Civil_Services Mentor_July_2011_

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Articles:8 Lokpal Bill8 Libyan Crisis

Cirrent Affairs:8 National Issues8 International Issues8 Economy8 India & The World8 Science & Technology8 Sports8 Awards & Prizes8 Persons in News

Special Study Material8 Bank Solved Paper (S.B.I.) P.O. Held on 18.04.2010

CONTENTS

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Issues
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The word Lokpal means an ombudsman in India. The word has beenderived from the Sanskrit words "loka" (people) and "pala" (protector/caretaker). So the word Lokpal means 'protector of people'. The con-cept of Lokpal has been drawn up to root out corruption at all levels inthe prevailing Indian polity.

The Lokpal will be a three-member body with a chairperson who is or was a chief justice or Supreme Court judge, and two members who areor have been high courts judges or chief justices.Implementation of the Lokpal bill will hopefully reduce corruption in India. The basicidea of the Lok Pal is borrowed from the office of ombudsman, which

has played an effective role in checking corruption and wrong-doing in Scandinavian and other nations.In early 1960s, mounting corruption in public administration set the winds blowing in favour of anOmbudsman in India too.

The Administrative Reforms Commission (ARC) set up in 1966 recommended the constitution of atwo-tier machinery - of a Lokpal at the Centre, and Lokayukta(s) in the states.the Lokpal has to com-

plete the inquiry within six months.

Duties of Lokpal are as follows:1. To judge the cases and make jurisdictions against corruption cases with the Lokpal.2. To judge whether a case is legal or whether a fake complaint has been made.3. To potentially impose fines on a fake complaint, or even a short span of jail time, if the case is not

proved to be legally true.

In India, the Jan Lokpal Bill (also referred to as the citizens' ombudsman bill) is a proposed anti-corruption law designed to effectively deter corruption, redress grievances and protect whistleblowers.The law would create an ombudsman called the Lokpal; this would be an independent body similar tothe Election Commission of India with the power to prosecute politicians and bureaucrats without prior

government permission.

A compromise bill, merging the Government's version and that of the civil group's version (Jan Lokpal),is being drafted by a committee of five Cabinet Ministers and five social activists. As of July 2011, themost current version of the bill is version 2.3, according to the government website. For 42 years, thegovernment-drafted bill has failed to pass the Rajya Sabha, the upper house of the Parliament of India.Thefirst Lokpal Bill was passed in the 4th Lok Sabha, the lower house of the Parliament, in 1969 but stalledin the Rajya Sabha. Subsequent Lokpal bills were introduced in 1971, 1977, 1985, 1989, 1996, 1998,2001, 2005 and 2008 but all failed to pass.

LOKPAL BILL
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they will be completely independent of the gov-ernments. No minister or bureaucrat will be ableto influence their investigations.

3. Cases against corrupt people will not linger onfor years anymore: Investigations in any case willhave to be completed in one year. Trial should becompleted in next one year so that the corrupt poli-tician, officer or judge is sent to jail within twoyears.

4. The loss that a corrupt person caused to the gov-ernment will be recovered at the time of conviction.

5. How will it help a common citizen: If any work of any citizen is not done in prescribed time in any

government office, Lokpal will impose financial penalty on guilty officers, which will be given ascompensation to the complainant.

6. So, you could approach Lokpal if your rationcard or passport or voter card is not being madeor if police is not registering your case or any other work is not being done in prescribed time.

Lokpal will have to get it done in a month's time.You could also report any case of corruption toLokpal like ration being siphoned off, poor qual-ity roads been constructed or panchayat funds be-ing siphoned off. Lokpal will have to complete itsinvestigations in a year, trial will be over in nextone year and the guilty will go to jail within twoyears.

7. But won't the government appoint corrupt andweak people as Lokpal members? That won't be

possible because its members will be selected by

judges, citizens and constitutional authorities andnot by politicians, through a completely transpar-ent and participatory process.

8. What if some officer in Lokpal becomes cor-rupt? The entire functioning of Lokpal/ Lokayuktawill be completely transparent. Any complaintagainst any officer of Lokpal shall be investigatedand the officer dismissed within two months.

9. What will happen to existing anti-corruptionagencies? CVC, departmental vigilance and anti-corruption branch of CBI will be merged intoLokpal. Lokpal will have complete powers andmachinery to independently investigate and pros-ecute any officer, judge or politician.

10. It will be the duty of the Lokpal to provide protection to those who are being victimized for raising their voice against corruption.

Some people have opined that the Jan Lokpal Billis 'Nave' in its approach to combating corruption.The Lokpal concept was criticized by the HumanResource Development (HRD) minister KapilSibal because of concerns that it will lack account-

ability, oppresively, and undemocratically.Theclaim that the Lokpal will be an extra-constitu-tional body has been derided by Hazares closestlieutenant, Arvind Kejriwal. He states the JanLokpal Bill drafted by civil society will only in-vestigate corruption offences and submit a chargesheet which would then tried and prosecuted,through trial courts and higher courts. Kejriwalfurther states that the proposed bill also lists clear

provisions in which the Supreme Court can abol-ish the Lokpal.Although Kejriwal has stated thatall prosecutions will be carried out through trialcourts, the exact judicial powers of LokPal is rather unclear in comparison with its investigative pow-ers.

The bill requires "...members of Lokpal and theofficers in investigation wing of Lokpal shall bedeemed to be police officers". Although some sup-

po rt er s have denied any judic ial po wers of Lokpal,the government and some critics have rec-

ognized Lokpal to have quasi-judicial powers.The bill states that "Lokpal shall have, and exercise thesame jurisdiction powers and authority in respectof contempt of itself as a High court has and mayexercise, and, for this purpose, the provisions of the Contempt of ourts Act, 1971 (Central Act 70of 1971) shall have the effect subject to the modi-fication that the ref rences therein to the High Courtshall be construed as including a reference to theLokpal." Review of proceedings and decisions by


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Lokpal is prevented in the bill, stating "...no proceedings or decision of the Lokpal shall be liable to bechallenged, reviewed, quashed or called in question in any court of ordinary Civil Jurisdiction." With-out judicial review, there is concern that Lokpal could become a extra-constitutional body with inves-tigative and judicial powers whose decisions cannot be reviewed in regular courts.

Whether or not to include the Prime Minister and higher judiciary under the Lokpal remains as one of the major issues of dispute. Although Hazare proposed Justice Verma, the former Chief Justice of theSupreme Court, as the Chairman of the Lokpal Bill panel,Justice Verma later expressed his constitu-tional objections for including the Prime Minister and higher judiciary under Lokpal, stating "thiswould foul with the basic structure of the constitution".

India is a country where honesty and integrity in public and private life have been glorified andupheldin great epics such as the Vedas, Upanishads and in the books and practices of everyreligion practicedhere.Yet, India today is one of the most corrupt countries in the world.Bringing public servants under ascanner which makes them strictly accountable is the start of amovement against corruption in India.And one significant step in attacking the spectre ofcorruption in India will be the implementation of thelok pal bill.

In the regular dispensation of government there are implicit and explicit ways that citizens canvoicetheir grievances and demand change. But these are often difficult. Within administrative departments,for example, any decision of one official can be appealed to a higher official, all the way up to the head

Lokpal will have no power to initiate suo motuaction or receive complaints of corruption fromthe general public. It can only probe.

Complaints forwarded by the Speaker of theLok Sabha or the Chairman of the Rajya Sabha.

Lokpal will only be an Advisory Body with arole limited to forwarding reports to a "Compe-tent Authority".

Lokpal will have no police powers and no abil-ity to register an First Information Report or pro-ceed with criminal investigations.

The CBI and Lokpal will be unconnected.

Punishment for corruption will be a minimumof 6 months and a maximum of up to 7 years.

Lokpal will have powers to initiate suomoto action or receive complaints of corrup-tion from the general public.

Lokpal will have the power to initiate prosecution of anyone found guilty.

