into Israeli settlements in occupied territories. The UN resolution states that the

Israeli settlements is infringing on the rights of the Palestinian people. The resolutionasked Israel to confiscate arms to prevent acts of violence by Israeli settlers.

The Pakistan government on 20 March 2012 issued the Statutory Regulatory Order(SRO) for switching over to a negative list regime for trade with India. As per SRO, the

import of 1209 Indian products will be included in the negative list and will not beimportable from India. Of the importable items from India, 137 products can be broughtin from India through the Wagah land border crossing.

The Bangladesh government decided to honour 132 foreign leaders, intellectuals, culturalpersonalities and organisations who helped in the country's Liberation war of 1971. Thelist of people to be honoured includes 47 Indians.The honour will be conferred on 27

March 2012.

India and the World Bank on 21 March 2012 signed an IDA credit of 152 million USdollars to finance the Indian governments efforts to help improve the efficiency, quality

and accountability of health services in Uttar Pradesh.

India and Colombia on 12 March 2012 signed a Cultural Exchange Programme (CEP) inNew Delhi for the Years 2012-2016. The CEP was signed in conformity with theprovision established in the Cultural Agreement between the Government of India andthe Government of Colombia. CEP was signed in Bogota, capital of Columbia on 22 May

1974.

A US (United States) federal judge on 1 March 2012 dismissed a lawsuit filed against theSri Lankan President Mahinda Rajapaksa. The lawsuit alleged that the human rights

abuses occurred during the civil war in Sri Lanka, and it held President Rajapaksaresponsible.




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India handed over 20 million Dollars standby loan to Maldives in view of the difficultfinancial situation there. Moreover, the 50 million dollar treasury bonds owed to the State

Bank of India by Maldives was extended for another year.

North Korea agreed to suspend its nuclear and uranium enrichment programme in returnfor US food aid. USA had promised North Korea 240000 tonnes of nutritional assistance

and food aid following breakthrough in talks with the latter. North Korea also agreed toallow UN inspectors to monitor its reactor in Yongbyon so that compliance with the

measures could be verified and the disablement of the 5-MW reactor and associatedfacilities could be confirmed. This step was taken two months after Kim Jong-un came to

power following the death of his father, Kim Jong-il.

India and ADB (Asian Development Bank) on 27 February 2012 signed the third and lasttranche of loan agreement to support electricity transmission and distribution capacity in

Assam under the Assam Power Sector Enhancement Investment Programme.

India on 29 February 2012 took over the chair of assembly and governing board ofAssociation of Supreme Audit Institutions (ASOSAI). Vinod Rai, Comptroller and

Auditor General of India are the new chairman of the 45-nation strong Asian

Organization of the Institutions of the Accountants General. ASOSAI is the largestregional organisation of the government auditors.

USA on 28 February 2012 refused to change its Afghanistan strategy in view of therecent violence. The American servicemen were killed following the burning of Qurans

at a military base. USA appreciated the effort of Afghanistan President Hamid Karzaiand other senior leaders who called for an end to violent protests.

India asked Somalia to bring in a national anti-piracy legislation for investigation andprosecution of suspected pirates. Addressing the UN Security Council, India urged thatSomalia should itself give a solution to the piracy problem.

India and Saudi Arabia discussed the World Oil Outlook in New Delhi on 23 February2012, especially the growing demand for hydrocarbons in Asia and India during the

delegation level talks. The talks were held under the India-Saudi Arabia EnergyConsultations. Indias requirement of incremental quantities of Saudi Arabian oil importsin the years ahead considering the ongoing expansion in Indias refining capacity. The

Indian side also conveyed its growing requirement of LPG (Butane and Propane)considering the accelerated expansion of LPG coverage in the countrys rural areas under

the Rajiv Gandhi Gramin LPG Vitran Yojana (RGGLVY).

Iran on 15 February 2012 launched three nuclear projects including a fourth generationUltra Centrifuge, which is capable of enriching the Uranium faster than its earlier models.The first one was at the Iranian Atomic Organization Research Center in Tehran where

Iran's first home-made nuclear fuel rods were loaded into a medical reactor forproduction of isotopes used in treatment of cancer patients. Iran unveiled two other

projects in the Natanz plant in central Iran. These include a facility which will enable theplant to enrich uranium to 20 per cent.

India and Saudi Arabia on 13 February 2012 agreed to set up a Joint Working Group onDefence Co-operation during the visit of Defence Minister A.K Antony to the latter. Thefocus was on strengthening bilateral co-operation in the defence sector.

The Arab League asked the UN to send a Joint UN-Arab league monitoring team toSyria. The League sought the nomination of a special envoy to head the Joint monitoringmission.




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Indonesia became the 157th country to adopt the Comprehensive Test Ban Treaty.Indonesia formalised ratification of the nuclear test ban treaty on 6 February 2012 at the

United Nations. The Association of Southeast Asian Nations (ASEAN) completed itstalks on the regional weapons free zone in 2011 and the 10 member states are now

completing ratification of that treaty.

India and the United States of America on 3 February 2012 signed a Memorandum ofUnderstanding (MoU) in Washington to co-operate on Labour and employment issuesduring the visit of labour and employment minister Mallikarjun Khagre.

Iran on 3 February 2012 successfully launched an observation satellite called navidsatellite into orbit above Earth. It will be placed into an orbit at an altitude between 250

and 370 kilometres. The weight of the satellite is 50-kilogram and it is meant to stay inorbit for 18 months.

India signed TIEA with Guernsey in the third week of December 2011. This is the 13thbilateral TIEA for Guernsey with a G20 nation. The TIEA will help Indian tax authoritiesget information on tax evasion cases.

The inaugural defence dialogue between the Defence Secretaries of India and Sri Lankawas held in New Delhi on 31 January 2012. Regional security situation including issuesof maritime security in the Indian Ocean region dominated the inaugural Annual Defence

Dialogue. Various issues relating to bilateral defence interactions came up for discussionat the Defence dialogue.

India, Japan and China entered into a pact to share data to achieve the most efficient useof Naval Forces present in the Indian Ocean Region known as the Shared Awareness andDeconfliction (SHADE). The initiative began functioning from 1 January 2012. China,

India, and Japan also agreed to carry out more effective coordination by establishing aconvoy coordination working group as part of the Shared Awareness and Deconfliction

Mechanism.

India's National Thermal Power Corporation (NTPC), on 29 January 2012 signed anagreement with Bangladesh Power Development Board (BPDP) for setting up a jointventure 1320 MW thermal power plant. The joint venture coal-based power plant willcomprise of two units of 660 MW each and will be set up at Rampal in Khulna Division

of Bangladesh. The project is the first joint venture power plant in Bangladesh. Theproject will be completed by 2016.

Pakistan's Supreme Court on 30 January 2012 granted two more months to the judicialcommission probing the memo issue to complete its investigation. The apex court said

the panel would decide on American businessman Mansoor Ijaz's request to record hisstatement outside the country. The Supreme Court had formed the commission on

December 30 and given it four weeks to complete its investigation. The term of thecommission would have ended on 30 January 2012.

Muslim brotherhoods the Freedom and Justice Party won 235 seats in the EgyptParliamentary elections. The election results were declared on 21 January 2012 by theHigh election committee. Elections were held on 498 seats.

In New Delhi, India and Pakistan on 25 January 2012 agreed in New Delhi to transit feeformula for Tapi (Tajikistan, Pakistan and India) gas pipeline project. On the Transit Fee,India and Pakistan agreed that the negotiations would be conducted in a transparent

manner keeping in mind the overall economics of the Project. Since there is a need to




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expedite the signing of the Gas Sale Purchase Agreement (GSPA), both sides agreed tosettle the Transit Fee issue at the earliest.

The Bangladesh army foiled a planned coup in December 2011 attempt to topple thegovernment of Prime Minister Sheikh Hasina. Some officers in military service were

involved in the conspiracy to topple the system of democratic governance. Two former

army officers were arrested and a manhunt was launched for the fugitive officer whilesome 16 others were kept under strict military vigil.

The Government of India and the World Bank on 20 January 2012 signed an IDA creditof 130 million US dollars to finance the project called NERLP (North East Rural

Livelihoods Project), to empower rural communities in the growth-deficient North East(NE) region to improve their livelihood opportunities.

