CURRENT NATIONAL AFFAIRS: JULY 2009

BANKING & FINANCE

RBI gives nod to cash withdrawals using swipe machines in stores

The Reserve Bank has allowed cash withdrawals using swipe machines at retail
shops. The facility will initially be available to the 14.3-crore people holding debit
cards issued in India. One will be able to withdraw up to Rs 1,000 in a day.

To avail this facility, a card holder will have to pay a fee of 2 to 3%. In case the
card-holder also makes a purchase with the card, the receipt will have to
separately indicate the cash withdrawn. For this, the swipe machines, or point-of-
sale (PoS) terminals, will have to be upgraded. The banks will split the service
charge with retailers to entice them to offer this service. At present, merchants
pay a fee of 1.5-2% for every card transaction.

The move will particularly benefit customers in smaller towns and rural areas,
which have few ATM machines. It will also bring down the amount of money a
retailer needs to deposit in a bank every day as it can disburse the same for a fee.
As for banks, the increased debit card usage will translate into higher fee income.

RBI has said the facility can be made available at any merchant establishment
designated by a bank after due diligence.
RBI Policy Review

Announcing the first quarter policy review for Financial Year 2009-10, RBI
Governor D. Subbarao said the apex bank’s status quo on policy rates would
anchor interest rate expectations that could spur investment demand. With
concerns over rising inflation, the RBI has decided to leave Cash Reserve Ratio at 5
per cent and the repo and reverse repo rates at 4.75 per cent and 3.25 per cent,
respectively.

The RBI has projected inflation at 5 per cent from the 4 per cent forecast earlier.
India’s GDP is projected to grow to 6 per cent in March 2010 “with an upward
bias”. Export demand remains weak. The services sector is sluggish on lagged
impact of weak industry growth, but the business outlook has turned positive.

According to the RBI, its policy initiatives since mid-September 2008 aimed at
providing ample rupee liquidity and ensuring continued flow of credit to all
productive sectors has shown results. These actions have resulted in
augmentation of actual/potential liquidity of over Rs 5,61,700 crore. The liquidity
situation has remained comfortable since mid-November 2008 as evidenced by
the LAF window where the Reserve Bank has been absorbing nearly Rs 1,20,000
crore on a daily average basis during 2009-10.
COMMISSIONS
Liberhan Commission on Babri Masjid demolition

It was on December 16, 1992 that M.S. Liberhan, then a judge of Punjab and
Haryana High Court, was asked to probe the conspiracy leading to the demolition
of Babri Masjid—an event that took communal polarisation to a new scale, and
shaped the politics of the turbulent 1990s.

Seventeen years, 399 sittings, 100 witnesses, 48 extensions and Rs 9 crore later,
Justice Liberhan submitted his report to Prime Minister Manmohan Singh,
indicting the BJP and its leaders, including L.K. Advani and the Sangh Parivar for
conspiring to demolish the Mughal-era mosque at Ayodhya on December 6, 1992.

The indictment of other front-ranking Hindutva leaders is sharper, with former UP

Chief Minister Kalyan Singh, Uma Bharti, Murli Manohar Joshi, Ashok Singhal,
Vinay Katiyar and others all coming in for severe criticism for their individual
culpability. As for Congress, the criticism is limited to the “inaction” of former PM
P V Narasimha Rao.

DEFENCE
‘One rank, one pension’ for officers, too

Defence Minister A.K. Antony clarified in the Lok Sabha on July 12, 2009, that
"one rank, one pension" recommendation of the Cabinet Secretary-led panel had
been accepted by the government for jawans as well as officers.
The decision is now nearer to the goal of “one rank, one pension” demand of
nearly 1.5 million personnel, Mr Antony said during question hour. The total
financial implications on account of benefits to the personnel would be Rs 2,144
crore.

The committee has recommended inclusion of Classification Allowance for the

Personnel Below Officer Rank (PBOR) from January 1, 2006, and removal of
linkage of full pensions with 33 years from the same date. The committee also
recommended revision of pension of Lt Generals after carrying out a separate pay
scale for them, bringing parity between pension pre- and post-October 10, 1997,
for PBOR pensioners and further improving PBOR pensions based on award of
Group of Ministers in 2006.

With regard to the separate pay commission, the Minister said it had been
agreed, and as and when necessary it would be set up in the future. The
government has also accepted the committee's recommendations regarding
raising the pension amount for those disabled or injured in war.

PLANNING & ECONOMY

Union Budget, 2009

“Aam Aadmi is now the focus of all our programmes and schemes”, declared
Finance Minister Pranab Mukherjee while presenting the Union Budget for 2009-
10 in Parliament on June 6, 2009. He further added that the UPA government has
gone for a paradigm shift for making the development process more inclusive,
which involves creating entitlements backed by legal guarantee to provide basic
amenities and opportunities for livelihood to vulnerable sections.
For industry as a whole the Budget turned out to be a mixed bag. While there is
cause for celebration that the Fringe Benefit Tax has been abolished, there is
unhappiness over the Minimum Alternate Tax (MAT) on booked profits being
raised from 10 per cent to 15 per cent. As a first reaction to the disappointment
of investors in general, the stock market tanked, with the BSE benchmark
suffering the biggest fall on any Budget day, and in the year too, by plunging over
869 points.

Highlights

 IT exemption limit raised; Rs 15,000 for senior citizens (65 yrs & above),
 Rs 10,000 for general tax payers and women.
 10% surcharge on personal income tax scrapped.
 Fringe Benefit Tax, Commodities Transaction Tax abolished.
 Corporate Tax unchanged; Minimum Alternate Tax hiked to 15%.
 Legal services brought under Service Tax net.
 Defence gets Rs 1,41,703 cr, up 34%.
 Cosmetic & plastic surgery become taxable services.
 Rs 3,472 cr for Commonwealth Games.
 Stimulus for print media for another six months.
 Allocation for NREGA up 144%.
 Banks, insurance firms to remain in public sector.
 Unique ID card to citizens in 12-18 months.
 IT returns to be made simpler.
 Allocation for JNNURM up by 87% to Rs 12,887 crore
 Allocation for APDRP surged by 160% to Rs 2,080 crore
 Allocation for NHAI has been raised by 23%
 Allocation for Brihanmumbai Storm water Drainage Project raised to Rs 500
crore from Rs 200 crore earlier
 Budgetary allocation for higher education sector increased to Rs 9,600
crore.
 Divestment target for year set at Rs 1,120 crore.
 100% tax exemption to electoral trusts.
 Collegium of commissioners to be setup to look into the cross-border tax
issues.
 Subsidized 7% interest schemes for crop loans to continue and incentive for
regular payers who will get loan at 6% interest.
 Major tax-breaks for agro-processing industry.
 Uniform non-promoter public share holding for all listed companies.
 Sharp 13% increase in spending to continue to provide stimulus to
economy.
 Fiscal Deficit 6.8% of GDP. Half of it to be met through market borrowings,
the rest by printing notes.
 Total subsidy bill for 2009-10 is Rs 1,11,276 crore.
 Tax burden on economy comes down to 10.9% of GDP, from 11.6% of GDP.
 Major tax holiday for future oil and gas producers.
  Tax exemptions to IT sector and EOUs extended by one more year.
 Simple deemed income scheme for small and micro enterprises with less
than Rs 40 lakh turnover per annum. They can opt to pay income tax on a
fixed 8% of their revenues and in turn be exempted from maintaining their
books.
 New hand-loom clusters to be set up in West Bengal, Tamil Nadu and
Rajasthan.
 Transport of goods by Rail to attract Service tax.
 Detailed Budget report is covered in Cover Story section.

Railway Budget, 2009

Mamata Banerjee spent the first couple of minutes of her first Budget speech
vehemently arguing that railway projects should be judged on social rather than
economic viability. For the next hour and a bit she showed that she values
political viability more than either. Railway ministers have traditionally lost no
opportunity to do their constituencies and home States a favour. But Mamata’s
third rail budget—she presented two in the NDA’s tenure in 2000 and 2001—
comfortably surpassed all previous efforts at regional partisanship.

It’s not as if her budget was harsh on other—neither passenger fares nor freight
rates have been touched. Not only does her home State, West Bengal, have 181
of the 309 stations identified for conversion into “Adarsh stations”, there were
oodles of other goodies like a rail coach factory, a huge chunk of new trains and
proposed new lines, nursing and medical colleges, and a de-congestion plan for
the Kolkata metro.
Despite some brave talk from Mamata on how well the Railways were bearing up
under the strain imposed by the pay commission and the economic slowdown,
the numbers reveal the financial stress. The operating ratio—which tells you what
proportion of traffic receipts get used up in just keeping the railways running—is
up to 92.5% from 75.9% just two years ago, a clear sign that less and less is
available for investing in future assets.

It’s no surprise, therefore, that Mamata asked for and got Rs 15,000 crore as
support from the government’s coffers against the Rs 10,000 crore her
predecessor Lalu Prasad had estimated in the interim budget.

Beyond West Bengal, the budget proposed a revamp of the Tatkal scheme,
cutting the advance period to two days from five, while also reducing the
minimum mark-up to Rs 100 from Rs 150 and making it a percentage of the base
fare rather than a flat premium.

Highlights

 Tatkal revamped, advance period cut from 5 to 2 days, minimum premium

reduced from Rs 150 to Rs 100.
 57 new trains, 27 extended, 13 made more frequent, 53 new lines being
considered. In addition, 12 non-stop long distance ‘Duronto’ trains. And AC,
 seating long-distance Yuva trains for youth & low income passengers with
cheap tickets.
 Double-decker AC inter-city trains.
 Ladies only suburban trains for Delhi, Chennai and Kolkata.
 Rs 25 monthly ‘Izzat’ season ticket for distances up to 100km for poor.
 Student passes to be extended to madrasa students and to Kolkata Metro.
 50 “world class” stations to be developed with public-private partnership.
Also, 50 stations to have multi-functional complexes with shopping &
budget hotels.
 375 stations to be turned into ‘Adarsh stations’ with drinking water, toilet.
 On-board infotainment services forRajdhanis, Shatabdis important distance
trains.
 Budget support to railways increased from Rs 10,000 cr to Rs 15,000 cr.

The impact of various populist measures announced by Mamata Banerjee as well

as the economic slowdown on the finances of Indian Railways has forced it to
compromise on investments that it will make during the year for future growth
and efficiency. It has pruned the appropriation to the depreciation reserve fund
by Rs 1,675 crore to Rs 5,325 crore in 2009-10, as against Rs 7,000 crore in 2008-
09. The fund is used for replacing aging assets. Theappropriation to capital
fund, which boosts the reserves of the corporation, has also been cut by a
whopping Rs 4,322 crore to Rs 642 crore in the current financial year, from Rs
4,965 crore in 2008-09.