Lokpal will have police powers as well asthe ability to register FIRs.

Lokpal and the anti corruption wing of theCBI will be one independent body.

Punishments will be a minimum of 5 yearsand a maximum of up to life imprisonment.

Jan Lokpal Bill(Citizen's Ombudsman Bill)Draft Lokpal Bill (2010)

Difference Between Draft Lokpal Bill 2010 and Jan Lokpal Bill


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Following a spate of protests in countries around the region, protests broke out in several areas of Libya challenging Col.Muammar Qaddafis 42-year rule. In late February, as the

governments response to these protests turned increasinglyviolent, the UN Security Council responded by passingResolution 1970 to impose sanctions on Qaddafi and refer thesituation in Libya to the International Criminal Court (ICC). Inearly March, the UN General Assembly suspended Libyasmembership to the Human Rights Council.On March 17th, the

UN Security Council passed Resolution 1973 calling for a no-fly zone to deter the bombardment of civilian targets by government forces. Resolution 1973 marks the first time the Security Council passeda resolution to authorize the use of force with an explicit reference to the responsibility to protect.An adhoc coalition composed of the US, France, and the UK began implementing the no-fly zone immediatelyafter the adoption of Resolution 1973. On March 27th, NATO assumed command of the military operationin Libya. NATO follows Resolution 1973 in banning all flights in Libyan airspace, except those for humanitarian and aid purposes, to make sure that civilians and civilian populated areas cannot besubjected to air attack by Qaddafi forces.NATO should develop a civilian casualty tracking, analysisand response mechanism with personnel in both Naples and in Benghazi. In addition to cataloguing allavailable known data, the cell would also recognize and investigate all allegations of civilian casualties,in anticipation of future development of an amends system.

France announced its official recognition for the L ibyan National Council as thesole representative of the Libyan people and became the first western country todo so. France also handed over the building of the former Libyan Embassy to

Paris to the Council. It also announced to send an ambassador to Benghazi (Libyassecond largest city) which is the seat of Libyan National Council.The President of France, Nicholas Sarkozy had presented the global plan on the Crisis in Libya atan emergency summit of European Union heads of government in Brussels on 11March 2011. European nations took actions to isolate the regime of Libyan dictator Muammar Gaddafiwith France officially recognising the rebel group in Libya. Britain pressed for the imposition of a no-fly zone and Germany freezed assets worth billions. Foreign ministers from the G8 failed to reach anyagreement on military intervention in Libya during the two-day summit in Paris. Despite France pushingfor a no-fly zone, G8 nations couldnt reach consensus on the establishment of a no-fly zone against

LIBYAN CRISIS


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Qadhafis forces in Libya. International conferencecalled by UK and held at London urged Muammar Qadhafi to resign as the ruler of Libya. The Londonconference in its resolution called for an immediateceasefire and to stop all attacks on civilians and

providing full humanitarian access to needy people.The London conference made a declaration thatthe NATO-led military operations would continuein Libya until the above mentioned requirementswere met.

Russian Angle

The air campaign against ColonelGaddafis forces in Libya has hadan unexpected consequence far from the front lines: it has resulted

in the first distinct manifestation of disagreementwithin Russias ruling duo. And the evidentdifference in position between President DmitryMedvedev and Prime Minister Vladimir Putin hasrevealed a fork in the road for Russias foreign

policy. When questions of war and peace are beingdecided, powers that aspire to a global role shouldoccupy a clear position either for, or against. Inthe case of Libya, Russia abstained from votingon the UN Security Council resolution. Abstention

under President Medvedev contradicts Russias prior strict adherence to a single foreign policy principle: opposition of foreign interventions ininternal affairs.These days, the Kremlin remainsneutral, although the case of Libya is far moreurgent. As for the real goal of the militarycampaign, there should be no illusions: the aim isregime change. Any scenario that leaves Muammar Gaddafi in power would be a moral and politicaldefeat for the West and West-friendly regimes inthe region.

To Moscow, Col Gaddafi is just one of many partners, and for Russia to jeopardise the current positive dynamic in relations with the US and theEU for the sake of Tripoli makes no sense.Deliberations about lost contracts in Libya are awaste of breath: given the situation there now, therewould be no more business as usual with theLibyan ruler anyway. The geopolitical purpose of

Operation Odyssey Dawn for Washington is to stopthe erosion of its influence in the Middle East,while for Europe it is to prevent the definitive lossof its international role. If they put a quick end tothe Gaddafi regime they will have achieved their aim, at least for a while. But if the operation dragson and requires more than air strikes, which looks

pro bable, the effect may be just the reverse:Western influence may plummet in the region. Arabregimes that supported the action will also be in avulnerable position. After the collapse of the SovietUnion, Moscow was at pains for a long time toassume or at least imitate the status of a global

power, par tici- pating in all decisions on theinternational stage. But towards the end of the lastdecade, Russia began to see itself not as a likenessof the former Soviet Union, but as a major and

influential, although regional, power whose vitalinterests have definite geographical contours. Todefend its interests, Moscow is ready to use force,as it did in South Ossetia.Both approaches havethe right to exist, but it would be advisable to pick one of them and stick to it. Simultaneouslydeclaring both puts the country in a weak andambivalent position, indicating that the Russianleadership has no mutual understanding and no co-ordinated policy. This is especially dispiriting at atime when chaos is only increasing around theworld.

Indias Interests

Along with Russia and China, Indiahas been critical of the ongoingwestern air strikes launched againstLibya on the ground that ordinary

Libyans would be affected and the air attackswould prove counterproductive to the US

purported humanitarian objective. The ExternalAffairs Minister, Mr S. M. Krishna, has urged thewestern nations, which have imposed a no flyzone over Libya, to ceasefire and called upon theGaddafi regime and the rebel forces to abjureviolence and talk to each other. From an Indiannational security and foreign policy perspective,the regime in Tripoli needs to be a friendly onesince Libya is an oil rich country and an eternal


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shock western air attacks or civil war couldaffect Indian industrial investments and energysecurity interests there. New Delhis stand that air attacks on Libya must cease is, therefore, groundedin rational choice and Waltzian realism: Every bigor aspiring power weighs the costs and benefits of the use of force and that their position on particular matters in world politics is guided by self-interest.In Indias case, it was protection of its vital interest

Libyan oil.

Indias national interests in Libya are essentiallyeconomic in nature. Considering an estimated18,000 Indians who work in that country, it is aconsiderable contribution to the remittanceeconomy and adds to our foreign exchange kitty.Otherwise, Indian companies, especially in the

hydrocarbon, power, construction and IT sector,have several ongoing projects in Libya. Besides,Indian oil majors Indian Oil, Oil India andONGC Videsh are increasingly involvingthemselves with the Libyan hydrocarbon sector

both in upstream and downstream. Also, BHELhas successfully completed execution of the

prestigious Western Mountain Gas Turbine Power Project. Similarly, i-flex Solutions is implementinga project on core banking solutions with the CentralBank of Libya and five other banks. Also, over the

past three decades, Indian co mpanies haveexecuted several projects there. These included

building hospitals, houses, schools, roads, power plants, airports, dams, transmission lines etc. The presence of Indian companies in Libya has risensignificantly in the last five years.

This includes major PSUs such as BHEL, OVL,IOC, Oil India, and private companies such as PunjLlyod, Unitech Ltd, KEC, Dastur Engineering,

Shapoorji Pallonji International, SECON Pvt Ltd,Global Steel Ltd (Ispat Group Co.), NIIT, SunPharma, Simplex Projects and SimplexInfrastructure Ltd. The bilateral trade figures for 2009-10 were at $844.62 million, showing asignificant upward trend since 2004-05, peakingto $ 1,366.65 million in 2007-08 compared to$29.12 million in 2003-04.