India on 18 January 2012 announced a substantial increase in educational assistance,being given to Sri Lanka. The funding amounting to 2.5 billion Srilankan Rupees willmark a threefold increase in the scholarships and self-financing slots for undergraduate,

masters and doctorate-level courses.

Pakistan's Supreme Court on 16 January 2012 issued a contempt of court notice to PrimeMinister Yousuf Raza Gilani for failing to re-open graft cases against President Asif AliZardari. The Apex Court also asked the Pakistan Prime Minister to appear before it on 19January 2012.

The 10th Pravasi Bhartiya Divas (PBD) was held on 7-9 January, 2012 at BirlaAuditorium, Jaipur.

Twelve of the 22 Indian diamond traders, detained in China for nearly 2 years on chargesof smuggling, reached India on 5 January 2012 after they were let off following

deportation orders by a Chinese court. Twenty-two traders, hailing mostly from Gujaratand Mumbai, were arrested in southern China's Shenzhen city in 2010 and were charged

with smuggling diamonds worth 50 million yuan or 7.3 million US Dollars. They wereaccused of sourcing diamonds illegally from Hong Kong for sale in the Chinese market.

Maldives on 4 January 2012 lifted ban on spas in the upmarket tourist destinationfollowing its verification that these spas were not being used for prostitution. Earlier, itwas alleged that these spas were the hub of prostitution. Following this, the tourism

ministry ordered all massage centres to shut down.

India on 30 April 2012 announced its decision to export 2.1 million tonnes (mt) of ironore to steel mills of Japan and South Korea under a long-term agreement due to be signedin May 2012. The iron ore will be supplied to leading steel mills of Japan and Korea,

including Posco, Kobe and Nippon Steel.

The Union Cabinet of India on 28 April 2012 approved the proposal by Oman to hike thegas price for an Indian fertilizer plant in the Gulf nation to 1.5 per million dollar metric

British thermal unit (mmBtu). The move aims to ensure uninterrupted supply of urea to

the Indian market.a) Oman India Fertilizer Company (OMIFCO): Oman India Fertilizer Company

(OMIFCO), a joint venture of Oman's state-owned Oman Oil Co (OCC) and

Indian co-operative firms KRIBHCO and IFFCO, produces about 2 milliontonnes of urea a year at Sur for exports to India. IFFCO and KRIBHCO hold 25

per cent stake each in OMIFCO, while the balance is with Oman Oil Company.




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The Union Cabinet on 26 April 2012 in a meeting headed by Prime Minister ManmohanSingh approved the signing of a new liberal visa regime with Pakistan thereby paving

way for easing travel restrictions and increasing people-to-people exchange.

The Supreme Court of Pakistan convicted Pakistan Prime Minister Yusuf Raja Gilani forcontempt of court for refusing to reopen corruption cases against President Asif Ali

Zardari. Gilani, who is the first Pakistan prime minister to be held guilty for contempt,could have been jailed for six months but was awarded just a symbolic punishment of

about 30 seconds.

Pakistan on 25 April 2012, successfully test-fired an upgraded version of Shaheen-1missile. The new upgraded Shaheen-1, with its even longer striking range and nuclear

carrying capability, can hit its targets in India. The missile test comes less than a weekafter India successfully test-fired inter-continental Agni-V missile capable of carrying a

nuclear warhead as far as Beijing.

The Netherlands Prime Minister Mark Rutte and his Cabinet resigned on 23 April 2012after failing to reach agreement on reducing the country's budget to meet European

guidelines. Rutte tendered his resignation to Queen Beatrix, the head of state, at her

palace in The Hague, which was accepted by her subsequently. US and Afghanistan inked a long-awaited strategic pact on 22 April 2012. The pact aims

at setting forth guidelines for US involvement in Afghanistan as forces are withdrawnfrom the trouble-torn nation.

A passenger aero plane crash near Islamabad in Pakistan on 20 April 2012 left more than100 people dead. The tragic incident occurred while the airliner was attempting to landduring a thunderstorm. The Bhoja airliner had been flying from the southern seaport city

of Karachi and burst into flames right before its landing in the Islamabad following a 3-hour flight. The airline Boeing 737 was carrying 121 passengers, including 11 children,

as well as six crew members.

The Fourth BRICS (Brazil, Russia, India, China and South Africa)summit was held inNew Delhi on 29 March 2012. The theme of the summit was BRICS partnership forGlobal Stability, Security and Prosperity.

World Trade Organisation (WTO) on 11 April 2012 pegged world trade growth at 3.7 percent for 2012 thereby projecting a further slowdown in world trade. World tradeexpanded by a mere 5 per cent in 2011 a sharp deceleration from the 2010 rebound of

13.8 per cent. The WTO expects trade to recover by 2013 and result in additional growthof 5.6 percent. According to the WTO, the slowdown of the global economy due to a

number of shocks including the European sovereign debt crisis resulted in the dip in thetrade figures.

Taliban militants on 15 April 2012, unleashed a string of attack in the high profilediplomatic pockets, NATO bases and Parliament of Kabul capital city of Afghanistan.

The militants also hit three provincesin Jalalabad, Logar and Paktia. The attack left 24people injured and 7 militants killed. The attackers also fired rockets at the parliamentbuilding and at the Russian embassy.

United States of America and Afghanistan on 8 April 2012 signed Memorandum ofUnderstanding (MoU) on the controversial issue of conduct of night raids on Afghanhomes. It empowered the Afghan security forces oversight over the raids led by the US

troops. The agreement leads to a more comprehensive long-term strategic partnership




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agreement between the two nations after the departure of all foreign troops fromAfghanistan in 2014.

Indias Atomic Energy Regulatory Board was designated as the 11th member of MEDP(Multinational Design Evaluation Programme) on 4 April 2012. The other members of

this body are China, Finland, Japan, Korea, South Africa, USA, UK, Canada, France and

Russia. India and UAE signed an agreement on 4 April 2012 to ease the entry of Indian contract

workers in the Emirates. The agreement was signed in Abu Dhabi, UAE. It provides foran electronic contract registration and validation system to safeguard and protect the

interests of migrant Indian workers.

Qatar on 3 April 2012 rejected Iraq's request to hand over the nation's fugitive Tareq AlHashemi to face terror charges in Baghdad. Qatar stated that it would not extradite him

since such a move would be contrary to diplomatic protocol. Qatar will not hand himover because there is no court verdict against him and because al-Hashemi is a foreign

official with diplomatic immunity. Iraq had asked Qatar to extradite the top Sunni leaderTareq Al-Hashemi against whom the Shiite Government issued an arrest warrant in

December 2011 on charges of running death squads for killing of Government officialsand opponents.

Reserve Bank of India (RBI) on 16 May 2012 decided to set up a 2 billion dollar swapfacility for SAARC (South-Asian Association for Regional Co-operation) member-nations. This facility will be available in foreign currency and Indian rupee.

Jean-Marc Ayrault a moderate Socialist took over as the Frances new Prime Minister on16 May 2012. His predecessor Francois Fillon welcomed him at the 18th centurymansion in central Paris that serves as the prime ministers office.

The Tibetan spiritual leader, the Dalai Lama, received the 1.7 million dollarTempletonPrize on 14 May 2012 for his role in promoting links between spirituality and science.The award was conferred at a ceremony in St. Paul's Cathedral, London.

Arsalan Rahmani Daulat, the Key Afghan peace mediator, was assassinated 13 May2012. The assassination of Daulat has raised the fears of disruption in the already fragilepeace talk. Rahmani, until April 2012 was the acting head of President Hamid Karzai's

Higher Peace Council. Rahmani had received tremendous success in accelerating thepeace negotiation over the past few months.

An Agni Airplane crashed in Jomsom in western Nepal crashed on 14 May 2012 killingnearly 14 of the 21 people on board while, 7 people were rescued alive. The plane was

flying from Pokhara to Jomsom, Mustang.