However, the corporation decided to increase thedividend to the central

government by Rs 768 crore to Rs 5,479 crore, despite a dip of over Rs 3,000
crore in cash surplus on account of a higher wage bill following implementation of
the Sixth Pay Commission award.
The cash surplus of the Railways during the current fiscal is estimated to dip to Rs
14,201 crore, from Rs 17,400 crore in 2008-09. The investible surplus of the
corporation is down by 36% to Rs 8,631 crore in 2009-10, from Rs 13,532 crore in
the previous year.

Travel with ‘Izzat’: The scheme aims to provide an opportunity to the poorest of
the poor to travel with dignity. Under the scheme, a uniformly priced monthly
season ticket of Rs 25 would be available free of all surcharges for travel up to 100
km for members of the un-organised sector with monthly income not exceeding
Rs 1500.

‘Duronto’ to beat Rajdhani: For the first time in the history, non-stop train service
is being introduced in India. The non-stop train service 'Duronto' will have AC and
non-AC sleepers and will run between select cities throughout the country. The 12
new non-stop fast trains announced by Mamata will take less time than
even RajdhaniExpress to complete their journey.

Ladies special: Mamata proposed to run 'Only Ladies' EMU trains in Delhi,
Chennai and Kolkata on the lines of those in Mumbai during office hours in
suburban services. Women RPF personnel would be deployed for security of
women passengers in trains.
List of new trains
1. Vishakhapatnam-Secunderabad-Mumbai Superfast (bi-weekly).
2. Sriganga Nagar-Delhi-Nanded Superfast (weekly)
3. New Jalpaiguri-Sealdah Superfast (tri-weekly)
4. Bangalore-Hubli-Solapur Superfast (tri-weekly)
5. Howrah-Bangalore Superfast (weekly)
6. Pune-Daund-Solapur Superfast (daily)
7. Ranchi-Howrah (3 days via Ghatshila-Kharagpur and 3 days via Asansol);
intercity (6 days a week)
8. Kamakhya-Puri Express (weekly)
9. Jabalpur-Ambikapur Express (tri-weekly)
10. Gandhidham-Howrah Superfast (weekly)
11. Delhi-Sadulpur Express (tri-weekly)
12. Ajmer-Bhopal Express (by integration of 9655/56 Ajmer-Ratlam and
9303/04 Ratlam- Bhopal express trains) (daily)
13. Bilaspur-Tirunelveli Jn. (Thiruvananthapuram) Superfast (weekly)
14. Mumbai-Karwar Superfast (tri-weekly)
15. Durg-Jaipur Express (weekly)
16. Dibrugarh Town-Chandigarh Express (weekly)
17. Delhi-Farakka Express (bi-weekly)
18. Hazrat Nizmmudin-Bangalore Rajdhani Express (tri-weekly), via
Kacheguda
19. New Jalpaiguri-Delhi Express (bi-weekly), via Barauni
20. Mumbai-Varanasi Superfast (daily)
21. Mysore-Yesvantpur Express (daily)
22. Koraput-Rourkela Express (daily) via Rayagada
23. Agra-Ajmer Intercity Superfast (daily)
24. Mumbai-Jodhpur-Bikaner Superfast (bi-weekly)
25. Agra-Lucknow Junction Intercity (daily)
26. Hapa-Tirunelveli Jn Superfast (bi-weekly), via Thiruvananthapuram
27. Gwalior-Bhopal Intercity Express (5 days a week), via Guna
28. Kanyakumari-Rameshwaram Express (tri-weekly), via Madurai
29. Howrah-Haridwar Superfast (5 days a week)
30. Varanasi-Jammu Tawi Superfast (daily)
31. Gorakhpur-Mumbai Superfast (daily)
32. New Delh-Guwahati Rajdhani Express (weekly), via Muzaffarpur
33. Veraval-Mumbai-link service
34. Ranchi-Patna Jan Shatabdi Express (daily)
35. Jhansi-Chhindwara Express (bi-weekly) via Bina-Bhopal
36. Mumbai-Jodhpur Express (weekly)
37. Jamalpur-Gaya Passenger (daily)
38. Jhajha-Patna MEMU (daily)
39. Kanpur-New Delhi Shatabdi Express (6 days a week)
40. Bhopal-Lucknow-Pratapgarh Superfast (weekly)
41. Lucknow-Rae Bareli-Bangalore Superfast (weekly)
42. Shimoga-Bangalore Intercity Express (daily)
43. Madurai-Chennai Express (bi-weekly)
44. Guwahati-New Cooch Behar Express Intercity (daily)
45. Balurghat-New Jalpaiguri Express (daily), via Kishanganj
46. Alipurduar-New Delhi Jalpaiguri Express Intercity (daily), via Siliguri
 47. Dharmanagar-Agartala Fast Passenger (daily)
48. Rewari-Phulera Passenger (daily), via Ringus
49. Shoranur-Nilambur Road Passenger (daily)
50. Coimbator-Shoranur Passenger (daily)
51. Mathura-Kasganj Passenger (daily)
52. Farakka-Katwa-Azimganj-Nawadwip Dham Express (daily)
53. Bangalore-Kochuveli Superfast (weekly)
54. Kolkata-Rampurhat Express (daily)
55. New Jalpaiguri-Digha Express (weekly)
56. Purulia-Howrah Express (bi-weekly)
57. Kolkata-Bikaner Express (weekly), via Nagore

India’s population may touch 2 billion by 2101

India’s future population could be much more than what is currently estimated.
The latest demographic projections by the Population Foundation of India (PFI)
and the Population Reference Bureau (PRB), USA, predict that India may have a
population of two billion by 2101, posing huge challenges in terms of distress
migration, pressures of the numbers on land, employment and environment,
prolonged poverty and changes in the demographic balance.

The study makes two more alarming conclusions: the population of 60 plus would
exceed that of those aged between 0 and 14 years, leading to substantial future
ageing in India by 2051. Further, Uttar Pradesh, Bihar, Madhya Pradesh and
Rajasthan would account for almost half of the country’s population by 2101.
These four States, with their high fertility rate, currently account for 40 per cent
of the country’s numbers, and are characterised by low literacy levels and low
health indicators such as high infant and maternal mortality.

There is, however, a difference between population projections of India by the

Registrar General of India (RGI) and those by the PFI/PRB. Contrary to the RGI’s
projection of 1,399 million population of India by 2026, the PFI/PRB projections
indicate 1,464 million by the said year. The new demographic study puts the
country’s population at 1825 million in 2051, reaching up to 2181 (crossing the
two billion mark) by 2101.

These differences stem mainly from the assumed total fertility rates (TFRs) in the
country’s four most populous States—UP, Bihar, MP and Rajasthan. Whereas the
PFI study concludes that TFR of 2.1 will be achieved in UP between 2051-56; Bihar
(2061-66); MP (2041-46) and in Rajasthan between 2051-56, the RGI assumes
these States would achieve the TFR targets much earlier.

As per the PFI, India, with the final TFR of 1.85, will achieve two billion population
by 2101; growth will peak in 2081-2086, after which the population decline will
start. The population of Kerala and Tamil Nadu would start declining in 2041-
2051; that of Andhra Pradesh and West Bengal would do so around 2061.

The study adds: “The priority for India should be to contain the unacceptably high
numbers of maternal and infant deaths, improve quality health services for
institutional deliveries; meet the unmet needs of family planning services and
focus on adolescents and youth (10 to 34 years) to make them productive
through gender-sensitive education.”

Current account swings to a surplus in March

India’s current account may have swelled to a surplus in the March quarter, but
that couldn’t dam a wider deficit for the 2008-09 fiscal as imports rose and
exports fell sharply due to the global slump.

Latest RBI data shows India’s current account, which captures trade flows,
boasting of a surplus of $4.75 billion during the quarter Jan-March 2009, as
against a deficit of $1.5 billion in the year-ago period, meaning the country has
received more dollars from selling goods and services to foreign countries than it
paid to buy them in this period. But the current account deficit for 2008-09
widened to $29.82 billion, or 2.6% of the gross domestic product (GDP), against
the previous year’s $17.03 billion, or 1.5% of GDP.

The capital account, meanwhile, ended in a modest surplus of $9 billion

compared to $108 billion in the previous year. Remittances also grew, but not at
the same pace as in the previous year. India’s balance of payment surplus—the
sum of current and capital accounts—saw a sharp drop to $300 million against
$24.99 billion in the previous year driven by dollar outflows due to FII selling in
the stock market and repayment of short-term foreign currency loans by
domestic corporates.
EDUCATION
Three-tier educational tribunal in the offing

The long awaited Educational Tribunal Bill, recommended by the Supreme Court
in the TMA Pai judgement and even by the Law Commission, envisages a three-
tier structure to deal with disputes between students and institutions, teachers
and institutions as well as disputes related to affiliation, unfair means adopted by
students in examination and by institutions.

The Bill proposes a National Educational Tribunal (NET) at the top. It will have the
power to settle any dispute between a higher educational institution and any
regulatory body except in matters of recognition. It will also adjudicate any
dispute between any two or more statutory regulatory bodies. NET will also
adjudicate any dispute related to matters of affiliation between a higher
educational institution and the affiliating university, where such a university is a
Central Educational Institution.

At the state level will be the State Educational Tribunal (SET). It will have original
jurisdiction to settle any dispute related to matters of affiliation between a higher
educational institution and the affiliating university. SET will also exercise original
jurisdiction to adjudicate a dispute related to any Central Educational Institution
in the state. It can call for records and pass orders in any matter either pending or
already decided by any District Educational Tribunal if it feels DET has
overstepped its jurisdiction.
SET will also adjudicate any matter referred it by DET where there is a difference
of opinion between the chairperson and member of DET. Either on a complaint or
suo motu, SET at any stage can transfer any case pending before DET to another
DET within the State. SET will exercise appellate jurisdiction over any matter
decided by any DET in the State.

At the lowest level will be DET. It will have the power to deal with grievances
expressed by a teacher or any other employee of a higher educational institution
against the management or governing body, provided the teacher or employee
has availed of all remedies available in the service rules.

Civil courts and High Courts will not entertain matters that concern the
educational tribunals. Chairperson of all tribunals would be judicial officers: a
district judge for DET, High Court judge for SET and Supreme Court judge for NET.
Judges at all levels can be either retired or serving.

FOREIGN RELATIONS
India, Japan to work together on climate change

Cementing their strategic ties, India and Japan, on July 2, 2009, agreed to
cooperate on pressing global issues of climate change, disarmament and non-
proliferation while moving ahead in negotiations to stitch a comprehensive
economic partnership pact.

External Affairs Minister S.M. Krishna, during his visit to Japan, held wide-ranging
discussions with the Japanese side on a gamut of bilateral relations during the
third strategic dialogue he co-chaired with his counterpart Hirofumi Nakasone.

On the issue of climate change, which they identified as an "important global

challenge," India and Japan hoped that all countries would participate
constructively and work towards an "ambitious" outcome at a crucial meeting on
a pact to replace the Kyoto protocol in Copenhagen later this year. During his
talks with Krishna, Nakasone asked India to play a leadership role "even more
positively and in a broader perspective" at the UN-sponsored 'COP 15' meeting on
climate change in December to discuss a new agreement to replace the Kyoto
Protocol.