Today, the western limited liability intervention inLibya minus boots-on-the-ground aims to providethe rebels a level-playing field against the moreorganised military muscle of Gaddafis forces.Perhaps, some level of western covert para-militarysupport like special forces/commandos may beoperationally deployed to advice the rebels ontactics to adopt against the regimes forces.Otherwise, the only advantage that the regimesforces have would be in terms of some superior weaponry such as shoulder fired rocket propelledgrenades/missile launchers.

Apart from this infantry-support weaponry, thequalitative difference would be in terms of command and control of the regimes forces thatin a sense would amount to a force multiplier vis-

a-vis the motley groups of rebels who lack such acoordinated approach to combat. he ostensiblelogic of the US-led western powers to embark onthis two-dimensional military adventure from theair and sea was only to prevent a carnage of therebel forces through neutralisation of Gaddaffisairpower, tanks and artillery by aerial and naval

bombardment. The opposition to western air strikesis solely on the grounds that collateral damagewould ensue and innocent citizenry would be hurtdue to flaws in military target acquisition

procedures based on inaccurate intelligence inputs.

India abstained from voting in the UNSC and didnot go along with the NATO-EU and Arab Leaguecountries. Clearly, the US anti-dictator policy over Libya is a contradiction considering Washingtonadopted a pro-dictator stance on Bahrain andsupported the Saudi Arabian force deployment toquell the opposition to the entrenched monarchythere. Similarly, India also was equally inconsistent

by voting with the western industrial democraciesagainst Iran in 2009 at the UN, but not doing sonow. But foreign policy and consistency are notalways synonymous with each other; instead,foreign policy and national interests have to be intune with each other.


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ment activities. The RSDP-2011 comes into ef-fect immediately.

Criticisism of State Governmentsfor Misusing Provisions of Land

Acquisition

|A Supreme Court bench including Justice GSSinghvi and Justice AK Ganguly refused to staythe Allahabad High Court order quashing the no-tifications for land acquisition in the area adjoin-ing New Delhi and NCR. The court slammed stategovernments for misusing provisions of Land Ac-quisition Act to divest farmers of their agriculturalland and giving it to builders. The court even ques-tioned building of hotels, malls and commercialcomplexes on land acquired for public purpose.The

bench made an observation that a sinister campaignhas been launched by many state governments totake advantage of the law against the poor peoplefor taking away the land and giving it to builderswhere multiplexes, malls, posh residential com-

plexes are developed which are beyond the reachof common men. The bench questioned the changein land use by Uttar Pradesh government in Greater

Noida.

Extension of the RSBY Scheme

The Union Cabinet approved extension of theRashtriya Swasthya Bima Yojana (RSBY) to allthe registered domestic workers in India. Thescheme will likely cover approximately 47.50 lakhdomestic workers in the country. The RSBY will

provide for smart card based cashless health in-surance cover of Rs.30000 per annum to BPLworkers (a unit of five) in unorganised sector inany empanelled hospital anywhere in India. Morethan 2.34 crore smart cards were issued on 31 May2011. The health insurance cover, available to do-mestic workers in the 18-59 age bracket, will en-title the beneficiary to cashless treatment atempanelled hospitals. The beneficiaries will haveto get identification certificates from two of thefour eligible institutions namely- employer, resi-dents welfare association, registered trade union

or the local police.The scheme has since then beenextended to building and other construction work-ers registered with Welfare Boards constitutedunder the Building and Other Construction Work-ers (Regulation of Employment and Conditions of Service) Act, 1996, street vendors, beedi workersand such MNREGA workers who have worked for more than 15 days during the preceding year.

National Mission for JusticeDelivery and Legal Reforms

Union Cabinet of India approved of a proposal of the law ministry for a National Mission for JusticeDelivery and Legal Reforms, providing for fasttrack courts to clear the backlog in the judicialsystem.The objective of the Mission is to increaseaccess to justice by reducing delays and arrears inthe system and enhance accountability throughstructural changes and by setting performance stan-dards. The objectives are to be achieved in a time

bound manner by 2015-16 through a mission modeapproach. The Mission is planned to have a Mis-sion Directorate, an Advisory Council and a Gov-erning Council for overseeing the implementationof the Mission.

Areas covered : Policy and legislative changes,re-engineering of procedures, human resource de-velopment, leveraging ICT and improve physicalinfrastructure of subordinate courts. Infrastructuredevelopment is a much needed requirement of thesubordinate judiciary. It aimed to increase accessto justice by reducing delays and arrears and en-hanced accountability through structural changesand by setting performance standards. The focuswas on infrastructure development in the courtsthrough computerisation, improving physical in-

frastructure and human resource development.

The salient features: The National Mission would comprise of Advi-sory Council, Governing Council, National Mis-sion Leader and the Mission Directorate. The Advisory council is to advise on the goals,objectives and strategies of the National Missionand the Action Plan and its implementation and


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performance of the Mission in meeting its objec-tives and would be chaired by the Minister for Lawand Justice and would have membership from Par-liament, State Governments, Jurists & senior of-ficers of Government of India. The Governing Council would facilitate imple-

mentation, give policy directions and oversee thework of the Mission and would be headed by theMinister for Law and Justice. The Secretary, Department of Justice would bethe National Mission Leader. A Mission Directorate would be constituted toimplement and monitor the various initiative/pro-gram of the National Mission. It would be headed

by an officer of the rank of the Joint Secretary whowould act as the Mission Director. An Action Plan has been drawn up which wouldof course be subjected to change once the Gov-erning Council meets to set out the agenda. Inadequacy of infrastructure facilities in Dis-trict and Subordinate courts has remained a major

bottleneck in the judicial system largely contrib-uting to the accumulation of arrears. So, a pre-liminary assessment of requirement of infrastruc-ture for subordinate courts from the States was alsomade.

High-powered Task Force of Defence Management

The Union government decided to set up a high- powered task force to review the unfinished tasksand make further suggestions for implementationwith a view to revamp of defence management inIndia. The government arrived at the decision tenyears after the Kargil Review Committee and aGroup of Ministers attempted the first major

revamp.The 14-member task force will be headed by Naresh Chandra, a former bureaucrat who hasheld top administrative jobs in the Ministry of Defence and Prime Minister's Office. Task forcemembers include Air Chief Marshal (retd.) S.Krishnaswamy, Gen. (retd.) V.R. Raghavan, theformer Department of Atomic Energy chief AnilKakodkar, Admiral (retd.) Arun Prakash, theformer R&AW head K.C. Verma, the former Union

Home Secretary V.K. Duggal, G. Parthasarathy,former diplomat, and senior journalist ManojJoshi.The panel is expected to start its work on 14July and has six months to complete its report.The

Naresh Chandra committee will contemporarisethe Kargil Review Committees (KRC) recommen-dations in view of the fact that 10 years have passedsince the report was submitted. It is also expectedto examine why some of the crucial recommenda-tions relating to border management and restruc-turing the apex command structure in the armedforces have not been implemented. It will look atthe reasons why the post of first among equalsamong the three service chiefs in the form of aChief of Defence Staff was never created.The for-mation of the task force marked the first compre-hensive attempt at reviewing the entire gamut of

defence preparedness and management in a decade.

Salwa J udum is Illegaland Unconstitutional

Sudershan Reddy and Justice SS Nijjar declaredSalwa Judum as illegal and unconstitutional. Thecourt ordered the immediate disarming of tribalyouths who are deployed as Special Police Offic-ers- either as Koya Commandos, Salwa Judum or

any other force- in the fight against the Maoistinsurgency. The court gave the ruling in responseto writ petition filed by social anthropologist

Nandini Sundar and others. The ruling given bythe court indicted the Chhattisgarh state for vio-lating Constitutional principles in arming youthwho had passed only fifth standard and conferringon them the powers of police.The bench held thatthe policy of the Chhattisgarh state violated therights under Articles 14 and 21 of the Constitutionof those who were employed as SPOs and used in

counter-insurgency measures against Naxalites aswell as of citizens living in the concerned areas.The

bench asked the state of Chhattisgarh to recall allfirearms issued to any of the SPOs. The word fire-arm means all forms of guns, rifles, launchers etc.


