CURRENT NATIONAL AFFAIRS: JAN – FEB 2009

India, Kazakhstan ink N-accord:

As part of its efforts to boost the country’s energy sources, India, on January 24,
2009, signed a civilian nuclear energy cooperation agreement with the uranium-
rich Kazakhstan. The agreement was signed during the visit of President Nursultan
Nazarbayev. India and Kazakhstan also signed four other key accords, including an
extradition treaty. President Nazarbayev was also the chief guest at the Republic
Day parade.

Afghan President’s visit:

Expressing solidarity with India in the wake of the Mumbai terror attacks, Afghan
President Hamid Karzai, during his visit on January 12, 2009, joined Prime Minister
Manmohan Singh in castigating Pakistan for reneging on its commitment not to
allow the misuse of its territory for terrorist activities. This was President Karzai’s
second visit to New Delhi within six months. He held extensive talks with Prime
Minister Manmohan Singh on a wide range
of issues, but the focus was on the Mumbai terror attacks.
India inks safeguards pact with IAEA:

On February 2, 2009, India signed a safeguards agreement with the International

Atomic Energy Agency (IAEA) which paves the way for the supply of atomic fuel
and technology by the international community to India after 34 years of nuclear
isolation. The agreement would effectively bring 14 of India’s nuclear reactors
under non-proliferation inspections of the international atomic watchdog. The
IAEA currently applies safeguards to six nuclear reactors in India. The India-
specific safeguards agreement was unanimously approved by the IAEA Board of
Governors on August 1, 2008.

RBI leaves rates untouched, sees lower 7% growth:

The Reserve Bank, on January 27, 2009, lowered the economic growth forecast to
7%, saying the global economic crisis has hit India shores, but kept key policy
rates and ratio unchanged. The bank also
lowered inflation estimates to 3% by March-end. In its quarterly review of the
annual monetary policy, the apex bank extended special refinance facilities to
banks up to September 30 for providing liquidity support to meet the funding
requirements of mutual funds, non-banking finance companies by relaxing the
maintenance of SLR up to 1.5%. The bank has injected over Rs 3,00,000 crore
liquidity into the financial system through several changes in policy rates since
October 2008. In the last three months, the repo rate, at which the apex bank
lends short-term funds to banks, has been reduced from 9% to 5.5% and the
reverse repo, at which the RBI accepts funds from banks, has been lowered from
6% to 4%. RBI said that the Central government’s fiscal deficit—the money spent
more than the revenue raised and borrowed funds—would shoot up from the
earlier estimate of 2.5% to 5.9% of the value of the country’s total economic
output.

Cabinet okays Rs 25,000 cr for NBFCs:

The government has set in motion the process of providing liquidity support of
up to Rs 25,000 crore to cash-strapped Non-Banking Finance Companies (NBFCs)
to enable them to pay existing liabilities as was announced in the second stimulus
package to spur sagging economic growth. A Stressed Asset Stabilisation Fund, set
up for acquiring the stressed assets of IDBI, would function as a Special Purpose
Vehicle (SPV) to provide money to non-deposit taking systemically important
NBFCs. The SPV would issue government guaranteed securities, subject to a total
amount of securities not exceeding Rs 20,000 crore with an additional Rs 5,000
crore, if needed. The funds will be used by NBFCs only to repay existing liabilities
he said, adding the RBI would issue guidelines for pricing and lending in
consultation with the Department of Financial Services.

SEBI unveils norms for pledging of shares:

The Securities and Exchange Board of India (SEBI) has spelt out the reporting
norms for companies whose promoters have pledged shares to a third party. The
market regulator has asked companies to disclose details of the promoters’
pledged shares within seven days of the date of receiving information from the
promoters. In a circular dated January 28, 2009, SEBI said the promoters, who
have pledged shares, have to disclose the details to the company within seven
days of such a transaction. Further, the market regulator said that companies
should disclose all the details pertaining to the promoters’ share pledge, if at the
end of any quarter, the total number of such pledged shares exceeds 25,000 or
one percentage of the total shareholding, whichever is lower.