Pakistan successfully test-fired Hatf III Ghaznavi missile on 10 May 2012. The missilehas a range of 290 km and it can hit its target in India. The missile is capable of carrying

nuclear warheads. The missile was launched at the conclusion of the annual field training

exercise of Army Strategic Force Command. All of nearly 50 people on board were killed in a Superjet 100 aircraft crash about 40

miles (64 km) south of Jakarta on 9 May 2012. The Superjet 100 aircraft, Russia's firstall-new passenger jet since the fall of the Soviet Union went missing on 9 May 2012.

Vladimir Putin the former Russian Prime Minister and the president of the United RussiaParty took the oath as the President of Russia on 7 May 2012. Putin had won the Russianpresidential elections with 63.6 % of the vote on 4 March 2012.




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A teenage suicide bomber blew himself up in Pakistan's northwest tribal area of Bajauron 4 May 2012. The suicide bomber aged 14 to 16, detonated explosives strapped to his

chest killing at least 24 people and leaving several others injured.

40 people killed and scores others left injured in two powerful bomb blasts in Damascuson 10 May 2012. The blast prompted UN observer chief to appeal for help to finish offthe violence in Syria. According to The Syrian Observatory for Human Rights, a Britain-

based monitoring group, 50 people including civilians and security forces members diedin the attack. The target of the attack was an intelligence services base.

Nepal cabinet tendered its resignation on 3 May 2012. Prime Minister Baburam Bhattaraialso slated resigned by the end of the month. The decision to step down came in the wakeof an agreement among the Nepals major political parties to form a new coalition

government led by Bhattarai.

Twenty people died and several others left injured in an attack on a Christian church inNigeria on 29 April 2012. The attackers targeted a Christian church service at a

university in Nigerias city of Kano.

Aung San Suu Kyi took the oath of office to become an official member of Myanmarsparliament on 2 May 2012. Suu Kyi, a Nobel Laureate, pro-democracy leader ofMyanmar for the first time has held public office since launching her struggle against

authoritarian rule nearly a quarter century ago.




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National

The Telecommunications Regulatory Authority of India (TRAI) in its much-awaitedtariff order issued on 30 April 2012, ordained the TV channels to carry a minimum of100 free-to-air channels on their networks. As per the TRAI order, the basic service tier

(BST) will comprise at least 5 channels of news and current affairs, infotainment, sports,kids, music, lifestyle, movies and general entertainment in Hindi, English and regional

language of the concerned region.

The information and broadcasting (I&B) ministry of India on 28 April 2012 notified themuch awaited Cable Television Networks Rules, 2012, which paves the way for

digitalisation of the sector in four metros.

The Rajya Sabha on 27 April 2012 passed amendments to the Central EducationalInstitutions (Reservation in Admissions) Act, 2006, exempting some central institutionsfrom implementing the other backward castes (OBC) quota. The institutions where

implementation of the Act exceeds the 50 percent reservation limit fixed by the SupremeCourt will fall under the amendment.

The Rajaya Sabha, the upper house of Indian parliament, on 24 April 2012, passed theRight of Children to Free and Compulsory Education (Amendment) Bill 2010. Theamendment seeks to provide the right to receive home-based education to children with

severe disabilities.

The Supreme Court of India on 23 April 2012 dismissed a petition challenging theappointment of Lieutenant General Bikram Singh as the next Army Chief. Bikram Singh

is slated to succeed General V.K. Singh as the army chief after the latter completes histenure in the office on 31 May 2012. In a petition filed on 4 April 2012, the army chief

designate Singh was accused of being indulged in a fake encounter in the Kashmir Valleyduring a counter-insurgency operation.

Supreme Court of India on 18 April 2012 upheld Election commissions poll symbolrules. It entitled a political party the status of state party and common symbol for itscandidates only if it secures not less than 6 percent of the total votes polled in a state and

returns at least two members to the assembly.

The Union Cabinet on 12 April 2012 gave its approval to the introduction of a Billseeking an amendment in the Registration of Births and Deaths Act, 1969. The aim is to

include registration of marriages as well and to maintain necessary records and statisticsfor registration of marriages.

The Supreme Court of India on 12 April 2012 upheld the constitutional validity of theRight to Education Act, 2009, which mandates 25 per cent free seats to the poor ingovernment and private unaided schools across the country. However, the act will apply

uniformly to government and unaided private schools except unaided private minority

schools. The Lucknow Bench of the Allahabad High Court on 10 April 2012 directed the Union

government of India and the Uttar Pradesh government to ensure that there is noreporting on movement of troops by the print or electronic media.

The Union government on 17 May 2012 cleared a Rs 8500-crore project under thePradhan Mantri Gram Sadak Yojana (PMGSY) with an objective to connect 6000

habitations in the 78 naxalite-affected districts of nine states. Under the project moneywill be utilised for new connectivity and upgradation of habitations, which will be an




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addition to the core network, approved in 2002 by the Union Ministry of RuralDevelopment.

The Supreme Court of India on 8 May 2012 directed the Union Government to eliminatethe Haj subsidy completely by reducing it gradually over the next ten years. The court

further ruled that the amount of Haj subsidy should be used for the uplift of the

communitya) Haj Subsidy: The Haj subsidy is a subsidy provided to Indian Muslim Hajjpilgrims by the Union Government of India through a heavy concession in airfare.

Pilgrims who apply through the Haj Committee of India are entitled to thereduced fare. The Government of India reimburses the subsidy to Air India.

The Supreme Court of India on 27 April 2012 held that Farmers whose land is acquiredfor a public purpose are entitled to the highest market value as compensation. TheSupreme Courts ruling came following a case of land acquisition in Punjabs Faridkot

district where the land owner was awarded a compensation of 1 lakh rupees per acredespite the land was located in commercially important area.




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Economy Current Affairs: December 2011- May 2012

Jet Fuel Prices reduced by Rs 312 per kilolitre

State-owned oil companies for the second time in the month of April reduced jet fuel prices by a

marginal Rs 312 per kilolitre or kl on 30 April 2012. The price of aviation turbine fuel (ATF), or

jet fuel, in the reduction was announced in the wake of a Rs 169.3 per kl cut in rates effected

from 16 April 2012.

The reductions are however overshadowed by the steep increases effected in March and early

April 2012. ATF rates were increased by 3.2 per cent on 1 March 2012, Rs 1298.88 per kl on 16

March 2012 and by another 2.8 per cent on 1 April 2012. Prior to being increased thrice in the

months of March and April, jet fuel was priced at Rs 62,557.12 per kl.

Delhi was reduced by Rs 311.74 per kl, or 0.46 per cent, to Rs 67319.71. In Mumbai, jet fuel is

to cost Rs 68,306.21 per kl as against Rs 68630.93 per kl now.

Jet fuel constitutes over 40 per cent of an airlines operating cost and the marginal reduction in

prices introduced on 30 April 2012 is expected to take the burden off the cash-strapped airlines.

The three fuel retailersIOC, Hindustan Petroleum and Bharat Petroleum revise jet fuel prices

on the 1st and 16th of every month, based on the average international price in the preceding

fortnight.

Indias Growth Projection for 2012 lowered to 6.9% by IMF

The International Monetary Fund (IMF) on 27 April 2012 lowered Indias growth projection to6.9 per cent for 2012. The multilateral agency in January projected Indian economy to grow to

by 7 per cent for 2012. The slashed growth projection is broadly attributed to the countrys poor

performance on the front of economic reforms and slowing investment.

The IMF, however, maintained Indias growth estimate for 2013 at 7.3 per cent. As per the IMF,

the national economy grew by 7.1 per cent last year.

The IMFs growth projection is an indication for the government to expedite the process of

economic reforms which has long been victim of the countrys internal political clutter. Many of

the important reforms are still in the pipeline which needed to be approved as soon as possible.

Government should make sure that it is taking adequate majors to boost up the sentiment of

investors, who are increasingly getting disenchanted of the future prospects of Indian Economy.

SP's cut Indias Credit Rating Outlook to Negative




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Standard & Poor's downgraded credit rating outlook for India to negative from stable on 25 April

2012. The cut in credit rating is the reflection of India's widening fiscal and current account

deficits.

The negative outlook jeopardises India's long-term rating of BBB-, the lowest investment grade

rating, and sent Indian bonds, stocks and the rupee lower.

India has no sovereign global bond issues, but a downgrade would increase borrowing costs for

local companies and make it harder to refinance debt, and may have a further chilling effect on

foreign investor confidence in the country in general.