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India International Institute of Democracy and Election

Management

The Election Commission of India launched theIndia International Institute of Democracy andElection Management, IIDEM in New Delhi. It isan advanced resource centre of learning, research,training and extension for participatory democracyand election management. The institute is set to

be a national and international hub for exchangeof good practices in election management. It wasinaugurated by the Chief Election Commissioner Dr. S Y Quraishi at Nirvachan Sadan 17 June2011.IIDEM is to work for enhancing voter edu-

cation, and developing human resource for effi-cient conduct of free and fair elections in India.Along with this it is also set to develop mutually

beneficial partnership with other countries. Theinstitute has four components. These are (1)Training and Capacity Development, (2) Voter Education and Civic Participation, (3) Research,Innovation and Documentation and (4) Interna-tional Projects and Technical Collaboration.

Centre forSocial Research Report

The Centre for Social Research (CSR) recentlyreleased a report- Gender dimensions of interna-tional migration from India and Bangladesh: Im-

pact on the families left behind on 5 August 2010.The report was based on the study of the socio-economic impact of migration on 1000 familiesfrom migration pockets of India and Bangladeshin 2009. In both these countries poverty, better pay

packets, employer relocation, landlessness, aban-donment/divorce, husband's premature death, edu-cation and children's dowry payment were the rea-sons that compelled people mostly women to mi-grate. Among the total number of people who mi-grated only a handfull used formal governmentmigration channels while the majority relied oninformal channels like dalaals and agents. Thestudy showed that in India, United Arab Emirates

was the most favoured destination of male and fe-male migrants, followed closely by Saudi Arabia.Whereas in Bangladesh, Saudi Arabia was the most

preferred, followed by UAE and Kuwait.

India Signed Three Agreements

with the World Bank forCleaning the anga River

India signed three agreements with the World Bank for cleaning the Ganga River on 14 June 2011.Besides this, the agreement also held for strength-ening Rural Livelihoods and Biodiversity Conser-vation of India. The World Bank agreed to pro-vide one billion US Dollars (approximately Rs4,600 crore) for the Ganga river cleaning project.It also agreed for a credit worth approximately 24million dollars for the two projects, i.e. strength-ening Rural Livelihoods and Biodiversity Conser-vation of India. The agreements for the BiodiversityConservation and Rural Livelihood ImprovementProject were signed by Mr. Venu Rajamony, JointSecretary, Department of Economic Affairs, Min-istry of Finance, on behalf of the Government of India, and Mr. Roberto Zagha, World Bank Coun-try Director in India in presence of Mr JairamRamesh, Minister Environment and Forests, Gov-

ernment of India.The Ganga faces great challengesfrom expanding population, urbanization and in-dustrial growth. To stop the flow of untreated mu-nicipal sewage and industrial effluent into theGanga river by 2020 is the objective of Ganga

project. The World Bank has been a major finan-cier of biodiversity projects globally. With the as-sistance of the World Bank, an empowered andcollaborative body of the Central and state gov-ernments, National Ganga River Basin Authority(NGRBA) decided to implement the NationalGanga River Basin Project. The focus of the projectis on (1) building and strengthening the NationalGanga River Basin Authoritys (NGRBA) relatedinstitutions at the Central and state level; (2) es-tablishing a world-class Ganga Knowledge Cen-tre; (3) enhancing river basin management; and (4)financing select priority investments to reduce

point-source pollution in a sustainable manner. Acomplete new model of managing the protected


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areas while safeguarding the livelihoods of localcommunities is set to put in place in two protectedareas, one each in Uttarakhand and Gujarat.

Pension Age-limitfor BPL to 60

The Union Cabinet of India lowered the age limitfor the purpose from 65 to 60 years. The decisiontaken by the cabinet will be effective from 1 April2011. It is like to benefit an additional 72.32 lakh

people in the age-group of 60-64 years. The deci-sion would lead to an additional expenditure of 1736 crore rupees.In 2007, the government hadlaunched the Indira Gandhi National Old Age Pen-sion scheme to provide assistance to senior citi-zens falling in the Below Poverty Line (BPL)category.The Union Cabinet also decided to raisethe rate of pension to persons of 80 years and abovefrom 200 rupees to 500 rupees.

Navodaya Vidyalayas outsidethe ambit of RTE Act

The Union Law Ministry decided to keep the Navodaya Vidyalayas in the country outside theambit of the Right to Education (RTE) Act. The

decision was reached by the Law Ministry after hearing out the logic of Human Resource Devel-opment Ministry and consultation with the Attor-ney General (AG). The two key provisions of theRTE Act are- no screening and 25% reservationfor economically weaker sections will not be ap-

plicable to 444 Navodaya Vidyalayas across thecountry. The RTE Act states that no screening testof either children or their parents can be conductedfor admission in any school. Every school will haveto reserve 25 percent seats for the children belong-ing to economically weaker section. However en-trance examination is the basis for admission in

Navodaya Vidyalayas, which had refused to admitchildren under RTE. Following the refusal of the

Navodaya Vidyalayas to abide by the prescribedadmission procedures, National Commission for Child Protection had issued notice to NavodayaVidyalaya to cancel admission on the basis of en-trance test.

There are a number of reasons for lettingNavodaya Vidyalayas off the RTE hook: Navodaya Vidyalayas start from class VI andnot class I. These schools, located in all districts, have 75%seats reserved for rural children. Seats are also re-

served for children from SC and ST communitiesin proportion to their population in the district, butnot less than the national average. One-third of the seats are for girl students and3% of the seats are for disabled children. Till class IX there is no fee, and from IX to XII,Rs 200 is charged per month.

CCS Gave Nod forNational Intelligence Grid

Cabinet Committee on Security (CCS) chaired byPrime Minister Manmohan Singh, gave its nod for

Na t iona l Int ellig en ce Grid (NATGRID). NATGRID would be a repository of informationranging from train and air journey to Income Taxand bank accounts of individuals. NATGRID willfacilitate sharing of such kind of information withlaw enforcement agencies to combat terror threat.The NATGRID will have access to 21 cat-egories of database like air travel, railway, bank account details, income tax, credit card transac-tions, visa and immigration records.

Following the Mumbai terror attack on 26 Novem- ber 2008, Home ministry had proposed a blue printfor countrys internal security, which included theformation of NATGRID.

J anani-ShishuSuraksha Programme

The UPA Chairperson Sonia Gandhi launched theJanani-Shishu Suraksha Programme at Mewat inHaryana. Janani-Shishu Suraksha programme wassponsored by the Ministry of Health and FamilyWelfare. The programme was launched for preg-nant women with the objective to effectively ad-dress the problem of maternal and childmortality.Under the Janani-Shishu Suraksha


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programme, pregnant mothers can avail govern-ment health institutions for free deliveries. Boththe mother and her child will get free treatment,free drugs and consumables, diagnostics, user charges besides free provision of blood andtransportation.The free facilities will comprisedelivery including C-section, special diet, diagnos-tics etc.

MPLAD SchemeRevised

As part of an effort to ensure timely and effectiveimplementation of works proposed under theMember of Parliament Local Area DevelopmentScheme (MPLADS), the Union Government de-cided to raise the amount to be released in the firstinstalment. The MPLADS allow MPs to suggestworks to the Head of District to be taken up intheir constituency.Projects implemented by gov-ernment agencies would now be provided 75 per cent of the project cost as the first instalment, whilethe ones implemented by non-governmental agen-cies would be provided 60 per cent. Currently only50 per cent of the estimated cost is released as thefirst instalment, irrespective of the nature of the

project, which led to complaints of delays in

completion.According to Union Minister for Sta-tistics and Programme Implementation M.S. Gill,the governments decision is likely to improve theworking of the Scheme as a whole. Conditionswere further relaxed for smaller projects costingless than Rs.2 lakh. For such small projects theentire amount would be released at one go.To en-sure that funds were not spread too thinly, the gov-ernment decided against sanctioning project cost-ing less than Rs.1 lakh.The Centre aims at ensur-ing that the MPLADS funds were utilised fruit-

fully for the benefit of the grassroots, therefore the basket of works that could be taken up under thescheme had been widened to include projects suchas the purchase of books for libraries, and ambu-lances and hearse vans that would be owned andcontrolled by district authorities.The scope and ex-tent of the physical monitoring of completed

projects would also be expanded to cover 400 moredistricts.