India lags in health spending:

At 4.8 per cent of the GDP, India’s total annual health expenditure (THE) is among
the poorest in the world, with only Nigeria, Indonesia and Bangladesh reporting
lesser expenditure. The WHO recommends a total annual health expenditure of
6.5 per cent of a country’s GDP. The public health expenditure (PHE) in the
country is as low as Rs 215 per capita per year. I t works out to a shockingly low
1.2 per cent of the GDP and 25 per cent of the total health expenditure. That the
basic health services are yet to reach the low-income groups is clear from the fact
that a whopping 75 per cent funding of the health sector still comes from private
sources. The national Samples Survey Organisation’s 60th round has reported 126
per cent increase in urban hospita-lization costs and 78 per cent increase in rural
hospitalization costs in the private sector as compared to the 52nd NSSO
conducted in 1995.
India losing 1m neonates, 78,000 mothers annually:

India is losing one million neonates annually, 82 per cent of them to birth-related
infections (pneumonia, tetanus and diarrhea), asphyxia and pre-term birth, finds
the latest UNICEF State of the World Children (SOWC) report. Maternal health
scenario is even worse, with 78,000 women dying each year from complications
related to pregnancy and childbirth. Three-quarters of all maternal deaths in India
are occurring from hemorrhage (38 per cent), followed by infections (11 per cent),
unsafe abortions (8 per cent) and hypertensive disorders (5 per cent). On an
average, every seven minutes, one woman dies of pregnancy problems;
institutional delivery rate remains a poor 40 per cent.

State of education—Puducherry best, Bihar worst:

India now has lesser number of single-teacher schools than it had a year ago. The
latest government study on the state of elementary education in India shows that
percentage of single-teacher schools in the country has declined from 11.76 in
2006-07 to 10.13 in 2007-2008, an improvement of 1.63 per cent. Among the
States, Puducherry is ranked first in both primary and
elementary education, while Bihar, Arunachal, West Bengal and Jhar-khand are at
the bottom. Kerala is the first in upper primary education, while Delhi and
Chandigarh are fourth and fifth, respectively. The government also lists Muslim
students as a separate category saying the percentage of Muslim enrolment in
primary classes increased to 10.49 in 2008 as against 9.39 the previous year.
Jharkhand Chief Minister resigns following loss in by-poll:

On January 12, 2009, Jharkhand Chief Minister Shibu Soren submitted his
resignation to Governor Syed Sibte Razi, ending speculation on his continuance in
the post after his defeat in the Tamar Assembly by-election. On January 19, the
Centre imposed President’s rule in Jhar-khand as no political alliance was in a
position to form an alternative government. Soren lost to the Jhar-khand party’s
Gopal Krishna Patar, also known as Raja Peter—a local Robin Hood—by nearly
9,000 votes. Raja Peter joins the ranks of MLAs with criminal backgrounds in
Jharkhand.

Satyam—A Rs 7,000 Crore Lie:

Ramalinga Raju, the politically-connected promoter-chairman of Hyderabad

headquartered Satyam Computers was lying for years to shareholders, employees
and the world at large, building up to India’s largest corporate fraud of over Rs
7,000 crore. India’s fourth largest IT company—after TCS, Infosys and Wipro—was
for years cooking its books by inflating revenues and profits, thus boosting its cash
and bank balances; showing interest income where none existed; understating
liability; and overstating debtors position (money due to it). This wasn’t some fly-
by-night operator that had been caught out. Satyam is listed on the NYSE, boasts
185 Fortune 500 companies and the US government among clients and employs
53,000 people. The Union government has entrusting the probe to the Serious
Fraud Investigations office, or SFIO.
Heroes, villains can smoke again:

Amitabh Bachchan and Shah Rukh Khan can again blow rings of smoke on
celluloid. The Delhi High Court has struck down the Ministry of Health’s 2005
notification banning smoking scenes. The court said the ban violated a
filmmaker’s right to freedom of speech and expression as guaranteed under
Article 19. “Directors should not have multi-farious authorities breathing down
their necks. A film must reflect the realities of life. It may be undesirable but it
exists and is not banned by law”, Justice Sanjay Kishan Kaul said. The order came
on a petition filed by director Mahesh Bhatt questioning the validity of a
notification under the Cigarettes and Other Tobacco Products (Prohibition of
advertisement and Regulation of Trade and Commerce, Production, Supply and
Distribution) Act.