Japan is keen to get India's cooperation on persuading industrialised and

emerging countries to iron out differences over how to fight global warming
ahead of the Copenhagen talks. The new pact, a successor to the 1997 Kyoto
protocol, is controversial because key polluters like the USA and Europe want
emerging economies to also help cut global gas emissions.

Prime Minister’s visit to France

The progress on the nuclear front, fight against terrorism, economic ties and
science and technology cooperation were high on agenda during Manmohan
Singh’s visit to Paris on July 13-14, 2009. An agreement on up-gradation of 51
French-made Mirage fighters was also discussed. The IAF had inducted Mirages
into its fleet in the mid-1980s and the upgrade is intended to increase its service
life by another 25 years. The visit also helped in putting the nuclear agreement
with France on fast track.

Prime Minister Singh was the first foreign dignitary to be the Guest of Honour at
the Bastille Day parade on July 14. German President Horst Koehler and
Cambodia’s Prime Minister Hun Sen also attended the parade. Several top foreign
dignitaries have attended the French National Day celebrations in the past but the
Indian Prime Minister was the first to be accorded the honour of being the Chief
Guest.

Nearly 400 personnel from the Indian armed forces also participated in the
parade in Paris alongside the men from the French Army, marking the
commemoration of Indian soldiers’ participation on French side and in French
territory during the two World Wars.

At the parade, the bonhomie between Mr Sarkozy and Mr Singh showed despite
the contrast between their personalities: the flamboyant Sarkozy dressed in dark
suit with his stunning wife, model-cum-singer-turned-first lady Carla Bruni in tow,
alongside the genial and soft-spoken Singh in his trade-mark sky blue turban. The
body language that the two leaders shared was an indication of the importance
that they attach to the growing economic and international engagement between
New Delhi and Paris that has seen their heads of governments routinely visiting
each other.
France, an enthusiastic backer of India at 2008’s Nuclear Suppliers Group (NSG)
and International Atomic Energy Association (IAEA) meetings that ended its
isolation from the civil nuclear mainstream, is one of the few countries besides
the US and Russia with whom India has signed a nuclear cooperation agreement.
Both countries continued to hold joint naval exercises even in the aftermath of
the nuclear test and their level of comfort came to the fore when France was
selected as the Indian Air Force’s first partner for joint fighter level exercises in
2003. Trade, cultural and people-to-people contacts are areas both sides are
working on and French companies have a long presence in India.

India de-links terror from composite dialogue

After three hours of hard-nosed negotiations on July 16, 2009, India and Pakistan
came out with a joint statement in which New Delhi appears to have bent
somewhat on its earlier steadfast position of keeping the focus on terror. The
statement, issued after the meeting between Prime Minister Manmohan Singh
and his Pakistani counterpart Yousuf Raza Gilani, on the sidelines of the NAM
Summit, recognised that terrorism was the “main threat to both countries’’ but
delinked the menace from the resumption of the composite dialogue process.

In fact, India even agreed with the Pakistani formulation that it is also a victim of
terror. Both reaffirmed their resolve to cooperate on this issue and share “real-
time, credible and actionable information on any future terror attacks”.
On its part, Pakistan conceded some ground to the Indian negotiating team by
dropping any reference to Kashmir though there was an implicit mention to this
issue in the statement which said, “Prime Minister Singh said that India is ready to
discuss all issues with Pakistan, including all outstanding ones.”

Later addressing a press conference, Manmohan Singh sought to downplay the

reference to delinking terror from the dialogue process, saying New Delhi’s
position on the issue remained unchanged. “Pakistan wants the dialogue to begin.
We said it can’t commence unless action is taken against those who
masterminded the Mumbai terror attack,’’ he underlined.

Asserting that the joint statement could not be termed as surrender by India, the
Mr Singh said India wanted an assurance that acts like Mumbai would not recur.
He emphasised that the India-Pakistan normalisation process would fail to move
ahead if no action was taken by Pakistan to check terrorism emanating from its
soil.

However, he reiterated that India could choose its friends but not neighbours.
“Dialogue is the only way forward but the composite dialogue has its history…we
need to think over it.’’ There was no decision on the nature of dialogue and the
issue would be sorted out by the foreign secretaries.

Pakistan scored over India by muscling in a mention to the troubled Balochistan in

the statement. “Prime Minister Gilani mentioned that Pakistan has some
information on threats in Balochistan and other areas,” the statement said.
Islamabad has persistently accused India of fomenting trouble in its largest
province in response to New Delhi’s charge that the Pakistani territory was being
used for launching terror attacks against India.

Many in the Indian diplomatic establishment were sceptical about the language of
the joint statement, which clearly gave an impression that India had diluted its
tough stand on the issue of terrorism, but Mr Singh pushed through his agenda in
keeping with his stand that good neighbourly relation between India and Pakistan
presented a win-win situation for both of them.

Amid Pakistan’s attempt to cash in on the reference to Balochistan in the India-

Pakistan joint statement, Afghanistan dismissed Islamabad’s charge that India was
backing insurgency in Pakistan’s restive province. Visiting Afghanistan Foreign
Minister Rangin Dadfar Spanta pointed out that this was not a new claim by
Pakistan. India had never used the Afghanistan territory against Pakistan.
Islamabad’s claim of India’s involvement in Balochistan was absolutely false, he
said.

Pak dossier owns up to two more 26/11 attackers

Islamabad has acknowledged that besides Ajmal Kasab, two more of the 10
terrorists who attacked Mumbai on 26/11—Imran Babar and Abdur Rahman
Chota—were Pakistani nationals.

The acknowledgment is part of the 26/11 dossier Pakistan handed over to India in
July 2009, which says that the nationality of Babar and Abdur Rahman were
determined on the basis of DNA samples.

This marked the first time Pakistan accepted that the attackers of Mumbai, Kasab
included, were its citizens.

Initially, Pakistan had contested Kasab’s disclosure about his being a citizen of
village Faridkot in Okara district. Though investigation by a television channel and,
later, statements of Kasab’s kin forced them to accept the fact, it is the first time
the acknowledgement has been made in a document handed over to India.

Pak dossier names 10 LeT foot soldiers, including Amjid Khan and Muhammad
Usman, whose involvement in the 26/11 attacks is ‘established beyond
reasonable doubt’. It says evidence ‘connects’ Zaki-ur-Rehman Lakhvi, al-Qama
and Zarar Shah with the attack. India sees the three as the men who planned the
terror strike.

Imran Babar, one of the two terrorists that Islamabad acknowledged as a

Pakistani citizen, called up a TV channel after landing in Mumbai, posing as a
member of Deccan Mujahideen—a concoction meant to mask the involvement of
Pakistani terrorists belonging to Lashkare-Taiba. Babar had grabbed the mobile
phone of Holtzberg Gavriel, a resident of Nariman House. Gavriel was among
those who were killed by Babar and his accomplice at Nariman House.
Abdur Rahman Chota had headed for Oberoi Trident Hotel where he snatched the
phone of Rita Sanjay Agarwal of Malabar Hill, Mumbai. Rita was later killed by the
terrorists. Besides matching the DNA samples, the identities of Kasab, Babar and
Abdur Rahman was established also with the help of records of families and
schools, statements of family members and voter list. The finding about the
nationalities of the three terrorists also validates the statement given by Kasab,
the sole attacker to have been nabbed by Mumbai police on the fateful night.

Visit of Secretary of US State Hillary

On her two-day visit to New Delhi, in July 20, 2009, US Secretary of State Hillary
Clinton drove straight from the airport to ITC Green, an energy-efficient building
in Gurgaon, to make a case that India could grow without hurting the
environment. Besides environment issues she discussed defence sales, civil
nuclear issues and NPT during her various meetings with the Indian
establishment. But, she made climate change her top priority.
On climate change, India firmly reiterated its position that it was not in a position
to take on legally binding targets on reducing emissions. This statement came
even as US secretary of state Hillary Clinton accepted that developed countries
had made “mistakes”, but that all countries need to take steps to reduce
emissions. Ms Clinton was speaking at the ITC Green Building in Gurgaon on the
first day of the Delhi leg of her India visit.

India stressed that its position on the on-going climate change agreement
negotiations is “clear, credible and consistent”. “We are fully alive to our global
responsibilities as well. We have done detailed modelling, the results of which are
being released very soon. The results are unambiguous. Even with 8-9% GDP
growth every year for the next decade or two, our per capita emissions will be
well below that of developed country averages. There is simply no case for the
pressure that we, who have among the lowest emissions per capita, face to
actually reduce emissions. As if this pressure was not enough, we also face the
threat of carbon tariffs on our exports to countries such as yours,” said Jairam
Ramesh, Union Minister for Environment.

Reaching out, Ms Clinton reassured that “the US does not and will not do
anything that will limit India’s economic progress. The challenge is to create a
global framework that recognises the different needs and responsibilities of
developed and developing countries alike.” Mr Ramesh reiterated that “India’s
position is that we are simply not in a position to take on legally binding emissions
reductions targets”.

India and the US have agreed on “concrete partnerships” in the area of energy
efficiency. “I want to say that both sides have agreed on the need of partnerships,
concrete partnerships, on projects in various fields like energy efficiency, solar
energy, biomass, energy-efficient buildings of the type that you are seeing here
today. We have made a good beginning. We have taken a small step today. We
will continue our engagements in multilateral forums. But we will also have
bilateral engagements,” Mr Ramesh said.
Ahead of the Copenhagen conference later in 2009, India and the US agreed upon
the need for a "fair" agreement on climate change and discussed ways of
collaborating in the fields of environmental planning, regulation, management
and forestry.

Ms Hillary assured that the US would not do anything to limit India's economic
growth and was aware of the concerns of the developing countries that needed to
eradicate poverty. She, however, said poverty eradication was possible with
sustainable development.

India listed three areas of cooperation with the US in the area of climate change—
research through an Indo-US Foundation for Climate Change; collaboration in
environment planning, regulation and management, and building institutional
capacity for continuing research on the subject.

During her visit to Mumbai, Hillary Clinton paid homage to the victims who lost
their lives in the terrorist attacks. In a symbolic gesture she stayed at Taj Hotel
Mumbai. Among those who met Clinton included 13 staff members of the Taj and
Oberoi hotels who were injured in the attack, including Taj General Manager
Karambir Kang who lost his wife and children in the terror strike.

She sought action against the ‘syndicate of terrorism’ in Pakistan and the
perpetrators of the Mumbai terror attacks, but defended Islamabad’s
commitment to countering terror. Ms Clinton expressed faith in the Pakistani
establishment saying that there has been an ‘evolving commitment’ on
Islamabad’s part to take action against terrorism and recognition within the
country that terrorists are an internal threat.

“Over the last six months, in the course of working with the government of
Pakistan, we believe there is a commitment to fighting terrorism that permeates
the entire government. We are watching it and hope they will make progress
against the syndicate of terrorism, including the Al Qaeda, Taliban and the other
groups,” she said.