Highlights of revised MPLADS: Projects implemented by government agencieswould now be provided 75 per cent of the projectcost as the first instalment. Conditions relaxed for smaller projects costingless than Rs.2 lakh.

Projects costing less than Rs 1 lakh will not to be sanctioned. Basket of works that could be taken up under the scheme had been widened to include projectssuch as the purchase of books for libraries. MPs would be allowed to spend up to Rs.10lakh a year on projects in any State or Union Terri-tory. Limit of Rs.50 lakh per annum was imposed oncontributions to trusts and societies.

Scope & extent of the physical monitoring of completed projects expanded to cover 400 moredistricts.

Security Auditof Nuclear Stations

The Union government of India ordered securityaudit of all important installations comprisingnuclear stations, military bases and oil refineriesacross the nation. The order was issued after a high-level meeting held by the Union Home Ministryfollowing the terrorist attack on a naval base inPakistan. A joint-team of local security heads andIntelligence Bureau will survey and assess the levelof security of the important installations. The se-curity audit will cover all nuclear plants, oil refin-eries, Indian Space Research Organisation instal-lations, military camps and airports.

20 More Districts in the

Naxal-hit states

The Union government of India decided to bring20 more districts in the Naxal-hit states for declar-ing more districts as extreme Left WingExtremism(LWE) affected districts. If these dis-tricts included in the list of LWE-hit distrcts, theseareas will receive special Central funds for infra-structure and security- related expenses under the


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Security Related Expenditure scheme. Under thisscheme, districts of Chhattisgarh, Bihar, Jharkahndand Orissa will be benefitted. A proposal regard-ing this was sent by the Union Ministry of HomeAffairs to the Planning Commission. At present,60 districts receive 25 crore rupees each for thescheme earmarked by a committee chaired by dis-trict collector. It has been a long-time demand of the Naxal-affected states that more districts bedeclared LWE.

Diesel is dearer by Rs 3 a litre& Kerosene by Rs 2 a litre

The Union government on 24 June 2011 decidedto increase the price of diesel by Rs. 3 a litre, kero-sene by Rs. 2 a litre and domestic LPG by Rs.50 acylinder. The government also slashed the Cus-toms duty on crude oil and all other petroleum

products by five percentage points. The excise dutyon diesel was reduced from Rs. 4.60 a litre to Rs.2 a litre. As a result of the government decisions arevenue loss of Rs Rs.49,000 crore wasentailed.The hike in the prices of the three com-modities will lead to a revenue gain of Rs. 21000crore to the oil marketing companies (OMCs), thatare currently suffering huge under-recoveries that

are being projected at Rs.170140 crore in 2011-12. The under-recoveries will now come down toRs.1.20 lakh crore.The Trinamool Congress hadopposed any increase in the prices of petroleum

pro du ct s, especially tho se of kero sene andLPG.However Pranab Mukherjee described theincrease in fuel prices as modest. Mukherjee ex-

pressed the hope that the State governments wouldreduce their taxes to provide relief to consumers.

Grievance Redressal Portal forInsurance Policy Holders

SK Sharma, Secretary, Department of FinancialServices, Ministry of Finance launched an onlinegrievance redressal portal for insurance policyholders in New Delhi. The portal would offer in-tegrated grievance management system (IGMS).The government launched this portal with the ob-

jective of putting in place a proper regulatory

mechanism to protect the interest of insurance policyholders.Integrated Grievance ManagementSystem (IGMS) is a comprehensive solution whichnot only provides a centralized and online accessto the policyholder but also completes access andcontrol to Insurance Regulatory DevelopmentAuthority (IRDA) for monitoring grievance dis-

posal by insurance companies. The system will beable to assign, store and track unique complaintIDs and also enable intimation to various stakeholders as needed.

NAC directed the Tribal AffairsMinistry to consult Jarawas

The National Advisory Council (NAC) directedthe Tribal Affairs Ministry consult the Jarawas, a

primitive tribal group in the Andaman and Nicobar Islands who are threatened with extinction, beforedrafting a policy on their future. The question ontheir future revolves around whether they shouldcontinue to live in their pristine habitat, in splen-did isolation, or be allowed to mingle with the lo-cal population.NACs concern was raised follow-ing a recommendation made by the Andaman and

Nicobar Islands administration that as the Jarawashave already begun mingling with the local popu-

lation, the policy of isolation should end. Earlier in 2011, the NAC itself had sent an official to theisland to check whether the Jarawas were beingadversely affected by the droves of tourists. Therehave been fears of exploitation, including sexualexploitation of the Jarawas.Sonia Gandhi headed

NAC wanted a full-fledged discussion on the is-sue regarding the future of Jarawas. LieutenantGovernor of the Islands, Lt.Gen. (retd.) Bhopinder Singh, made a presentation on the Jarawa policyadopted by the government in 2004 and the cur-

rent status of the threatened tribal group.

The Survey of India ReportSubmitted

The Survey of India report was submitted to thesubmitted to the Supreme Court on 30 April 2010.The report deals with the mining activities of theAndhra Pradesh- Karnataka border that involved


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the Karnataka Cabinet ministers- the Reddy brothers. The report recommended the Andhra Pradeshgovernment to redraw the leases of all their four mines and continue with the ban on their miningactivities until the demarcation is complete. The report became a cause of concern for the Reddy broth-ers whose Obulapuram Mining Company has three mining leases and their partnership firm Anantapur Mining Corporation has one lease in Andhra Pradesh. The boundary pillars in the Reddys mines werereported missing. Reddys mines extended into Karnataka and overlapped with the mine of rival miner Bellary Iron Ores Pvt Ltd, belonging to S K Modi.

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Germany to Shut itsNuclear Plants

Germany announced its decision to phase out itsall the nuclear plants by 2022. This decision,

prompted by Japans Fukushima nuclear disaster,will make Germany the first major industrializednation to go nuclear-free.People of Germany arestrongly opposed to nuclear power and took tostreets after Fukushima to urge the government toshut down all reactors as soon as possible.Germany(Europes largest economy) is determined to re-

place its nuclear power with renewable energy re-sources. Energy from wind, solar and hydroelec-tric power at present produces about 17 percent of the countrys electricity.The decision taken by theGermany suggests that there is no such compul-sion on an industrialised society to meet the en-ergy needs of economic growth and rising living

standards.

Amendments toSwiss Banking Secrecy Laws

Swiss parliament gave approval to Switzerlandsamendments to tax treaties with other countries,including India. This makes easier access for In-dia, to collect information about the illegal fundsheld by the Indian nationals in Swiss private banks.The Swiss parliament endorsed amendments todouble-taxation agreements (DTAAs) in line withinternationally applicable standards. The benefi-ciaries from the new amendments include India,Germany, Canada, Japan, the Netherlands, Greece,Turkey, Uruguay, Kazakhstan, and Poland. Thesecountries are secured with easy legal assistance andinformation. This also allows the countries to iden-tify an account holder from their own territories

by providing an IBAN number or social security

number. It agreed to adopt its tax code, agreeingto share information in cases involving tax whichis not a crime under Swiss law.The new amend-ments to Swiss banking secrecy laws are however

be challenged by a popular referendum within 100days from its announcement.