CURRENT INTERNATIONAL AFFAIRS

Obama takes over as 44th President of USA:

On January 20, 2009, Barack Obama became first black American to occupy White
House, fulfilling Martin Luther King’s dream sooner than anyone had imagined. He
was sworn in as the 44th President of the United States. The event marked the
end of an eight-year chapter of George W. Bush’s Presidency, a record blighted by
unfinished wars, record deficits and an economy in recession.
United States pulls back as Iraqis vote:

On February 1, 2009, Iraqis across the country voted in provincial elections that
will help shape their future, but regardless of the outcome it is clear that the
Americans are already drifting offstage and that most Iraqis are ready to see them
go. The signs of mutual disengagement were everywhere. In the days leading up
to the elections, it was possible to drive safely from near the Turkish border in the
north to Baghdad and on south to Basra, just a few miles from the Persian Gulf
without seeing an American convoy. In the Green Zone, the Americans retreated
to their vast, garrisoned new embassy compound. Iraqi soldiers now handle all
checkpoints. In the US, many view the war as already over, even though more
than 140,000 American soldiers remain in Iraq. Allies of Iraq’s Prime Minister
appeared to have made gains in the provincial elections, rewarding groups
credited with reining in insurgents and militias, according to unofficial projections.

$138-b lifeline for Bank of America:

In yet another rescue act, the US government decided to inject $20 billion of fresh
capital into financial services major Bank of America, apart from standing
guarantee to its toxic assets worth $118 billion. While the treasury will invest $20
billion in the firm in return for preferred stocks, FDIC, along with the Treasury, will
guarantee bad assets. Bank of America would also comply with enhanced exe-
cutive compensation restrictions. The bank, which recently acquired Merrill
Lynch, has already received $25 billion from the Troubled Asset Relief Program.
UK launches second rescue plan:

Britain unveiled a second bank rescue plan and Royal Bank of Scotland recorded
the biggest loss in UK corporate history in the month of January 2009, while a cut
in Spain’s credit rating caused fresh market wobbles. Announcing Britain’s bank
bailout, Finance Minister Alistair Darling said fourth-quarter GDP figures would
confirm the UK was in recession for the first time since 1992. The European
Commission, meanwhile, forecast the euro zone economy would contract for the
first time in 2009, by 1.9%, and grow by only 0.4% in 2010. RBS said it made a loss
of up to £28 billion ($41.3 billion) in 2008, including a huge goodwill hit on its
purchase of parts of ABN Amro in 2007. Britain pumped £37 billion into the banks
in October 2008 but credit remains scarce. The UK government will now allow
banks to insure themselves against losses on their riskiest assets. It will offer
guarantees on their debt and set up a £50-billion fund to buy up high-quality
securities to get cash flowing freely again.

Sri Lanka—LTTE last post falls, Army says war over:

On January 25, 2009, Sri Lankan troops rampaged through stiff resistance to
capture the garrison town of Mullaitivu, the last military stronghold of the
Liberation Tigers of Tamil Eelam, making a decisive victory in the war for
territorial control of the island’s north and east. Earlier, on January 9, Elephant
Pass, the last LTTE stronghold on the A-9 main highway also fell and enabled the
military to re-open the Jaffna-Kandy supply route for people and troops instead of
relying on supplies through ships.
Middle East—Tensions remain despite ceasefire:

On January 18, 2009, Israel decided to halt its Gaza offensive without any
agreement with Hamas. However, Hamas vowed to fight on. Gaza’s border
crossings with Israel were initially allowed to open only for humanitarian supplies,
with a more permanent solution linked to progress over negotiations. Later,
Hamas also announced an immediate ceasefire by its fighters and allied groups in
the Gaza Strip, adding that the Islamists gave Israel a week to pull out its troops.
During the 22-day-long offensive, Israeli attacks killed more than 1,300
Palestinians, including some 700 civilians. Hundreds of gunmen were among the
dead. Ten Israeli soldiers were killed as well as three Israeli civilians hit by rockets.
The mounting civilian death toll in the Gaza Strip and mounting destruction and
hardship in the territory brought strong international pressure on Israel to stop
the
offensive.