In Delhi, Ms Clinton, apart from calling on Prime Minister Manmohan Singh, met
UPA Chairperson Sonia Gandhi and Leader of the Opposition L.K. Advani. She held
bilateral talks with External Affairs Minister S.M. Krishna.

During her visit the two countries signed several major accords, including an end-
use monitoring agreement to bolster high-end arms sales and another on space
launches.

She assured India that the Obama administration will honour the Indo-US nuclear
deal, in letter and spirit. Dispelling all misgivings, she promised not to block
transfer of nuclear technology to India, nor deny enrichment and reprocessing
technology (ENR) to India. She also announced that Mr Manmohan Singh would
be the first State guest at the Obama White House on November 24, 2009.

India and USA identified two nuclear sites which will kick off US nuclear business
in India, but due to the fact that the Indian government would have to announce
it in Parliament first, Krishna could not take credit for the announcement. The
sites are in Andhra Pradesh and Gujarat. But for those sites to draw in US
businesses — GE-Hitachi and Toshiba-Westinghouse are looking at jobs,
investment, big business — India will first have to sign the IAEA’s liability
convention that will enable US companies to do nuclear business here. Clinton
gently nudged the Indian government on this saying the next step would be for
India to sign the liability act on nuclear damage.

India makes fresh bid for UNSC seat

India launched a renewed campaign for a seat in the UN Security Council using
the forum of the G-8 Summit. In an unusually feisty article written for the
compendium of the G-8, Prime Minister Manmohan Singh said, “The Security
Council has not changed at all and its present structure poses serious problems of
legitimacy. The system of two-tiered membership, which gives a veto to the five
permanent members—the nations that emerged victorious after the Second
World War—is clearly anachronistic.”

In his article, Mr Manmohan Singh made a strong case for reforming all
international institutions, from the Security Council to institutions of global and
financial governance. “The problems faced by the institutions of governance
charged with handling the financial system are also relevant for other
international institutions dealing with political and security issues, trade, climate
change, etc. They need to update structures and upgrade work methods; reform
decision-making and ensure effective delivery,” he said.
JAMMU & KASHMIR
Governor gives clean chit to Omar, tells him to continue

J&K Governor N.N. Vohra has conveyed to Chief Minister Omar Abdullah that,
based on the information supplied to him by the Union Home Ministry, there was
no basis for him to resign. Omar had, on July 28, 2009, submitted his resignation
to the Governor following the PDP allegations in the Assembly of his involvement
in the infamous sex scandal of 2006.

The Chief Minister in his meeting with the Governor had requested the Governor
to inquire, on a time-bound basis, into the allegations made against his moral
character. Omar had requested him to accept his resignation immediately in case
the Governor was satisfied that there was any basis therein.

The rejection of the Chief Minister’s resignation set at rest speculations and
uncertainty that had prevailed in the political circles. Omar had himself made it
clear that unless any final decision was taken there was no lowering of guard on
the functioning of the government.

Srinagar sex scandal had made headlines in 2006. CBI filed charge sheet against
36 people in the case, but the investigations threw up a huge list of people who
needed to be questioned. The case, being heard by a division bench, passed its
verdict in October 2007 after CBI “concluded” investigations and submitted its
4,000-page findings. The two judges—Justices B A Kirmani and Hakeem Imtiaz
Hussain—were unanimous in terming investigation lax and deficient and asked
CBI why certain influential persons, who had been named and identified by
witnesses, were left out.

LAW POINT
Delhi HC says homosexuality not a crime

On July 2, 2009, India took a giant, albeit belated, step towards globalization
when the Delhi High Court delivered a historic judgement to amend a 149-year-
old colonial-era law—Section 377 of the IPC—and decriminalize private
consensual sex between adults of the same sex. It is the biggest victory yet for gay
rights and a major milestone in the country’s social evolution. India has become
the 127th country to take the guilt out of homosexuality.

In a judgement that has aroused strong reactions from religious and political
groups, the court declared that Section 377 IPC—where it ‘‘criminalized
consensual sexual acts of adults in private’’—violated fundamental rights to
personal liberty (Article 21 of the Constitution), equality (Article 14) and
prohibition of discrimination (Article 15).

A bench comprising Chief Justice A.P. Shah and Justice S. Muralidhar clarified that
the provisions of Section 377, enacted in 1860 to deal with an unspecified range
of ‘‘unnatural offences’’, would hereafter be restricted to non-consensual penile
‘‘non-vaginal sex’’ (rape by a homosexual) and ‘‘penile non-vaginal sex involving
minors’’ (paedophilia).
Upholding the petition filed by Naz Foundation, the court ruled: ‘‘Indian
constitutional law does not permit the statutory criminal law to be held captive by
the popular misconceptions of who the LGBTs (lesbians, gays, bisexuals and trans-
genders) are. It cannot be forgotten that discrimination is antithesis of equality
and that it is the recognition of equality which will foster the dignity of every
individual.’’

LEGISLATION
Education Bill

Seven years after Parliament approved an amendment to the Constitution making

education for children between the age of six and 14 a fundamental right, the
apex legislative body has passed the Right of Children to Free and Compulsory
Education Bill, 2009.

Though an initial draft of the legislation had been prepared by the NDA
government, progress was slow with early elections. With the BJP-led alliance
voted out, the task of honouring the commitment was left to the UPA
government. A draft law was prepared by a committee headed by the current
Human Resource Development Minister Kapil Sibal.

Once the Right of Children to Free and Compulsory Education Bill becomes an Act,
the 86th Amendment to the Constitution will be notified. As of now, free and
compulsory education is part of the Directive Principles of State Policy.
Both the Centre and States will be responsible for the finances. The Centre will
prepare the capital and recurring expenditure and provide it as grants-in-aid to
each State from time to time. The share between the Centre and States will be
decided later.

The cost to the exchequer will be nearly Rs 12,000 crore every year. Even private,
unaided schools will get assistance, as 25% of their seats will have to be reserved
for poor children in the neighbourhood. However, the Bill is clear that schools
which got land at a concessional rate and were anyway obliged to give reservation
to 25% poor children in the neighbourhood will not be compensated.
Compensation will be based on per-child expenditure by government on
education. Currently, per-child cost borne by government is about Rs 3,000 per
annum.

The legislation has a host of features that stress not only on reaching out to every
child in the 6-14 age group, but also on quality and accountability of the State and
education system. To ensure that the law gets effectively implemented, the Bill
has provisions that prohibits teachers from undertaking private tuition and not
letting them being used for non-educational purposes. To ensure that parents
have equal stake in the system, the Bill provides for school management
committees in all government and aided schools. Women have been given 50%
reservation in the school committees. Each committee will monitor and oversee
the working of the school, manage its assets and ensure quality.
Every State government would have to compulsorily define and set up
neighbourhood schools to educate every child aged six to 14 years. For this, the
States will receive financial assistance from the Centre. The Centre has left it to
States to define “disadvantaged groups”, mandating the inclusion of disabled
children in this category.

The law puts the onus on States to notify its historic requirements—no child can
be expelled from school or be put through any exam, not even class V and VIII
boards; no child can be denied admission to any school for lack of birth or transfer
certificate; no capitation fee can be charged. Also, the States will have to ensure
no non-teaching work is given to teachers and quality teachers are recruited;
untrained teachers would have to upgrade themselves in five years.

For the first time, quality of schools has been mandated under law, with the
government listing minimum infrastructure requirements on the part of schools.
It has asked the States to identify schools that don’t conform, asking them to do
so in three years or face de-recognition.

There is also a provision that teacher vacancy should never exceed more than
10% of the total strength. To monitor implementation of the law, the Bill
proposes a National Advisory Council at the Centre and State advisory council in
each State capital. In case of complaints of non-compliance, the initial complaint
would go to local authority and should be resolved within 90 days.
Nuclear Bill on civil liability

The proposed bill on nuclear civil liability—very high on the US priority list with
India—to cover accidents in nuclear installations will limit monetary
accountability of the operator to Rs 300 crore, while damages in excess will be
borne by the Indian government.

The limited liability clause could bring cheer to multinationals who are looking at
billions of dollars worth of business in India. Fixing the liability on operators is
important to US firms who are looking to supply nuclear reactors at Andhra
Pradesh and Gujarat as otherwise they cannot avail of insurance. With operators,
not suppliers, responsible for liability commitments, US firms can go ahead with
their business contracts.

The proposed Bill, besides limiting the liability of the operator, gives flexibility to
central government to decrease compensation amount on the operator. But in
what could be of significance, the Bill states that in each case where the
government decides to decrease the liability, it “shall not be less than Rs 100
crore”. The amount of liability shall not include any interest or cost of
proceedings.

The bill debars civil courts from entertaining any suit or proceedings in respect of
any matter which the claims commissioner is empowered to adjudicate.
The setting up of a six-member nuclear damage commission has been proposed
to look into the claims. The chairperson and members of the commission shall be
appointed by the central government on the recommendation of a three-member
committee headed by the cabinet secretary and having secretaries from the
department of atomic energy and the ministry of law as the other two members.

The chairperson of the commission will be a person who will be qualified to be a

judge of a High Court.

POLITICAL
No dilution in foreign policy, says Manmohan

Prime Minister Manmohan Singh, July 17, 2009, had difficulties in selling the idea
of an engagement with Pakistan where the action on terror was delinked from the
composite dialogue process. He claimed that there was no dilution on India’s
stand on cross border terrorism and that ‘meaningful dialogue’ with Pakistan
would depend on steps taken by Islamabad to end cross border terrorism.

BJP leader Arun Jaitley, during his clarification, had pointed out that India’s
consistent position on cross-border terrorism and use of terms like State-
sponsored terrorism were at variance with what is stated in the joint statement
on delinking terror issues from the composite dialogue process. He further
pointed out that India’s national commitment is going to be the joint statement
and not other statements.
The Indo-Pak joint statement said that “action on terrorism should not be linked
to the composite dialogue process and these should not be bracketed.”’ This is
followed by a line that says India is “ready to discuss all issues with Pakistan,
including all outstanding issues.”

The reference to Baluchistan in the joint statement also invited criticism as

Pakistan for long has accused India of fomenting trouble. There is
acknowledgment that New Delhi’s concession to Pakistan will enable it to claim
parity with India as a terror victim.

Mr Singh in a statement in both Houses of Parliament maintained that a

“meaningful dialogue” would depend on Islamabad fulfilling its pledge on
terrorism “in letter and spirit”. “It has been and remains our consistent position
that the starting point of any meaningful dialogue with Pakistan is a fulfillment of
their commitment, in letter and spirit, not to allow their territory to be used in
any manner for terrorist activities against India,’’ he said.

The Prime Minister further said that India would take the call on broadening the
dialogue with Pakistan. “Whether, when and in what form we broaden the
dialogue with Pakistan will depend on future developments,’’ he said, and added
that the foreign secretaries would meet often and report to the Foreign Ministers
who will meet on the sidelines of the United Nations General Assembly.