India's fiscal deficit widened to 5.9% of gross domestic product in the fiscal year 2011-12,

starkly higher than the government's target of 4.6%. The country is performing equally bad on

the front of foreign institutional investment as it witnessed a sharp decline in the FII over the past

few months. India has drawn nearly 171.8 million dollar FII so far in April 2012 against more

than 5 billion dollar in February 2012.

The credit rating downgrading indicates that the government will now have to contemplate

seriously over the long-pending economic reforms and push them through as soon as possible.

Timeline for 2G Spectrum Auction extended till 31 August 2012

The Supreme Court of India on 24 April 2012 turned down the union governments plea to grant

400 days to complete fresh distribution of 2G spectrum licenses. The court, however, extended

the deadline for the auction of licenses from 2 June 2012 to 31 August 2012 considering that

technically it was not possible to analyse the auction by June 1.

The court had on 2 February 2012 ruled that all the 122 licenses allocated to eight operators

under the first come first serve policy in January 2008 during the A Raja regime be quashed

early June and asked the government to recon duct the license distribution through an open

bidding process.

A Supreme Court bench of Justices G S Singvhi and K S Radhakrishnan also held that existing

licenses will remain operational till 7 September 2012.

The bench maintained that its 2 February 2012 order cancelling 122 licenses allocated during the

tenure of A Raja and would remain operational.

The bench was hearing the Union Government's application, seeking clarification of its direction

in the 2 February 2012 judgement which had fixed 2 June 2012 as the deadline, when the 122 2G

spectrum licenses, issued in 2008, would stand quashed.

The Union government had on 1 March 2012 moved the apex court stating it would impact over

69 million mobile users as the auction process for spectrum will take at least 400 days. The




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Centre had informed the court that the auction process has commenced but it would take around

400 days for it to be completed.

RBI directed Banks to Print MICR and IFSC Code on Passbook

Apex Indian bank, the Reserve Bank of India on 21 April 2012 directed all commercial banks toprint the MICR (Magnetic Ink Character Recognition) and IFSC (Indian Financial System Code)

code on the passbook and statement of account of the customers. The bank made the printing of

MICR and IFSC code compulsory for all the banks.

The banks, under their current practice, provide MICR code on the cheque leaf along with the

IFSC code of the branch.

Under the RBI guidelines, MICR code is mandatory for all electronic clearing services (credit

and debit) transactions. IFSC code is a pre-requisite for national electronic funds transfer (NEFT)and real time gross settlement (RTGS) transactions.

Govt approved 22 FDI Proposals worth Rs.586.137 crore

The Union government on 20 April 2012 approved 22 foreign direct investment (FDI) proposals,

amounting to Rs.586.137 crore ($112.5 million). The proposals were cleared following

recommendations made by the Foreign Investment Promotion Board (FIPB) at its meeting on 30

March 2012.

The government cleared Shantha Biotechnics' proposal of Rs.514 crore to increase its foreign

equity in Brownfield pharmaceutical sector in order to carry out the activities of research,development, manufacturing and marketing of bio-tech products and other bio-generics.

It also cleared Mahindra and Mahindra's Rs.25.99-crore proposal for setting up a joint venture

company to develop, manufacture and provide service support for radar systems and various

kinds of defence electronic systems. The government also allowed Springer Editorial Services'

Rs 12.87-crore proposal to increase foreign equity up to 100 per cent.

TRAI approved Increase in Processing Fee for Mobile Recharge Coupons

Telecom regulator TRAI on 19 April 2012 approved increase in processing fee for all mobile

recharge coupons (top-up vouchers) priced above Rs 20. The government however left the

processing fee unchanged for the vouchers below Rs 20. The processing fee is included within

the MRP of recharge coupon purchased. The regulator cleared the increase of 50 per cent in the

charge through an amendment made to the Telecom Tariff Order (TTO).




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It directed all telecom service providers to provide consumers with at least one top up voucher

priced at Rs 10 when it noticed that top up vouchers priced below Rs 20 are not available with

some service providers.

The order was issued after telecom industry body COAI and AUSPI made written submission to

the Telecom Regulatory Authority of India arguing that there have been inflationary pressuresover the last three years ever since the ceiling of Rs 2 was prescribed by TRAI. It was also

pointed out that COAI that the rising cost of providing services by way of hike in salaries and

wages, increased transportation and diesel cost and so in support of raising the fee.

India registered Highest Ever Trade Deficit of $184.9 billion in 2011-12

Commerce Secretary on 19 April 2012 announced that India surpassed the export target of $300

billion for 2011-12. India was able to surpass the trade target of $300 billion despite slowdown

in demand in its traditional markets of the US and Europe. Exports increased by 21 per cent to

$303.7 billion in 2011-12 powered by a strong growth in petroleum, pharmaceuticals andengineering products.

However, imports surged by 32.1 per cent to $488.6 billion thereby leaving the highest-ever

trade deficit of $184.9 billion.

Other sectors which showed healthy performance with respect to export include drugs and

pharmaceuticals up 21.9 per cent at $13.1 billion; leather (up 22.5 per cent) at $4.2 billion;

electronics (up 9.2 per cent) at $9 billion; cotton yarn and fabric made-up (up 17.4 per cent) at

$7.2 billion, readymade garments yarns and fabrics (up 18 per cent) at $13.7 billion and marine

products (up 31.4 per cent) at $3.4 billion.

Imports also registered a huge surge with petroleum, oil and lubricants moving up by a steep

46.9 per cent to $155.6 billion largely due to increased prices in international markets. Imports of

gold and silver jumped by 44.4 per cent to $61.5 billion while that of coal surged by 80.3 per

cent to $17.6 billion.

Union Government decided on 1 million Caps on ECB for Aviation Sector

The Union government on 19 April 2012 permitted companies engaged in the aviation sector to

raise working capital resources through the external commercial borrowings (ECBs) route to the

tune of $1 billion. The limit for individual airline companies was set at $300 million. This limit

can be availed themselves of either in a lump sum or in tranches, depending on the utilisation of

the limit during the one year when the facility is available. So far airlines were allowed to raise

foreign capital only for import of capital equipment such as aircraft.

To increase access to ECBs, the RBI is likely to relax the average maturity period for ECBs

above $20 million from five to three years. The RBI is also expected to notify within a week

guidelines for the proposal, which was part of the budget 2012-13.




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ECBs, a financial instrument used by the government to facilitate the access to foreign funds by

Indian corporations and public sector undertakings totalled $35.90 billion in 2011-12. They are

easier and more attractive way to raise the loan than domestic borrowings.

The government also allowed the airlines to directly import jet fuel as actual end users thereby

enabling them to escape the state value added tax (VAT), which ranges from three to 33 percent.

Retail inflation shot up to 9.47% in March 2012

As per the government data released on 18 April 2012, retail inflation shot up to 9.47% in March

2012 because of higher prices of milk, vegetables, protein-based items and edible oil products.

Retail inflation, based on the Consumer Price Index (CPI) had recorded 8.83% in February 2012.

The All-India CPI is prepared in addition to the three retail price indices for agricultural

labourers, rural labourers and industrial workers prepared by the Ministry of Labour.

However inflation based on Wholesale Price Index showed only a marginal decline to 6.89% in

March 2012. Wholesale price index (WPI)-based inflation fell to 6.89 per cent in March from

6.95 per cent in February 2012. As per the index food inflation rose to a five-month high of 9.94

per cent, compared with 6.07 per cent in February 2012 and deflation in January 2012. Given

that the food basket has more weight in the CPI than in the WPI, overall inflation numbers

showed a rise in the case of the retail price index.

ECB Norms for Power Sector liberalised

The Union government on 18 April 2012 decided to liberalise the external commercial

borrowing (ECB) norms for the power sector. The announcement was made in tune with the

announcement made in this respect by the Finance Minister, Pranab Mukherjee while presenting

the Union budget 2012-13.

Power sector companies will now be able to use up to 40 per cent of ECB loans to refinance their

rupee debt, provided the remaining 60% balance is utilised for investments in new projects. So

far, power companies were permitted to use only 25 per cent of the ECB to refinance their

domestic rupee-debt loan.