Obama, Hu discuss trade imbalances:

On January 31, 2009, US President Barack Obama told

Chinese leader Hu Jintao in a phone call that the two countries must work
together to correct global trade imbalances and unclog credit markets to fight the
world economic crisis. Hu told Obama that China firmly opposed trade or
investments protectionism as part of settling the crisis and said Beijing would join
Washington in promoting stable development at an economic summit in London
in April 2009. Hu also acknowledged US efforts to address the world economic
crisis and said the two countries should strengthen cooperation. In 2008 China
overtook Japan as the largest foreign holder of US government debt and held
$681.9 billion in US Treasuries as of November 2008. With the US expected to
issue new debt to help pay for a huge economic stimulus package, China’s
holdings could grow.

US cuts $ 55 m of terror aid to Pakistan:

The Obama administration’s threat to make Pakistan more accountable in the war
on terror is materializing quickly, with Washington now withholding $55 million
from the latest tranche of reimbursement of expenses that Pakistan claims to
have incurred while fighting against terrorism. The decision was taken after
auditors raised objections about the bills
given by Pakistan for expenses incurred in the war on the Pakistan-Afghan border.
Financial advisor in Pakistan PM’s office, Shaukat Tarin, confirming the
development, put down the US decision to a change in accounting procedures. He
added that Pakistan has demanded a reassessment from Washington to enable
release of the remaining amount. But the decision assumes significance in view of
the Obama administration’s known stance that Islamabad must deliver on its
commitment as a member of the coalition against terror, in order to receive
assistance.
US sanctions on Pak N-scientist, 12 others:

The US State Department has slapped sanctions on 13 individuals and three

private companies because of their involvement in the Pakistan-led Abdul Qadeer
Khan nuclear-proliferation network. The sanctions followed a multiyear US
government review of information regarding the A.Q. Khan network. The entities
provided an extensive international network for the proliferation of nuclear
equipment and know-how that offered one-stop shopping for countries seeking
to develop nuclear weapons, the State Department said. In 2008 a UN nuclear
watchdog said the A.Q. Khan network smuggled nuclear weaponisation blueprints
to Iran, Libya and North Korea and was active in 12 countries.

Lashkar-e-Toiba’s latest name:

Jamaat-ud-dawa, the banned charity front of Lashkar-e-Toiba, has resurfaced as

the Tehreek-e-Tahafuz Qibla Awal following the United Nations Security Council
ban. A video in public domain shows JuD leaders and activists holding a rally
under the banner Tehreek-e-Tahafuz Qibla Awal. The Indian establishment had
been voicing concerns about JuD renaming itself in a bid to escape UNSC
sanctions that included freezing of accounts, travel and arms ban. Sources have
pointed out that JuD remained active in spite of the ban and kept updating its
website regularly. Headquarters of JuD in Muridke was never shut down and
reports said that all educational institutes, hospitals and seminaries of JuD were
operating routinely. The change of name will basically allow JuD to escape
restrictions placed on organisations and individuals put on UNSC consolidated list
of terror groups and terrorists and operate funds in banks’ accounts frozen by the
UNSC ban.

Extra – GK
India has slipped to the 41st position from 23rd in 2007-08 in the Global
Innovation Index (GII) 2008-09, says a study by industry body CII and B-school
INSEAD. The US has topped the ranking once again, followed by Germany,
Sweden and the UK. As per the survey, India is at the 49th position in terms of the
overall input pillars index and is ranked 34 when it comes to the overall output
pillars index. In both cases, China is ranked above India. However, India tops the
BRIC nations for variables such as institutions and policies that can provide
support for innovation. Similarly, in terms of human capacity, which captures the
human resource and education aspects of a nation, India is among the top 30
countries in the world and leads among the BRIC countries as well.

Army Day is celebrated on January 15.

Kazakh President Nursultan Nazarbayev was the Guest of Honour at the Republic
Day parade, 2009.

The new armoured limousinewhich transported US President Barack Obama

down Pennsylvania Avenue during the inauguration parade on January 20 looked
like something out of a James Bond film. Nicknamed The Beast, the 18-foot-long
Cadillac is actually a bunker on wheels. It features heavy armour that is at least 5
inches thick and is filled with special foam that can prevent it from blowing up in
the event of a direct hit. The tradition of US Presidents using Cadillac limousines
dates back to the Woodrow Wilson era (1913-21). In 1965, Lyndon Johnson was
the first President to ride in a bulletproof limo to an inaugural parade, less than
two years after John F. Kennedy was shot and killed while riding in an open car.