Mr Singh further maintained that he got an assurance from Mr Gilani on bringing

the perpetrators of the Mumbai terror attack to justice and that he had been told
that there is growing consensus within Pakistan against the terror infrastructure.

Invoking his predecessor Atal Behari Vajpayee, Prime Minister Manmohan Singh,
on July 29, 2009, silenced the critics of his recent foreign policy initiatives in the
Opposition, asserting that there was no dilution in India’s stand on terror while
strongly pitching for remaining engaged with Pakistan in the larger interest of
peace in South Asia.

Setting at rest fears that India had capitulated to Pakistan by agreeing to delink
terror from the composite dialogue process, the Mr Singh explained ‘’this is not
correct. The joint statement emphasised that action on terrorism cannot be
linked to dialogue. Pakistan knows very well that action on terror is an absolute
and compelling imperative that does not depend on the resumption of dialogue.’’

On the controversial reference to Balochistan in the joint statement, he said his

Pakistani counterpart Yousaf Raza Gilani raised the issue during their Sharm-el
Sheikh meeting. “I told him we are willing to discuss all these issue because we
know we are doing nothing wrong. I told PM Gilani that our conduct is an open
book.”

Underlining that dialogue was the best way to move forward, he asserted that
India was not diluting its resolve to defeat terrorism by talking to any country.
“Unless we talk directly talk to Pakistan, we will have to rely on third parties to do
so,” a route which has its own limitations.
In this context, he cited the example of Vajpayee, recalling how his predecessor
demonstrated political courage of visiting Lahore in 1999, which was followed by
the Kargil conflict, and the hijacking of an Indian Airlines plane to Kandahar. Still
Vajpayee invited then Pakistan Pervez Musharraf to Pakistan in July 2001 and
tried to make peace.

Noting that the global scenario was changing fast, he narrated how the US and
Iran had also come to the negotiating table after 30 years of hostilities. “Unless
we want to go to war with Pakistan, dialogue is the only way out,” he added.

SCANDALS
R.K. Anand is guilty: SC

Talking tough on the deteriorating professional standards among lawyers, the

Supreme Court upheld the punishment awarded to the noted criminal lawyer R.K.
Anand for influencing a key witness in the BMW hit-and-run case. The court asked
the Bar Council of India and the Bar Councils of the States to take remedial
measures for restoration of the professional standards among lawyers for proper
dispensation of criminal justice system in the country.

Dismissing the appeal of Anand, a bench comprising Justice B.N. Agrawal, Justice
G.S. Singhvi and Justice Aftab Alam said, “the sting recordings were rightly made
the basis of conviction and the irresistible conclusion is that the conviction of R.K.
Anand for contempt of court is proper legal and valid calling for no interference”.
The court sought within two months a reply from Anand as to why his
punishment should not be enhanced which may include a jail term and extending
of his period of prohibition from appearance in the Delhi High Court and its sub-
ordinate courts. “He does not show any remorse for his gross misdemeanour and
instead tries to take on the High Court by defying its authority,” the bench said
entertaining the plea of enhancement of Anand’s punishment in the case.

The bench, however, allowed the appeal of special public prosecutor I.U. Khan
who was convicted for criminal contempt for colluding with the defence in the
case. The court also set aside the fine slapped on Khan and asked the full court of
the Delhi High Court to consider the issue of stripping of Khan’s status of a senior
advocate.

The Delhi High Court, on August 21, 2008, had prohibited both Anand and Khan
by way of punishment, from appearing before it and its sub-ordinate courts for a
period of four months. It, however, left them free to carry on their other
professional work, such as consultations, advises, conferences, opinion etc. It had
also said the both Anand and Khan had forfeited their right to be designated as
senior advocates and recommended to the full court to divest them of the
honour.
TERRORISM; LAW & ORDER
ISI spreading terrorism in India, says US

A top US military strategist has affirmed that Pakistan has been fomenting
terrorism in India and Afghanistan, endorsing New Delhi’s and the Indian Army’s
long-held view at a time when the two neighbours are sparring over the issue.
The damning public US indictment of Pakistan’s use of terrorism came from US
Admiral Mike Mullen, who told the Arabic television network Al Jazeera, ahead of
his meeting with General Deepak Kapoor, that in the long run the ISI has to
change its strategic thrust, which has been to foment chaotic activity in its border
countries.

When the surprised anchor asked, ‘‘What do you mean when you say the ISI has
had a strategic thrust to foment chaos in bordering countries?’’ Mullen did not
mince words. ‘‘What I mean is that they have clearly focused on support of ...
historically, of militant organizations both east and west. I mean that’s been a
focus of theirs in Kashmir, historically, as well as in FATA. And I think ... that
fundamentally has to change.’’

Mullen’s observations are critical because Pakistan has lately taken to accusing
India of fomenting insurgency in Balochistan and even backing the Taliban to
offset its indictment in Kashmir, charges that have been scoffed at in both New
Delhi and Washington. The prevailing Pakistani narrative, encouraged by some of
its high officials, is that India and Afghanistan are in cahoots with Washington in
destabilizing Pakistan, including the use of Pakistan’s own proxy, Taliban, against
it.

Islamabad has also complained repeatedly to the US about the strong Indian
influence in Afghanistan where Pakistan is now largely despised, except in Taliban
strongholds. There is palpable agitation in Pakistan over closer military ties
between New Delhi and Washington, even though many in India itself are still
leery and distrustful about the US.

Kasab confesses, names Pak masters

Springing a surprise on the 65th day of 26/11 attack trial, lone surviving Pakistani
terrorist Mohammad Ajmal Kasab pleaded guilty before a special court on the
charges of executing the terror strikes in Mumbai along with his accomplices,that
claimed over 180 lives. He followed up his confession with a plea for an early
sentence.

22-year-old Kasab, who had earlier backed off from his police confession
admitting his role in the Mumbai mayhem stating that it had been made under
duress, confessed before the court mid-way through the hearing, admittedly
upon discovering that Islamabad had accepted his Pakistani nationality. He
confirmed to the judge that that he was not confessing under duress.

Kasab’s confession began right from his journey from Karachi on the Lashker-e-
Taiba-orchestrated terror mission and narrated the entire sequence of events
leading up to Mumbai carnage, including terror training of the attackers at
Pakistani camps, their boarding the rogue ship Al Husseini from Pakistani waters,
hijacking an Indian vessel midsea and then landing on the Mumbai coast in a boat
along with nine other terrorists. Importantly, he claimed that an Indian named
Abu Jindal had taught Hindi to the Mumbai attackers during their training in
Pakistan.

Kasab, in his confession, described in detail how the 10-member LeT attack team
split into smaller groups after landing in Mumbai, with he getting paired with
terrorist Abu Ismail, and the two went on to fire indiscriminately at the CST
station, before proceeding to Cama Hospital, killing ATS chief and Mumbai top
cops Vijay Salaskar and Ashok Kamte, and then driving away to Girgaum
Chowpatty.

Kasab’s sudden confession came as a complete surprise to the prosecution.

Special public prosecutor admitted he was “surprised” at the “unexpected”
confession, but added nevertheless that it had come has a big victory for the
prosecution. Even Judge Tahiliyani seemed to have been taken aback by Kasab’s
decision to plead guilty and called lawyers from both sides to figure out the
significance of the under-trial’s statement.

Pakistan, however, questioned the “quality” of Kasab’s confessions. “They

(confessions) are no evidences. These were provided by a person who is behind
the bars. We cannot crackdown on people based on his statements,” Pakistan’s
Defence Minister told a private TV channel. The statement has raised questions
about Pakistan’s sincerity.

Maoists plan to take battle to new fields

If the Centre has its action plan ready to deal with Maoists, the Red ultras have a
counter-plan in place which talks about expanding their “guerrilla war to new
areas” to “disperse the enemy force (security personnel) over a sufficiently wider
area”.

Taking note of what Home Ministry has planned to counter them, the politburo of
CPI (Maoist)—an umbrella organisation of naxal outfits in the country—in its
meeting on June 12, 2009 came out with a detailed plan, asking its armed wing,
People Liberation of Guerrilla Army (PLGA), to carry out “tactical counter-
offensives” keeping in mind strengths and weaknesses of government forces.

A copy of the naxals’ plan was seized by security agencies during operations in
Jharkhand, Chhattisgarh and Orissa. It explains how the ultras are fanning out to
different States to deviate police and paramilitary forces from Abhujmaad—an
area comprising nearly 4,000 sq km of dense forest in Chhattisgarh, considered to
be the Maoists’ safest base.

Though the politburo considered government forces to be “superior”, it noted

that that it would be difficult for the Centre to send enough forces required by
each state in near future as raising of central forces would take time. “Keeping
this in mind, we have to further aggravate the situation and create more
difficulties for the enemy (security) forces by expanding our guerrilla war to new
areas, on the one hand, and intensify the mass resistance in existing areas so as to
disperse the enemy forces over a sufficiently wider area,” the Maoists’ politburo
said. Realising that any mistake on their part would be utilised by government
forces to isolate them, the politburo has issued certain dos and don’ts for its
cadre.

Mumbai blasts case

A special court set up under the Prevention of Terrorism Act (POTA) has found
three persons guilty of carrying out two bomb blasts at Zaveri Bazaar and the
Gateway of India in Mumbai on August 25, 2003 and has sentenced them to
death.

Judge M.R. Puranik of the special court found the three—Hanif Sayyed, 46, his
wife Fahmeeda, 43, and Ashrat Ansari, 32—guilty. Three other persons had been
let off earlier by the court. One of the three, the daughter of the Sayyed couple
who was a minor at the time of the incident, was made an approver in the case.
This is said to be the first instance of a couple being found guilty under POTA. The
two have another daughter who was four years old at the time of the incident.

The blasts claimed the lives of 52 persons injured 184 others. According to the
prosecution, the trio was responsible for attempting to set off a series of bomb
blasts across Mumbai in retaliation for the 2002 post-Godhra riots in Gujarat.
They were part of an outfit called the Gujarat Revenge Force formed to carry out
the attacks.

Apart from the blasts at Gateway of India and the Zaveri Bazaar, the three had
allegedly planted explosives at the Santa Cruz Export Processing Zone in
December 2002 and in a BEST bus some weeks before the deadly blasts. While
the bomb at SEEPZ was defused, the blast in the bus claimed two lives.

Investigators probing the blasts had first picked up Ansari whose interrogation led
them to the Sayyed couple and their daughter. Two others, Rizwan Ladoowala
and Hassan Batterywala, who were also arrested in connection with the case,
were let off following an order of the Supreme Court in 2008. According to the
prosecution a third accused Nisar Ahmed, who was the brain behind the blasts,
was killed in an encounter shortly after the others were arrested.

Pak admits LeT hand in Mumbai attack

Pakistan has finally admitted the complicity of Lashker e Taiba in the 26/11 terror
strikes on Mumbai and has filed a charge-sheet against the plotters of the attack.