French Nationals to Sue Sarkozyover Crimes in Libya

Two French lawyers have said that they are plan-ning to sue French President Nicolas Sarkozyagainst the Humanity crimes over the military cam-

paign in Libya that was led by NATO. JacquesVerges and Roland Dumas two of the French law-yers have decided to represent the families of thevictims during the military campaign. It was saidthat the military campaign that was initiated as ameans to protect the civilians was in fact respon-

sible for their killings. The two lawyers said themilitary campaign as an inhuman assault againstthe common man and a sovereign country, and thatthey have decided to defend the victims of themilitary campaign. It was said that the two law-yers have decided to defend the victims of the

NATO bombings because they themselves saw theaftermath consequences of the bombings whenthey visited Libya. Though the western governmenthas denied any civilian casualties caused duringthe NATO bombings, Verges and Dumas have saidthat they had seen several such casualties at vari-ous such hospitals and there are almost 20,000 suchvictims.

Constitution (15th Amendment)Bill, 2011 passed in Bangladesh

The Parliament of Bangladesh, the Jatiyo Sangsad, passed the Constitution (15th Amendment) Bill,

INTERNATIONAL

ISSUES


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2011 on 30 June 2011 to amend its constitutionunder which the caretaker government system for holding general elections was scrapped. The billwhich contained 15 proposals was passed by divi-sion vote with a majority of 291-1. However,amendments moved by ruling alliance opposingIslam as the state religion and religion-based poli-tics were rejected. Islam has been retained as thestate religion alongwith Bismillahi-Ar-Rahman-Ar-Rahim.The Constitutional amendments incor-

porate strict provisions against military takeovers.It treats military takeovers as treachery and a sub-versive act. Parliament has been given power tohand down maximum penalty to those usurpingstate power.The caretaker system was introducedin 1996 under the 13th amendment to the consti-tution of Bangladesh. Since then, the general elec-

tions were overseen by non-partisan caretaker gov-ernments.

10th SCO Summit

The six-nation Shanghai Cooperation Organisation(SCO) celebrated its 10th anniversary on 15 June2011 in Astana, the capital city of Kazakhstan, bysumming up its achievements and outlining itsfuture direction. The six-nation SCO member states are China, Russia, Kazakhstan, Kyrgyzstan,Uzbekistan and Tajikistan. India, Pakistan and Iranare with Observer status in the SCO. Indian Ex-ternal Affairs Minister, SM Krishna attended thesummit.

SCOs Joint Declaration:The joint declaration of the summit included (1)establishing an inseparable international securitycommunity to guard information security, (2) fighting the three evil forces of terrorism, separat-

ism and extremism, and (3) combating drug traf-ficking. aims they desire in the region for Afghani-stan i.e. the Afghanistan becomes a geo-strategic

bridge as well as a terror-free zone.

About SCO: SCO was founded on 15 June 2001. The SCO was born of the need of sharing themember countries growing desire to enhance mu-

tual trust, carry out mutually beneficial coopera-tion and address challenges through joint efforts.

UN launched Drivefor Sustainable Sanitation

The United Nations launched a drive, Sustainablesanitation: The Five-Year-Drive to 2015 to accel-erate progress towards the goal of halving the

proportion of the population without access to ba-sic sanitation by 2015. The drive was established

by the General Assembly in a resolution adoptedin December 2010 that called on Member Statesto redouble efforts to close the sanitation gap, oneof the eight Millennium Development Goals(MDGs) that world leaders have pledged to achieve

by 2015.The UN had recognised access to sanita-tion as a human right, a basic service required tolive a normal life. However despite the recogni-tion, some 2.6 billion people or half the popula-tion in the developing world still lack access toimproved sanitation.Sanitation is an unpopular subject though it is an extremely sensitive issue.The UN resolution of December 2010 had calledfor an end to open defecation, the most dangeroussanitation practice for public health and one prac-tised by over 1.1 billion people who have no ac-

cess to facilities

Pakistan gets ChineseAid Against the US Raids

After the killing of the deadly terrorist Osama BinLaden, US have accused Pakistan Government for harbouring the deadly terrorist for many years.

Now by doubling its military attacks on Pakistanthe US wants to enter into the sphere thats influ-enced by the Chinese Government. But in retalia-tion to the Obama Administration the Chinese gov-ernment has again lend a helping hand towardsPakistan by providing air arsenal and even warnedthe US government that any sort of attack on Pa-kistan would considered as an inhuman and un-friendly attack on the Chinese government too. TheChinese government has clearly said that any at-tack on Pakistan will be considered as an attack against China which will not be tolerated. This is


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the 1st such blunt ultimatum for the US govern-ment after the Soviet warning during the crisis inBerlin in the year 1958-1961.

Yingluck Shinawatra toBecome the PM of Thailand

Yingluck Shinawatra from the Pheu Thai (PT) party, had a stunning victory aginst her opposition party, Democrat Party in Thailands election . Sheis all set to become Thailands first female PrimeMinister. Pheu Thai was backed by exiled former Premier of Thailand, Thaksin Shinawatra.Yingluck Shinawatra is Thaksins youngest sister.Yingluck Shinawatra was a run-of-the-mill busi-nesswoman by profession.The election commis-sion of Thailand announced on 4 July 2011 thatPheu Thai won an outright majority, taking 265 of 500 seats in the Thai parliament. The ruling Demo-crat Party took just 159 seats, down from the 170which they occupied in the Abhisit Vejjajivasrulling assembly of 480 seats.

Arrest Warrant for MuammarGaddafi

The International Criminal Court issued an arrest

warrant for Libyan leader Muammar Gaddafi, hisson Saif al-Islam and Libyan intelligence chief Abdullah al-Senussi on charges of crimes againsthumanity. The warrant was issued for them for orchestrating the killing, injuring, arrest and im-

prisonment of hundreds of civilians during the first12 days of unrest and for trying to cover up thealleged crimes. It was felt that Gaddafi and com-

pany needed to be arrested so as to prevent themcovering up ongoing crimes and committing newcrimes.Presiding judge Sanji MmasenonoMonageng declared that Saif al-Islam Gaddafi wasaccused of conceiving and orchestrating a plan todeter and quell by all means the civilian demon-strations.

President of YemenLeft Country

President of Yemen Ali Abdullah Saleh left for Saudi Arabia for medical treatment and thus endedhis 33-year rule over the nation. On 3 June 2011

he was injured in a rocket attack by the rivalgroup.It created a political vacuum and a hope for the pro-democracy movement to achieve its ob-

jective. But at the same time it will fuel violencein the country because it is divided into armedtribes and to unify them under one command wont

be an easy task.

IAEA Called forAction on Nuclear Safety

The International Atomic Energy Agency (IAEA)in a concluding session of an international minis-terial conference in Vienna on 24 June 2011 ex-

pressed urgency to take appropriate action on the basis of lessons from the civil nuclear accident atthe quake-and-tsunami-hit Fukushima Daiichi

plant in Japan.Amid rising global consensus, theauthorities in Fukushima prefecture announced

plans to distribute dosimeters to schoolchildren tocontinuously monitor their exposure to nuclear

radiation at the grassroots and take follow-up ac-tion.

Parents however continued to express concern over the public health hazard their children were ex-

posed to since the March 11 accident.In the meanwhile a Chinese research ship was detected withinthe Japanese exclusive economic zone. In this re-gard, Japan's Chief Cabinet Secretary Yukio Edanomentioned that China should have first contactedJapan about any radiation concerns even if the shipwas sent for collecting seawater samples in thatregard.IAEA promised widespread support for thesystematic review of the safety of all nuclear power

plants.The Ministers of the IAEA member-statesalso recognised the need for a global nuclear li-ability regime for appropriate compensation in theevent of a nuclear accident.


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US Decided to pull-outTroops from Afghanistan

US President Barack Obama set in motion a sub-stantial withdrawal of American troops in an ac-knowledgment of the shifting threat in the region

and the political and economic challenges in a war-weary America. He announced that the UnitedStates had largely achieved its goals inAfghanistan. Obama announced plans to withdraw10000 troops from Afghanistan by the end of 2011.The remaining 20000 troops from the 2009 surgewould leave by 2012 summer, amounting to abouta third of the 100000 troops in the country. The

pullout will continue at a steady pace until secu-rity is handed over to Afghan authorities in 2014.The withdrawals would signal the end of themilitarys counterinsurgency strategy adopted 18months ago.