ECB, which totalled $35.9 billion in 2011-12, are considered attractive as cost of raising the loan

is lower than that of domestic borrowings. The proportion of ECBs having maturity between 5 to7 years went up from about 47 per cent in 2007-08 to almost 70 per cent in 2010-11. ECBs for

infrastructure sector moved up from 15.2 per cent in 2007-08 to 42.3 per cent in 2010-11.

RBI instructed Commercial Banks to reduce their Exposure to Gold Loan Companies to

7.5%




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Reserve Bank of India (RBI) on 17 April 2012 instructed commercial banks to reduce their

exposure to gold loan companies to 7.5% of their capital funds from the existing 10%. The

directive will impact the gold loan companies such as Muthoot Finance and Manappuram

Finance as they will receive less funding. The central bank also set up a working group to

suggest ways to deal with the issue.

Banks were directed to reduce their regulatory exposure ceiling in a single NBCFC, having gold

loans to the extent of 50% or more of its total financial assets, from the existing 10% to 7.5% of

bank's capital funds. The direction was given in the back of a situation when gold loans were

growing rapidly and there was a concentration risk.

Banks barred from charging Prepayment Penalty on Floating Rate Home Loans

The Reserve Bank of India (RBI) on 17 April 2012 banned banks from charging a prepayment

penalty on floating rate home loans. Banks were barred from charging any fee from a customer

who wants to repay an outstanding loan and close the account.

Housing finance regulator National Housing Bank (NHB) had previously barred home finance

companies from charging any prepayment penalty. Among banks, State Bank of India was the

first to do away with the pre-payment fee on both fixed and floating rate loans. Taking cue nearly

20 banks withdrew the penalty on floating rate loans. However, most lenders continue to charge

the penalty on premature closure of fixed rate loans.

RBI also directed banks to minimise the wide variation in rates offered to retail and bulk

depositors on deposits with very little difference in maturities. It also mandated that banks offer a

basic savings and deposit account to all their customers. These accounts should have some

minimum common facilities and not prescribe a minimum balance.

Reserve Bank of India cut the Repo Rate by 50 Basis Points

Reserve Bank of India, the apex Indian Bank, on 17 April 2012, cut the key policy rates for the

first time in the past three years. While the repo rate (the rate at which the RBI lends money to

banks) was cut down by 50 basis points from 8.50 per cent to 8.00 per cent, the reverse repo rate

(normally fixed at a spread of 100 basis points below the repo rate) was reduced to 7.0 per cent.

The marginal standing facility rate, which has a spread of 100 basis points above the repo rate,

now stands at 9.0 per cent.

The RBIs move to cut down key policy rates came in the wake of slumping growth which was

reduced to 6.1 per cent in the third quarter of fiscal year 2011-12. Headline WPI inflation had

moderated to below 7 per cent by end March although there are fears that it will flare up again.

The RBI has, therefore, played it safe by projecting an inflation target of 6.5 per cent by March

2013. Its GDP projection for this year is 7.3 per cent.




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FDI Inflows into Indias Services Sector up by 62% in April-January 2011-12

Foreign direct investment (FDI) inflows into the services sector in India went up by 62% during

April-January period 2011-12 on account of unfavourable economic conditions of the western

markets.

The financial and nonfinancial services sector attracted FDI worth $4.83 billion during the 10-

month period of 2011-12 as compared to $2.98 billion in the April-January period of 2010-11.

The trend reflected confidence in India's growth story. It was observed that though the economic

growth in India itself declined in 2011-12 to 6.9%, the economy was among the best performing

in the world.

Despite taxation and policy issues, the country enjoys the investor confidence as is evident from

a 53 per cent increase in total FDI inflows to $26.19 billion during the 10-month period (April-

January 2011-12). The sectors that attracted sizeable FDI inflows include drugs and

pharmaceutical ($3.20 billion), construction ($2.23 billion), telecommunications ($1.99 billion)and power ($1.56 billion).

Union Cabinet approved a Proposal to set up SPV for GSTN

The Union Cabinet on 12 April 2012 approved a proposal to set up a Special Purpose Vehicle

(SPV) for Goods and Services Tax Network (GSTN) to help facilitate the smooth introduction of

the new indirect tax regime.

GSTN SPV is to be incorporated as Section 25 not-for-profit private limited company in which

strategic control would be held by the Centre. It will provide IT infrastructure and services to

various stakeholders including the Centre and states.

The SPV will have an equity capital of Rs 10 crore, with both the Centre and states having stakes

of 24.5 per cent each. Non government institutions would hold 51 per cent equity.

Union Cabinet approved Extension of Funding for Swavalamban Scheme

The Union Cabinet on 12 April 2012 approved the extension of funding support for

implementing the Swavalamban Scheme under the New Pension System (NPS) from three years

to five years for all subscribers enrolled during 2010-11, 2011-12 and 2012-13.

The exit norms of the scheme were also relaxed to enable subscribers under Swavalamban to exit

at age 50 instead of 60, or a minimum tenure of 20 years, whichever is later. The Cabinet

decided to provide an additional funding support of Rs 2065 crore to the scheme till 2016-17.

The cabinets decision will benefit 70 lakh workers in the unorganised sector.

Cabinet approved Public Procurement Bill




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The Union Cabinet on 12 April 2012 approved Public Procurement Bill, 2012 which aims at

regulating public procurement of above Rs 50 lakh and provides fair treatment to bidders. The

move is aimed at bringing transparency in State purchases.

Public Procurement Bill, 2012 aims at regulating public procurement by all ministries and

departments of the Union government, Central public sector enterprises (CPSEs), autonomousand statutory bodies controlled by the Centre and other procuring entities. The Bill also proposes

absence of price negotiations, except in circumstances that are prescribed, and for which reasons

are to be recorded.

CCEA approved Rs 30000 crore Bailout for Air India

The Union government on 12 April 2012 approved Rs 30000 crore bailout for Air India. It was

decided that Rs 6750 crore would be infused immediately to meet the airline's working capital

requirement and the total of bailout amount would be spread out over a period of 9 years. The Rs

30000 crore bailout package was approved in addition to the equity infusion of Rs 3200 crorealready in place.

The government also decided on other issues with an objective of pulling out ailing Air India

from its debt burden and enabling it to turn into a profit making venture.

The decisions of the Cabinet Committee on Economic Affairs (CCEA) decided to hive off the

engineering services and ground handling business, and go ahead with the induction of 27 new

Boeing 787 Dreamliners.

E-filing of Returns compulsory for Individuals with Income above Rs 10 lakh

The Union government on 11 April 2012 made it mandatory for individuals with income above

Rs 10 lakh to file their tax returns 2011-12 onwards electronically. E-filing was made

compulsory for the person who is an individual, or a Hindu Undivided Family, if his or its total

income, or the total income in respect of which he is or it is assessable under the Act during the

previous year, exceeds Rs 10 lakh for assessment year 2012-13 onwards. E-filing for such

individuals was optional till 2010-11.

Currently business houses with receipts of Rs 60 lakh and professionals with income of Rs 15

lakh are mandatorily required to e-file their return with digital signature.

FIIs permitted to invest 23% in Indian Commodity Exchanges without Government

Approval

The updated Consolidated Foreign Direct Investment Policy Document released by the

Commerce and Industry Ministry on 10 April 2012. The updated Consolidated Foreign Direct




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Investment Policy Document' changed the norms for both non-banking finance companies

(NBFCs) and foreign institutional investors (FIIs).

The ministry through the document declared that foreign institutional investors (FIIs) can invest

up to 23 percent in Indian commodity exchanges without government approval. The updated

Consolidated Foreign Direct Investment Policy Document also stated that import of second-handcapital goods will become tougher.

Composite foreign investment cap of 49 per cent (FDI limit of 26 per cent and FII ceiling of 23

per cent) in commodity exchanges which requires Government/Foreign Investment Promotion

Board (FIPB) approval exists currently. However following the upgradation of Consolidated

Foreign Direct Investment Policy Document, FIPB nod will be required only for the FDI

component, not for FII investment.