The second and supplementary charge-sheet in the 26/11 case, filed by the
Pakistani investigating authorities in the Adiala court, names five LeT operatives,
including operations chief Zaki-ur-Rehman Lakhvi and communications head Zarar
Shah, as accused in planning and launching the Mumbai strikes. The five—Lakhvi,
Shah, Abul Al Qama, Shahid Jamir Riaz and Hamad Amin Sadiq—will be tried in
the anti-terror court in the garrison city of Rawalpindi. The trial will held in
camera within the high-security Adiala Jail for security reasons.

The supplementary charge-sheet came close on the heels of Pakistan’s admission

in a fresh 36-page dossier submitted to India, that LeT indeed was the terror
outfit that had launched the daring attack on November 2008. This was after
investigations by Pakistan’s Federal Investigation Agency (FIA) confirmed the
findings of the Indian probe linking LeT bosses in Pakistan to the 26/11 mayhem.
While the latest charge-sheet names Zaki-ur-Rehman Lakhvi as the main
mastermind, Zarar Shah is described as the leader in charge of LeT’s
communications and Ajmal Amir Kasab identified as a Pakistani national.
 CURRENT INTERNATIONAL AFFAIRS

AFGHANISTAN
US launches biggest operation against Afghan Taliban

On July 2, 2009, thousands of US marines stormed deep into Taliban territory in

an Afghan river valley, launching the biggest military offensive of Barack Obama’s
presidency. The marines said that Operation Khanjar, or Strike of the Sword, will
be decisive and is intended to seize virtually the entire lower Helmand River
valley, the heartland of the Taliban insurgency and the world’s biggest opium
poppy producing region.

The Taliban has vowed to fight back. “Thousands of Taliban mujahideen are ready
to fight US troops,” Mullah Hayat Khan, a senior Taliban commander, said.
Meanwhile, Pakistan’s army deployed more troops to a stretch of the Afghan
border to stop Taliban militants fleeing the major US offensive in Afghanistan.

CHINA
Uighur unrest

China faced its worst unrest in decades in July 2009 when tensions between the
dominant Han Chinese and the Turkic-speaking, Muslim Uighurs descended into
violence in the regional capital of Urumqi. Nearly 200 people died in the unrest.
Chinese officials said that police killed 12 people during July 5 rioting—a rare
acknowledgment by the government that security forces opened fire in the worst
ethnic clashes to hit the region in decades.

The chairman of the Standing Committee of the Xinjiang Regional People's

Congress blamed the riots on "three forces"—extremism, separatism, and
terrorism—both at home and abroad. Eligen Imibakhi, the top legislator in
Xinjiang, said authorities will speed up local legislation against separatism in the
western region that has a long-running independence movement by minority
Uighurs. He added that the public's lack of understanding about laws is also an
"urgent problem," and the government plans to distribute legal booklets in ethnic
minority languages to farmers and herdsmen across the region.

The violence began when police in Urumqi intervened at a peaceful protest by

Uighurs, who went on a rampage, smashing windows, burning cars and beating
Han Chinese. Two days later, vigilante groups of Han took to the streets and
attacked Uighurs.

Even as additional security personnel and machinery poured into Urumqi, the
capital of western Xinjiang province, the Chinese foreign ministry got into action
asking several countries, including Pakistan, to prove their friendship by taking a
stand on the issue. Beijing wants several countries to unearth the links between
their citizens and the World Uighur Congress, which Beijing claims is behind the
violence in Urumqi. The government had earlier issued a white paper, which
claimed that several Xinjiang terrorists were trained in training bases in Pakistan.
A worried Hu Jintao, President of China, left the G-8 summit in Italy and rushed
back to Beijing as it dawned on Chinese authorities that the Urumqi violence
might set off a chain reaction and eventually affect the party position.

NIGERIA
Troops rout ‘Taliban’, kill 200

On July 30, 2009, Nigerian forces put Islamist extremists to fight in a brutal all-out
assault on their northern stronghold after an uprising led to clashes that have left
hundreds dead. Nigerian troops raided the Islamists headquarters in the northern
city of Maiduguri, killing some 200 followers of the self-styled Taliban sect, along
with its deputy leader.

Maiduguri has seen the worst of the unrest in northern Nigeria which started in
nearby Bauchi State. At least 600 people have been killed in the clashes in Borno
and three other northern States, according to figures from police and witnesses.

Boko Haram, also called ‘Nigerian Taliban’, is a sect led by Mohammed Yusuf, an
Islamic scholar who wants sharia law across Nigeria. Based in Maiduguri, his
followers include former university lecturers and students as well as illiterate,
jobless youths. Mohammed Yusuf is in his mid-30s and has considerable wealth.
His followers say he was educated in Iran.

Boko Haram means “western education is sinful” in Hausa language. Boko Haram
followers pray in separate mosques and believe their wives should not be seen by
any men other than themselves Nigeria has equal numbers of Christians and
Muslims. In 2002, 215 died in rioting in Kaduna after a newspaper article
suggested Prophet Mohammad would have married a beauty queen at a Miss
World contest held in Abuja. A protest against Danish cartoons of the Prophet in
2006 sparked riots, killing 157.

PAKISTAN
Emergency was unconstitutional: SC

In a landmark judgement, the Pakistan Supreme Court on July 10, 2009, declared
as illegal and unconstitutional the emergency imposed on November 3, 2007, by
former President Gen Pervez Musharraf and all his subsequent actions, including
sacking of 60 judges.

The judgement, which has far reaching legal and political implications, termed
Musharraf a “usurper” whose actions were subversive of the Constitution. The
imposition of provisional Constitution order (PCO), under which Musharraf
purged the judiciary and packed it with pliant judges, was also declared
unconstitutional.

In a significant move, the apex court allowed protection to some of Musharraf's

actions, including holding of general elections, oath administered by Justice Dogar
to President Asif Zardari and the ordinance creating command and control
authority for security and safety of country's nuclear assets.
Prior to announcing the judgement delivered by a 14-judge bench, Chief Justice
Iftikhar Chaudhry declared that the court was looking forward to a kind of verdict
which should not be disruptive. “Huge unconstitutionality and illegality had taken
place under Musharraf's emergency,” he observed, adding: “But we have to be
very careful in order not to rock the boat and destroy the democratic system.”

The court also declared as illegal the action of the present PPP government to
enhance the number of judges of the Supreme Court from 17 to 29 through the
Finance Bill that contained the budgetary proposals in June 2008. The creation of
Islamabad High Court was also declared unconstitutional as this step required a
Constitutional amendment by Parliament and not through the amendment
introduced by Musharraf as the army chief.

The judgement was widely acclaimed across the country and people raised
slogans, and distributed sweets. President Asif Zardari welcomed the judgement
and promised to implement it.

USA
Hillary spells out US international agenda

Secretary of State Hillary Rodham Clinton delivered a major foreign policy speech
in Washington in July 2009, in which she pledged her commitment to "smart
power" while acknowledging an international agenda that is "unforgiving."

Speaking at the Council on Foreign Relations, Clinton noted that the wars in Iraq
and Afghanistan, conflict in the South West Asia, ongoing threats of violent
extremism and nuclear proliferation, global recession, climate change, hunger and
disease, and a widening gap between rich and poor are all challenges that affect
America's security and prosperity. "And all threaten global stability and progress."
she said.

In approaching these foreign policy challenges, she said, the US has to deal with
the urgent, the important and the long-term all at once.

She was confident that the Obama administration had the right strategy, the right
priorities and the right policies. "We have the right President. And we have the
American people, diverse, committed, involved and open to the future," she said.
Defending the administration's willingness to talk with perceived foes of the US,
she said this was not a sign of weakness to be exploited. "We will not hesitate to
defend our friends, our interests and above all our people, vigorously and when
necessary with the world's strongest military," she said.

Discussing Afghanistan and Pakistan, Clinton said the US was committed to

disrupting, dismantling, and ultimately defeating Al-Qaida and its extremist allies.
Yet, she admitted, "Americans often ask as to why do we ask our young men and
women to risk their lives in Afghanistan when Al-Qaida's leadership is in
neighbouring Pakistan?" She went on to answer that question, saying, "We and
our allies fight in Afghanistan because the Taliban protects Al-Qaida and depends
on it for support, sometimes, coordinating activities. In other words, to eliminate
Al-Qaida, we must also fight the Taliban."
Priorities of Obama administration

 Reverse the spread of nuclear weapons, prevent their use, and build a
world free of their threat.
 Isolate and defeat terrorists and counter violent extremists while reaching
out to Muslims around the world.
 Encourage and facilitate the efforts of all parties to pursue a
comprehensive peace in South West Asia.
 Pursue global economic recovery and growth — by strengthening the US
economy, advancing a robust development agenda, expanding trade that is
free and fair, and boosting investment that creates decent jobs.
 Combat climate change, increase energy security, and lay the foundation
for a prosperous clean-energy future.
 Support and encourage democratic governments that protect the rights of
and deliver results for their people.
 And stand up for human rights everywhere.

INTERNATIONAL ECONOMY
IMF pegs 2010 global growth at 2.5%

The International Monetary Fund (IMF) has raised its 2009 growth forecast for
Asia's developing economies from 4.8% to 5.5% but cautioned that a sustained
rebound will depend on recovery in developed economies. It cited improved
prospects for regional giants China and India. In a report, it raised its 2009 growth
outlook for China by one percentage point to 7.5%, and for India by 0.9
percentage points to 5.4%.

IMF also raised its outlook for the global economy in 2010, but said recovery from
the worst recession since World War II would be sluggish. The IMF boosted its
2010 global growth forecast to 2.5%, an improvement of 0.6 percentage point
from its April forecast. The updated IMF forecast was marginally worse for 2009,
showing a contraction of 1.4% across the global economy.

IMF to issue bonds to combat crisis

The International Monetary Fund has decided to issue bonds for the first time in
its 60-year history in an effort to win contributions from emerging economies
such as China, Brazil and Russia. China has already said it will invest $50 billion,
while Russia and Brazil have pledged $10 billion each through the new bond offer.
It would mark the first time that developing countries have made contributions to
the IMF. The bonds will be issued in the IMF’s own currency, known as Special
Drawing Rights, which is based on a basket of currencies made up of the dollar,
euro, yen and British pound. The bonds will be issued for a maximum of five
years.

Thanks to Asia, economic crisis is rolling back: UN

The current economic crisis is rolling back due to the significant progress made by
countries in Asia like India and China, according to a top UN official. The financial
stimulus packages and reforms announced by these countries could help in
creating a more integrated and coordinated Asia and the Pacific that builds up on
collective regional strengths and resources. During the course of the UN Economic
and Social Council session in Geneva, UN Economic and Social Commission for
Asia and the Pacific (ESCAP) Executive Secretary Noeleen Heyzer highlighted the
need for appropriate investments in infrastructure to create economic corridors
that link less developed countries to economic centres in the region, thereby
increasing intra-regional trade. Heyzer added that her organization has responded
to the crisis by encouraging policies that include social programmes such as health
coverage, pensions, education and agricultural extension services, as well as
investment in small and medium scale enterprises.