The US Food and Drug Administration has opened an office in New Delhi and
would shortly start another in Mumbai. The move is part of a US programme
called Beyond the Borders initiative, that aims at ensuring safety and quality of
medicines and food imports by expanding FDA’s outreach.

Vikas Swarup is the author of the book “Q & A” on which the film Slumdog
Millionaire is based.

The Union government has scrapped its export tax on basmati rice and cut the
floor price for overseas shipments to $1,100 (Rs 53,900) per tonne.

The Heads of eight institutions—Archeological Survey of India, Anthropological

Survey of India, National Museum, National Library, National Archives, National
Gallery of Modern Arts, Central Reference Library, National Research Laboratory
for Conservation of Cultural Property)—who were earlier appointed through the
UPSC, will now be appointed through a search-cum-Selection Committee
monitored by the Ministry of Culture.
Archeological Survey of India, New Delhi established in 1861, maintains 3,667
monuments of national importance (including 21 monuments, which are world
heritage sites).

Anthropological Survey of India, Kolkata, researches in the area of bio-cultural

and biological aspects of Indian populations.

National Museum, New Delhi was set up in 1960, and houses more than two lakh
art objects. National Library, Kolkata is a repository of all reading and information
material produced in India as well as abroad, concerning India.

National Archives, New Delhi was set up as an imperial records department in

1891 in Calcutta. It is the custodian of non-current records of enduring value of
Central Government Ministries/Departments/ offices and their predecessor
bodies.

The silver lotus awards are the national film awards presented in two main
categories: feature films and non-feature films. These were established in 1954.
Two separate 10-member jury panels select the winners for each, and these juries
are appointed by the Directorate of Film Festivals in India.

The distance between planets was calculated by Copernicus using Kepler’s Third
Law of Planetary Motion. According to Kepler’s Law of Motion, the square of the
time period of the revolution of a planet around the sun is directly proportional to
the cube of the semi-major axis of its orbit.
S. Krishnaswamy, a documentary film maker on historical subjects, was
commissioned by late Prime Minister Indira Gandhi to do the controversial Time
capsule project during the Emergency in 1975. He has been conferred the Padma
Shri award in 2009. He is also known for making the hugely popular documentary
Indus Valley to Indira Gandhi which covered every State from Kashmir to Kerala
and dealt with contentious issues like untouchability, women being worshipped
as deity and being subjected to slavery.

International Customs Day is observed on January 26.

On recommendations of the Commission for Agricultural Costs and Prices (CACP),

the Cabinet Committee on Economic Affairs has approved the Minimum Support
Prices (MSP) for wheat at Rs 1,080 per quintal, an increase of Rs 80 per quintal
over the past year’s MSP. CACP is the nodal agency that recommends
remunerative prices of crops.

Rising by almost 60 per cent since 2003-04, India’s per capita income, which
indicates what an average person earns, has increased to Rs 33,283 in 2007-08, as
per the quick estimates of national income released by the Central Statistical
Organisation (CSO). The per capita income, increased by 12.7 per cent (at current
prices) during 2007-08, while country’s population inched up by 1.4 per cent to
1.38 billion by the end of the fiscal.
Commanding officer of Chandigarh-based 48 Squadron, Gp Capt S.C. Chafekar has
been decorated with the Shaurya Chakra for exceptional courage and
professionalism. He had created history by landing an AN-32 twin-engine aircraft
at the world’s highest airfield, Daulat Beg Oldie, located at an altitude of 17,000
feet, on May 31, 2008.

Reliance Industries Limited (RIL) Chief Mukesh Ambani has emerged as the third-
richest Chief Executive in the world, as per a list of the 10 wealthiest CEOs
compiled by Forbes magazine. Steel tycoon Lakshmi Mittal, Anil Ambani and Sunil
Mittal are the other Indians in the list. Billionaire investor Warren Buffet was the
wealthiest Chief Executive for the second year in a row, with a stake worth $ 35.9
billion in investment management firm Berkshire Hathaway. Business software
major Oracle CEO Larry Ellison was ranked second ($ 19.7 billion).

First-time users of internet can now literally find the web at their doorstep as
Google India has launched a customized internet-enabled bus which will touch 15
towns in Tamil Nadu to rope in more people on the information superhighway.
The bus has four booths based on four themes—information, communication,
entertainment and education—with informative content in English and Tamil.