ADB projected Moderate Increase in Indias GDP to 7% in 2012-13

The Asian Development Bank (ADB) in its flagship annual publication Asian Development

Outlook (ADO) released on 11 April 2012 projected moderate increase in growth rate for India

to 7 percent in 2012-13. The ADB stated that strong economic performance would depend on the

countrys ability to push reforms agenda and address issues constraining investments. The

government however estimated a growth rate of 7.6 per cent for 2012-13 fiscal.

Moderation in the growth of non-oil imports in 2012-13 and improved economic prospects in the

advanced countries in 2013-14 is likely to help the current account deficit to improve to 3.3% in

2012-13 and further to 3% in 2013-14.

ADB mentioned in its publication that number of bills and measures to improve Indiasinvestment environment introduced in Parliament are making little progress amidst in the back of

insufficient consensus for immediate reforms. However the ADB mentioned the recent rise in the

pace of road construction and clearances for power projects was a positive signal and would

likely mark increase levels of investment.

Supreme Court dismissed the Review Petitions filed by Seven Telecom Companies

The Supreme Court of India on 4 April 2012 quashed the review petitions filed by seven telecom

companies (Videocon Telecommunications, S Tel, Sistema Shyam Teleservices, Tata

Teleservices, Unitech Wireless (Tamil Nadu), Etisalat DB Telecom and Idea Cellular), whose

license was cancelled by the Supreme Court in its 2 February 2012 verdict.

The Supreme Court bench of Justices GS Singhvi and KS Radhakrishnan dismissed the petition

as it found no merit in it. The Apex Court had voided all 122 2G licences allocated by A Raja in

January 2009 on first come first serve policy. The court in its 2 February 2012 verdict had held

the policy fundamentally flawed and unconstitutional. The court also dismissed the petition of A

Raja, prime accused in the 2G spectrum scam.




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The Supreme Court, however, accepted the union governments petition to hear in open court the

petition filed by the Union government seeking review of its ruling cancelling 122 licences for

the 2G spectrum.

Reporting Requirements of the Banks to Monitor Gold Import tightened

The Reserve Bank of India on 3 April 2012 tightened the reporting requirements of the banks. As

per the directions issued, banks will have to submit a monthly statement informing the central

bank about the quantity of gold imported and mode of payment adopted. The statement is to be

filed with the foreign exchange department of the RBI and has to be submitted at the end of

March and September.

The directive was issued amidst concerns of huge outflow of foreign exchange on import of gold

which is believed to be putting pressure on the India's current account deficit (CAD).

Banks were directed to file a half yearly statement on quantity and value of gold imported by

nominated banks, agencies, export-oriented units (EOUs) and special economic zone (SEZs) in

gem & jewellery sector, as well as mode of payment. Also they have to file monthly statement

on the quantity and value of gold imports by the nominated agencies (other than the nominated

banks), EOUs, SEZs as well as the cumulative position at the end of the reporting month.

Earlier, banks were only required to submit a monthly statement on the number of transactions

and value of gold imported by EOUs, units in SEZ\export processing zone and nominated

agencies/banks. India is the world's largest importer and consumer of the precious metal.

India's Exports grew by annual 4.2% in February 2012

India's exports grew by an annual 4.2% in February 2012 to USD 24.6 billion. The growth was

the slowest in three months. The country is likely to miss the target of USD 300 billion for 2011-

12 in the wake of difficult global environment. Export growth slipped to 44.25% in August 2011

from a peak of 82% in July. The export growth had stood at 36.36% in September, 10.8% in

October and 3.8% in November 2011.

Exports showed some improvement when it grew by 6.7% in December 2011 and over 10% in

January 2012. During the April-February period in 2011-12, exports aggregated to USD 267.4

billion, a year-on-year growth of 21.4% on account of the surge witnessed in the early months of2011-12 fiscal.

Imports on the other hand grew at a faster rate of 20.6% year-on-year to USD 39.7 billion in

February 2012 resulting in a trade deficit of USD 15.1 billion. During the 11-month period

(April 2011-February 2012), imports increased by 29.4% to USD 434.1 billion.

RBI released September 2011 Quarterly Statistics on Deposits & Credit




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The Reserve Bank of India (RBI) on 3 April 2012 released 'Quarterly Statistics on Deposits and

Credit of Scheduled Commercial Banks, September 2011. The release included data related to

deposits and credit of scheduled commercial banks including regional rural banks (RRBs) as on

30 September 2011. The data included in the release were based on Basic Statistical Return

(BSR)-7 received from all scheduled commercial banks (including RRBs).

Highlights of RBIs Quarterly Statistics on Deposits and Credit of Scheduled Commercial

Banks

Number of banked centres

The number of banked centres of Scheduled Commercial banks stood at 35,435. 27,913 of

these centres were single office centres and 68 centres had 100 or more bank offices.

Deposits and Credit of top 100/200 centres

The top hundred centres, arranged according to the size of deposits accounted for 69.6 percent of the total deposits. Whereas the top hundred centres arranged according to the size of bank

credit accounted for 78.5 per cent of total bank credit.

In September 2010, the corresponding shares of top hundred centres in aggregate deposits

and gross bank credit had stood at 68.8 per cent and 78.0 per cent.

Aggregate deposits of top hundred centres increased by 23.5 per cent in September 2011 over

September 2010.

Annual growth rate of gross bank credit of top hundred centres at 24.3 per cent in September

2011 was higher than the 19.7% growth recorded in September 2010.

The top 200 centres in terms of aggregate deposits covered 32.4 per cent of reporting offices

and 74.5 per cent of aggregate deposits. The top 200 centres in terms of gross bank credit

accounted for 31.8 per cent of reporting offices and 81.9 per cent of gross bank credit.

Retail Inflation shot up to Double Digit Mark at 10.32 percent in April 2012

As per official data at the retail level released on 18 May 2012, retail inflation shot up to thedouble digit mark at 10.32 percent in April 2012 on account of substantial increase in vegetable,edible oils and milk prices.

The retail inflation data showed that the surge in prices of vegetables was the greatest at 24.55per cent in April year-on-year. Vegetables were followed by edible oils, the prices of whichsoared by 17.63 per cent while milk products were next in line with a 14.94 per cent increase inprices in April 2012.




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As for the protein-rich items such as eggs, meat and fish, the year-on-year increase in prices wereat 9.95 per cent. Prices of cereals however went up by a much smaller margin of 3.94 per centduring the month.

Sugar turned dearer by 4.32 per cent in April at the retail level while pulses became costlier 6.03per cent as compared to the same month of 2011.

Overall prices of food and beverages grew by 10.18 per cent in April. Food inflation based onwholesale price entered into double-digit for the first time in six months. Food inflation grew to10.49 per cent in April 2012 based on the wholesale priceClothing, bedding and footwear became costlier by 11.95 per cent and prices of fuel and lightgrew by 11.40 per cent.

According to the CPI data, inflation rates for rural and urban areas were estimated at 9.86 percent and 11.10 per cent, respectively, for April while the revised figures for the two segments forMarch was pegged at 8.70 per cent and 10.30 per cent, respectively.

Inflation based on Consumer Price Index (CPI) in the urban areas surged by 11.10 per cent inApril year-on-year, while in rural area it grew by 9.86 per cent.

Indias Consumer Price Inflation Figure surged to 10.36 Per Cent in the Month of April

Indias consumer price inflation (CPI) surged to 10.36 per cent in the month of April 2012. The

CPI figure for the month of February and March stood at 9.47 percent and 8.22 percentrespectively. The rising figure is largely driven by a rise in prices of vegetables, eggs and fishproducts.

Inflation as measured by Indias benchmark wholesale price index (WPI) rose to 7.23 percent in

April 2012 as prices of food, fuel and manufacturing items went up considerably.

The Reserve Bank of India, which unlike other central banks uses mainly the wholesale priceindex for monitoring inflation, slashed policy rates by a steeper-than-expected 50 basis pointslast month to boost a sagging economy.

The unrelenting inflation has left the RBI with very little room to further slash the credit rates.The central bank had cut down the policy rates by 50 basis points in its quarterly review ofmonetary policy in April 2012. The move was aimed at giving a boost to the flaccid state ofeconomy.