ENVIRONMENT
Climate talks stall as West asks India, China to cut emissions

Attempts to forge a global consensus to battle climate change suffered a serious

setback as developed countries tried to wriggle out of any short-term
commitment to reduce greenhouse gas emissions and instead, demanded that
developing economies such as India and China accept emission reduction targets.

At a meeting of the Major Economies Forum in Rome on July 9, 2009, the

developed countries tried to renege on their commitment to use 1990 as the base
year for reducing emissions. Nor would they spell out what quantum of
commitments they would accept in the run-up to 2020. The developed nations
insisted that India, China and other emerging economies like Brazil and South
Africa agree to a long-range target for reduction of GHGs with the burden-sharing
formula remaining ambiguous.

Sources termed the deliberations at the Rome meeting as “tense” with India and
China having to join hands to counter pressure from the developed world led by
the US. The India-China partnership had staved off a similar challenge at the Bonn
climate change talks.

India blinks on emission caps

At the Major Economies Forum (MEF) meeting in Italy, India has gone back on
some key principles— like a refusal to accept emission caps—that it had held to
be non-negotiable till just before the G8 meet in Italy. In the course of some
tough negotiations, India appears to have relented in the face of pressure from
industrialized countries. Its biggest compromise at the MEF was to accept that all
countries would work to reduce emissions in order to not let global temperatures
rise more than 2°C above pre-industrialization levels.

When this declaration, signed by PM Manmohan Singh, is turned into targets for
different countries, this may imply substantial emission reduction targets for India
even if rich countries take a hefty 80% cut in their own emissions by 2050. While
an 80% cut is the most ambitious target ever considered for the developed world,
India and China would still be faced with large cuts.

Till date, India had insisted that the science behind the 2°C target has been
questioned even by the UN climate science panel. It demanded that unless rich
nations put figures on the table about what sort of reductions they were willing to
accept collectively by 2020, and then again by 2050, India would not agree to any
commitments for the long term which the 2-degree agreement places on them.

According to several Indian observers, the recent decision would tie India’s hands
as it goes into talks at the formal UN negotiations. India for the first time has
officially agreed that there is a global target and it may now, in due course, spell
out what it will take to reach it. Now the global target of emission cuts instead of
equity would become the over-arching argument in the negotiations.

N-PROLIFERATION
Myanmar close to testing N-bomb

As world concerns remain focused on the clandestine nuclear programme of

North Korea and Iran, reports are filtering in of Myanmar’s isolated military junta
may be just a few years from testing its first atomic bomb. The key far-eastern
nation is building a secret nuclear reactor and plutonium extraction facilities with
North Korea’s help, Sydney Morning Herald has reported citing two key junta
defectors. The Herald identified the two defectors as an officer with a Myanmar
army’s secret nuclear battalion and the other a former executive and leading
regime business partner, Htoo Trading, who handled nuclear contracts with
Russia and North Korea.

The Myanmarese military is said to have the reactor located in mountain caves
inter-linked by deep tunnels at Naung Laing in Northern part of the country,
apparently to camouflage it from detection by satellites.

The secret complex, the paper said, runs parallel to a civilian reactor being built at
another site by Russia, which both Moscow and Yangon authorities say will be put
under international safeguards.

The revelations by the Australian Daily come as US Naval Warships recently

shadowed a North Korean commercial vessel bound for Myanmar, suspecting it to
be carrying contraband nuclear and missile components. However, the ship was
not intercepted. China and other Asian nations had helped persuade Myanmar to
turn back the North Korean freighter.

A month back Japanese police had arrested a North Korean and two of its own
nationals allegedly trying to export illegally to Myanmar magnetic measuring
device that could be used to develop missiles.

Washington, the report said, is increasingly concerned that Myanmar is the main
nuclear proliferation threat from North Korea, after Israel destroyed in September
2007 a reactor that North Koreans were apparently building in Syria.
INTERNATIONAL RELATIONS
Medvedev threatens US over missile shield

Russian President Dmitry Medvedev has warned the United States that if it did
not reach agreement with Russia on plans for missile defence systems, Moscow
would deploy rockets in an enclave near Poland. In sharp contrast to his positive
words during President Barack Obama’s visit to Moscow in first week of July,
2009, when the two reached broad agreement on nuclear arms cuts, Medvedev
used a news conference at the G8 summit to return to Russia’s earlier tough
rhetoric on arms control.

Referring to an order he gave in early 2009 to prepare deployment of short-range

Russian missiles in the western enclave of Kaliningrad to answer to any U.S.
deployment of a missile shield in central Europe, Medvedev said: “If we don’t
manage to agree on the issues, you know the consequences. What I said during
my state of the nation address has not been revoked.”

In Moscow, Medvedev and Obama agreed a target for cuts in nuclear arms and a
year-end deadline for a reduction deal. Obama had praised Medvedev as a
“straightforward professional” leader. Before his Moscow visit, Obama had made
clear, though, that he would not accept any effort by Moscow to link arms control
to missile defence, and reiterated Washington’s stance that any system would be
to protect against a threat from Iran, not from Russia.
Obama meets Putin

US President Barack Obama held his first meeting with Russian Prime Minister
Vladimir Putin in Moscow on July 7, 2009, and hoped that talks between them
would put bilateral relations “on a much stronger basis”.

Obama, on his first visit to Russia since becoming President, met Putin at the
Prime Minister’s country residence, a day after inking a landmark strategic arms
reduction treaty with President Dmitry Medvedev. After exchanging pleasantries,
Putin told Obama that Russia is hoping for better relations with the US, following
the disagreements that arose with the previous administration. Obama said the
meeting provided an opportunity to “put US-Russian relations on a much stronger
basis”.

Ties between the two Cold-War rivals have been marked with several strains,
including over arms control, NATO expansion, and US missile defence plans for
Europe. The two leaders had traded barbs ahead of the US President’s visit, with
Obama terming Putin a man who has ‘one foot in the past’ and the Prime Minister
responding by saying that ‘Russians do not stand with feet apart’.
SUMMITS
G-8 summit

On July 8, 2009, G-8 leaders held their summit meeting at L’Aquila, a mountain
town in Italy. According to the summit draft, G8 leaders believe the world
economy still faces “significant risks” and may need further help. The draft also
reflected on failure to agree climate change goals for 2050.

Discord over environmental measures was underlined by withdrawal from the

meeting of Chinese President Hu Jintao, who returned to Beijing because of
unrest in north-western China in which 156 people were killed.

The Group of Eight—United States, Germany, Japan, France, Britain, Italy, Canada
and Russia—kicked off with debate on the economic crisis, after what one analyst
called a “reality check” in recent times on the prospects for rapid recovery. G8
leaders badly underestimated the economic problems facing them when they met
in Japan in 2008 and now focused on what must be done to prevent another
meltdown.

President Barack Obama and his G-8 summit partners held tense discussions
about how both rich and emerging nations can live up to new clean climate goals
adopted by leading industrialised nations. Confronting global warming, a trend
scientists say could unleash devastating droughts, floods and disease if left
unchecked, was a dominant theme again G-8.
The G8 summit wound up with a wry acknowledgement of its growing irrelevance
as the world’s premier power bloc. Phoenix-like, the G14 is rising from its ashes,
much more inclusive, with developed and developing countries together on an
equal footing.

The intimation of G8’s impending demise came from the host of the summit,
Italian premier Silvio Berlusconi. ‘‘We saw that G8 is no longer a suitable format
to show a global economic way of doing. Instead, a consolidated G14 representing
80% of the world economy could create a real dialogue. We want to see if the
G14 is the best solution to make debates which will bring to us unique results.’’

The deliberations of G8 and G5 saw even French president Nicolas Sarkozy making
a strong case for G14 to deal with the issues of global governance after Brazil’s
President Lula spoke about the idea of a new group.

After dealing with issues of climate change, trade and global economic downturn,
the G8 and G5 countries turned their attention to food security, pledging to
mobilise US $20 billion over three years by substantially increasing aid to
agriculture for achieving food security across the nations.

The leaders also committed themselves to reducing trade distortions and refrain
from raising new barriers to trade and investment and to implement WTO-
consistent measures to stimulate exports. To this end, the ‘L'Aquila Joint
Statement on Global Food Security and Regional Organisations’ said the nations
would aim at an ambitious, comprehensive and balanced conclusion of the Doha
Development Round and called for renewed and determined to bring it to a
timely and successful conclusion.

Admitting the global economic crisis had serious and alarming implications for
growth and poverty eradication in developing countries, the declaration said G8
and G5 countries were determined to engage responsibly with low-income
countries, especially those in situations of fragility. It resolved that partner
countries should continue reforming financial system regulation to prevent boom
and bust cycles in economy. The declaration admitted international financial
institutions needed reform to make them compatible to the reality of the new
world financial order.

The G-8 nations also asked international bodies to study ways of intervening in oil
markets to block speculation.

The next Summit will be held at Muskoka in Canada in 2010.

NAM Summit

Leaders from Non Aligned Movement countries, including India, met in Sharm el-
Sheikh in Egypt on July 15, 2009 to hammer out a strategy to tackle the world
financial crisis and sought international solidarity to fight terrorism and enhance
peace and development.

Opening the two-day 15th NAM Summit of the 118 developing nations at this
Egyptian Red Sea resort city, Cuban President Raul Castro said the grouping
believes that all countries in the world should search for effective and justified
measures to tackle the current financial crisis.

In his address, Egyptian President Hosni Mubarak, who took over the NAM
Chairmanship from Castro for a three-year term, sought serious efforts and
international solidarity to enhance world peace and development. Mubarak spoke
about the international financial system and the need to deal with on war-footing
challenges like climate change, food security, peace and security, disarmament,
human rights and rule of law.

The Summit aimed at evolving a new international order to effectively face

contemporary world challenges.

Founded in September 1961 by first Indian Prime Minister Jawaharlal Nehru,

former Egyptian President Gamal Abdel-Nasser and ex-Yugoslav President Josip
Tito, NAM now groups 118 member states, 16 observer countries and 9 observer
organisations. The grouping, which represents nearly two-thirds of the UN
member countries and comprises 55 per cent of the world population, focuses on
interests of developing world.

At the two-day Summit, the leaders discussed the global financial crisis, climate
change, the Mideast peace process, food security, energy and nuclear issues.
They also signed the Summit's Final Document and Sharm El Sheikh Declaration
and approved the NAM's strategy and action plan for the future three years.
Sharm El Sheikh Summit Declaration reiterated the strong commitment to the
purposes and the principles of the United Nations Charter and the principles of
international law, international humanitarian law and human rights law. The
member-States desired to enhance the strengthening and revitalization process
of the Movement through concrete measures, at all levels.