Syria's PresidentRecommended Reforms

Syria's President Bashar al-Assad proposed hold-ing of a national dialogue that will recommendsweeping reforms aimed at transforming the po-litical landscape.It was declared that people from

all walks of life would participate in the nationaldialogue, organised around committees, and rec-ommendations would be made within 30 to 60days.The Syrian President pledged his commitmentto fundamental reforms, including the drafting of a new Constitution. The changes would cover the

political arena and would create greater mediafreedoms.While speaking on the on-going protests,Assad said the demonstrations comprised threecore sets of people: those who were peaceful andhad legitimate demands, those who were vandalsand outlaws and radical and blasphemous intel-lectuals.

Germany Announced Easing of Export Control Laws for India

Germany announced easing of export control lawsfor India. The new laws$allow India, accessing

dual use items, marking a major development thatis beneficial in the expansion of the nuclear en-ergy sector. Previously India was removed fromthe list of countries subject to national export con-trol restrictions.

The new norms allow Germany to treat India justlike any other EU countries. India had approachedGermany in 2010 to relax export control laws toallow high technology trade with it. And in May2011 Germany modified its export control legisla-tion vis--vis India. Germany repealed their restric-tions for the export of goods for nuclear power

plants in the same announcement.

Approval of theConstitutional Reforms Moroco

People of Morocco approved the constitutionalreforms which is expected to bring democratic re-forms in the country.According to an official esti-mate, 98 percent of voters on the day of referen-dum voted to approve the constitutional reforms,with a 72 percent of the 13 million registered vot-ers casting their votes.King of Morocco,Mohammed VI had announced his proposed re-forms in June 2011 according to which his power

would be limited while strengthening the primeministers office and the parliament.However, thecritics said the new constitution has not limitedthe power of Mohammed because he can stillchoose the Prime Minister from the party that wonthe elections and continue to oversee the Moroccos

judiciary, security apparatus and religious matters.

The UN-HABITAT Report

According to the UN-HABITAT report on the Stateof the World Cities 2010/2011: Bridging the Ur-

ban Divide, Governments across the world workedcollectively to lift 227 million people out of slumconditions, surpassing the Millennium Develop-ment target by 2.2 times. India was applauded for

bettering the lot of 59.7 million, therefore the proportion of people living in slum conditions camedown from since 2000 from 41.5 per cent in 1990to 28.1 per cent in 2010 in India.


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The World in 2050 Report

According the report, The World in 2050 by PricewaterhouseCoopers, India can be expected to be thefastest growing large economy in the world over the period to 2050. Indias share of global GDP,measured at market exchange will rise to around 13 per cent, from 2 per cent in 2009. India willovertake all G7 countries except the US, to become the world's third largest economy with a projected

GDP of $31313 billion. China, currently the world's third largest economy is estimated to move to the No. 1 spot by 2040, with an estimated GDP of $51180 billion by 2050. PwC however warned that Indiawill only achieve this performance if it maintains a prudent fiscal policy as well as continues to open upto foreign trade and investment, and further invest in transport and energy infrastructure, andeducation.India's growing young population will spur its growth while China's rapidly aging popula-tion will lead to its rate of gain. The Chinese economy will be 35 per cent larger than the US by 2050.Russia will also be adversely affected by its shrinking working age population, and will be the slowestof the E7 countries.The World in 2050 report provides a strikingly gloomy picture for the G7 nations of France, Germany, Italy, Japan, the UK, US and Canada. The combined economies of the so-called E-7group of countries, comprising India, China, Brazil, Mexico, Russia, Indonesia and Turkey is expectedto be 64 per cent larger than the G7 by 2050. Dependence on European and American export marketswill pose a problem for the G7 nations.Among the countries likely to see the biggest falls is Australia,which could fall off the top 20 ranking. Also Britains ranking will dip from sixth to ninth position(measured by MER) will be accentuated by its over-dependence on the EU and US as trading partners.

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India-Malaysia CECA

The India-Malaysia Comprehensive EconomicCooperation Agreement (CECA) will be effectivefrom 1 July 2011. India-Malaysia CECA is Indiasfourth bilateral Comprehensive Economic Coop-eration Agreement, after Singapore, Japan andSouth Korea. The CECA envisages liberalizationof trade in goods, trade in services, investmentsand other areas of economic cooperation.Under India-Malaysia CECA, the items on which Indiahas got market access from Malaysia include

basmati rice, mangoes, eggs, trucks, motorcyclesand cotton garments, which are all items of con-siderable export interest to India. At the same time,India has provided adequate protection for sensi-tive sectors such as agriculture, fisheries, textiles,chemicals, auto, etc.The India-Malaysia CECAalso facilitates cross-border investments between

the two countries. The CECA creates favourableconditions for the business communities of bothcountries to increase bilateral trade andinvestment. Trade between India and Malaysiareached 10 billion US dollars in 2010-11, an in-crease of 26 percent from the year 2009-10.

Chinese CurrencyRenminbi in Srilanka

The Sri Lankan Central Bank Monetary Board on27 June 2011 announced that Chinese Renminbiwould be included in the list of designated curren-cies permitted for international transactionsthrough banks in Sri Lanka. People can now trans-act in Renminbi (for cross-border transactions)with banks authorized for such transactions. Theother currencies in the designated list are Cana-dian dollar, Australian dollar, New Zealand dol-lar, US Dollar, Hong Kong Dollar, Singapore dol-

lar, Danish kroner, Euro, Norwegian kroner, Brit-ish pound sterling, Swiss franc, Swedish kroner and Japanese yen.The Sri Lankan Monetary boardreasoned that China was a leading player in inter-national trade had economic connections withmany countries. Recently, the Renminbi hasevolved as a globally acceptable currency. Besides,Sri Lanka too has an increasing volume of tradeand investment transactions with China.

Christine Lagardeis Chief of IMF

Christine Madeleine Odette Lagarde was the firstwoman ever to become minister of Economic Af-fairs of a G8 economy, and is the first woman toever head the IMF. She is a notable antitrust andlabour lawyer.Lagarde first made history as the firstfemale chair of the international law firm Baker &

McKenzi. Her personal interest in European af-fairs led her to open the European Law Centre, anoffice of Baker & McKenzie in Brussels exclu-sively dedicated to the practice of European Unionlaw.On 16 November 2009, The Financial Timesranked her the best minister of finance of theEurozone. In 2009, Lagarde was ranked the 17thmost powerful woman in the world by Forbesmagazine. Lagarde became president of the glo-

bal strategic committee in 2004.

Golden Peacock EnvironmentManagement Award

for 2011 to SAIL

Maharatna Steel Authority of India Limited (SAIL)received the prestigious Golden Peacock Environ-ment Management Award for the year 2011. Theaward was presented to SAIL in recognition of its

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initiatives and achievements in the field of envi-ronment management. In the last four years thecompany succeeded in reducing particulate emis-sions by 52%, specific water consumption by 11%and specific energy consumption by 5%, and in-creased solid waste utilisation by 18%. SAIL inaccordance with the National Environment Policy,

built a management system at its different plantsand units for further environmental protection, in-cluding acquisition of certification under ISO:14001. All major units of SAIL, covering both

production and service departments, are ISO:14001accredited. In addition, the townships of Bhilai,Rourkela and Salem Steel Plants have also beencertified to ISO:14001.SAIL effectively adoptedwaste minimisation strategies, including conser-vation at source, recovery and recycling, to man-

age the wastes associated with steel making. Ex-tensive afforestation programmes have been car-ried out by the company in all its plants and minesto develop sinks for absorbing air and noise

pollution.SAIL spent nearly Rs. 90 lakh on a programme for ecological restoration of degradedeco-systems over a period of five years up to 2010.The Golden Peacock Awards, instituted by the In-stitute of Directors, New Delhi, are presented an-nually under various categories.The winners of theGolden Peacock Awards for 2011 were finalised

by a jury headed by Justice P.N. Bhagwati, former Chief Justice of India and Member, UN HumanRights Commission, and presented on the occa-sion of the 13th World Congress on EnvironmentManagement.