Consumer Price Index (CPI)




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The annual consumer price index (CPI) was brought out into the practice in February 2012. Itmeasures retail prices of major food groups, fuel, clothing, housing and education across ruraland urban India.

Commerce Ministry relaxed the Conditions for Sugar Exports

The Commerce Ministry, on 16 May 2012, relaxed conditions for sugar exports by raising thequota to 25000 tonnes from 10000 tonnes.

Both the Food Ministry and the Directorate General of Foreign Trade (DGFT) issued separatenotifications related to the decision. Exports were permitted as the country's sugar output isexpected to touch 26 million tonnes in 2011-12, higher than the annual demand of 21.5-22million tonnes.

The notification comes following the Food Ministrys formal order issued on 15 May 2012

allowing sugar export without any quantitative restrictions.

Indian Rupee plunged to its Historic Low of 54.56 Against the U.S. Dollar

Indian Rupee plunged to its historic low mark of 54.56 against the U.S. dollar on 16 May 2012.At the Interbank Foreign Exchange market, the rupee opened sharply lower at 54.06 and plungedto all time low of 54.56, surpassing the previous all-time low of 54.30 recorded in December2011. It finally closed at 54.50.

A falling rupee will adversely affect the economy by raising the cost of imports, which in turnwill hike the price of important items in the economy. The falling rupee is largely attributed tothe factors like swelling trade deficit, which widened to over 10.9 per cent of gross domestic

product in the fiscal years 2011-12, and grim economic outlook.

Rupee was not the only currency which fell down amidst the global pressure but many of themajor currencies witnessed the same fate as the dollar was viewed by the investors as the safestbet. While Euro hit its four-month low mark, dollar geared up for its highest level sinceSeptember 2010.

C Rangrajan, the prime minister's economic advisory council chairman advocated the use ofIndia's foreign exchange reserves to keep in check the consistent depreciation of the rupeeagainst the dollar. India has a total of nearly 290 billion dollar as its foreign exchange reserves.

Following Revised Production Estimates Cotton Advisory Board, Centre allowed furtherCotton Export

The Union government in the meeting of informal group of ministers chaired by FinanceMinister Pranab Mukherjee on 30 April 2012 decided to allow further cotton exports in the 2011-12 marketing year ending September 2012 following the upward revision of production estimate.




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The government had in March 2012 lifted the ban on exports but had decided not to issue freshregistration of certificates (RCs). It only allowed shipments for which RCs were already issuedbefore the ban was imposed on 5 March 2012. India exported 113 lakh bales so far in the currentcotton season. Prior to the imposition of the ban the government had issued RCs for about 130

lakh bales.

The decision was based on revised production estimates of the Cotton Advisory Board as well asthe Agriculture Ministry. As per the decision, there would not be any quantitative restrictions onregistration.

The Cotton Advisory Board (CAB) had in April 2012 revised production estimates upwards to347 lakh bales from 345 lakh bales for the 2011-12 season. It also revised domestic consumptionestimates downwards to about 250 lakh bales from 260 lakh bales earlier. The Agriculture

Ministry too revised upwards cotton output to 352 lakh bales from 340.8 lakh bales.

State-owned Oil Companies reduced Jet Fuel Prices by Rs 312 per kilolitre

State-owned oil companies for the second time in the month of April reduced jet fuel prices by amarginal Rs 312 per kilolitre or kl on 30 April 2012. The price of aviation turbine fuel (ATF), orjet fuel, in the reduction was announced in the wake of a Rs 169.3 per kl cut in rates effectedfrom 16 April 2012.

The reductions are however overshadowed by the steep increases effected in March and early

April 2012. ATF rates were increased by 3.2 per cent on 1 March 2012, Rs 1298.88 per kl on 16March 2012 and by another 2.8 per cent on 1 April 2012. Prior to being increased thrice in themonths of March and April, jet fuel was priced at Rs 62,557.12 per kl.

Delhi was reduced by Rs 311.74 per kl, or 0.46 per cent, to Rs 67319.71. In Mumbai, jet fuel isto cost Rs 68,306.21 per kl as against Rs 68630.93 per kl now.

Jet fuel constitutes over 40 per cent of an airlines operating cost and the marginal reduction inprices introduced on 30 April 2012 is expected to take the burden off the cash-strapped airlines.

The three fuel retailersIOC, Hindustan Petroleum and Bharat Petroleum revise jet fuel priceson the 1st and 16th of every month, based on the average international price in the precedingfortnight.

Goa topped the List of States with Highest Per Capita Income




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Goa topped the list of the states with highest per capita income in the country with a total percapita income of 192652 rupees.

Delhi with a total per capita income of 1.75 lakh rupees in 2011-12 secured second spot in thelist, followed by Haryana with per capita income of 109227 rupees.

The national average was estimated at 38005 rupees in 2011-12 against 35993 rupees in 2010-11. The estimates WERE prepared as per methodology prescribed by the Central StatisticalOrganisation on the basis of provisional data provided by it and other government sources.

Union Government decided to include Chit Funds under the Chit Fund Act of 1982 in Six

States

The Union government decided to include Chit funds, an informal pooling of funds fromindividuals for lending under the Chit Fund Act of 1982 in six states including Gujarat andKerala. The decision was meant to help people access the dispute settlement mechanism.

Nagaland, Haryana, Tripura, and Arunachal Pradesh are the other states to come under the Act,providing a cushion for small savers who are at the mercy of local operators. Of the six statesbrought under the central ruling, only Kerala operated under the Kerala Chit Act of 1975. Theother five states had no laws to regulate chit fund operators.

Registered chit funds have to follow rules laid down by the Reserve Bank of India. Industrysources say the legislation will force several unregistered chit funds to shut shop across thecountry.

Given that the chit funds are not managed professionally, investors face difficulty in gettingdisputes resolved. As per the estimates projected by the chit fund industry, over 12000 registeredchit funds manage in excess of Rs 35000 crore a year. The share of unregistered funds is possibly80-90 times more than registered funds. The move is expected to bring about level playing fieldamong registered and unregistered chit fund operators and make chit funds a safer product forinvestors.

A chit scheme generally has a pre-determined value and duration. Each scheme admits aparticular number of members (generally equal to the duration of the scheme), who contribute acertain sum of money every month (or everyday) to the pot. The pot is then auctioned out

every month. The person bidding lowest sum gets the bid amount.

The initiative to bring chit fund operators under registration is being considered a positive moveas it will set systems and processes in the chit fund industry. If chit funds are registered andbound under a central Act, it will improve (legal) the recourse mechanism for investors.




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E-Challan and Receipt (ECR) facility launched by Employees Provident Fund

Organisation (EPFO)

Union minister of labour and employment Mallikarjun Kharge inaugurated the E-Challan andReceipt (ECR) facility on 1 May 2012 to bring transparency and accessibility for employers in

depositing monthly Employees Provident Fund or EPF contributions of their workers.

Employers under the ECR service would have to register their organisations online and generatechallans for making monthly deposits. They can use these challan for either electronically orphysically depositing the Provident Fund or PF contributions to the bank. After the bankconfirms the deposit, the concerned regional offices system would be automatically notified and

individual members accounts would get updated.

The claim settlement process would become much easier as under the new initiative, employee

details will be added and updated electronically. Also the need of annual accounts preparation atthe end of the year can be done away with under this system.

RBI directed Indian Banks to maintain Tier I Capital of at least 7% of their Risk Weighted

Assets

The Reserve Bank of India on 2 May 2012 published guidelines for implementation of the newglobal capital adequacy norms, called Basel III, by March 2018. Indian banks will have tomaintain Tier I capital, or core capital, of at least 7 per cent of their risk weighted assets on anongoing basis. The objective is to strengthen risk management mechanism. As per the guidelinesspecified by the central bank, commercial banks will have to maintain their total capital

adequacy ratio at 9 percent, higher than the minimum recommended requirement of 8 percentunder the Basel III norms.

It was decided that scheduled commercial banks (excluding LABs and RRBs) operating in Indiawill have to maintain a minimum total capital (MTC) of 9 percent of total risk weighted assets(RWAs) as against a MTC of 8 percent of RWAs as prescribed in Basel III rules text of theBCBS (Basel Committee on Banking Supervision).