The declaration said NAM will continue to promote disarmament and

international security and stability on the basis of equal and undiminished
security for all, bearing in mind that total and complete Nuclear Disarmament
remains the only route to establish a world free from Nuclear Weapons, taking
into consideration related issue of Nuclear Non Proliferation in all its aspects and
the inalienable right of all states to the peaceful uses of nuclear energy. NAM will
engage constructively with concrete actions towards the implementation of the
unequivocal undertaking by the Nuclear Weapon States, as well as the recent
statements made by leaders of some Nuclear Weapons States to eliminate their
nuclear arsenals and work towards realizing a World Free of Nuclear Weapons,
including through the establishment of Nuclear Weapon Free-Zones, particularly
in the Middle East region;

NAM will also ensure that the current comprehensive review of Peace Keeping
Operations takes duly into account the position of the Movement, in particular
the demands of Troop Contributing Countries, and to ensure that the review
processes of the Peace Building Commission and the Peace Building Fund will
achieve their objectives to support all countries emerging from conflict, based on
the principle of national ownership and coordinated activities within the United
Nations system;

NAM will reinforce and build new momentum in addressing human rights issues
based on a cooperative and balanced approach focused on constructive dialogue
and capacity building, while taking duly into account the diversity of societies,
political, economic, social and legal systems, cultures and religions, and avoiding
selectivity, double standards and any attempt to exploit or use human rights as an
instrument for political purposes, with a view to reinforcing the commitment to
the promotion and protection of all human rights and fundamental freedoms for
all, in particular the right to development,

NAM will continue to uphold the fundamental and inalienable right of all peoples,
including all non-self governing territories, as well as those territories under
foreign occupation and colonial or alien domination to self determination, the
exercise of which, in the case of peoples under foreign occupation and colonial or
alien domination, remains valid and essential to ensure the eradication of all
these situations and to guarantee universal respect for human rights and
fundamental freedoms;

NAM also demanded achieving a just and comprehensive peace in the Middle
East based on relevant United Nations Security Council Resolutions, Madrid Terms
of Reference, land for peace, and the Arab Peace Initiative in its entirety; and said
that NAM firmly supports the inalienable rights of the Palestine people to self-
determination and the establishment of their independent, contiguous and viable
State in Palestine with East Jerusalem as its capital, and a just and agreed upon
solution to the Palestine refugee question on the basis of resolution 194.

The declaration also seeks to restore the balance between the Principal Organs of
the United Nations and reaffirm the role and authority of the General Assembly,
while asserting its fundamental role in international peace and security and in
promoting multilateralism.

On climate change the declaration asked to strengthen the political momentum in

preparation for the Copenhagen conference in a manner that duly reflects the
views of NAM countries with regard to mitigation, adaptation, finance,
technology transfer, capacity building and shared vision in accordance with the
principle of Common but Differentiated Responsibilities, and fully utilize the high
level meeting to be convened by the Secretary General of the United Nations at
the beginning of the 64th session of the General Assembly to highlight the
concerns of the NAM countries.

On terrorism the declaration aspired to strengthen NAM solidarity in combating

terrorism in all its forms and manifestations, wherever and by whomsoever
committed, in accordance with the principles of the United Nations Charter,
international law and the relevant international conventions. In this context, it
stressed that terrorism should not be associated with any religion, nationality,
civilization or ethnic group.

The Heads of State and Government recognised the long history of Nelson
Mandela’s leading role in and support for Africa’s struggle for liberation, self
determination and Africa’s unity and also his outstanding contribution in the
creation of a non-racial, non sexist, and democratic South Africa. They expressed
their support for and solidarity with the Nelson Mandela Day International
Campaign and called on Non-aligned Movement member States and peoples to
join in the campaign, including by contributing 67 minutes of their time in service
of their communities in recognition of Madiba’s 67 years contribution in service of
humanity. They also endorsed the declaration to observe July 18, Madiba’s
birthday, as Nelson Mandela International Day, and requested that a resolution to
this effect be adopted by the UN General Assembly at its 64th session.

INTERNATIONAL TERRORISM
Pak nurtured terrorism: Zardari

In an astonishingly candid admission—a first by any Pakistani head of State—

President Asif Ali Zardari has admitted militants and terrorists were wilfully
created by past Pakistani governments and nurtured as a policy to achieve tactical
objectives.

‘‘Militants and extremists emerged on the national scene and challenged the state
not because the civil bureaucracy was weakened and demoralized but because
they were deliberately created and nurtured as a policy to achieve short-term
tactical objectives. Let’s be truthful and make a candid admission of the reality,’’
he told a gathering of civil servants in Islamabad on Tuesday night.
‘‘The terrorists of today were heroes of yesteryear until 9/11 occurred and they
began to haunt us as well,’’ Zardari said. He also pointedly said that future
generations won’t forgive the current leadership if it does not take corrective
measures.

India has long charged Pakistan with sponsoring terrorism in Kashmir by providing
arms, ammunition and training to militants who have been engaged in a war of
secession. Zardari’s admission is bound to create a major flutter in Islamabad,
particularly within the Army.

Criticising former military rulers—itself an act of derring-do—Zardari said

concentration of power in one individual was against the spirit of democracy and
good governance. ‘‘Too much power in one hand lasts for a short time,’’ he said.
‘‘For power to be effectively used for long lasting public good, it must be
dispersed as widely as possible.’’

India responded by saying that Pakistan President Asif Ali Zardari's “confession”
about nurturing of terrorists had vindicated its stand and hoped Islamabad would
now make a “determined” effort to end terrorism across the border.

Making statements in both Houses of Parliament, External Affairs Minister SM

Krishna said Pakistan must “expose” and “take action” against “conspiracies and
conspirators” for terror attacks launched in India from across the border, as
future of dialogue is premised on an atmosphere free of the threat of violence.
Extra-GK

According to data released by the Central Statistical Organisation, India's per

capita income has increased by over one-third from Rs 26,003 in 2005-06 to Rs
37,490 in 2008-09. Per capita income is the amount an individual earns, of the
yearly income that is generated in the country through productive activities. It
means the share of each individual when the income from the productive
activities is divided equally among citizens.

The growth in real gross domestic product at factor cost declined from 9 per cent
in 2007-08 to 6.7 per cent in 2008-09. The sector-wise growth of GDP in
agriculture, forestry and fishing in 2007-08 was 4.9 per cent, but declined to 1.6
per cent in 2008-09. Industry witnessed a growth of 8.1 per cent in 2007-08, but it
reduced to 3.9 per cent in 2008-09.

Bharti Airtel has picked up the title sponsorship of the Champions League T20
cricket tournament 2009, for Rs 170 crore.

Developers of Special Economic Zones (SEZs) will now get a blanket exemption
from stamp duty on land purchases within the notified area for non-core activities
such as building hotels, housing complexes, shopping malls and golf courses. For
the developers of the 500-odd SEZs in the country, slated to bring in investments
of over Rs 100,000 crore, this ends the uncertainty that had cropped up after
some States had voiced their opposition. The exemption, however, will be
available only after formal approval of the zone. For land bought after in-principle
approval, the State government may either give the exemption upfront or collect
the duty and refund it after the zone has been set up. If under some
circumstances, notification of a zone is cancelled, the State government will be
entitled to withdraw the concession and recover the same from the developer.

Gail India, country’s largest gas transportation company, will invest Rs 7,600
crore in building India’s longest gas pipeline from Jagdishpur in Uttar Pradesh to
Haldia in West Bengal.

Haryana has become the first State in India to have ten eco-sensitive zones.
Union ministry of environment and forests has notified around two national parks
and eight wildlife sanctuaries of Haryana.

Indian film industry is the world’s largest in terms of number of films produced as
well as the number of cinema-goers. It produces almost as many films as the next
three—the US, Japan and China— combined. The Indian film industry, with its
major centres at Mumbai, Chennai and Hyderabad, produced 1,132 feature films
in 2007. In comparison, the American film industry in 2008 produced 520 feature
films, Japan 418 and China 400. As for theatre admissions, India’s count of 3.3
billion for 2008 was higher than the combined total of the next nine biggest film
producing countries. The US was the only other country to have more than a
billion admissions. These facts have been put together by European Audiovisual
Observatory, a public service body gathering and distributing information on the
audiovisual industry, in its publication, ‘Focus 2009-World Film Market Trends’.
Indian Railways has introduced a new train, Andolan (agitation) Express that will
run from Singhur to Howrah. According to Railway Minister Mamta Banerjee the
name “signifies the victory of the poor farmers of Singur against the forcible
acquisition of their farmland”.

India's external debtwent up by $5.3 billion or 2.4% to $229.9 billion as of March

2009, according to RBI. The debt denominated in US dollar accounted for 57% of
total external debt.

Milan has been named as the world’s top fashion city in the Global Language
Monitor’s (GLM) annual global survey. Mumbai is at 16th and New Delhi at 17th
position. Following Milan are New York, Paris, Rome and London.

Netbooks are low-cost notebook PCs designed for internet surfing and other
Web-based applications.

Prime MinisterManmohan Singh has become the first head of State to be Chief
Guest at France National Day. The celebrations commemorate the 1789 invasion
of the Bastille prison that sparked the French Revolution. Also, the parade down
the Champs Elysees was lead by Indian Army’s Maratha Regiment contingent.

Quotes that various Finance Minister of India quoted in their Budget speech:
Manmohan Singh, in his path-breaking 1991 speech paraphrased the French
writer Victor Hugo to declare ‘No power on earth can stop an idea whose time
has come”; P. Chidambaram opted for the Tamil seer-poet Thiruvalluvar’s lines,
“Iyattralum, eettalum, kattalum, katta; Vakuthalam vallath arasu (To be able to
increase wealth, to lay it up and guard; And also well to distribute it, marks a royal
lord) in his first Budget speech and stayed with him for every successive speech.
Yashwant Sinha was noted for quoting Ramdhari Singh Dinkar’s lines, “The stars
of the dark night are fading. The whole sky belongs to you,” in his first Budget
speech, and then his own Prime Minister, AB Vajpayee, in his second. Pranab
Mukherjee, in his 2009 Budget speech, quoted extensively from Kautilya’s
Arthshastra.

Revising the growth projection to 6.5% from the earlier 5.7% for 2009-10, Reserve
Bank of India has said it expected inflation to go up to 5.4% by 2009-10-end. In its
macro-economic review, RBI, however, said indications are that dampened
growth impulses may continue due to significant delay in monsoon in certain
parts of the country and persistence of global recession. The review, ahead of the
quarterly review of RBI's annual monetary policy, quoted the RBI’s Professional
Forecasters Survey to indicate that the average inflation in the fourth quarter of
2009-10 will be around 5.4%.

The Union government has decided to change the base year of the Wholesale
Price Index (WPI) series from 1993-94 to 2004-05. The move is aimed at tracking
changes in price level accurately.

US citizens continued to be on the top of the list of those who found the country
attractive enough to travel. Latest figures released by the Home Ministry show
that India received as many as 52,78,852 foreign visitors in 2008, against
50,96,990 in 2007, an increase of 1.81 lakh, quite less than what the country
witnessed during 2004-07 when it recorded an addition of over five lakh visitors
every year. US, along with the UK, accounted for nearly 30% of the total
foreigners who visited India in 2008.

World Population Day is observed on July 11.