Delhi Cabinet WaivedVAT on Increased Price of Diesel

The Delhi Cabinet on 27 June 2011 decided to

waive VAT on the increased price of diesel to pro-vide 37 paise per litre benefit to consumers. Thegovernment also offered Rs.40 per cylinder sub-sidy on cooking gas to 4.50 lakh families under the Below Poverty Line and Antyodaya AnnaYojana (AAY) scheme.Union Finance Minister Pranab Mukherjee's had requested all the StateGovernments to lower Value Added Tax on oil

products to reduce the impact of the hike in diesel,

LPG and kerosene prices announced by the Cen-tre. Chief Minister Sheila Dikshit announced themarginal reduction in diesel price in Delhi and thesubsidy on cooking gas for the poorest of the fami-lies in response to the finance ministers plea.Delhicurrently levies 12.5 per cent VAT on diesel incomparison to neighbouring Haryana's 8.8 per cent.Delhi Government would not levy any VATon the increased price of diesel. So the price of diesel, which stood at Rs.37.75 prior to the hike,would only increase by Rs.3 to Rs.40.75. The 37

paise VAT which the Government had levied tak-ing the selling price to Rs.41.12 was cancelled.Therefore diesel would sell at Rs.40.75 per litre.The Chief Minister said the Cabinet has alsodecided to grant a substantial relief to BPL andAAY families in respect of LPG cylinders. The

earlier price of LPG was Rs.345.35 per cylinder and after increase of Rs.50 the price of a LPG cyl-inder had gone up to Rs.395.35. The Delhi Gov-ernment has decided to provide a subsidy of Rs.40on every 14.2 kg LPG cylinder. This would ben-efit nearly 4.50 lakh BPL families and about 1 lakhAAY families in Delhi.

Indias Rating forForeign & Local Currency Debt

Outlook upgradedInternational credit rating agency DBRS in June2011 upgraded Indias long term foreign and localcurrency debt outlook from negative to stable.Indias long term foreign and local currency debtoutlook was upgraded in view of robust policyframework and ongoing reforms.The upgrade ismainly on account of the governments stronger commitment on reducing fiscal deficit and possi-

bility of a new Direct Tax Code that will contrib-ute in enhanced efficiency in tax.DBRS mentionedthat the Indian government was addressing thecountrys infrastructure deficit by spending $514

billion, or 9 per cent of GDP, on infrastructure between 2007-2012, and an additional $1 trillionfrom 2013-2017, approximately one-half of whichmay come from the private sector and public-pri-vate partnerships.The rating agency raised the out-look for the first time since it started rating the


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India in June 2007 though it has cautioned againstthe high debt ratios.

RBI extended10 % Ceiling of Bank Investment

in Liquid Schemes of Mutual Funds

The Reserve Bank of India on 5 July 2011 extendedthe 10 per cent ceiling of bank investment in liq-uid schemes of mutual funds to include short-termdebt funds. Bank investment in debt schemes of mutual funds with weighted average maturity of

portfolio of not more than one year, would be subjected to the cap.

The RBI in its Monetary Policy Statement for 2011-12 had directed banks to cap their investments inthe liquid schemes of mutual funds at 10 per centof their net worth.The central bank noted that witha view to ensuring a smooth transition banks whichhave investments in these schemes of mutual fundsin excess of the 10% limit, could comply with thisrequirement at the earliest but not later than sixmonths from 5 July 2011.RBIs decision to extendthe ceiling was aimed at ensuring a smooth transi-tion. Banks which already have investments in liq-uid schemes of mutual funds in excess of the 10

per cent limit, are allowed to comply with this re-quirement at the earliest but not later than sixmonths from the date of this circular.

RBI pointed out in the money policy statement that banks investments in liquid schemes of mutualfunds grew manifold and that liquid schemes con-tinued to rely heavily on institutional investors suchas commercial banks whose redemption require-ments are likely to be large and simultaneous. TheRBI opined that money which was circularly mov-ing between banks and the debt-oriented mutualfunds (DoMFs) could potentially lead to systemicrisk. Banks normally put in their surplus funds inliquid schemes of mutual funds, which invest inshort-term debt schemes of duration of less than ayear. Such schemes give banks higher returnswithin a short period.

FDI in May 2011 Inflows Jumped111 per cent at $4.664 Billion

According to the Finance Ministrys data releasedon 4 July 2011, Foreign Direct Investment (FDI)

in India saw an unprecedented growth in May withthe inflows jumping nearly 111 per cent at $4.664

billion, the second highest FDI inflow in any monthin the last 11 years. According to a statement re-leased by the ministry of commerce, FDI in April-May 2010 had stood at $2.213 billion.During thefirst two months of the current fiscal 2011-12 theforeign direct investments in the country stood awhopping increased of around 77 per cent asagainst the inflow during the corresponding pe-riod in 2010.Recent investments like $7 billion BP-Reliance tie-up are indicative of a positive trend.Vodafone's purchase of Essar's stake of around $5

billion is also an indicator of continuing investor confidence in India. The recent trend of dip in FDIinflows thus appears to have been reversed in thecurrent financial year.

The last fiscal witnessed a 25 per cent dip in FDIinflows amid uneven global recovery from the re-cession of 2008. A slew of measures were taken

by the government to arrest the fall and boost in-vestor confidence started showing results. Also theapprovals given to Posco and to the Cairn-Vedantaacquisition are also likely to further increase FDIin 2011.The ministry clarified foreign investmentrules in a move to ease the regulatory burden for the government while at the same time simplifiedthe procedures as well.

As per the revised rules, only proposals involvingtotal FDI of more than Rs 1,200 crores would be

required to be placed before Cabinet Committeeon Economic Affairs (CCEA) for approval.Theincrease in FDI inflow in May 2011 represents anincrease of nearly 111 per cent over the FDI equityinflows of $2.213 billion received in the samemonth in 2010.


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obtaining the registration number from the bank.ECB/FCCB beyond $500 million for the purposeof redemption of the existing FCCB will be con-sidered under the approval route. ECB/FCCBavailed of for the purpose of refinancing the exist-ing outstanding FCCB will be considered as partof the limit of $500 million available under theautomatic route as per the extant norms.The re-structuring of FCCBs that involve a change in theexisting conversion price would not be permissible.The central bank has asked banks to monitor theend-use of funds.

Buyback of Foreign CurrencyConvertible Bonds Extended

The RBI decided had on 30 June 2011 extendedthe buyback of foreign currency convertible bondstill March 2012. The earlier deadline was to ex-

pire on 30 June 2011. The RBIs move is expectedto benefit several companies facing severe fund-ing problems for buyback due to lacklustre equitymarkets. FCCBs issued by them are trading at bigdiscounts, making buyback an expensive proposi-tion.

In its Financial Stability Report, the RBI estimated

that FCCBs worth Rs 31,500 crore would maturein March 2013 and a major chunk of these maynot be converted into equity, the current stock

prices of issuing companies being significantly below their conversion prices.According to theRBI, during the three financial years in 2005-06to 2007-08, Indian firms raised foreign capitalthrough FCCBs which were very popular at thetime. The conversion price on such bonds was 25-150 per cent higher than the prevailing stock priceat the time of issuance and they carried zero or

very low coupons.FCCB proceeds were meant for overseas acquisition (19 per cent) and import of capital goods (16 per cent) as per returns filed byfirms.

MachendranathanCommittee Suggestions

A high-powered committee of the steel min

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