Also, banks were directed to keep a capital conservation buffer of 2.50 percent. It essentially

means that banks will have to set aside more capital as buffer to avoid a 2008-like crisis again.On failing to set aside the mentioned capital, the banks will not be able to pay dividend andbonus. The RBI tightened the norms to monitor banks investments, inter-connectedness andcross-holdings in the financial sector services which are beyond the active regulatory purview ofthe central bank.

Basel III requires banks to have a higher share of core capitalwhich is equity and reserves.




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Banks will thus require additional Rs 1-1.5 lakh crore over the next six years for doing the samelevel of business.

The implementation of the capital adequacy guidelines based on the Basel III capital regulations

will begin on 1 January 2013. Banks are to attain a minimum Tier I capital ratio of 4.5 per centby January 2013, 5.5 per cent by January 2014, and 6 per cent by January 2015. The new capitalregulations will be fully implemented by 31 March 2018.

Under the existing Basel II framework, banks are required to maintain Tier I capital of at least 6per cent of their risk weighted assets. Under Basel III, Tier I capital will predominantly consist ofcommon equity, defined as paid-up equity capital, share premium, surpluses arising from sale ofassets, other disclosed free reserves, and balance in the profit and loss account at the end of thefinancial year.

Union Government constituted Inter-Ministerial Group to maximise Coal, Shale Gasexploitation

The Union government constituted an Inter-Ministerial Group (IMG) for developing acoordinated approach for optimal exploitation of coal bed methane (CBM), underground coalgasification and shale gas.

The IMG is to be headed by Planning Commission Member B K Chaturvedi and includespetroleum secretary GC Chaturvedi, coal secretary Alok Perti, ONGC CMD Sudhir Vasudeva,Coal India chairman S Narsing Rao and Reliance Industries CEO P M S Prasad.

The IMG was entrusted the responsibility of recommending a coordinated approach by oil, gas,and coal companies to work together for maximising exploration of hydrocarbon resourcepotential. ONGC and Coal India have been entrusted the responsibility of providing support onthe technical details.

The initiative to appoint the committee was taken amidst reports that oil ministry found a widevariation in CBM prices offered by Reliance Industries and Essar.

Essar has discovered the price for its Raniganj (East) CBM at $4.2 per mmBtu, while RIL has

pegged it in the range of over $11 a mmBtu for its two blocks in Madhya Pradesh, oil ministrysources said.

The oil rich states get 10 per cent royalty and 13 per cent value added tax from CBM while theCentre nets 12.5 per cent production-linked payment and 2 per cent central sales tax.

Directorate General of Hydrocarbons (DGH) drafted Policy on Exploitation of Shale Gas




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The Directorate General of Hydrocarbons (DGH) drafted a safe as well as encouraging policy onexploitation of shale gas that is seen as the new hope for fuelling Indias burgeoning appetite forhydrocarbons. DGF drafted the policy in the wake of the CAGs strictures against the DGH andthe Petroleum Ministry on violations in the KG-D6 contract.

The draft policy does not permit cost recovery and hence profit sharingthe two features thatcame under criticism by the CAG in its audit report. However it banks on production-linkedpayment (PLP) as the Centres share from the discovery.

The draft stated that the PLP would be a fixed percentage of revenue receipts from the shale gasor shale oil sold from the contract area, net of royalty on a monthly basis. Royalty would be inline with what is prescribed in the Oilfields (Regulation & Development) act. The PLP quoted atthe time of the bidding for blocks assumes significance as it would carry the maximum 60 percent weight for deciding the award of the block. The total investment quoted for completing the

promised minimum work programme would get 40 per cent weightage. As a fiscal incentive, thecontractor will be exempt from PLP payment for the first five years from the start of commercialproduction or from the date of entering the development and production phase, whichever isearlier.

The maximum period of PLP exemption would be 10 years from the date of signing of thecontract and will not be extended under any circumstance since it is an incentive for fasterdevelopment.

As per the policy, the explorer will be given the freedom to market shale gas within India on anarms length basis, with shale oil marketing following the prevailing norms of the NewExploration Licensing Policy. The other incentive proposed in the draft is customs dutyexemption on the import of goods and materials for exploration and exploitation of shale gas oroil.

The blocks are to be awarded through open international competitive bidding with up to 100 percent equity participation by foreign companies. The operating firm in a consortium would be theone which has minimum 25 per cent equity. The contract would be for 30 years with the first fiveyears kept for exploration, appraisal and evaluation of the prospect and its feasibility.

RBI raised Interest Rate Ceiling on NRI Deposits in Foreign Currencies by up to 3%

The Reserve Bank of India (RBI) on 4 May 2012 raised the interest rate ceiling on NRI depositsin foreign currencies by up to 3%. The interest rate ceiling on Foreign Currency Non-ResidentFCNR (B) deposits of banks was raised from 125 basis points (bps) (1.25%) above thecorresponding LIBOR or swap rates to 200 bps for maturity period of one year to less than three




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years, and to 300 bps for maturity period of three to five years. The RBIs measure was aimed atchecking flight of foreign currency in the wake of continued fall in the value of the Indian rupee.

The Indian banks will from now on be able to offer higher interest rates on NRI deposits in

foreign currency. The central bank deregulated interest rates on export finance, a developmentthat would help exporters to freely raise money in foreign currency without any limit on interestceilings. The measures adopted by the central bank are aimed at arresting the declining value ofthe Indian rupee which closed at Rs53.47 against a dollar. For one-year, LIBOR (London Inter-Bank Offered Rate) stood at 1.0472%. LIBOR is world's most widely used benchmark for short-term interest rates.

Reserve Bank of India also decided to allow banks to determine their interest rates on exportcredit in foreign currency with effect from 5 May 2012.

Competition Commission of India constituteded Eminent Persons Advisory Group

The Competition Commission of India (CCI) formed an Eminent Persons Advisory Group(EPAG) on 7 May 2012. The group is constituted to provide CCI inputs and advice on issuesimpacting markets and competition, among others.

The group comprise Infosys founder N.R. Narayana Murthy, former Comptroller and AuditorGeneral V.N. Kaul, former Deputy Governor of Reserve Bank of India Rakesh Mohan, BioconChairman and MD Kiran Mazumdar-Shaw, former Director, of IIM-Ahmedabad BakulDholakia, former Chairman of CERC S.L Rao, former Vice-Chancellor of NLSIU, BangaloreN.L Mitra.

The group will hold its maiden meeting on July 2012. The Group will have interaction/meetingswith the Commission two to three times a year.

Indian Export Figure grew by 3.2 per cent in April 2012

The Indian export registered a moderate growth of 3.2 per cent in April 2012 at 24.5 billiondollar. The lower export growth rate largely reflects the declining demand of goods globally. Theimport over the same period of time also plunged which translated into reduced trade deficit at13.2 billion dollar.

As per the provisional figures released by the Commerce Secretary, Rahul Khullar, exports inApril, the first month of the fiscal 2012-13 amounted to 24.5 billion dollar. Imports for themonth grew by 3.8 per cent to 37.9 billion dollar.

The lowering export figure is largely attributed to the serious demand problems and constraintsin the Western markets, particularly in Europe, which is passing though its worst economiccrisis.




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Inflation Figure for April 2012 surged to 7.23 Per Cent

Indias overall inflation for the month of April 2012 swelled to 7.23 per cent. The rising figureowes to higher prices of food items, manufactured goods and fuels. The Wholesale Price Index(WPI) was at 6.89 percent in March 2012. The inflation figure for February was also revised to

7.36 per cent from 6.95 per cent earlier.

The inflation in overall food items accelerated by 10.48 per cent as prices of vegetables jumpedby 60.97 per cent, milk rose by 15.51 per cent and the cost of eggs, meat and fish surged by17.54 per cent.

The rising inflation figure poses a great challenge before the RBI, which has been underconsistent pressure to cut down the policy rates to accelerate the shrinking growth. The persistenthigh inflation, however, provides RBI with very little space to take any bold step on rate cut.Practically, the RBI could not go for policy rates cut until the inflation does not come below thecomfort level.




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Environment & Ecology

The WGEEP (Western Ghats expert Panel) designated entire Western Ghats as anEcologically Sensitive Area. The panel in its report classified the 142 taluks in

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